PAGE
IDS
Precious
Metals
Fund
1996 Semiannual Report
(Picture of icon: cart of precious gems)
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.
Distributed by
American Express
Financial Advisors Inc.
PAGE
(Picture of icon: cart of precious gems)
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.
Contents
From the president 3
From the portfolio manager 3
Ten largest holdings 5
Financial statements 6
Notes to financial statements 9
Investments in securities 25
Board members and officers 27
IDS mutual funds 28
PAGE
To our shareholders
(Picture of: William R. Pearce)
William R. Pearce
President of the Fund
(Picture of: Richard Warden)
Richard Warden
Portfolio manager
From the president
The volatility in the stock market in recent months has put some investors,
even experienced ones, on edge. Although no one can know exactly what will
happen next, history tells us that ups and downs are intrinsic to stock
investing.
But, history also shows that changing strategies with every twist and turn
of the market is an impractical and, worse yet, typically unproductive way
to invest. What matters more, therefore, is how we react to market
volatility. If we take a long-term view and accept the downs with the ups,
we improve our chances of success. For in the investment world, the race
most often goes not to the swift, but to the persistent.
Along the way, of course, you'll still want to review your investment
program to make sure it's on track to achieving your financial goals. Your
American Express financial advisor will help you do just that, and I
suggest you take advantage of his or her services on a regular basis.
William R. Pearce
PAGE
From the portfolio manager
After a spectacular surge early in 1996, gold stocks cooled off
considerably during the past six months, resulting in a comparatively
modest gain by IDS Precious Metals Fund. For investors in the Fund's Class
A shares, that meant a total return (net asset value change and dividends)
of 4.3% for the April through September period, the first half of
the Fund's current fiscal year.
The period began with gold stocks still sprinting ahead, continuing a trend
that had been in place for more than a year. Although gold is
traditionally viewed as a hedge against rising inflation, in this case
inflation remained well-behaved in most major world markets. (Consistent
with the subdued inflation level, the price of gold, which typically
moves in tandem with inflation, fluctuated to only a small degree.)
Instead, the run-up stemmed more from a fundamental factor -- demand for
gold outstripping supply. That condition was joined early in 1996 by
another familiar force in the gold market -- speculation by investors
wanting to get in on what appeared to be a nonstop investment
bandwagon.
Summer slump
But, following powerful upward moves in April and May, the bandwagon
finally broke down in June, sending gold stocks sprawling. In fact, this
Fund, which was up more than 18% for the prior two months, was down nearly
25% in June alone. (So much for the merits of bandwagon-jumping.) The
final three months of the period were, on a relative basis anyway, pretty
calm.
While unpleasant, last summer's sell-off was not a shock to experienced
gold-stock investors, myself included. The speculation level in the market
had clearly become excessive, and excessiveness, sooner or later, gets
corrected in financial markets. Much of the decline was concentrated in
the stocks of small gold-exploration companies, many of them with limited
track records.
The Fund owned several of those issues, which in general had been a big
boon to performance in prior months. As the period progressed, I trimmed
the Fund's exposure to such stocks and reduced major positions in some
stocks that had experienced substantial price increases. There was little
change in the period as to the regional mix of the holdings; nearly
three-fourths remained in stocks of companies located outside the
U.S., namely Canada, Australia and South Africa.
A similar environment
Looking to the rest of the fiscal year, the environment is virtually the
same as it was six months, or even a year ago. Gold demand, led by China,
India and the U.S., remains healthy, while supply, on the other hand,
continues to lag behind. The other influencing factor, inflation, still
has yet to become a serious threat in major global markets. On a
long-term basis, the supply/demand situation supports the case for higher
gold-stock prices, but, as was evident this past six months, substantial
volatility will likely be part of any underlying trend in the gold market.
Richard Warden
PAGE
IDS Precious Metals Fund, Inc.
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
_____________________________
Sept. 30, 1996 $14.35
_____________________________
March 31, 1996 $13.75
_____________________________
Increase $ 0.60
_____________________________
Distributions
April 1, 1996 - Sept. 30, 1996
_____________________________
From income $ --
_____________________________
From capital gains --
_____________________________
Total distributions $ --
_____________________________
Total return* +4.3%**
_____________________________
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
_____________________________
Sept. 30, 1996 $14.18
_____________________________
March 31, 1996 $13.65
_____________________________
Increase $ 0.53
Distributions
April 1, 1996 - Sept. 30, 1996
_____________________________
From income $ --
_____________________________
From capital gains --
_____________________________
Total distributions $ --
_____________________________
Total return* +3.9%**
_____________________________
Class Y
6-month performance
(All figures per share)
Net asset value (NAV)
_____________________________
Sept. 30, 1996 $14.37
_____________________________
March 31, 1996 $13.76
_____________________________
Increase $ 0.61
_____________________________
Distributions
April 1, 1996 - Sept. 30, 1996
_____________________________
From income $ --
_____________________________
From capital gains --
_____________________________
Total distributions $ --
_____________________________
Total return* +4.4%**
_____________________________
*The prospectus discusses the effect of
sales charges, if any, on the various
classes.
**The total return is a hypothetical
investment in the Fund with all
distributions reinvested.
PAGE
IDS Precious Metals Fund, Inc.
The Fund's ten largest holdings
Picture of pie chart: The ten holdings listed here make up 43.47% of
the Fund's net assets
<TABLE>
<CAPTION>
Percent Value
(of Fund's net assets) (as of Sept. 30, 1996)
<S> <C> <C>
Bre-X Mineral 6.77% $7,695,412
This company, directly and through joint ventures, is engaged in the
acquisition, exploration and development of mining properties.
Dayton Mining 5.41 6,146,046
A South American precious metals producer.
Getchell Gold 5.08 5,770,275
Explores for, develops mines and processes gold ore in North Central
Nevada.
Sons of Gwalia 4.83 5,488,214
Australian company engaged in the mining and exploration of gold.
Freeport-McMoRan Copper & Gold 4.81 5,468,750
Involved in the exploration for, development, mining and milling of one
containing copper, gold and silver in Indonesia.
Euro-Nevada Mining 4.78 5,431,489
North American gold royalty company.
Barrick Gold 3.31 3,768,750
This company is engaged in the mining and exploration of gold in the
United States, Chile and Canada.
Ashanti Gold 2.95 3,350,000
This company, through its subsidiaries, is engaged in the exploration,
development and mining of gold.
Stillwater Mining 2.81 3,196,013
This company explores, develops, mines and produces platinum, palladium
and associated metals from the Stillwater Complex located in the
Beartooth Mountains in Southern Montana.
TVX Gold 2.72 3,089,547
A Canadian and South American precious metals producer.
</TABLE>
<PAGE>
PAGE
<TABLE>
<CAPTION>
Statement of assets and liabilities
IDS Precious Metals Fund, Inc.
Sept. 30, 1996
_____________________________________________________________________________________________________________
Assets
______________________________________________________________________________________________________________
<S> <C>
<S> (Unaudited)
Investments in securities, at value (Note 1)
(identified cost $82,428,109) $115,592,964
Cash in bank on demand deposit 980,152
Dividends and accrued interest receivable 957,283
Receivable for investment securities sold 292,308
Unrealized appreciation on foreign currency contracts held, at value (Notes 1 and 4) 11,079
_____________________________________________________________________________________________________________
Total assets 117,833,786
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Payable for investment securities purchased 2,241,436
Unrealized depreciation on foreign contracts held, at value (Notes 1 and 4) 461
Payable upon return of securities loaned (Note 6) 1,800,000
Accrued investment management services fee 17,809
Accrued distribution fee 457
Accrued service fee 1,670
Accrued transfer agency fee 1,856
Accrued administrative services fee 572
Other accrued expenses 124,571
_____________________________________________________________________________________________________________
Total liabilities 4,188,832
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $113,644,954
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value $ 79,259
Additional paid-in capital 76,200,024
Undistributed net investment income 470,899
Accumulated net realized gain (Notes 1 and 6) 3,729,917
Unrealized appreciation of investments and on translation
of assets and liabilities in foreign currencies (Note 4) 33,164,855
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $113,644,954
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $106,339,585
Class B $ 7,303,601
Class Y $ 1,768
Net asset value per share of outstanding capital stock: Class A shares 7,410,879 $ 14.35
Class B shares 514,926 $ 14.18
Class Y shares 123 $ 14.37
See accompanying notes to financial statements. <PAGE>
PAGE
Financial statements
Statement of operations
IDS Precious Metals Fund, Inc.
Six month ended Sept. 30, 1996
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
(Unaudited)
Income:
Interest $1,202,156
Dividends (net of foreign taxes withheld of $10,270) 234,781
_____________________________________________________________________________________________________________
Total income 1,436,937
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 521,154
Distribution fee -- Class B 21,638
Transfer agency fee 107,761
Incremental transfer agency fee -- Class B 571
Service fee
Class A 95,008
Class B 5,047
Administrative services fee 34,900
Compensation of board members 2,767
Compensation of officers 282
Custodian fees 33,580
Postage 11,638
Registration fees 119,725
Audit fees 10,375
Administrative 591
Other 6,422
_____________________________________________________________________________________________________________
Total expenses 971,459
Earnings credits on cash balances (Note 2) (4,721)
_____________________________________________________________________________________________________________
Total net expenses 966,738
__________________________________________________________________________________________________________________
Investment income -- net 470,199
_____________________________________________________________________________________________________________
Realized and unrealized gain -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions
(including gain of $1,087 from foreign currency transactions) (Note 3) 11,372,413
Net change in unrealized appreciation or depreciation of investments and on
translation of assets and liabilities in foreign currencies (7,053,325)
_____________________________________________________________________________________________________________
Net gain on investments and foreign currencies 4,319,088
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $4,789,287
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.<PAGE>
</TABLE>
PAGE
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Precious Metals Fund, Inc.
_____________________________________________________________________________________________________________
Operations and distributions Sept. 30, 1996 March 31, 1996
Six months ended Year ended
(Unaudited)
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income (loss) -- net $ 470,199 $ (504,852)
Net realized gain on investments and foreign currencies 11,372,413 17,556,494
Net change in unrealized appreciation or depreciation of investments
and on translation of assets and liabilities in foreign currencies (7,053,325) 28,256,105
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations 4,789,287 45,307,747
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A -- (63,093)
_____________________________________________________________________________________________________________
Capital share transactions (Note 5)
_____________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 92,018,704 114,090,666
Class B shares 7,210,628 5,261,955
Class Y shares -- 1,000
Reinvestment of distributions at net asset value
Class A shares -- 61,004
Payments for redemptions
Class A shares (91,527,216) (129,488,052)
Class B shares (Note 2) (3,338,187) (2,659,608)
_____________________________________________________________________________________________________________
Increase (decrease) in net assets from capital share transactions 4,363,929 (12,733,035)
_____________________________________________________________________________________________________________
Total increase in net assets 9,153,216 32,511,619
Net assets at beginning of period 104,491,738 71,980,119
_____________________________________________________________________________________________________________
Net assets at end of period
(including undistributed net investment income of
$470,899 and $700) $113,644,954 $104,491,738
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
PAGE
Notes to financial statements
IDS Precious Metals Fund, Inc.
(Unaudited as to Sept. 30, 1996)
______________________________________________________________________________
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 invests primarily in securities of companies engaged in the
exploration, mining, processing or distribution of gold and other
precious metals. Most of these companies will be located outside of the
United States. The Fund offers Class A, Class B and Class Y shares. Class
A shares are sold with a front-end sales charge. Class B shares may be
subject to a contingent deferred sales charge and such automatically
convert to Class A after eight years. Class Y shares, have no sales
charge and are offered only to qualifying institutional investors.
All classes of shares have identical voting, dividend, liquidation and
other rights, and the same terms and conditions, except that the level of
distribution fee, transfer agency fee and service fee (class specific
expenses) differs among classes. Income, expenses (other than class
specific expenses) and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative
net assets.
Significant accounting policies followed by the Fund are summarized below:
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
Valuation of securities
All securities are valued at the close of each business day. Securities
traded on national securities exchanges or included in national market
systems are valued at the last quoted sales price; securities for which
market quotations are not readily available, are valued at fair value
according to methods selected in good faith by the board. 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.
Option transactions
In order to produce incremental earnings, protect gains, and facilitate
buying and selling of securities for investment purposes, the Fund may
buy or write options traded on any U.S. or foreign exchange or in the over-
the-counter market where the completion of the obligation is dependent
upon the credit standing of the other party. The Fund also may buy and sell
put and call options and write covered call options on portfolio
securities and may write cash-secured put options. The risk in writing a call
option is that the Fund gives up the opportunity of profit if the market
price of the security increases. The risk in writing a put option is that
the Fund may incur a loss if the market price of the security decreases
and the option is exercised. The risk in buying an option is that the
Fund pays a premium whether or not the option is exercised. The Fund also
has the additional risk of not being able to enter into a closing
transaction if a liquid secondary market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The
Fund will realize a gain or loss upon expiration or closing of the option
transaction. When an option is exercised, the proceeds on sales for a
written call option, the purchase cost for a written put option or the
cost of a security for a purchased put or call option is adjusted by the
amount of premium received or paid.
Futures transactions
In order to gain exposure to or protect itself from changes in the
market, the Fund may buy and sell stock index futures contracts traded
on any U.S. or foreign exchange. The Fund also may buy or write put and
call options on these futures contracts. Risks of entering into futures
contracts and related options include the possibility that there may be an
illiquid market and that a change in the value of the contract or option
may not correlate with changes in the value of the underlying securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin)
are made or received by the Fund each day. The variation margin payments
are equal to the daily changes in the contract value and are recorded as
unrealized gains and losses. The Fund recognizes a realized gain or loss
when the contract is closed or expires.
Foreign currency translations and
foreign currency contracts
Securities and other assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the closing rate of
exchange. Foreign currency amounts related to the purchase or sale of
securities and income and expenses are translated at the exchange rate on the
transaction date. The effect of changes in foreign exchange rates on
realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net
realized gains or losses from foreign currency transactions may arise from
sales of foreign currency, closed forward contracts, exchange gains or
losses realized between the trade date and settlement dates on securities
transactions, and other translation gains or losses on dividends, interest
income and foreign withholding taxes.
<PAGE>
Federal taxes
Since the Fund's policy is to comply with all sections of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders, no provision for
income or excise taxes is required.
Net investment income (loss) and net realized gains (losses) may differ
for financial statement and tax purposes primarily because of the
deferral of losses on certain futures contracts, the recognition of
certain foreign currency gains (losses) as ordinary income (loss) for tax
purposes and losses deferred due to "wash sale" transactions. The
character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gains
(losses) were recorded by the Fund.
Dividends to shareholders
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.
<PAGE>
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
Effective March 20, 1995, the Fund entered into agreements with American
Express Financial Corporation (AEFC) for managing its portfolio,
providing administrative services and serving as transfer agent. Under
its Investment Management Services Agreement, AEFC determines which
securities will be purchased, held or sold. The management fee is a
percentage of the Fund's average daily net assets in reducing percentages
from 0.8% to 0.675% annually. 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 zero. The adjustment increased the fee by $55,825 for the six
months ended Sept. 30, 1996.
Under an Administrative Services Agreement, the Fund pays AEFC for
administration and accounting services at a percentage of the Fund's
average daily net assets in reducing percentages from 0.06% to 0.035%
annually.
Under a separate Transfer Agency Agreement, AEFC maintains shareholder
accounts and records. The Fund pays AEFC an annual fee per shareholder
account for this service as follows:
o Class A $15
o Class B $16
o Class Y $15
Also effective March 20, 1995, the Fund entered into agreements with
American Express Financial Advisors Inc. for distribution and shareholder
servicing-related services. Under a Plan and Agreement of Distribution,
the Fund pays a distribution fee at an annual rate of 0.75% of the Fund's
average daily net assets attributable to Class B shares for distribution-
related services.
Under a Shareholder Service Agreement, the Fund pays a fee for service
provided to shareholders by financial advisors and other servicing agents.
The fee is calculated at a rate of 0.175% of the Fund's average daily net
assets attributable to Class A and Class B shares.
AEFC will assume and pay any expenses (except taxes and brokerage
commissions) that exceed the most restrictive applicable state expense
limitation.
Sales charges received by American Express Financial Advisors for
distributing Fund shares were $299,705 for Class A and $5,809 for Class B
for the six months ended Sept. 30, 1996. The Fund also pays custodian
fees to American Express Trust Company, an affiliate of AEFC.
During the six months ended Sept. 30, 1996, the Fund's custodian and
transfer agency fees were reduced by $4,721 as a result of earnings
credits from overnight cash balances.
<PAGE>
Prior to April 30, 1996, the Fund had a retirement plan for its
independent board members. The plan was terminated April 30, 1996.
The total liability for the plan is $5,575, which will be paid out at some
future date.
______________________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $49,827,741 and $44,029,441,
respectively, for the six months ended Sept. 30, 1996. Realized gains and
losses are determined on an identified cost basis.
Brokerage commissions paid to brokers affiliated with AEFC were $3,400
for the six months ended Sept. 30, 1996.
______________________________________________________________________________
4. Foreign currency contracts
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.
At Sept. 30, 1996, the Fund had entered into three foreign currency
exchange contracts that obligate the Fund to deliver currencies at
specified future dates. The unrealized appreciation and/or depreciation
on these contracts are included in the accompanying financial statements.
The terms of the open contract are as follows:
<TABLE>
<CAPTION>
Exchange date Currency to be Currency to be Unrealized Unrealized
delivered received appreciation depreciation
______________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Oct. 1, 1996 1,873,247 2,565,000 $10,220 $ --
U.S. Dollar Canadian Dollar
Oct. 2, 1996 398,080 291,848 -- 461
Canadian Dollar U.S. Dollar
Oct. 15, 1996 357,110 487,500 859 --
U.S. Dollar Canadian Dollar
-------- --------
$11,079 $ 461
/TABLE
<PAGE>
5. Capital share transactions
Transactions in shares of capital stock for the periods indicated are as
follows:
<TABLE>
<CAPTION>
Six months ended Sept. 30, 1996
Class A Class B Class Y
_____________________________________________________________________________
<S> <C> <C> <C>
Sold 6,362,333 497,823 --
Issued for reinvested -- -- --
distributions
Redeemed (6,302,422) (230,484) --
____________________________________________________________________________
Net increase 59,911 267,339 --
____________________________________________________________________________
Year ended March 31, 1996
Class A Class B* Class Y*
_____________________________________________________________________________
Sold 11,145,976 478,047 120
Issued for reinvested 6,147 -- --
distributions
Redeemed (12,805,371) (235,650) --
_____________________________________________________________________________
Net increase (decrease) (1,653,248) 242,397 120
_____________________________________________________________________________
*Inception date was March 20, 1995.
</TABLE>
____________________________________________________________________________
6. Lending of portfolio securities
At Sept. 30, 1996, securities valued at $1,353,600 were on loan to
brokers. For collateral, the Fund received $1,800,000 in cash. Income
from securities lending amounted to $9,229 for the six months ended
Sept. 30, 1996. The risks to the Fund of securities lending are that the
borrower may not provide additional collateral when required or return
the securities when due.
______________________________________________________________________________
7. Financial highlights
The tables below show certain important financial information for
evaluating the Fund's results.
PAGE
<TABLE>
<CAPTION>
IDS Precious Metals Fund, Inc.
Performance
Financial highlights
Fiscal period ended March 31,
Per share income and capital changes*
Class A
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996** 1996 1995199419931992 1991 1990 1989 1988
Net asset value, $13.75 $7.99 $8.44 $6.00 $5.15 $5.40 $6.98 $6.76 $7.06 $8.57
beginning of period
Income from investment operations:
Net investment income (loss) .06 (.05) .04 .04 .04 .06 .12 .21 .12 .12
Net gains (losses) .54 5.82 (.45) 2.44 .84 (.24) (1.57) .10 (.30) (.73)
(both realized
and unrealized)
Total from investment .60 5.77 (.41) 2.48 .88 (.18) (1.45) .31 (.18) (.61)
operations
Less distributions:
Dividends from net -- (.01) (.04) (.04) (.03) (.07) (.13) (.09) (.12) (.11)
investment income
Distributions from -- -- -- -- -- -- -- -- -- (.79)
realized gains
Total distributions -- (.01) (.04) (.04) (.03) (.07) (.13) (.09) (.12) (.90)
Net asset value, $14.35 $13.75 $7.99 $8.44 $6.00 $5.15 $5.40 $6.98 $6.76 $7.06
end of period
Ratios/supplemental data
Class A
1996** 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net assets, end of $106 $101 $72 $74 $53 $53 $68 $91 $103 $118
period (in millions)
Ratio of expenses to 1.63%+ 1.65% 1.61% .51% 1.79% 1.59% 1.48% 1.46% 1.33% 1.11%
average daily net assets++
Ratio of net income (loss) .83%+ (.64%) .31% .46% .86% .64% 1.95% 2.75% 1.60% 1.44%
to average daily net assets
Portfolio turnover rate 42% 50% 37% 49% 19% 21% 54% 76% 49% 77%
(excluding short-term
securities)
Average brokerage
commission rate+++ $0.0232 -- -- -- -- -- -- -- -- --
Total return*** 4.3% 72.1% (4.9%) 41.3% 17.2% (3.3%) (20.8%) 4.4% (2.5%) (8.1%)
*For a share outstanding throughout the year. Rounded to the nearest cent.
**Six months ended Sept. 30, 1996 (Unaudited).
***Total return does not reflect payment of a sales charge.
+Adjusted to an annual basis.
++Effective fiscal year 1996, expense ratio is based on total expenses of
the Fund before reduction of earnings credits on cash balances.
+++Effective fiscal year 1997, the Fund is required to disclose an average
brokerage commission rate. The rate is calculated by dividing the total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period by the total number of related shares purchased
and sold.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
IDS Precious Metals Fund, Inc.
Performance
Financial highlights
Fiscal period ended March 31,
Per share income and capital changes*
Class B Class Y
<S> <C> <C> <C> <C> <C> <C>
1996*** 1996 1995** 1996*** 1996 1995**
Net asset value, $13.65 $7.99 $7.72 $13.76 $7.99 $7.62
beginning of period
Income from investment operations:
Net investment income
(loss) (.01) (.09) .01 .07 (.04) --
Net gains (both realized .54 5.75 .26 .54 5.81 .37
and unrealized)
Total from investment .53 5.66 .27 .61 5.77 .37
operations
Net asset value, $14.18 $13.65 $7.99 $14.37 $13.76 $7.99
end of period
Ratios/supplemental data
Class B Class Y
1996*** 1996 1995** 1996*** 1996 1995**
Net assets, end of $7 $3 $-- $-- $-- $--
period (in millions)
Ratio of expenses to 2.44%# 2.31% .08%# 1.35%# 1.39% --%+
average daily net assets++
Ratio of net income to .29%# (1.18%) .28%# 1.14%# (.43%) --%+
average daily net assets
Portfolio turnover rate 42% 50% 37% 42% 50% 37%
(excluding short-term
securities)
Total return+++ 3.9% 70.8% 3.5% 4.4% 72.3% 4.9%
Average brokerage
commission rate## $0.0232 -- -- $0.0232 -- --
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Inception date was March 20, 1995 for Class B and Class Y.
***Six months ended Sept. 30, 1996 (Unaudited).
+Ratio of expenses and net investment income to average daily net assets is
not presented for class Y as only three shares were outstanding during the
period.
++Effective fiscal year 1996, expense ratio is based on total expenses of the Fund
before reduction of earnings credits on cash balances.
+++Total return does not reflect payment of a sales charge.
#Adjusted to an annual basis.
##Effective fiscal year 1997, the Fund is required to disclose an average brokerage
commission rate. The rate is calculated by dividing the total brokerage
commissions paid on applicable purchases and sales of portfolio securities for
the period by the total number of related shares purchased and sold.
</TABLE>
PAGE
<TABLE>
<CAPTION>
Investments in securities of unaffiliated issuers
IDS Precious Metals, Inc. (Percentages represent value of
Sept. 30, 1996 (Unaudited) investments compared to net assets)
Investments in securities of unaffiliated issuers
Common stocks (91.2%)(c)
Issuer Shares Value(a)
<S> <C> <C>
Australia (12.4%)
Acacia Resources 1,500,000 (b) 2,767,864
Delta Gold 125,000 (b) 277,183
Golden Shamrock Mines 3,583,300 (b,d) 2,695,903
Normandy Mining 314,000 427,716
Plutonic Resources 600,000 2,423,367
Sons of Gwalia 900,000 5,488,214
Total 14,080,247
North/South America (71.5%)
America Mineral Fields 90,000 (b) 495,649
Argosy Mining 1,348,200 (b) 2,425,429
Argosy Mining 151,800 (b,e) 268,640
Arizona Star Resource 100,000 (b) 719,609
Asia Pacific Resources 175,000 (b) 1,285,016
Barrick Gold 150,000 3,768,750
Bema Gold 50,000 (b,e) 356,133
Bre-X Minerals 400,000 (b) 7,695,412
Cambiex Exploration 380,000 (b) 348,787
Cambior 212,700 2,920,652
Canarc Resources 900,000 (b) 1,301,922
Carson Gold 400,000 (b) 754,852
Dayak Goldfield 500,000 (b,e) 624,150
Dayton Mining 900,000 (b) 6,146,046
Eldorado 100,000 (b) 605,793
Euro-Nevada Mining 12,500 (e) 362,099
Euro-Nevada Mining 187,500 5,431,489
First Dynasty Mines 200,000 (b) 638,836
Francisco Gold 208,500 (b) 2,005,616
Franco Nevada 78,700 2,950,130
Franco Nevada 51,300 (e) 1,923,020
Freeport-McMoRan Copper & Gold 175,000 5,468,750
Geomaque Exploration 300,000 (b) 704,922
Getchell Gold 121,800 (b) 5,770,275
Goldcorp 210,000 (b) 1,850,423
Golden Knight Resources 300,000 (b) 1,872,450
Granges 150,000 (b) 226,896
Greenstone Resources 100,000 (b) 1,464,919
Java Gold 500,000 (b) 715,935
Kinross Gold 50,000 (b) 341,447
Meridian Gold 742,000 (b) 1,689,022
Metallica Resources 300,000 (b) 1,046,370
Nevsun Resources 250,000 (b) 1,835,737
Oliver Gold 350,000 (b,e) 1,657,670
Pangea Goldfields 155,000 (b,e) 921,907
Romarco Minerals 500,000 (b) 2,459,885
Stillwater Mining 170,454 (b) 3,196,013
Tiomin Resources 225,000 (b) 421,301
Triton Mining 132,200 (b) 519,344
TVI Pacific 476,000 (b,e) 611,665
TVI Pacific 200,000 (b) 257,002
TVX Gold 450,000 (b) 3,089,547
Valerie Gold 80,800 (b) 664,507
Williams Resources 1,000,000 (b,e) 1,138,150
Williams Resources 300,000 (b) 341,448
Total 81,293,615
South Africa (3.6%)
Driefontein
Consolidated ADR 100,000 1,039,844
Goldfields of South Africa 10,000 286,250
Loraine Gold Mines 250,000 (b) 826,612
Vaalreef Exploration & Mining ADR 100,000 800,000
Western Area Gold ADR 76,611 1,106,076
Total 4,058,782
United Kingdom (3.7%)
Ashanti Gold 200,000 3,350,000
Bayrchik Gold 200,000 (b) 853,007
Total 4,203,007
Total common stocks
(Cost: $67,762,057) 103,635,651
Other (4.0%)(c)
Issuer Shares Value(a)
America Mineral Fields
Warrants 45,000 (g) $ --
Argosy Mining
Warrants 250,000 (g) --
Banro Resource
with warrants 80,000 (b) 587,440
Campbell Resources
Warrants 250,000 91,785
Canarc Resources
Warrants 230,000 (g) --
Golden Bear Minerals
Special warrants 500,000 910,550
Granges
Warrants 75,000 (g) --
Nevsun Resources
Special warrants 250,000 1,835,738
Oliver Gold
Warrants 225,000 (e) 660,866
Steppe Gold
Special warrants 300,000 (e) 462,600
Tombstone Exploration
Warrants 350,000 (g) --
Valerie Gold
Warrants 5,500 (g) --
Total other
(Cost: $7,514,054) $4,548,979
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (5.6%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
<S> <C> <C> <C>
U.S. government agency (1.7%)
Federal Home Loan Mtge Corp
Disc Nt
10-10-96 5.28% $1,900,000 1,897,502
Commercial paper (3.9% )
Dean Witter
10-30-96 5.33 3,500,000 3,485,029
Mobil Australia Finance
10-16-96 5.34 1,000,000 (f) 997,783
Total 4,482,812
Total short-term securities
(Cost: $6,380,314) $6,380,314
Total investment in securities of unaffiliated issuers
(Cost: $81,656,425) $114,564,944
</TABLE>
<TABLE>
<CAPTION>
Investments in securities of affiliated issuer (h)
Common stocks (0.9%)
Issuer Shares Value(a)
<S> <C> <C>
Tombstone Exploration 700,000 (b) $ 1,028,020
Total investments in securities of affiliated issuers
(Cost: $771,684) $ 1,028,020
Total investments in securities
(Cost: $82,428,109)(i) $115,592,964
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(d) Security is partially on loan. See Note 7 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.
(f) Commercial paper sold within terms of a private placement
memorandum, exempt from registration under Section 4(2) of the
Securities Act of 1933, as amended, and may be sold only to dealers in
that program or other "accredited investors." This security has been
determined to be liquid under guidelines established by the board.
(g) Presently negligible market value.
(h) Investments representing 5% or more of the outstanding voting
securities of the issuer. Transactions with companies that are or were
affiliates during the period ended Sept. 30, 1996 are as follows:
</TABLE>
<TABLE>
<CAPTION>
Issuer Beginning Purchase Sales Ending Dividend
cost cost cost cost income
<S> <C> <C> <C> <C> <C>
Tombstone Exploration $ -- $771,684 -- $771,684 --
(i) At Sept. 30, 1996, the cost of securities for federal income tax
purposes was approximately $82,428,000 and the approximate
aggregate gross unrealized appreciation and depreciation based on
that cost was:
Unrealized appreciation $37,495,000
Unrealized depreciation (4,330,000)
Net unrealized appreciation $33,165,000
</TABLE>
PAGE
Board members and officers
Board members and officers of the Fund
_____________________________________________________________________
President and interested board member
William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.
_____________________________________________________________________
Independent board members
H. Brewster Atwater Jr.
Former chairman and chief executive officer, General Mills, Inc.
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for
Public Policy Research.
Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
Melvin R. Laird
Senior counsellor for national and international affairs,
The Readers's Digest Association, Inc.
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
C. Angus Wurtele
Chairman of the board, The Valspar Corporation.
_____________________________________________________________________
Interested board members who are officers and/or employees of AEFC
William H. Dudley
Executive vice president, AEFC.
David R. Hubers
President and chief executive officer, AEFC.
John R. Thomas
Senior vice president, AEFC.
_____________________________________________________________________
Officers who also are officers and/or employees of AEFC
Peter J. Anderson
Vice President of all funds in the IDS MUTUAL FUND GROUP.
Melinda S. Urion
Treasurer of all funds in the IDS MUTUAL FUND GROUP.
___________________________________________________________________
Other officer
Leslie L. Ogg
Vice president, general counsel and secretary of all funds in
the IDS MUTUAL FUND GROUP.
<PAGE>
PAGE
IDS mutual funds
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 globe
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 of globes
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.
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) 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) flower
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 and 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) spinning toy
IDS Stock Fund
Invests in a Portfolio comprised primarily of common stocks of companies
representing many sectors of the economy. Seeks current income and growth
of capital.
(icon of) building with columns
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) three 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 in high-yielding common stocks
to seek high current income and, secondarily, to benefit from the growth
potential offered by stock investments.
(icon of) two puzzle pieces
IDS Mutual
Invests in a 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 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) two 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
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
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
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
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 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
Quick telephone reference
American Express Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota:
800-437-3133
Mpls./St. Paul area:
671-3800
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express Infoline
Automated account information (TouchTone- phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota:
800-272-4445
Mpls./St. Paul area:
671-1630
PAGE
AMERICAN EXPRESS FINANCIAL ADVISORS
IDS Precious Metals Fund
IDS Tower 10
Minneapolis, MN 55440-0010
