<PAGE>
PAGE 1
IDS
Precious
Metals
Fund
1995 annual report
(prospectus enclosed)
[icon of a mining car filled with coins]
The goal of IDS Precious Metals Fund, Inc. is long-term growth of
capital. The fund invests primarily in securities of companies
engaged in exploration, mining, processing or distribution of gold
and other precious metals. Most of these companies will be located
outside of the United States.
(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.<PAGE>
PAGE 2
[icon of a mining car filled with coins]
While investors typically look to stocks and bonds for the best
return on their money, there are times when hard assets such as
gold can play a small but important role in a diversified
portfolio. Because owning the metal itself is often impractical,
most investors put their money in stocks of companies that mine
gold and other precious metals. Those stocks, which form the
bedrock of IDS Precious Metals fund, usually move in tandem with
the prices of the metals.
<PAGE>
PAGE 3
Contents
[diagram showing one booklet enclosed by another; lines connect the
outer booklet with the "annual report" heading below and the inner
booklet with the "prospectus" heading below]
1995 annual report
The purpose of this annual report is to tell investors how the fund
performed.
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.................................................24
Federal income tax information...................................27
1995 prospectus
The prospectus, which is bound into the middle of this annual
report, describes the fund in detail.
The fund in brief
Goal.............................................................3p
Types of fund investments and their risks........................3p
Manager and distributor..........................................3p
Portfolio manager................................................3p
Alternative sales arrangements...................................4p
Sales charge and fund expenses
Sales charge and operating expenses..............................5p
Performance
Financial highlights.............................................7p
Total returns....................................................8p
Key terms.......................................................10p
Investment policies and risks
Facts about investments and their risks.........................11p
Alternative investment option...................................15p
Valuing assets..................................................15p
How to buy, exchange or sell shares
Alternative sales arrangements..................................16p
How to buy shares...............................................18p
How to exchange shares..........................................21p
How to sell shares..............................................21p
Reductions and waivers of the sales charge......................25p
<PAGE>
PAGE 4
Special shareholder services
Services........................................................29p
Quick telephone reference.......................................29p
Distributions and taxes
Dividend and capital gain distributions.........................30p
Reinvestments...................................................30p
Taxes...........................................................31p
How the fund is organized
Shares..........................................................33p
Voting rights...................................................33p
Shareholder meetings............................................33p
Directors and officers..........................................33p
Investment manager and transfer agent...........................35p
Distributor.....................................................36p
About American Express Financial Corporation
General information.............................................38p
Appendix
Descriptions of derivative instruments..........................39p
<PAGE>
PAGE 5
To our shareholders
[photo of William Pearce]
William R. Pearce
President of the fund
[photo of Richard Warden]
Richard H. Warden
Portfolio manager
From the president
All of the funds in the IDS MUTUAL FUND GROUP held shareholder
meetings on Nov. 9, 1994. The meetings, which were well-attended,
approved all of the proposals advanced by management. Among the
proposals were:
o The election of directors and the selection of KPMG Pear
Marwick LLP as independent auditors for each of the funds
in the group.
o A new investment management agreement that became
effective March 1995, when the funds began offering
multiple classes of shares.
o A change in investment policy that will permit the fund
to adopt a master/feeder structure if and when the board
of each fund determines that it is in the best interest
of shareholders.
o Changes with respect to the fund's "fundamental
investment policies" that, among other things, allows the
board to modify them should it deem appropriate.
The final change shareholders approved was the conversion of
Precious Metals from a diversified to a non-diversified fund.
No other business was presented at the meeting, which was concluded
by a report to shareholders from the American Express Financial
Corporation Investment Department.
Thanks to all of you for your effort in reviewing the proxy
material and voting your proxies.
[reproduced signature]
William R. Pearce
From the portfolio manager
If there was ever any question about the volatility among stocks of
gold producers, the past fiscal year should have put that to rest.
Substantial stock-price swings resulted in similar fluctuations in
IDS Precious Metals Fund's net asset value, sometimes as great as
11% in a single month. In the end, this fund finished the year
(April 1994 through March 1995) with a loss of approximately 5%.
<PAGE>
PAGE 6
At the outset of the period, gold stocks were still feeling the
effects of a sharp decline that occurred early in 1994. This
largely resulted from selling pressure created by investors who
wanted to take profits from their investments in gold stocks, which
had recorded exceptional gains in 1993. (This fund, in fact, was
up 81% that year.) In addition, investors in the Far East began
curtailing their buying of gold bullion while, here at home,
interest rates were rising. Both of these factors helped keep
gold-stock prices down.
Inflation fear fuels stocks
After a lackluster early summer, the stocks and the fund began to
gather forward momentum last July. The primary impetus was growing
concern about the potential for a marked increase in the U.S.
inflation rate. As it usually has throughout modern history, the
price of gold rose in response to that concern.
True to their anticipatory nature, gold stocks moved up before the
price of the metal itself and enjoyed a strong run-up through
September. The roller-coaster performance pattern quickly resumed,
however, as inflation fears came and went throughout the fall and
winter.
The strongest market during the fiscal year was South Africa. We
sold a modest amount of our holdings there, moving some of the
profits into West Africa, a new mining area that we believe offers
good potential. Other than that, the portfolio was largely
unchanged during the period.
Demand stays strong
One constant in the market was gold's positive supply/demand
situation -- healthy demand (mainly for gold jewelry) with no
significant increase in supply. Also benefiting the stocks and the
fund were appreciating currencies in dominant gold markets such as
South Africa and Australia.
Looking ahead, favorable market factors are still present.
Inflation appears to be increasing somewhat in the U.S. and has
already reached a high level in China, which has historically been
a major gold buyer. Second, worldwide demand for gold continues to
outpace supply. While those conditions are likely to support gold
stocks over the long term, investors should, as always, expect
substantial price swings along the way.
[reproduced signature]
Richard H. Warden
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
March 31, 1995 $ 7.99
March 31, 1994 $ 8.44
Decrease $(0.45)<PAGE>
PAGE 7
Distributions
April 1, 1994 - March 31, 1995
From income $ 0.04
From capital gains $ --
Total distributions $ 0.04
Total return** (4.9%)
Class B
March 20, 1995 - March 31, 1995
(All figures per share)
Net asset value (NAV)
March 31, 1995 $7.99
March 20, 1995* $7.72
Decrease $0.27
Distributions
March 20, 1995* - March 31, 1995
From income $ --
From capital gains $ --
Total distributions $ --
Total return** --%***
Class Y
March 20, 1995 - March 31, 1995
(All figures per share)
Net asset value (NAV)
March 31, 1995 $7.99
March 28, 1995* $7.62
Decrease $0.37
Distributions
March 28, 1995* - March 31, 1995
From income $ --
From capital gains $ --
Total distributions $ --
Total return** --%***
*Commencement of operations.
**The prospectus discusses the effects of the sales charge on the
various classes.
***Not presented -- as short period of operations may not be
indicative of annual results.
<PAGE>
PAGE 8
IDS Precious Metals Fund, Inc.
Your fund's ten largest holdings
(Pie chart)
The ten holdings listed here make up 54.42% of the funds's net
assets
Percent Value
(of fund's net assets) (as of March 31, 1995)
Barrick Gold 10.07% $7,250,000
Barrick Gold is engaged in the mining and exploration of gold in
the United States, Chile and Canada.
Sons of Gwalia 7.03 5,058,000
Australian precious metals producer.
Freeport McMoRan Copper & Gold
6.84 4,921,875
Gold, silver and cooper producer in Indonesia.
TVX Gold 6.26 4,507,979
Canadian and South American precious metals producer.
Dayton Mining 4.61 3,318,300
South American precious metals producer
Acacia Resources 4.31 3,104,500
Australian precious metals producer.
Stillwater Mining 4.20 3,025,560
Company explores, develops, mines and produces platinum, palladium
and associated metals from the Stillwater Complex located in the
Beartooth Mountains in southern Montana.
Plutonic Resources 3.99 2,873,500
Australian precious metals producer.
Intl Gold Resources 3.60 2,589,930
Canadian company exploring for gold in West Africa.
Santa Fe Pacific Gold 3.51 2,525,000
One of the largest gold mining concerns in North America.
<PAGE>
PAGE 9
Making the most of your fund
Class A
Average annual total return*
(as of March 31, 1995)
1 year 5 years Since inception**
- -9.65% +2.75% +6.99%
*Average annual total return is not presented for Class B and Class
Y because annualized return based on short period of operations may
not be indicative of annual results.
**Period from April 22, 1985 to March 31, 1995.
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 deduction 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
To keep your assets growing steadily, one of the best ways to
invest in the fund is by dollar-cost averaging -- a time-tested
strategy that can make market fluctuations work for you. To
dollar-cost average, simply invest a fixed amount of money
regularly. You'll automatically buy more shares when the fund's
share price is low, fewer shares when it is high.
this does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Amount Per-share
Month invested market price Number of shares purchased
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
By investing an equal number of dollars each month...
you automatically buy more shares when the per share market price
is low [arrow pointing to "Apr" line in table above]
and fewer shares when the per share market price is high [arrow
pointing to "Sept" line in table above]
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 10
Your fund's long-term performance
Three ways to benefit from a mutual fund:
o your shares increase in value when the fund's investments
do well
o you receive capital gains when the gains on investments
sold by the fund exceed losses
o you receive income when the fund's stock dividends,
interest and short-term gains exceed its expenses
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gain distributions to buy additional shares
of the fund or another fund.
Class A*
How your $10,000 has grown in IDS Precious Metals Fund
Average annual total return
(as of March 31, 1995)
Since
1 year 5 years 4/22/85
- -9.65% +2.75% +6.99%
...... S&P 500 Stock Index
______ Precious Metals Fund
------ Lipper Gold Fund Index
$20,000 [chart showing performance of
S&P 500, IDS Precious Metals Fund, and
Lipper Gold Fund Index, with Precious Metals
Fund beginning at $9,500 and ending at $19,948]
$9,500
5/1/85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95
*Average annual total return is not presented for Class B and Class
Y because annualized return based on short period of operations may
not be indicative of annual results.
Assumes:
o Holding period from 5/1/85 to 3/31/95.
o Returns do not reflect taxes payable on distributions.
o Also see "Performance" in the fund's current prospectus.
o Reinvestment of all income and capital gain distributions
for the fund, with a value of $4,476
The Standard & Poor's 500 Stock Index, 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.<PAGE>
PAGE 11
Lipper Gold Fund Index, published by Lipper Analytical Services,
Inc., includes 10 funds that are generally similar to this fund,
although some funds in the index may have somewhat different
investment policies or objectives.
On the chart above you can see how the fund's total return compared
to two widely cited performance indexes, the S&P 500 and the Lipper
Gold Fund Index. In comparing Precious Metals 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.
Average annual total return figures reflect the deduction of the
maximum 5% sales charge. This was a period of widely fluctuating
security prices. Past performance is no guarantee of future
results.
<PAGE>
PAGE 12
Independent auditors' report
___________________________________________________________________
The board of directors and shareholders
IDS Precious Metals Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments in securities,
of IDS Precious Metals Fund, Inc. as of March 31, 1995, and the
related statement of operations for the year then ended and the
statements of changes in net assets for each of the years in the
two-year period ended March 31, 1995, and the financial highlights
for each of the years in the nine-year period ended March 31, 1995,
and for the period from April 22, 1985 (commencement of operations)
to March 31, 1986. 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
Precious Metals Fund, Inc. at March 31, 1995, and the results of
its operations for the year then ended and the changes in its net
assets for each of the years in the two-year period ended March 31,
1995, and the financial highlights for the periods stated in the
first paragraph above, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
May 5, 1995
<PAGE>
PAGE 13
Statement of assets and liabilities
IDS Precious Metals Fund, Inc.
March 31, 1995
<TABLE>
<CAPTION>
_____________________________________________________________________________________________________________
Assets
______________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $60,239,026) $72,200,838
Cach in bank on demand deposit 21,945
Dividends and accrued interest receivable 286,984
Receivable for investment securities sold 550,525
Receivable for foreign currency contracts held, at value (Notes 1 and 4) 108,427
U.S. government securities held as collateral (Note 8) 4,246,701
_____________________________________________________________________________________________________________
Total assets 77,415,420
_____________________________________________________________________________________________________________
Liabilities
____________________________________________________________________________________________________________
Payable for investment securities purchased 108,164
Payable for foreign currency contracts held, at value (Notes 1 and 4) 108,164
Payable upon return of securities loaned (Note 8) 5,139,101
Accrued investment management and services fee 17,262
Accrued distribution and service fee 3,855
Accrued transfer agency fee 6,641
Accrued administrative services fee 1,320
Other accrued expenses 50,794
_____________________________________________________________________________________________________________
Total liabilities 5,435,301
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $71,980,119
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value; $ 90,094
Additional paid-in capital 85,077,269
Undistributed net investment income 62,735
Accumulated net realized loss (Notes 1 and 7) (25,212,054)
Unrealized appreciation (Note 4) 11,962,075
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $71,980,119
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $71,983,637
Class B $ 41,461
Class Y $ 21
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock: Class A shares 9,004,216 $ 7.99
Class B shares 5,190 $ 7.99
Class Y shares 3 $ 7.99
_____________________________________________________________________________________________________________
See accompanying notes to financial statements. <PAGE>
PAGE 14
Financial statements
Statement of operations
IDS Precious Metals Fund, Inc.
Year ended March 31, 1995
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
Income:
Interest $ 216,520
Dividends (net of foreign taxes withheld of $70,423) 1,114,157
_____________________________________________________________________________________________________________
Total income 1,330,677
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and service fee 586,618
Distribution fee - Class A 81,016
Transfer agency fee 208,881
Service fee 3,851
Administrative services fee 1,320
Compensation of directors 1,517
Compensation of officers 719
Custodian fees 73,028
Postage 19,573
Registration fees 76,556
Reports to shareholders 30,374
Audit fees 18,500
Administrative 3,018
Other 9,141
_____________________________________________________________________________________________________________
Total expenses 1,114,112
_____________________________________________________________________________________________________________
Investment income -- net 216,565
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions
(including loss of $4,384 from foreign currency transactions) (Note 3) 2,803,911
Net change in unrealized appreciation or depreciation (6,250,409)
_____________________________________________________________________________________________________________
Net loss on investments and foreign currency (3,446,498)
_____________________________________________________________________________________________________________
Net decrease in net assets resulting from operations $(3,229,933)
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 15
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Precious Metals Fund, Inc.
Year ended March 31,
_____________________________________________________________________________________________________________
Operations and distributions 1995 1994
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 216,565 $ 312,287
Net realized gain on investments and foreign currency 2,803,911 9,988,564
Net change in unrealized appreciation or depreciation (6,250,409) 11,276,891
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations (3,229,933) 21,577,742
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (320,491) (300,226)
_____________________________________________________________________________________________________________
Capital share transactions (Note 5)
_____________________________________________________________________________________________________________
Proceeds from sales or transfers from other funds
Class A shares (Note 2) 87,414,117 127,104,496
Class B shares 39,862 --
Class Y shares 20 --
Reinvestment of distributions at net asset value
Class A shares 314,487 294,640
Payments for redemptions or transfers to other funds
Class A shares (86,077,835) (127,803,264)
_____________________________________________________________________________________________________________
Increase (decrease) in net assets from capital share transactions 1,690,651 (404,128)
_____________________________________________________________________________________________________________
Total increase (decrease) in net assets (1,859,773) 20,873,388
Net assets at beginning of year 73,839,892 52,966,504
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$62,735 and $181,946) $71,980,119 $ 73,839,892
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 16
Notes to financial statements
IDS Precious Metals Fund, Inc.
___________________________________________________________________
1. Summary of significant accounting policies
The fund is registered under the Investment Company Act of 1940 (as
amended) as a non-diversified, open-end management investment
company. 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
which the fund began offering on March 20, 1995, may be subject to
a contingent deferred sales charge and such shares automatically
convert to Class A after eight years. Class Y shares, which the
fund also began offering on March 20, 1995, have no sales charge
and are offered only to qualifying institutional investors.
All classes of shares have identical voting, dividend, liquidation
and other rights, and the same terms and conditions, except that
the level of distribution fee, transfer agency fee and service fee
(class specific expenses) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized
gains or losses on investments are allocated to each class of
shares based upon its relative net assets.
Significant accounting policies followed by the fund are summarized
below:
Valuation of securities
All securities are valued at the close of each business day.
Securities traded on national securities exchanges or included in
national market systems are valued at the last quoted sales price;
securities for which market quotations are not readily available,
including illiquid securities, 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. Investments in metals, if any,
are valued daily using data from independent brokers and pricing
services.
Options transactions
In order to produce incremental earnings, protect gains, and
facilitate buying and selling of securities for investment
purposes, the fund may buy or write options traded on any U.S. or
foreign exchange or in the over-the-counter market where the
completion of the obligation is dependent upon the credit standing
of the other party. The fund also may buy and sell put and call
options and write covered call options on portfolio securities and
may write cash-secured put options. The risk in writing a call
option is that the fund gives up the opportunity of profit if the
market price of the security increases. The risk in writing a put
option is that the fund may incur a loss if the market price of the
security decreases and the option is exercised. The risk in buying <PAGE>
PAGE 17
an option is that the fund pays a premium whether or not the option
is exercised. The fund also has the additional risk of not being
able to enter into a closing transaction if a liquid secondary
market does not exist.
Option contracts are valued daily at the closing prices on their
primary exchanges and unrealized appreciation or depreciation is
recorded. The fund will realize a gain or loss upon expiration or
closing of the option transaction. When an option is exercised, the
proceeds on sales for a written call option, the purchase cost for
a written put option or the cost of a security for a purchased put
or call option is adjusted by the amount of premium received or
paid.
Futures transactions
In order to gain exposure to or protect itself from changes in the
market, the fund may buy and sell stock index futures contracts
traded on any U.S. or foreign exchange. The fund also may buy or
write put and call options on these futures contracts. Risks of
entering into futures contracts and related options include the
possibility that there may be an illiquid market and that a change
in the value of the contract or option may not correlate with
changes in the value of the underlying securities.
Upon entering into a futures contract, the fund is required to
deposit either cash or securities in an amount (initial margin)
equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by the fund each
day. The variation margin payments are equal to the daily changes
in the contract value and are recorded as unrealized gains and
losses. The fund recognizes a realized gain or loss when the
contract is closed or expires.
Foreign currency translations and
foreign currency contracts
Securities and other assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the closing
rate of exchange. Foreign currency amounts related to the purchase
or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in
foreign exchange rates on realized and unrealized security gains or
losses is reflected as a component of such gains or losses. In the
statement of operations, net realized gains or losses from foreign
currency transactions may arise from sales of foreign currency,
closed forward contracts, exchange gains or losses realized between
the trade date and settlement dates on securities transactions, and
other translation gains or losses on dividends, interest income and
foreign withholding taxes.
The fund may enter into forward foreign currency exchange contracts
for hedging purposes and to protect against adverse exchange rate
fluctuation. The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the fund and the
resulting unrealized appreciation or depreciation are determined
using foreign currency exchange rates from an independent pricing
service. The fund is subject to the credit risk that the other
party will not complete the obligations of the contract.<PAGE>
PAGE 18
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 liabilities, as a result of
permanent book-to-tax differences, undistributed net investment
income has been decreases by $15,285 and accumulated net realized
loss has been decreased by $15,744, resulting in a net
reclassification adjustment to decrease paid-in-capital by $459.
Dividends to shareholders
An annual dividend declared and paid by the end of the calendar
year from net investment income is reinvested in additional shares
of the fund at net asset value or payable in cash. Capital gains,
when available, are distributed along with the income dividend.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Dividend income is recognized on the ex-dividend
date or upon receipt of ex-dividend notification in the case of
certain foreign securities. Interest income, including level-yield
amortization of premium and discount is accrued daily.
___________________________________________________________________
2. Expenses and sales charges
Under terms of a prior agreement which ended March 19, 1995, the
fund paid American Express Financial Corporation a fee for managing
its investments, recordkeeping and other specified services. The
fee is a percentage of the fund's average daily net assets
consisting of a group asset charge in reducing percentages from
0.46% to 0.32% annually on the combined net assets of all non-money
market funds in the IDS MUTUAL FUND GROUP and an individual annual
asset charge of 0.46% of average daily net assets. The fee is
adjusted upward or downward by a performance incentive adjustment
based on the fund's average daily net assets over a rolling 12-
month period as measured against the change in the Lipper Gold Fund
Index. The maximum adjustment is 0.12% of the fund's average daily
net assets after deducting 1% from the performance difference. If
the performance difference is less than 1%, the adjustment will be <PAGE>
PAGE 19
zero. The adjustment decreased the fee by $4,582 for the year ended
March 31, 1995.
Also under the terms of a prior agreement, the fund also paid
American Express Financial Advisors Inc. a distribution fee at an
annual rate of $6 per shareholder account and American Express
Financial Corporation a transfer agency fee at an annual rate of
$15 per shareholder account. The transfer agency fee is reduced by
earnings on monies pending shareholder redemptions.
Effective March 20, 1995, when the fund began offering multiple
classes of shares, the fund entered into agreements with American
Express Financial Corporation for managing its portfolio, providing
administrative services and serving as transfer agent as follows:
Under its Investment Management Services Agreement, American
Express Financial Corporation determines which securities will be
purchased, held or sold. The management fee is a percentage of the
fund's average daily net assets in reducing percentages from 0.8%
to 0.675% annually. The performance incentive adjustment remains
unchanged from the prior agreement. Under an Administration
Services Agreement, the fund pays American Express Financial
Corporation for administration and accounting services at a
percentage of the fund's average daily net assets in reducing
percentages from 0.06% to 0.035% annually.
Under a separate Transfer Agency Agreement, American Express
Financial Corporation maintains shareholder accounts and records.
The fund pays American Express Financial Corporation an annual fee
per shareholder account for this services as follows:
- - Class A $15
- - Class B $16
- - Class Y $15
Also effective March 20, 1995, the fund entered into agreements
with American Express Financial Advisors Inc. for distribution and
shareholder servicing -- related services as follows: Under the
Distribution Agreement, the fund pays a distribution fee at an
annual rate of 0.75% of the fund's average daily net assets
attributable to Class B shares for distribution-related services.
Under a Shareholder Service Agreement, the fund pays a fee for
service provided to shareholders by financial advisors and other
servicing agents. The fee is calculated at a rate of 0.175% of the
fund's average daily net assets attributable to Class A and Class B
shares
American Express Financial Corporation will assume and pay any
expenses (except taxes and brokerage commissions) that exceed the
most restrictive applicable state expense limitation.
Sales charges by American Express Financial Advisors for
distributing fund shares were $224,151 for Class A for the year
ended March 31, 1995. The fund also pays custodian fees to American
Express Trust Company, an affiliate of American Express Financial
Corporation.
<PAGE>
PAGE 20
The fund has a retirement plan for its independent directors. Upon
retirement, directors receive monthly payments equal to one-half of
the retainer fee for as many months as they served as directors up
to 120 months. There are no death benefits. The plan is not funded
but the fund recognizes the cost of payments during the time the
directors serve on the board. The retirement plan expense amounted
to $181 for the year ended March 31, 1995.
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $26,573,298 and $24,706,324,
respectively, for the year ended March 31, 1995. Realized gains and
losses are determined on an identified cost basis.
Brokerage commissions paid to brokers affiliated with American
Express Financial Corporation were $600 for the year ended March
31, 1995.
________________________________________________________
4. Foreign currency contracts
At March 31, 1995, the fund had entered into a foreign currency
exchange contract that obligates the fund to deliver currency at a
specified future dates. The unrealized appreciation of $263 on this
contract is included in the accompanying financial statements. The
terms of the open contract are as follows:
<TABLE>
<CAPTION>
U.S. Dollar value U.S. Dollar value
Currency to be as of Currency to be as of
Exchange date delivered March 31, 1995 received March 31, 1995
____________________________________________________________________________________________________
<S> <C> <C> <C> <C>
April 4, 1995 108,164 $108,164 151,694 $108,427
U.S. Dollar Canadian Dollar
/TABLE
<PAGE>
PAGE 21
<TABLE>
<CAPTION>
5. Capital share transactions
Transactions in shares of capital stock for the periods indicated are as follows:
________________________________________________________________________________________
Period ended March 31, 1995 Year ended
3/31/94
Class A Class B* Class Y* Class A
________________________________________________________________________________________
<S> <C> <C> <C> <C>
Sold 11,024,627 5,190 3 16,147,926
Issued for reinvested
distributions 39,672 -- -- 33,825
Redeemed (10,809,372) -- -- (16,262,033)
______________________________________________________________________________________
Net increase (decrease) 254,927 5,190 3 (80,282)
_______________________________________________________________________________________
*Commencement of operations was March 20, 1995 for Class B and March 28, 1995
for Class Y.
</TABLE>
___________________________________________________________________
6. Illiquid securities
At March 31, 1995, investments in securities included issues that
are illiquid. The fund currently limits investments in illiquid
securities to 10% of the net assets, at market value, at the time
of purchase. The aggregate value of such securities at March 31,
1995, was $3,025,559 which represents 4.2% of net assets.
Pursuant to guidelines adopted by the fund's board of directors,
certain unregistered securities are determined to be liquid and are
not included within the 10% limitation specified above.
___________________________________________________________________
7. Capital loss carryover
For federal income tax purposes, the fund has a capital loss
carryover of $25,212,057 at March 31, 1995 that will expire in 1998
through 2001 if not offset by subsequent capital gains. It is
unlikely the board of directors will authorize a distribution of
any realized capital gain until the available capital loss
carryover has been offset or expires.
___________________________________________________________________
8. Lending of portfolio securities
At March 31, 1995, securities valued at $4,748,790 were on loan to
brokers. For collateral, the fund received $892,400 in cash and
U.S. government securities valued at $4,246,701. Income from
securities lending amounted to $14,575 for the year ended March 31,
1995. The risks to the fund of securities lending are that the
borrower may not provide additional collateral when required or
return the securities when due.
<PAGE>
PAGE 22
9. Financial highlights
"Financial highlights" showing per share data and selected
information is presented on page 7 of the prospectus.
<PAGE>
PAGE 23
<TABLE>
<CAPTION>
Investments in securities
IDS Precious Metals Fund, Inc.
March 31, 1995
(Percentages represent value of
investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (89.6%)(c)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Australia (20.4%)
Acacia Resources 1,750,000 (b) $ 3,104,500
Delta Gold 600,000 (b) 1,187,400
Mount Burges Gold Mining 400,000 (b) 55,600
Newcrest Mining 200,000 759,400
Niugini Mining 200,000 (b) 532,200
Plutonic Resoures 700,000 2,873,500
Poseidon Gold 386,703 (d) 705,733
Sons of Gwalia 1,200,000 5,058,000
Wiluna Mines 500,000 (b) 421,500
____________
Total 14,697,833
_____________________________________________________________________________________________________________________________
North/South America (60.5%)
Baja Gold 100,000 (b) 165,470
Barrick Gold 290,000 7,250,000
Cambior 200,000 2,320,140
Canarc Resources 1,000,000 (b) 1,582,700
Carson Gold 720,200 (b) 922,289
Dayton Mining 1,125,000 (b,d) 3,318,300
Diamond Fields Resources 130,000 (b) 2,162,771
Euro-Nevada Mining 50,000 1,330,935
Francisco Gold 200,000 (b) 266,000
Franco Nevada 20,000 1,000,000
Freeport McMoRan Copper & Gold 225,000 4,921,875
Golden Star Resources 100,000 (b) 800,360
Guyanor Resources 20,000 (b) 38,848
Intl Gold Resources 900,000 (b) 2,589,930
Newmont Gold 40,000 1,655,000
Placer Dome 100,000 2,437,500
San Fernando Mining 100,000 (b) 205,040
Santa Elina 500,000 (b) 539,550
Santa Fe Pacific 200,000 (b) 2,525,000
Stillwater Mining 170,454 (b,g) 3,025,559
TVX Gold 686,700 (b) 4,507,979
____________
Total 43,565,246
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.<PAGE>
PAGE 24
South Africa (6.2%)
Driefontein Consolidated ADR 30,000 $ 420,000
Kloof Gold Mining ADR 50,000 581,250
Loraine Gold Mines 250,000 (b) 750,500
Vaalreefs Exploration
Mining ADR 200,000 1,487,500
Western Deep Levels ADR 35,000 1,172,500
____________
Total 4,411,750
_____________________________________________________________________________________________________________________________
United Kingdom (2.5%)
Ashanti Gold 75,000 (d,e) 1,850,625
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $52,104,537) $64,525,454
_____________________________________________________________________________________________________________________________
Preferred stocks & other (2.2%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Carson Gold
Warrants 750,000 (h) --
Dayton Mining
Warrants 292,500 (h) --
Echo Bay Finance
$1.75 Cv Cl D 50,000 1,612,500
_____________________________________________________________________________________________________________________________
Total preferred stocks & other
(Cost: $2,066,000) $ 1,612,500
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 25
<TABLE>
<CAPTION>
Bond (0.1%)(c)
_____________________________________________________________________________________________________________________________
Issuer and Principal Value(a)
coupon rate amount
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Agnico Eagle Mines
(U.S. Dollar)
3.50% Cv 2004 $100,000 $ 79,000
____________________________________________________________________________________________________________________________
Total bond
(Cost: $84,605) $ 79,000
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (8.3%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (7.1%)
Federal Home Loan Bank
Disc Note
04-05-95 6.06% $1,800,000 $ 1,798,790
Federal Home Loan Mtge Corp
Disc Notes
04-21-95 5.95 600,000 598,027
04-25-95 5.94 1,500,000 1,494,090
Federal Natl Mtge Assn
Disc Notes
04-19-95 5.94 200,000 199,409
04-19-95 5.95 1,000,000 997,035
___________
Total 5,087,351
_____________________________________________________________________________________________________________________________
Commercial paper (1.2%)
American General
04-24-95 6.05 900,000 (f) 896,533
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $5,983,884) $ 5,983,884
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $60,239,026)(i) $72,200,838
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 26
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing.
(c) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in the
currency indicated.
(d) Security is partially on loan. See Note 8 to the financial statements.
(e) Represents a security sold under Rule 144A, which is exempt from registration under the Securities
Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the board of
directors.
(f) Commercial paper sold within terms of a private placement memorandum, exempt from regristration under
Section 4(2) of the Securities Act of 1933, as amended, and may be sold only to dealers in that program
or other "accredited investors." This security has been determined to be liquid under guidelines established
by the board of directors.
(g) Identifies issues considered to be illiquid (see Note 6 to the financial statements).
Information concerning such security holdings at March 31, 1995, is as follows:
Security Acquisition Cost
date
_______________________________________________________________________________
Stillwater Mining 09-13-94 $999,997
_______________________________________________________________________________
(h) Presently negligible market value.
(i) At March 31, 1995, the cost of securities for federal income tax purposes was
$60,239,023 and the aggregate gross unrealized appreciation and depreciation
based on that cost was:
Unrealized appreciation $18,019,590
Unrealized depreciation (6,057,775)
___________________________________________________________________________________________
Net unrealized appreciation $11,961,815
___________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 27
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposits (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
seek high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) cornucopia
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher
rated, lower risk bond categories, or the equivalent, and in
government bonds.
(icon of) greek column
<PAGE>
PAGE 28
IDS Selective Fund
Invests in high-quality corporate bonds and other highly rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests primarily in securities issued or guaranteed as to the
timely payment of principal and interest by the U.S. government,
its agencies and instrumentalities. Seeks a high level of current
income and safety of principal consistent with its type of
investments.
(icon of) federal building
IDS Strategy, Short-Term Income Fund
Invests primarily in short-term and intermediate-term bonds and
notes to seek a high level of current income.
(icon of) chess piece
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
<PAGE>
PAGE 29
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the fund but does not guarantee
the market value of the fund's shares.
(icon of) shield with eagle head
Growth and income investments
These funds focus on securities of medium to large, well-
established companies that offer long-term growth of capital and
reasonable income from dividends and interest. Moderate risk.
IDS International Fund
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The fund may invest up to 20% of
its assets in the U.S. market.
(icon of) three flags
IDS Managed Retirement Fund
Invests in a combination of common stocks, fixed-income investments
and money market securities to seek a maximum total return through
a combination of growth of capital and current income.
(icon of) bird in a nest
IDS Equity Select Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of capital and
income.
(icon of) three apple trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by our research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund
Invests in common stock of companies representing many sectors of
the economy. Seeks current income and growth of capital.
(icon of) building with columns
<PAGE>
PAGE 30
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) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to seek high
current income and, secondarily, to benefit from the growth
potential offered by stock investments.
(icon of) four puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
Growth investments
Funds in this group seek capital growth, primarily from common
stocks. They are high risk mutual funds with a potential for high
reward.
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Strategy Aggressive Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess piece
<PAGE>
PAGE 31
IDS Growth Fund
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy. These
companies offer above-average potential for long-term growth.
(icon of) world
IDS New Dimensions Fund
Invests primarily in companies with significant growth potential
due to superiority in technology, marketing or management. The
fund frequently changes its industry mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The fund holds
stocks for the long term with the goal of capital growth.
(icon of) shooting star
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 32
Federal income tax information
IDS Precious Metals 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 dividend listed below was 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 Precious Metals Fund, Inc.
Fiscal year ended March 31, 1995
Class A
Income distribution - taxable as dividend income, 100% qualifying
for deduction by corporations.
Payable date Per share
Dec. 30, 1994 $0.0359
Total distributions $0.0359
<PAGE>
PAGE 33
Quick telephone reference
American Express Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express Infoline
Automated account information (TouchTone(trademark) 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 Precious Metals Fund
IDS Tower 10
Minneapolis, MN 55440-0010
