<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 18 (File No. 2-97636) X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 18 (File No. 811-4299) X
IDS LIFE SERIES FUND, INC.
___________________________________________________________________
IDS Tower 10, Minneapolis, Minnesota 55440-0010
___________________________________________________________________
(612) 671-3678
___________________________________________________________________
Mary Ellyn Minenko - IDS Tower 10, Minneapolis, MN 55440-0010
___________________________________________________________________
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check
appropriate box)
_____immediately upon filing pursuant to paragraph (b)
X on June 29, 1995 pursuant to paragraph (b) of rule 485
_____60 days after filing pursuant to paragraph (a)(i)
on (date) pursuant to paragraph (a)(i) of rule 485
_____75 days after filing pursuant to paragraph (a)(2)
_____on (date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
_____this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Registrant filed its 24f-2 Notice for the fiscal year ending
April 30, 1994 on or about June 22, 1995.
<PAGE>
PAGE 2
Cross reference sheet for the IDS Life Series Fund showing location
in the prospectus and Statement of Additional Information of the
information called for by the items enumerated in Part A and Part B
of Form N-1A.
Negative answers omitted from Part A or Part B are so indicated.
<TABLE>
<CAPTION>
PART A
Item No. Location in Prospectus
<C> <C>
1 Cover page of prospectus
2 The fund in brief; Sales charge and fund expenses
3(a) Financial highlights
(b) NA
(c) Performance
(d) Financial Highlights
4(a) The fund in brief; Investment policies and risks; How the fund is organized
(b) Investment policies and risks
(c) Investment policies and risks
5(a) How the fund is organized; Directors and officers; Directors and officers of the fund (listing)
(b) How the fund is organized; About American Express Financial Corporation
(b)(i) About American Express Financial Corporation - General Information
(b)(ii) Investment manager and transfer agent
(b)(iii) Investment manager and transfer agent
(c) Portfolio manager
(d) The fund in brief
(e) How the fund is organized: Investment manager and transfer agent
(f) How the fund is organized: Distributor
(g) How the fund is organized: Investment manager and transfer agent
5A(a) *
(b) *
6(a) How the fund is organized: Shares; Voting rights
(b) NA
(c) NA
(d) Voting rights
(e) Cover page; Special shareholder services
(f) Distributions and taxes: Dividends and capital gain distributions; reinvestments
(g) Distributions and taxes: Taxes
(h) NA
7(a) How the fund is organized: Distributor
(b) Performance: Key terms; Valuing assets
(c) How to buy, exchange or sell shares
(d) How to buy, exchange or sell shares: Three ways to invest
(e) NA
(f) Distributor
8(a) How to buy, exchange or sell shares: How to sell shares
(b) NA
(c) How to buy, exchange or sell shares: Three ways to invest - "If your account falls below $300..."
(d) How to buy, exchange or sell shares: Redemption policies - "Important..."
9 None
<PAGE>
PAGE 3
PART B
Item No. Section in Statement of Additional Information
10 Cover page of SAI
11 Table of contents
12 NA
13(a) Additional Investment Policies; all appendices except Dollar Cost Averaging
(b) Additional Investment Policies
(c) "Unless changed by the board of directors, the fund may..." in Additional Investment Policies
(d) Portfolio Turnover, last paragraph of Portfolio Transactions
14(a) Directors and officers of the fund;** Directors and officers (SAI & prospectus)
(b) Directors and Officers
(c) Directors and Officers (last paragraph)
15(a) NA
(b) NA
(c) Directors and Officers (last paragraph)
16(a)(i) How the fund is organized; About American Express Financial Corporation**
(a)(ii) Investment Management and Services Agreement; Supplemental Agreement of Distribution
(a)(iii) Investment Management and Services Agreement: Group Asset Charge
(b) Investment Management and Services Agreement; Plan and Supplemental Agreement of Distribution
(c) NA
(d) None
(e) NA
(f) Distribution Agreement; Plan and Supplemental Agreement of Distribution
(g) NA
(h) Custodian; Independent Auditors
(i) Transfer Agency Agreement; Custodian
17(a) Portfolio Transactions
(b) Brokerage Commissions Paid to Brokers Affiliated with American Express Financial Corporation
(c) Portfolio Transactions
(d) Portfolio Transactions
(e) Portfolio Transactions
18(a) How the fund is organized: Shares and Voting rights**
(b) NA
19(a) Investing in the Fund
(b) Valuing Fund Shares; Investing in the Fund
(c) NA
20 Taxes
21(a) Distribution Agreement
(b) Distribution Agreement - the table
(c) NA
22(a) Performance Information: Calculation of Yield (money market funds) (NA for all other funds).
(b) Performance Information: Calculation of Total Return and/or Yield (all other funds) (NA for money market funds)
23 Financial Statements
* Designates information is located in annual report.
**Designates location in prospectus.
</TABLE>
<PAGE>
PAGE 4
IDS Life Series Fund
Prospectus
June 29, 1995
IDS Life Series Fund, Inc. (the fund) is a series mutual fund with
six portfolios, each with a different investment objective.
Equity Portfolio is a stock portfolio.
Income Portfolio is a bond portfolio.
Money Market Portfolio is a money market portfolio.
An investment in Money Market Portfolio is neither insured nor
guaranteed by the U.S. Government and there can be no assurance
that the portfolio will be able to maintain a stable net asset
value of $1 per share.
Managed Portfolio is a managed portfolio.
Government Securities Portfolio is a government securities
portfolio.
International Equity Portfolio is an international stock portfolio.
This prospectus contains information about the fund that you should
know before investing. Read it along with your variable life
insurance policy prospectus before you invest and keep them for
future reference.
International Equity Portfolio is not available for investment
under all life insurance policies. Please see the prospectus for
your policy to see if it is available.
Additional facts about the fund are in a Statement of Additional
Information (SAI), filed with the Securities and Exchange
Commission (SEC). The SAI, dated June 29, 1995, is incorporated
here by reference. For a free copy, contact IDS Life Series Fund,
Inc.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC
OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
IDS LIFE IS NOT A FINANCIAL INSTITUTION, AND THE SECURITIES IT
OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY FINANCIAL INSTITUTION NOR ARE THEY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR
ANY OTHER AGENCY.
<PAGE>
PAGE 5
IDS Life Series Fund, Inc.
IDS Tower 10
Minneapolis, MN 55440-0010
612-671-3733, or TTY: 800-285-8846
New York Service: 518-869-8613
<PAGE>
PAGE 6
Table of contents
The fund in brief
Goals and types of portfolio investments
Manager and distributor
Variable accounts
Sales charge
Expenses
Performance
Financial highlights
Total returns
Yield calculations
Key terms
Investment policies and risks
Facts about investments and their risks
Alternative investment option
Valuing assets
How to invest, transfer or redeem shares
How to invest
How to transfer among subaccounts
Redeeming shares
Distributions and taxes
Dividend and capital gain distributions
Taxes
How the fund is organized
Shares
Voting rights
Shareholder meetings
Portfolio managers
Directors and officers
Investment manager
Investment advisory agreement
About IDS Life and American Express Financial Corporation
General information
<PAGE>
PAGE 7
The fund in brief
Goals and types of portfolio investments
IDS Life Series Fund is a series mutual fund. It has six
portfolios whose goals and types of investments are as follows:
Equity Portfolio's goal is capital appreciation. The portfolio
invests primarily in U.S. common stocks and securities convertible
into common stock.
Income Portfolio's goal is to maximize current income while
attempting to conserve the value of the investment and to continue
the high level of income for the longest period of time. The
portfolio invests primarily in corporate bonds of the four highest
ratings.
Money Market Portfolio's goal is to provide maximum current income
consistent with liquidity and conservation of capital. The
portfolio invests primarily in high-quality, short-term debt
securities.
Managed Portfolio's goal is to maximize total investment return
through a combination of capital appreciation and current income.
The portfolio invests in common and preferred stocks, convertible
securities, debt securities and money market instruments.
Government Securities Portfolio's goal is to provide a high level
of current income and safety of principal. The portfolio invests
in debt obligations issued or guaranteed by U.S. governmental
units.
International Equity Portfolio's goal is capital appreciation and
it invests primarily in common stocks of foreign issuers.
Because any investment involves risk, achieving these goals cannot
be guaranteed. Only the shareholders can change the goals.
Manager and distributor
The fund is managed by IDS Life Insurance Company (IDS Life), a
subsidiary of American Express Financial Corporation. American
Express Financial Corporation has an agreement with IDS Life to
furnish investment advice for funds managed by IDS Life. IDS Life
and IDS Life Insurance Company of New York (IDS Life of New York)
buy fund shares for their variable accounts used in connection with
their variable life insurance policies. In the future, the fund
may offer shares to the owners of other variable life and variable
annuity contracts issued by IDS Life or by IDS Life of New York.
Variable accounts
You may not buy (nor will you own) shares of the fund directly.
You invest by buying a variable life insurance policy from IDS Life
or IDS Life of New York and allocating your premium payments among
different subaccounts of the variable accounts that invest in these
portfolios.<PAGE>
PAGE 8
Sales charge
Cost of insurance charges, premium expense charges, surrender
charges, mortality and expense risk fees and other charges under
your policy are described in the variable life insurance policy
prospectus. There is no sales charge for the sale or redemption of
fund shares.
Expenses
The fund pays IDS Life a fee for managing its investment portfolios
and for certain administrative services. The fund also pays
certain nonadvisory expenses. See "Investment manager" under "How
the fund is organized."
<PAGE>
PAGE 9
Performance
Financial highlights
<TABLE>
<CAPTION>
Equity Portfolio
Financial highlights
The tables below show certain important financial information for evaluating each portfolio's results.
Fiscal period ended April 30,
Per share income and capital changes*
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 18.10 $ 16.87 $ 16.01 $ 13.94 $ 12.77 $ 12.16 $ 10.79 $ 12.05 $ 9.94 $10.00
Income (loss from
investment operations:
Net investment income .10 .06 .03 .03 .13 .35 .36 .15 .16 .13
Net gains (losses) on
securities (both realized
and unrealized 2.40 3.26 1.40 2.90 2.09 .61 1.37 (1.13) 2.17 (.06)
Total from investment
operations 2.50 3.32 1.43 2.93 2.22 .96 1.73 (0.98) 2.33 .07
Less distributions:
Dividends from net
investment income (.10) (.06) (.03) (.03) (.13) (.35) (.36) (.15) (.16) (.13)
Distributions from
realized gains (.45) (2.03) (.54) (.83) (.92) - - (.13) (.06) -
Total distributions (.55) (2.09) (.57) (.86) (1.05) (.35) (.36) (.28) (.22) (.13)
Net asset value,
end of period $ 20.05 $ 18.10 $ 16.87 $ 16.01 $ 13.94 $ 12.77 $ 12.16 $ 10.79 $12.05 $ 9.94
Ratios/supplemental data
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
Net assets, end of period
(in thousands) $241,032 $151,860 $87,742 $55,265 $33,933 $16,355 $11,620 $ 7,247 $2,984 $ 211
Ratio of expenses to average
daily net assets .77% .75% .79% .80% .80%+ .80%+ .80% 1.10% 1.23% .95%++
Ratio of net income to average
daily net assets .56% .33% .21% .17% 1.03% 2.61% 3.32% 1.21% 1.40% 3.83%++
Portfolio turnover rate
(excluding short-term
securities) 144% 109% 81% 52% 79% 190% 48% 57% 57% 15%
Total return+++ 13.87% 19.72% 8.92% 21.06% 18.55% 7.84% 16.18% (8.04)% 23.66% .69%***
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Commencement of operations. Period from Jan. 20, 1986 to April 30, 1986.
*** For the period from Jan. 20, 1986 to April 30, 1986, the annualized total return is 2.50%.
+ Commencing on May 1, 1989, IDS Life voluntarily limited total operating expenses to 0.8% of average daily net assets. Had IDS
Life not done so, the expenses per share and the ratio of expenses to average daily net assets would have been $.11 and 0.86%
and $.13 and 0.90% for the years ended April 30, 1991 and 1990, respectively.
++ Adjusted to an annual basis.
+++ Total return does not reflect the expenses that apply to the subaccounts or the policies.
</TABLE>
<PAGE>
PAGE 10
<TABLE>
<CAPTION>
Income Portfolio
Financial highlights (continued)
Fiscal period ended April 30,
Per share income and capital changes*
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 9.71 $ 10.19 $ 9.40 $ 9.19 $ 8.55 $ 8.93 $ 9.05 $ 9.42 $10.35 $10.00
Income (loss) from
investment operations:
Net investment income .69 .71 .76 .73 .75 .75 .70 .68 .74 .35
Net gains (losses) on
securities (both realized
and unrealized) (.07) (.48) .80 .21 .64 (.40) (.12) (.37) (.93) .35
Total from investment
operations .62 .23 1.56 .94 1.39 .35 .58 .31 (.19) .70
Less distributions:
Dividends from net
investment income (.69) (.71) (.77) (.73) (.75) (.73) (.70) (.68) (.74) (.35)
Net asset value,
end of period $ 9.64 $ 9.71 $ 10.19 $ 9.40 $ 9.19 $ 8.55 $ 8.93 $ 9.05 $ 9.42 $10.35
Ratios/supplemental data
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
Net assets, end of period
(in thousands) $37,823 $33,770 $22,641 $16,306 $11,949 $8,831 $6,203 $4,456 $2,397 $ 215
Ratio of expenses to average
daily net assets .80% .80% .80%+ 80%+ .80%+ .80%+ 1.11% 1.13% 1.72% .68%++
Ratio of net income to
average daily net assets 7.23% 6.83% 7.66% 7.86% 8.41% 8.02% 7.87% 7.50% 6.27% 13.99%++
Portfolio turnover rate
(excluding short-term
securities) 55% 60% 47% 75% 55% 60% 99% 64% 38% -
Total return+++ 6.67% 2.12% 17.17% 10.60% 16.77% 3.75% 6.70% 3.59% (1.58)% 6.98%***
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Commencement of operations. Period from Jan. 20, 1986 to April 30, 1986.
*** For the period from Jan. 20, 1986 to April 30, 1986, the annualized total return is 25.49%.
+ Commencing on May 1, 1989, IDS Life voluntarily limited total operating expenses to 0.8% of average daily net assets. Had IDS
Life not done so, the ratio of expenses to average daily net assets would have been 0.83%, 0.88%, 0.93% and 0.96% for the years
ended April 30, 1993, 1992, 1991 and 1990, respectively.
++ Adjusted to an annual basis.
+++ Total return does not reflect the expenses that apply to the subaccounts or the policies.
</TABLE>
<PAGE>
PAGE 11
<TABLE>
<CAPTION>
Money Market Portfolio
Financial highlights (continued)
Fiscal period ended April 30,
Per share income and capital changes*
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
Income from
investment operations:
Net investment income .04 .03 .03 .05 .07 .08 .07 .06 .05 .02
Total from investment
operations .04 .03 .03 .05 .07 .08 .07 .06 .05 .02
Less distributions:
Dividends from net
investment income (.04) (.03) (.03) (.05) (.07) (.08) (.07) (.06) (.05) (.02)
Net asset value,
end of period $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
Ratios/supplemental data
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
Net assets, end of period
(in thousands) $9,885 $9,557 $8,181 $9,771 $9,596 $6,321 $4,721 $2,748 $1,007 $ 199
Ratio of expenses to
average daily net assets .60%+ .60%+ .60%+ .60%+ .60%+ .60%+ 1.10%+ .96% 1.35% .64%++
Ratio of net income to
average daily net assets 4.45% 2.61% 3.00% 4.60% 7.06% 8.26% 7.38% 5.89% 4.46% 6.01%++
Total return+++ 4.50% 2.61% 3.04% 4.71% 7.41% 8.61% 7.52% 6.13% 5.38% 1.74%***
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Commencement of operations. Period from Jan. 20, 1986 to April 30, 1986.
*** For the period from Jan. 20, 1986 to April 30, 1986, the annualized total return is 6.35%.
+ Commencing on April 5, 1989, IDS Life voluntarily limited total operating expenses to 0.6% of average daily net assets. Had
IDS Life not done so, the ratio of expenses to average daily net assets would have been $0.77%, 0.71%, 0.74%, 0.75%, 0.86%,
0.96% and 1.35% for the years ended April 30, 1995, 1994, 1993, 1992, 1991, 1990 and 1989, respectively.
++ Adjusted to an annual basis.
+++ Total return does not reflect the expenses that apply to the subaccounts or the policies.
</TABLE>
<PAGE>
PAGE 12
<TABLE>
<CAPTION>
Managed Portfolio
Financial highlights (continued)
Fiscal period ended April 30,
Per share income and capital changes*
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 13.85 $ 13.84 $ 13.55 $ 13.29 $ 12.80 $ 11.22 $ 10.42 $ 11.40 $ 10.06 $10.00
Income (loss) from
investment operation:
Net investment income .44 .42 .44 .48 .57 .57 .61 .42 .40 .18
Net gains (losses) on
securities (both realized
and unrealized) .30 1.40 1.44 1.87 1.90 1.58 .80 (.84) 1.41 .06
Total from investment
operations .74 1.82 1.88 2.35 2.47 2.15 1.41 (.42) 1.81 .24
Less distributions:
Dividends from net
investment income (.44) (.42) (.44) (.48) (.57) (.57) (.61) (.42) (.40) (.18)
Distributions from
realized gains (.04) (1.39) (1.15) (1.61) (1.41) - - (.14) (.07) -
Total distributions (.48) (1.81) (1.59) (2.09) (1.98) (.57) (.61) (.56) (.47) (.18)
Net asset value,
end of period $ 14.11 $ 13.85 $ 13.84 $ 13.55 $ 13.29 $ 12.80 $ 11.22 $ 10.42 $ 11.40 $10.06
Ratios/supplemental data
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
Net assets, end of period
(in thousands) $219,986 $160,706 $100,139 $72,366 $51,442 $32,725 $25,807 $21,901 $10,779 $ 588
Ratio of expenses to
average daily net assets .78% .77% .79% .80% .80%+ .80%+ .72%+ 1.03% 1.30% .68%++
Ratio of net income to
average daily net assets 3.27% 2.83% 3.15% 3.40% 4.38% 4.54% 5.76% 3.86% 3.53% 6.41%++
Portfolio turnover rate
(excluding short-term
securities) 143% 106% 118% 122% 71% 107% 58% 67% 43% -
Total return+++ 5.47% 13.30% 14.03% 17.84% 20.18% 19.37% 13.88% (3.57%) 18.32% 2.38%***
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Commencement of operations. Period from Jan. 20, 1986 to April 30, 1986.
*** For the period from Jan. 20, 1986 to April 30, 1986, the annualized total return is 8.71%.
+ Commencing on April 5, 1989, IDS Life voluntarily limited total operating expenses to 0.8% of average daily net assets. Had
IDS Life not done so, the ratio of expenses to average daily net assets would have been 0.81%, 0.82% and 0.84% for the years
ended April 30, 1991, 1990 and 1989 respectively.
++ Adjusted to an annual basis.
+++ Total return does not reflect the expenses that apply to the subaccounts or the policies.
</TABLE>
<PAGE>
PAGE 13
<TABLE>
<CAPTION>
Government Securities Portfolio
Financial highlights (continued)
Fiscal period ended April 30,
Per share income and capital changes*
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 9.88 $ 10.54 $ 9.69 $ 9.44 $ 8.88 $ 8.97 $ 9.00 $ 9.40 $10.32 $10.00
Income (loss) from
investment operations:
Net investment income .59 .60 .63 .66 .67 .69 .64 .64 .66 .34
Net gains (losses) on
securities (both realized
and unrealized) (.03) (.56) .94 .28 .56 (.09) (.03) (.40) (.92) .32
Total from investment
operations .56 .04 1.57 .94 1.23 .60 .61 .24 (.26) .66
Less distributions:
Dividends from net
investment income (.59) (.60) (.63) (.66) (.67) (.69) (.64) (.64) (.66) (.34)
Distributions from
realized gains -- (.10) (.09) (.03) - - - - - -
Total distributions (.59) (.70) (.72) (.69) (.67) (.69) (.64) (.64) (.66) (.34)
Net asset value,
end of period $ 9.85 $ 9.88 $10.54 $ 9.69 $ 9.44 $ 8.88 $ 8.97 $ 9.00 $ 9.40 $10.32
Ratios/supplemental data
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
Net assets, end of period
(in thousands) $11,440 $11,185 $9,619 $7,853 $6,314 $3,184 $2,773 $2,170 $1,230 $ 309
Ratio of expenses to
average daily net assets .80%+ .80%+ .80%+ .80%+ .80%+ .80%+ 1.12%+ 1.13% 1.56% .68%++
Ratio of net income to
average daily net assets 6.02% 5.59% 6.10% 6.79% 7.24% 7.34% 7.19% 7.04% 5.90% 1.47%++
Portfolio turnover rate
(excluding short-term
securities) 12% 32% 15% 11% 18% 18% 14% 13% 43% -
Total return+++ 5.98% 0.16% 16.58% 10.20% 14.30% 6.50% 7.12% 2.77% (2.73)% 6.60%***
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Commencement of operations. Period from Jan. 20, 1986 to April 30, 1986.
*** For the period from Jan. 20, 1986 to April 30, 1986, the annualized total return is 24.09%.
+ Commencing on April 5, 1989, IDS Life voluntarily limited total operating expenses to 0.8% of average daily net assets. Had
IDS Life not done so, the ratio of expenses to average daily net assets would have been 0.87, 0.85%, 0.88%, 0.92%, 1.08%,
1.12%, and 1.21% for the years ended April 30, 1995, 1994, 1993, 1992, 1991, 1990 and 1989 respectively.
++ Adjusted to an annual basis.
+++ Total return does not reflect the expenses that apply to the subaccounts or the policies.
</TABLE>
<PAGE>
PAGE 14
<TABLE>
<CAPTION>
International Equity Portfolio
Financial highlights (continued)
Fiscal period ended April 30,
Per share income and capital changes*
1995**
<S> <C>
Net asset value, beginning of period $10.00
Income (loss) from investment operations:
Net investment income .15
Net gains (losses) on securities (both
realized and unrealized) .29
Total from investment operations .44
Less Distributions:
Dividends from net investment income (.15)
Distributions from realized gains --
Total distributions (.15)
Net asset value, end of period $ 10.29
Ratios/supplemental data
1995**
Net assets, end of period (in thousands) $ 8,497
Ratio of expenses to average daily 1.00%+***
net assets
Ratio of net income to average daily
net assets 5.66%+
Portfolio turnover rate (excluding
short-term securities) 40%
Total return+++ 4.4%++
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Commencement of operations. Period from Oct. 28, 1994 to April 30, 1995.
***During the fiscal period ended April 30, 1995, IDS Life voluntarily limited
total operating expenses to 1.00% of average daily net assets. Had IDS not
done so, the ratio of expenses to average daily net assets would have been 1.76%.
+ Adjusted to an annual basis.
++ For the period from October 28, 1994 to April 30, 1995, the annualized total
return is 8.9%.
+++Total return does not reflect the expenses that apply to the subaccounts or
the policies.
</TABLE>
The information in the preceding tables has been audited by KPMG
Peat Marwick LLP, independent auditors. The independent auditors'
report and additional information about the performance of the fund
is contained in the fund's annual report which may be obtained
without charge.
<PAGE>
PAGE 15
Total returns
Average annual total returns as of April 30, 1995
Purchase 1 year 5 years Since
made ago ago inception*
Equity Portfolio +13.87% +16.33% +12.70%
S&P 500 +17.47 +12.62 +13.67
Lipper Growth
and Income Fund
Index +11.93 +11.82 +12.20
Cumulative total returns as of April 30, 1995
Purchase 1 year 5 years Since
made ago ago inception*
Equity Portfolio +13.87% +113.04% +205.65%
S&P 500 +17.47 + 81.25 +227.00
Lipper Growth
and Income Fund
Index +11.93 + 74.87 +193.12
Average annual total returns as of April 30, 1995
Purchase 1 year 5 years Since
made ago ago inception*
Income Portfolio +6.67% +10.51% +7.60%
Lehman Aggregate
Bond Index +7.32 + 9.39 +9.13
Cumulative total returns as of April 30, 1995
Purchase 1 year 5 years Since
made ago ago inception*
Income Portfolio +6.67% +64.83% + 98.15%
Lehman Aggregate
Bond Index +7.32 +56.70 +124.25
<PAGE>
PAGE 16
Average annual total returns as of April 30, 1995
Purchase 1 year 5 years Since
made ago ago inception*
Managed Portfolio + 5.47% +14.05% +12.73%
S&P 500 +17.47 +12.62 +13.67
Lipper Balanced
Fund Index + 8.33 +10.42 +10.61
Cumulative total returns as of April 30, 1995
Purchase 1 year 5 years Since
made ago ago inception*
Managed Portfolio + 5.47% +92.98% +206.44%
S&P 500 +17.47 +81.25 +227.00
Lipper Balanced
Fund Index + 8.33 +63.21 +156.39
Average annual total returns as of April 30, 1995
Purchase 1 year 5 years Since
made ago ago inception*
Government
Securities Portfolio +5.98% +9.28% +7.08%
Merrill Lynch 1-3
Govt Index +5.77 +7.35 +7.53
Cumulative total returns as of April 30, 1995
Purchase 1 year 5 years Since
made ago ago inception*
Government
Securities Portfolio +5.98% +55.74% +89.33%
Merrill Lynch 1-3
Govt Index +5.77 +42.53 +96.94
<PAGE>
PAGE 17
Average annual total returns as of April 30, 1995
Purchase Since
made inception**
International Equity Portfolio +4.38%
Goldman Sachs Extended Global
Market Index ex. U.S. +3.93
Goldman Sachs Extended Global
Market Index ex. U.S. with
Japanese Modification +3.74
Cumulative total returns as of April 30, 1995
Purchase Since
made inception**
International Equity Portfolio +4.38%
Goldman Sachs Extended Global
Market Index ex. U.S. +3.93
Goldman Sachs Extended Global
Market Index ex. U.S. with
Japanese Modification +3.74
* Jan. 20, 1986
**October 28, 1994
These examples show total returns from hypothetical investments in
each portfolio. These returns are compared to those of popular
indexes for the same periods. The results do not reflect the
expenses that apply to the subaccounts or the policies. Inclusion
of these charges would reduce total return for all periods shown.
For purposes of calculation, information about each portfolio
assumes the deduction of applicable portfolio expenses, makes no
adjustments for taxes that may have been paid on the reinvested
income and capital gains, and covers a period of widely fluctuating
securities prices. Returns shown should not be considered a
representation of the fund's future performance.
The portfolio's investments may be different from those in the
indexes. The indexes reflect reinvestment of all distributions and
changes in market prices, but exclude brokerage commissions or
other fees.
Standard & Poor's 500 Stock Index (S&P 500), an unmanaged list of
common stocks, is frequently used as a general measure of market
performance. However, the S&P 500 companies are generally larger
than those in which the fund invests.
Lipper Growth and Income Fund Index, published by Lipper Analytical
Services, Inc., includes 30 funds that are generally similar to
Equity Portfolio, although some funds in the index may have
somewhat different investment policies or objectives.<PAGE>
PAGE 18
Lehman Aggregate Bond Index is made up of a representative list of
government and corporate bonds as well as asset-backed securities
and mortgage-backed securities. The index is frequently used as a
general measure of bond market performance. However, the
securities used to create the index may not be representative of
the bonds held in the Income Portfolio.
Lipper Balanced Fund Index, published by Lipper Analytical
Services, Inc., includes 10 funds that are generally similar to the
Managed Portfolio, although some funds in the index may have
somewhat different investment policies or objectives.
Merrill Lynch 1-3 Year Government Index is an unmanaged list of all
treasury and agency securities. The index is used here as a
general measure of performance. However, the securities used to
create the index may not be representative of the debt securities
held in the Government Securities Portfolio.
The Goldman Sachs Extended Global Market Index ex. U.S. consists of
market capitalization-weighted combinations of the Financial
Times/Standard & Poor's (FT/S&P) Actuaries World Indices and the
International Finance Corporation Investable (IFCI) Indices. The
FT/S&P Actuaries Indices include 26 primarily developed countries
and cover approximately 80% of the equity capitalization within
those countries. The IFCI Market Indices consist of an additional
46 primarily emerging market countries and covers between 60% and
70% of the total capitalization in the markets included. The index
is used here as a general measure of performance. However, the
securities used to create the index may not be representative of
the securities held in the International Equity Portfolio.
The Goldman Sachs Extended Global Market Index ex. U.S. with
Japanese Modification is calculated by Goldman, Sachs & Co. and is
based on the GS-EGMI World Index excluding U.S. region with Japan
included at 50% of its percentage weight. The weight of Japan is
reset each week and the weights of the remaining countries are
proportionally increased to make up for Japan's reduced weight.
The index is used here as a general measure of performance.
However, the securities used to create the index may not be
representative of the securities held in the International Equity
Portfolio.
Yield calculations
Income Portfolio and Government Securities Portfolio may calculate
a 30-day annualized yield by dividing:
o net investment income per share deemed earned during a 30-day
period by
o the net asset value per share on the last day of the period,
and
o converting the result to a yearly equivalent figure.
This yield calculation does not include any surrender charge or
life insurance policy charges, which would reduce the yield quoted.
<PAGE>
PAGE 19
A portfolio's yield varies from day to day, mainly because share
values and net asset values (which are calculated daily) vary in
response to changes in interest rates. Net investment income
normally changes much less in the short run. Thus, when interest
rates rise and share values fall, yield tends to rise. When
interest rates fall, yield tends to follow.
Money Market Portfolio calculates annualized simple and compound
yields based on a seven-day period.
Past yields should not be considered an indicator of future yields.
Key terms
Average annual total return - The annually compounded rate of
return over a given time period (usually two or more years) - total
return for the period converted to an equivalent annual figure.
Capital gains or losses - Increase or decrease in value of the
securities the portfolio holds. Gains are realized when securities
that have increased in value are sold. A portfolio also may have
unrealized gains or losses when securities increase or decrease in
value but are not sold.
Close of business - Normally 3 p.m. Central time each business day
(any day the New York Stock Exchange is open).
Distributions - Payments to the subaccounts of two types:
investment income (dividends) and realized net long-term capital
gains (capital gains distributions).
Investment income - Dividends and interest earned on securities
held by the portfolio.
Net asset value (NAV) - Value of a single share held by the
portfolio. It is the total market value of all of a portfolio's
investments and other assets, less any liabilities, divided by the
number of shares outstanding.
The NAV is the price the subaccount receives when it sells shares.
It usually changes from day to day, and is calculated at the close
of business. For the Income and Government Securities Portfolios,
NAV generally declines as interest rates increase and rises as
interest rates decline.
Total return - Sum of all returns for a given period, assuming
reinvestment of all distributions. Calculated by taking the total
value of shares at the end of the period (including shares acquired
by reinvestment), less the price of shares purchased at the
beginning of the period.
Yield - Net investment income earned per share for a specified time
period, divided by the share price at the end of the period.
<PAGE>
PAGE 20
Investment policies and risks
Equity Portfolio - Under normal market conditions, Equity Portfolio
invests in U.S. common stocks listed on national securities
exchanges that the investment manager believes have potential for
capital appreciation. The companies in which the portfolio invests
may be well-seasoned or relatively new and lesser-known as long as
the investment manager believes the stock is attractive for capital
growth.
The portfolio also may invest in convertible securities, derivative
instruments, money market instruments and foreign investments.
Neither foreign investments nor derivative instruments will exceed
25% of the portfolio's total assets.
Income Portfolio - Under normal market conditions, Income Portfolio
primarily invests in debt securities. At least 50% of its net
assets are invested in corporate bonds of the four highest ratings,
in other corporate bonds the investment manager believes have the
same investment qualities, and in government bonds.
The portfolio also may invest in corporate bonds with lower
ratings, convertible securities, preferred stocks, derivative
instruments, foreign investments and money market instruments.
Foreign investments are limited to 25% of the portfolio's total
assets. The portfolio does not have a minimum rating requirement
for corporate bonds.
Money Market Portfolio - Under normal market conditions, Money
Market Portfolio invests primarily in high-quality, short-term,
marketable debt securities and other money market instruments. For
a description of money market securities, see Appendix B in the
SAI.
Managed Portfolio - This portfolio invests in common and preferred
stocks, convertible securities, debt securities, derivative
instruments, foreign securities and money market instruments. The
portfolio manager continuously will adjust the mix of investments
subject to the following three net asset limits: 1) up to 75% in
equity securities (stocks), 2) up to 75% in bonds or other debt
securities, and 3) up to 100% in money market instruments. Stocks
and debt securities will be selected for capital appreciation,
income or both. Money market instruments will be selected for
current income and safety of principal.
Of the assets invested in bonds, at least 50% will be in corporate
bonds of the four highest ratings, in other corporate bonds the
investment manager believes have the same investment qualities, and
in government bonds. For the other 50% invested in corporate
bonds, there is no minimum rating requirement. Foreign investments
are limited to 25% of the portfolio's total assets.
Government Securities Portfolio - Under normal market conditions,
Government Securities Portfolio invests in securities that are
issued or guaranteed by a U.S. governmental unit. The portfolio
<PAGE>
PAGE 21
also may invest in derivative instruments on U.S. government
securities. Shares of this portfolio are not insured or guaranteed
by the U.S. government or by any other person or entity.
International Equity Portfolio - Under normal market conditions,
International Equity Portfolio invests at least 80% of its total
assets in foreign equity securities having a potential for superior
growth. Superior means portfolio performance better than the
Goldman Sachs Extended Global Market Index ex. U.S.
The portfolio's investments will be primarily in common stocks and
securities convertible into common stocks of foreign issuers.
However, if the investment manager believes they have more
potential for capital growth, the portfolio may invest in bonds
issued or guaranteed either by countries that are members of the
Organization for Economic Cooperation and Development (OECD) or by
international agencies such as the World Bank or the European
Investment Bank. These bonds will not be purchased unless, in the
judgment of the investment manager, they are comparable in quality
to bonds rated AA by Standard & Poor's Corporation (S&P).
The percentage of portfolio assets invested in particular countries
or regions of the world will change according to their political
stability and economic condition. Ordinarily, the portfolio will
invest in companies domiciled in at least three foreign countries.
Normally, investments in U.S. issuers will constitute less than 20%
of the portfolio's investments. However, as a temporary measure,
the portfolio may invest any portion of its assets in securities of
U.S. issuers that appear to have greater potential for superior
growth than foreign securities. U.S. investments would include
common stocks, convertible securities and corporate and government
bonds. The bonds must bear one of the four highest ratings given
by Moody's or S&P or must be of comparable quality. The portfolio
also may invest in money market instruments and derivative
instruments. No more than 5% of the portfolio's total assets may
be invested in options on individual securities.
The various types of investments the portfolio managers use to
achieve investment performance are described in more detail in the
next section and in the SAI.
Facts about investments and their risks
Common stocks: Stock prices are subject to market fluctuations.
Stocks of larger, established companies that pay dividends may be
less volatile than the stock market as a whole. Stocks of smaller
or foreign companies may be subject to abrupt or erratic price
movements. Also, small companies often have limited product lines,
smaller markets or fewer financial resources. Therefore, some of
the securities in which a portfolio invests involve substantial
risk and may be considered speculative.
Preferred stocks: If a company earns a profit, it generally must
pay its preferred stockholders a dividend at a pre-established
rate.
<PAGE>
PAGE 22
Convertible securities: These securities generally are preferred
stocks or bonds that can be exchanged for other securities, usually
common stock, at prestated prices. When the trading price of the
common stock makes the exchange likely, the convertible securities
trade more like common stock.
Debt securities: The price of bonds generally falls as interest
rates increase, and rises as interest rates decrease. The price of
an investment grade bond also fluctuates if its credit rating is
upgraded or downgraded.
The price of bonds below investment grade may react more to the
ability of a company to pay interest and principal when due than to
changes in interest rates. They have greater price fluctuations,
are more likely to experience a default, and sometimes are referred
to as "junk bonds." Reduced market liquidity for these bonds may
occasionally make it more difficult to value them. In valuing
bonds, a portfolio relies both on independent rating agencies and
the investment manager's credit analysis. Securities that are
subsequently downgraded in quality may continue to be held and will
be sold only when the portfolio's investment manager believes it is
advantageous to do so.
Bond ratings of holdings for fiscal year ended
April 30, 1995 for Income Portfolio
<TABLE><CAPTION>
S&P Rating Protection of Percent of net
Percent of (or Moody's principal and assets in unrated
net assets equivalent) interest securities*
<C> <C> <C> <C>
25.89% AAA Highest quality .06%
4.67 AA High quality --
11.78 A Upper medium grade --
19.54 BBB Medium grade .14
9.86 BB Moderately speculative --
7.32 B Speculative .22
.31 CCC Highly speculative --
-- CC Poor quality --
-- C Lowest quality --
-- D In default --
.49 NR Unrated securities .07
* American Express Financial Corporation's assessment of unrated securities.
Bond ratings of holdings for fiscal year ended
April 30, 1995 for Managed Portfolio
S&P Rating Protection of Percent of net
Percent of (or Moody's principal and assets in unrated
net assets equivalent) interest securities*
4.76% AAA Highest quality .20%
1.13 AA High quality --
2.81 A Upper medium grade .02
4.90 BBB Medium grade .12
3.35 BB Moderately speculative --
5.14 B Speculative .27
.09 CCC Highly speculative --
-- CC Poor quality --
-- C Lowest quality --
-- D In default --
1.32 NR Unrated securities .71
* American Express Financial Corporation's assessment of unrated securities.
</TABLE>
(See Appendix G to the SAI for further information regarding
ratings.)<PAGE>
PAGE 23
Debt securities sold at a deep discount: Some bonds are sold at
deep discounts because they do not pay interest until maturity.
They include zero coupon bonds and PIK (pay-in-kind) bonds. To
comply with tax laws, a portfolio has to recognize a computed
amount of interest income and pay dividends to shareholders even
though no cash has been received. In some instances, a portfolio
may have to sell securities to have sufficient cash to pay the
dividends.
Mortgage-backed securities: All portfolios except Money Market may
invest in U.S. government securities representing part ownership of
pools of mortgage loans. A pool, or group, of mortgage loans
issued by such lenders as mortgage bankers, commercial banks and
savings and loan associations, is assembled and mortgage pass-
through certificates are offered to investors through securities
dealers. In pass-through certificates, both principal and interest
payments, including prepayments, are passed through to the holder
of the certificate. Prepayments on underlying mortgages result in
a loss of anticipated interest, and the actual yield (or total
return) to the portfolio, which is influenced by both stated
interest rates and market conditions, may be different than the
quoted yield on the certificates.
Foreign investments: Securities of foreign companies and
governments may be traded in the United States, but often they are
traded only on foreign markets. Frequently, there is less
information about foreign companies and less government supervision
of foreign markets. Foreign investments are subject to currency
fluctuations and political and economic risks of the countries in
which the investments are made including the possibility of seizure
or nationalization of companies, imposition of withholding taxes on
income, establishment of exchange controls or adoption of other
restrictions that might affect an investment adversely. If an
investment is made in a foreign market, the local currency must be
purchased. This is done by using a forward contract in which the
price of the foreign currency in U.S. dollars is established on the
date the trade is made, but delivery of the currency is not made
until the securities are received. As long as the portfolio holds
foreign currencies or securities valued in foreign currencies, the
price of a portfolio share will be affected by changes in the value
of the currencies relative to the U.S. dollar. Because of the
limited trading volume in some foreign markets, efforts to buy or
sell a security may change the price of the security, and it may be
difficult to complete the transaction. The limited liquidity and
price fluctuations in emerging markets could make investments in
developing countries more volatile.
Derivative instruments: The portfolio managers may use derivative
instruments in addition to securities to achieve investment
performance. Derivative instruments include futures, options and
forward contracts. Such instruments may be used to maintain cash
reserves while remaining fully invested, to offset anticipated
declines in values of investments, to facilitate trading, to reduce
transaction costs, or to pursue higher investment returns.
Derivative instruments are characterized by requiring little or no
initial payment and a daily change in price based on or derived
<PAGE>
PAGE 24
from a security, a currency, a group of securities or currencies,
or an index. A number of strategies or combination of instruments
can be used to achieve the desired investment performance
characteristics. A small change in the value of the underlying
security, currency or index will cause a sizable gain or loss in
the price of the derivative instrument. Derivative instruments
allow a portfolio manager to change the investment performance
characteristics very quickly and at lower costs. Risks include
losses of premiums, rapid changes in prices, defaults by other
parties, and inability to close such instruments. A portfolio will
use derivative instruments only to achieve the same investment
performance characteristics it could achieve by directly holding
those securities and currencies permitted under the investment
policies. The portfolios' custodian will maintain, in a segregated
account, cash or liquid high-grade debt securities that are marked
to market daily and are at least equal in value to the portfolios'
obligations. No more than 5% of each portfolio's net assets can be
used at any one time for good faith deposits on futures and
premiums for options on futures that do not offset existing
investment positions. For further information, see the options and
futures appendixes in the SAI.
Securities and derivative instruments that are illiquid: Illiquid
means the security or derivative instrument cannot be sold quickly
in the normal course of business. Some investments cannot be
resold to the U.S. public because of their terms or government
regulations. All securities and derivative instruments, however,
can be sold in private sales, and many may be sold to other
institutions and qualified buyers or on foreign markets. Each
portfolio manager will follow guidelines established by the board
of directors and consider relevant factors such as the nature of
the security and the number of likely buyers when determining
whether a security is illiquid. No more than 10% of each
portfolio's net assets will be held in securities and derivative
instruments that are illiquid.
Money market instruments: Short-term debt securities rated in the
top two grades are used to meet daily cash needs and at various
times to hold assets until better investment opportunities arise.
Generally less than 25% of each of Equity, Income, Managed,
Government Securities and International Equity Portfolio's assets
are in these money market instruments. However, for temporary
defensive purposes these investments could exceed that amount for a
limited period of time.
Securities of other investment companies: Equity, Income and
International Equity Portfolio may invest in securities of
investment companies by purchase in the open market where the
dealer's or sponsor's profit is the regular commission. If any
such investment is made, not more than 5% of the portfolio's net
assets (10% for International Equity Portfolio) will be so
invested. To the extent the portfolio were to make such
investments, you may be subject to duplicative advisory,
administrative and distribution fees.
<PAGE>
PAGE 25
The investment policies described above may be changed by the board
of directors.
Lending portfolio securities: Each portfolio may lend its
securities to earn income so long as borrowers provide collateral
equal to the market value of the loans. The risks are that
borrowers will not provide collateral when required or return
securities when due. Unless shareholders approve otherwise, loans
may not exceed 30% of a portfolio's net assets.
Alternative investment option
In the future, the board of the fund may determine for operating
efficiencies to use a master/feeder structure. Under that
structure, the fund's investment portfolios would be managed by
another investment company with the same goal as the fund, rather
than being invested directly in a portfolio of securities.
Valuing assets
Money Market Portfolio's securities are valued at amortized cost.
In valuing assets of Equity, Income, Managed, Government Securities
and International Equity Portfolios:
o Securities and assets with available market values are valued
on that basis.
o Securities maturing in 60 days or less are valued at amortized
cost.
o Securities and assets without readily available market values
are valued according to methods selected in good faith by the
board of directors.
o Assets and liabilities denominated in foreign currencies are
translated daily into U.S. dollars at a rate of exchange set
as near to the close of the day as practicable.
How to invest, transfer or redeem shares
How to invest
You may invest in the portfolios of the fund only by buying a
variable life insurance policy offered by IDS Life or IDS Life of
New York. Your financial advisor will help you fill out and submit
an application. For further information concerning acceptance of
your application, see the variable life insurance policy
prospectus.
How to transfer among subaccounts
You can transfer all or part of your value in a subaccount to one
or more of the other subaccounts. That way, you transfer to a
portfolio with a different investment objective. Please refer to
your variable life insurance policy prospectus for more information
about transfers among subaccounts.
<PAGE>
PAGE 26
Redeeming shares
The fund will buy (redeem) any shares presented by the subaccounts.
Policy surrender details are described in your variable life
insurance policy prospectus. Payment generally will be made within
seven days of the surrender request. The amount may be more or
less than the amount invested. Shares will be redeemed at net
asset value at the close of business on the day the request is
accepted at the Minneapolis office for IDS Life or at the Albany
office for IDS Life of New York. If the request arrives after the
close of business, the price per share will be the net asset value
at the close of business on the next business day.
Distributions and taxes
The fund distributes to shareholders (the subaccounts) net
investment income and net capital gains. It does so to qualify as
a regulated investment company and to avoid paying corporate income
and excise taxes.
Dividend and capital gain distributions
The fund distributes its net investment income (dividends and
interest earned on securities held by the fund, less operating
expenses) to shareholders (the subaccounts) at the end of each
calendar quarter for Equity, Managed and International Equity
Portfolios. For Income, Money Market and Government Securities
Portfolios, net investment income is distributed monthly. Short-
term capital gains distributed are included in net investment
income. Net realized capital gains, if any, from selling
securities are distributed at the end of the calendar year. Before
they're distributed, both net investment income and net capital
gains are included in the value of each share. After they're
distributed, the value of each share drops by the per-share amount
of the distribution. (Since the distributions are reinvested, the
total value of the holdings will not change.) The reinvestment
price is the net asset value at close of business on the day the
distribution is paid.
Taxes
The Internal Revenue Service (IRS) has issued final regulations
relating to the diversification requirements under section 817(h)
of the Internal Revenue Code. Each portfolio intends to comply
with these requirements.
Federal income taxation of separate accounts, life insurance
companies and variable life insurance policies is discussed in the
variable life insurance policy prospectus.
Income received by the International Equity Portfolio may be
subject to foreign tax and withholding. Tax conventions between
certain countries and the United States may reduce or eliminate
these taxes.
<PAGE>
PAGE 27
How the fund is organized
IDS Life Series Fund, Inc. is a series mutual fund. The fund is a
diversified, open-end management investment company, as defined in
the Investment Company Act of 1940. It was incorporated in
Minnesota on May 8, 1985. The fund headquarters are at IDS Tower
10, Minneapolis, MN 55440-0010.
Shares
The fund is owned by the subaccounts, its shareholders. Each of
the portfolios issues its own series of common stock. All shares
issued by each portfolio are of the same class--capital stock. Par
value is $.001 per share. Both full and fractional shares can be
issued. The shares of each portfolio making up IDS Life Series
Fund, Inc. represent an interest in that portfolio's
assets only (and profits or losses) and, in the event of
liquidation, each share of a portfolio would have the same rights
to dividends and assets as every other share of that portfolio.
Voting rights
For a discussion of the rights of policy owners concerning the
voting of shares held by the subaccounts, please see the variable
life insurance policy prospectus. Each share of a portfolio has
one vote. On an issue affecting a particular portfolio, its shares
vote as a separate series. On some issues, all shares of the fund
vote together as one series. All shares have cumulative voting
when voting on the election of directors.
The goals of the portfolios can be changed only if the majority of
the outstanding shares agree. The vote of a majority of the
outstanding voting shares means the vote:
o of 67% or more of the voting shares present at such meeting,
if the holders of more than 50% of the outstanding voting
shares are present or represented by proxy; or
o of more than 50% of the outstanding voting shares, whichever
is less.
Shareholder meetings
The fund does not hold annual shareholder meetings. However, the
directors may call meetings at their discretion, or on demand by
holders of 10% or more of the outstanding shares, to elect or
remove directors.
Portfolio managers
Equity Portfolio
Marty Hurwitz joined American Express Financial Corporation in 1987
and serves as portfolio manager. He was appointed to manage this
portfolio in July 1993. He also serves as portfolio manager for
IDS Life Aggressive Growth Fund and manages accounts for IDS
Advisory Portfolio Management Group, a division of American Express
Financial Advisors Inc.
<PAGE>
PAGE 28
Income Portfolio
Lorraine Hart joined American Express Financial Corporation in 1984
and serves as vice president - insurance investments. She has
managed this portfolio since 1991. She also manages the invested
asset portfolios of IDS Life, IDS Life of New York, and American
Enterprise Life Insurance Company.
Money Market Portfolio
Gregg Syverson joined American Express Financial Corporation in
1984 and serves as portfolio manager. He has managed this
portfolio since 1992. He also manages the short-term investments
and debt for American Express Financial Corporation, American
Express Financial Advisors Inc., IDS Life and IDS Certificate
Company.
Managed Portfolio
Deb Pederson joined American Express Financial Corporation in 1986
and serves as portfolio manager. She has managed the fixed income
portfolio of Managed Portfolio since 1993. She also manages the
fixed income portfolio of IDS Life Managed Fund and the low grade
invested assets of IDS Life, IDS Life of New York and American
Enterprise Life Insurance Company.
Betty Tebault joined American Express Financial Corporation in 1985
as an analyst, becoming associate portfolio manager in 1991,
helping to manage Wealth Management Portfolios and the IDS Stock
Fund. She became portfolio manager in 1993 and was appointed to
manage this portfolio in January 1995.
Government Securities Portfolio
Jim Snyder joined American Express Financial Corporation in 1989
and serves as portfolio manager. He was appointed to manage this
portfolio in April 1994. He also serves as associate portfolio
manager of IDS Federal Income Fund. Prior to joining American
Express Financial Corporation, he had been a Quantitative
Investment Analyst at Harris Trust.
International Equity Portfolio
Richard Lazarchic joined American Express Financial Corporation in
1979 and serves as portfolio manager. He was associate portfolio
manager of IDS Mutual from 1988 through 1989 and served as
portfolio manager of IDS Utilities Income Fund from 1989 through
mid 1993 and Diversified Equity Income Fund from 1990 through mid
1994. He also serves as portfolio manager of IDS Managed
Retirement Fund.
Directors and officers
Shareholders elect a board of directors that oversees the
operations of the fund and chooses its officers. Its officers are
responsible for day-to-day business decisions based on policies set
by the board. The board has named an executive committee that has
authority to act on its behalf between meetings.
On April 30, 1995 the fund's directors and officers did not own any
shares of the fund.
<PAGE>
PAGE 29
Investment manager
The fund pays IDS Life for managing its portfolio, providing
administrative services and serving as transfer agent.
Under its Investment Management and Services Agreement, IDS Life
determines which securities will be purchased, held or sold
(subject to the direction and control of the fund's board of
directors). For these services the fund pays IDS Life a fee based
on the average daily net assets of the portfolios at the following
rates: 0.7% on an annual basis for Equity, Income, Managed and
Government Securities Portfolios, 0.5% for Money Market Portfolio,
and 0.95% for International Equity Portfolio.
Under the Agreement, the fund also pays taxes, brokerage
commissions and nonadvisory expenses. However, IDS Life has agreed
to a voluntary limit of the annual charge of 0.1% of the average
daily net assets of the fund for these nonadvisory expenses. Total
net fees and expenses incurred after the limitations by each
portfolio amounted to 0.77%, 0.80%, 0.60%, 0.78%, 0.80% and 1.0% of
average daily net assets for Equity, Income, Money Market, Managed,
Government Securities and International Equity Portfolios;
respectively for the period ended April 30, 1995.
IDS Life reserves the right to discontinue limiting these
nonadvisory expenses at 0.1%. However, its present intention is to
continue the limit until the time that actual expenses are less
than the limit.
Investment Advisory Agreement
IDS Life and American Express Financial Corporation have an
Investment Advisory Agreement that calls for IDS Life to pay
American Express Financial Corporation a fee for investment advice
about the fund's Portfolios. The fee paid by IDS Life is 0.25% of
Equity, Income, Money Market, Managed and Government Securities
portfolios' average net assets for the year. The fee paid by IDS
Life is 0.50% of International Equity portfolio's average net
assets for the year. American Express Financial Corporation also
executes purchases and sales and negotiates brokerage as directed
by IDS Life.
Total fees and expenses (excluding taxes and brokerage commissions)
cannot exceed the most restrictive applicable state expense
limitation.
About IDS Life and American Express Financial Corporation
General information
IDS Life Series Fund is managed by IDS Life, a wholly owned
subsidiary of American Express Financial Corporation, which itself
is a wholly owned subsidiary of the American Express Company
(American Express), a financial services company headquartered in
New York City.
<PAGE>
PAGE 30
IDS Life is a stock life insurance company organized in 1957 under
the laws of the State of Minnesota and located at IDS Tower 10,
Minneapolis, MN 55440-0010. IDS Life conducts a conventional life
insurance business in the District of Columbia and all states
except New York.
The American Express Financial Corporation family of companies
offers not only insurance and annuities, but also mutual funds,
investment certificates and a broad range of financial management
services.
American Express Financial Corporation has been providing financial
services since 1894. Besides managing investments for all publicly
offered funds in the IDS MUTUAL FUND GROUP, American Express
Financial Corporation also manages investments for itself and its
subsidiaries, IDS Certificate Company and IDS Life. Total assets
under management on April 30, 1995 were more than $115 billion.
American Express Financial Advisors Inc. serves individuals and
businesses through its nationwide network of more than 175 offices
and more than 7,900 planners.
Other subsidiaries provide investment management and related
services for pension, profit-sharing, employee savings and
endowment funds of businesses and institutions.
<PAGE>
PAGE 31
STATEMENT OF ADDITIONAL INFORMATION
for
IDS LIFE SERIES FUND, INC.
Equity Portfolio
Government Securities Portfolio
Income Portfolio
International Equity Portfolio
Managed Portfolio
Money Market Portfolio
June 29, 1995
This Statement of Additional Information is not a prospectus. It
should be read together with the Fund's prospectus which may be
obtained from your American Express financial advisor, or by
writing or calling IDS Life Series Fund, Inc. at the address or
telephone number below.
International Equity Portfolio is not available for investment
under all life insurance policies. Please see the prospectus for
your policy to see if it is available.
The date of this Statement of Additional Information is June 29,
1995, and is to be used with the Fund's Prospectus dated June 29,
1995 and the Fund's Annual Report for the fiscal year ended April
30, 1995.
IDS Life Series Fund, Inc.
IDS Tower 10
Minneapolis, MN 55440-0010
(612) 671-3733
TTY: 800-285-8846
New York Service:
(518) 869-8613
<PAGE>
PAGE 32
TABLE OF CONTENTS
Goals and Investment Policies........................See Prospectus
Additional Investment Policies................................p. 3
Portfolio Transactions........................................p. 22
Brokerage Commissions Paid to
Brokers Affiliated with IDS Life..............................p. 24
Calculation of Total Return...................................p. 25
Calculation of Yield..........................................p. 26
Valuing Each Portfolio's Shares...............................p. 27
Investing in the Fund.........................................p. 30
Redeeming Shares..............................................p. 30
Capital Gains and Losses......................................p. 31
Investment Management and Other Services......................p. 31
Management of the Fund........................................p. 32
Custodian.....................................................p. 35
Independent Auditors..........................................p. 35
Financial Statements..............................See Annual Report
Appendix A: Foreign Currency Transactions, for
Investments of Equity, Income, Managed
and International Equity Portfolios..............p. 36
Appendix B: Description of Money Market Securities, for
Investments of all Portfolios except
Government Securities............................p. 41
Appendix C: Options and Stock Index Futures Contracts,
for Investments of Equity, Managed and
International Equity Portfolios..................p. 43
Appendix D: Options and Interest Rate Futures Contracts,
for Investments of Income, Managed and
Government Securities Portfolios.................p. 51
Appendix E: Mortgage-Backed Securities and Additional
Information on Investment Policies for all
Portfolios except Money Market...................p. 57
Appendix F: Dollar-Cost Averaging............................p. 60
Appendix G: Description of Corporate Bond Ratings............p. 61
<PAGE>
PAGE 33
ADDITIONAL INVESTMENT POLICIES
In addition to the investment goals and policies presented in the
prospectus, each Portfolio has the investment policies stated
below.
Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Equity Portfolio agree to a change, Equity Portfolio will not:
Underwrite securities of other issuers. However, this shall not
preclude the purchase of securities for investment, on original
issue or otherwise, and shall not preclude the acquisition of
portfolio securities under circumstances where the portfolio would
not be free to sell them without being deemed an underwriter for
purposes of the Securities Act of 1933 (1933 Act) and without
registration of such securities or the filing of a notification
under that Act, or the taking of similar action under other
securities laws relating to the sale of securities.
Buy securities of an issuer if the officers and directors of the
Portfolio and of American Express Financial Corporation hold more
than a certain percent of the issuer's outstanding securities. The
holdings of all officers and directors of the Portfolio who own
more than 0.5% of an issuer's securities are added together and if
in total they own more than 5%, the Portfolio will not purchase
securities of that issuer.
Buy or sell real estate, unless acquired as a result of ownership
of securities or other instruments, except this shall not prevent
the portfolio from investing in securities or other instruments
backed by real estate or securities of companies engaged in the
real estate business.
Buy or sell physical commodities unless acquired as a result of
ownership of securities or other instruments, except this shall not
prevent the portfolio from buying or selling options and futures
contracts or from investing in securities or other instruments
backed by, or whose value is derived from, physical commodities.
Make cash loans if the total commitment amount exceeds 5% of the
portfolio's total assets.
Lend portfolio securities in excess of 30% of its net assets, at
market value. The current policy of the board of directors is to
make these loans, either long- or short-term, to broker-dealers.
In making such loans the portfolio gets the market price in cash,
U.S. government securities, letters of credit or such other
collateral as may be permitted by regulatory agencies and approved
by the board of directors. If the market price of the loaned
securities goes up, the portfolio will get additional collateral on
a daily basis. The risks are that the borrower may not provide
additional collateral when required or return the securities when
due. A loan will not be made unless the opportunity for additional
<PAGE>
PAGE 34
income outweighs the risks. During the existence of the loan, the
portfolio receives cash payments equivalent to all interest or
other distributions paid on the loaned securities.
Invest more than 5% of its total assets, at market value, in
securities of any one company, government or political subdivision
thereof, except the limitation will not apply to investments in
securities issued by the U.S. government, its agencies or
instrumentalities. Up to 25% of the portfolio's total assets may
be invested without regard to this 5% limitation.
Borrow money or property except as a temporary measure for
extraordinary or emergency purposes, and in an amount not exceeding
one-third of the market value of its total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing. The portfolio will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5%. The portfolio has not borrowed in the past and has no
present intention to borrow.
Concentrate its investments in any particular industry, but
reserves freedom of action to do so provided that not more than 25%
of its assets, taken at cost, may be so invested at any one time.
Purchase securities of any issuer if immediately after and as a
result of such purchase the Portfolio would own more than 10% of
the outstanding voting securities of such issuer.
Unless changed by the board of directors, the following policies
apply to Equity Portfolio:
The portfolio will not invest in companies for the purpose of, or
with the effect of, acquiring control.
The portfolio will not buy on margin or sell short.
The portfolio will not invest in securities of any investment
company except in the open market where no commission or profit to
a sponsor or dealer results from such purchase other than customary
broker's commission. The portfolio does not intend to invest in
such securities but may do so to the extent of not more than 5% of
its total assets (taken at market or other current value). The
portfolio may acquire limited amounts of securities of one or more
investment companies as permitted by the Investment Company Act of
1940 (1940 Act), in connection with the acquisition of or merger
with such companies. Except for these instances, the portfolio
will not purchase securities of investment companies.
The portfolio may make contracts to purchase securities for a fixed
price at a future date beyond normal settlement time (when issued
securities or forward commitments). A portfolio does not pay for
the securities or receive dividends or interest on them until the
contractual settlement date. The portfolio's custodian will
maintain, in a segregated account, cash or liquid high-grade debt
securities that are marked to market daily and are at least equal
in value to the portfolio's commitments to purchase the securities.<PAGE>
PAGE 35
When-issued securities or forward commitments are subject to market
fluctuations and they may affect the portfolio's total assets the
same as owned securities.
The portfolio may maintain a portion of its assets in cash and
cash-equivalent investments. The cash-equivalent investments the
Portfolio may use are short-term U.S. and Canadian government
securities and negotiable certificates of deposit, non-negotiable
fixed-time deposits, bankers' acceptances and letters of credit of
banks or savings and loan associations having capital, surplus and
undivided profits (as of the date of its most recently published
annual financial statements) in excess of $100 million (or the
equivalent in the instance of a foreign branch of a U.S. bank) at
the date of investment. Any cash-equivalent investments in foreign
securities will be subject to the limitations on foreign
investments described in the prospectus. The portfolio also may
purchase short-term corporate notes and obligations rated in the
top two classifications by Moody's Investors Service, Inc. or
Standard & Poor's Corporation or the equivalent and may use
repurchase agreements with broker-dealers registered under the
Securities Exchange Act of 1934 and with commercial banks. A risk
of a repurchase agreement is that if the seller seeks the
protection of the bankruptcy laws, the portfolio's ability to
liquidate the security involved could be impaired.
The portfolio does not intend to invest more than 2% of its net
assets in warrants that are not listed on a national securities
exchange. In no event will the investment in warrants exceed 5% of
the portfolio's net assets. A warrant is a right to buy a certain
security at a set price for a certain period of time and is freely
traded in the market.
The portfolio may invest in Rule 144A securities, which are
unregistered securities offered to qualified institutional buyers,
and interest-only and principal-only fixed mortgage-backed
securities (IOs and POs) issued by the United States government or
its agencies and instrumentalities. In determining the liquidity
of Rule 144A securities, IOs and POs, the investment manager, under
guidelines established by the board of directors, will consider any
relevant factors including the frequency of trades, the number of
dealers willing to purchase or sell the security and the nature of
marketplace trades.
The portfolio may invest in commercial paper issued in transactions
not involving a public offering under Section 4(2) of the
Securities Act of 1933 (4(2) paper). In determining the liquidity
of 4(2) paper, the investment manager, under guidelines established
by the board of directors, will evaluate relevant factors such as
the issuer and the size and nature of its commercial paper
programs, the willingness and ability of the issuer or dealer to
repurchase the paper, and the nature of the clearance and
settlement procedures for the paper.
<PAGE>
PAGE 36
The portfolio will not invest in securities which are not readily
marketable (including restricted securities and repurchase
agreements over 7 days) without registration or the filing of a
notification under the 1933 Act, or the taking of similar action
under other securities laws relating to the sale of securities, if
immediately after the making of any such investment more than 10%
of the portfolio's net assets (taken at market or other current
value) are invested in such securities.
The portfolio will not invest in interests in oil, gas and other
mineral exploration or development programs.
Notwithstanding any of the portfolio's other investment policies,
the portfolio may invest its assets in an open-end management
investment company having substantially the same investment
objectives, policies and restrictions as the portfolio for the
purpose of having those assets managed as part of a combined pool.
Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Government Securities Portfolio agree to a change, Government
Securities Portfolio will not:
Act as an underwriter (sell securities for others). However, under
the securities laws, the portfolio may be deemed to be an
underwriter when it purchases securities directly from the issuer
and later resells them.
Buy securities of an issuer if the officers and directors of the
portfolio and of American Express Financial Corporation hold more
than a certain percent of the issuer's outstanding securities. The
holdings of all officers and directors of the portfolio and of
American Express Financial Corporation who own more than 0.5% of an
issuer's securities are added together and if in total they own
more than 5%, the portfolio will not purchase securities of that
issuer.
Buy or sell real estate, unless acquired as a result of ownership
of securities or other instruments, except this shall not prevent
the portfolio from investing in securities or other instruments
backed by real estate or securities of companies engaged in the
real estate business.
Buy or sell physical commodities unless acquired as a result of
ownership of securities or other instruments, except this shall not
prevent the portfolio from buying or selling options and futures
contracts or from investing in securities or other instruments
backed by, or whose value is derived from, physical commodities.
Make cash loans if the total commitment amount exceeds 5% of the
portfolio's total assets.
Lend portfolio securities in excess of 30% of its net assets, at
market value. The current policy of the board of directors is to
make these loans, either long- or short-term, to broker-dealers.
<PAGE>
PAGE 37
In making such loans the portfolio gets the market price in cash,
U.S. government securities, letters of credit or such other
collateral as may be permitted by regulatory agencies and approved
by the board of directors. If the market price of the loaned
securities goes up, the portfolio will get additional collateral on
a daily basis. The risks are that the borrower may not provide
additional collateral when required or return the securities when
due. A loan will not be made unless the opportunity for additional
income outweighs the risks. During the existence of the loan, the
portfolio receives cash payments equivalent to all interest or
other distributions paid on the loaned securities.
Invest more than 5% of its total assets, at market value, in
securities of any one company, government or political subdivision
thereof, except the limitation will not apply to investments in
securities issued by the U.S. government, its agencies or
instrumentalities. Up to 25% of the portfolio's total assets may
be invested without regard to this 5% limitation.
Borrow money or property except as a temporary measure for
extraordinary or emergency purposes, and in an amount not exceeding
one-third of the market value of its total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing. The portfolio will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5%. The portfolio has not borrowed in the past and has no
present intention to borrow.
Make a loan of any part of its assets to American Express Financial
Corporation, to the officers and directors of American Express
Financial Corporation or to its own officers and directors.
Buy any property or security (other than securities issued by the
portfolio) from any officer or director of American Express
Financial Corporation or the Fund, nor will the portfolio sell any
property or security to them.
Issue senior securities, except that this restriction shall not be
deemed to prohibit the portfolio from borrowing money from banks,
lending its securities, or entering into repurchase agreements or
options or futures contracts.
Unless changed by the board of directors, the following policies
will apply to Government Securitites Portfolio:
The portfolio will not invest in illiquid securities if,
immediately after making such an investment, more than 10% of the
portfolio's net assets, at market, would be invested in such
securities.
The portfolio will not invest for the purpose of exercising control
or management.
The portfolio will not buy on margin or sell short, except that it
may enter into interest rate futures contracts.
<PAGE>
PAGE 38
The portfolio will not invest in securities of investment companies
except by purchase in the open market where the dealer's or
sponsor's profit is just the regular commission.
The portfolio may make contracts to purchase securities for a fixed
price at a future date beyond normal settlement time (when issued
securities or forward commitments). A portfolio does not pay for
the securities or receive dividends or interest on them until the
contractual settlement date. The portfolio's custodian will
maintain, in a segregated account, cash or liquid high-grade debt
securities that are marked to market daily and are at least equal
in value to the portfolio's commitments to purchase the securities.
When-issued securities or forward commitments are subject to market
fluctuations and they may affect the portfolio's total assets the
same as owned securities.
The portfolio may maintain a portion of its assets in cash and
cash-equivalent investments. The cash-equivalent investments the
portfolio may use are short-term U.S. and Canadian government
securities and negotiable certificates of deposit, non-negotiable
fixed-time deposits, bankers' acceptances and letters of credit of
banks or savings and loan associations having capital, surplus and
undivided profits (as of the date of its most recently published
annual financial statements) in excess of $100 million (or the
equivalent in the instance of a foreign branch of a U.S. bank) at
the date of investment. Any cash-equivalent investments in foreign
securities will be subject to the limitations on foreign
investments described in the prospectus. The portfolio also may
purchase short-term corporate notes and obligations rated in the
top two classifications by Moody's Investors Service, Inc. or
Standard & Poor's Corporation or the equivalent and may use
repurchase agreements with broker-dealers registered under the
Securities Exchange Act of 1934 and with commercial banks. A risk
of a repurchase agreement is that if the seller seeks the
protection of the bankruptcy laws, the portfolio's ability to
liquidate the security involved could be impaired.
The portfolio may invest in repurchase agreements. Repurchase
agreements involve investment in debt securities whereby the seller
agrees to repurchase the securities at cost plus an agreed to
interest rate within a specified time. A risk of a repurchase
agreement is that if the party with whom this portfolio has entered
into such an agreement seeks the protection of bankruptcy laws, the
portfolio's ability to liquidate the security involved could be
temporarily impaired, and it subsequently may incur a loss if the
value of the security declines, or if the other party defaults on
its obligation. There also is the risk that the portfolio may be
delayed or prevented from exercising its rights to dispose of the
collateral securities.
The portfolio may invest in Rule 144A securities, which are
unregistered securities offered to qualified institutional buyers,
and interest-only and principal-only fixed mortgage-backed
securities (IOs and POs) issued by the United States government or
its agencies and instrumentalities. In determining the liquidity
<PAGE>
PAGE 39
of Rule 144A securities, IOs and POs, the investment manager, under
guidelines established by the board of directors, will consider any
relevant factors including the frequency of trades, the number of
dealers willing to purchase or sell the security and the nature of
marketplace trades.
The portfolio may invest in commercial paper issued in transactions
not involving a public offering under Section 4(2) of the
Securities Act of 1933 (4(2) paper). In determining the liquidity
of 4(2) paper, the investment manager, under guidelines established
by the board of directors, will evaluate relevant factors such as
the issuer and the size and nature of its commercial paper
programs, the willingness and ability of the issuer or dealer to
repurchase the paper, and the nature of the clearance and
settlement procedures for the paper.
The portfolio will not pledge or mortgage its assets beyond 15% of
the cost of its gross assets. For purposes of this restriction,
collateral arrangements with respect to margin for interest rate
futures contracts are not deemed to be a pledge of assets.
Notwithstanding any of the portfolio's other investment policies,
the portfolio may invest its assets in an open-end management
investment company having substantially the same investment
objectives, policies and restrictions as the portfolio for the same
purpose of having those assets managed as part of a combined pool.
Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Income Portfolio agree to a change, Income Portfolio will not:
Underwrite securities of other issuers. However, this shall not
preclude the purchase of securities for investment, on original
issue or otherwise, and shall not preclude the acquisition of
portfolio securities under circumstances where the portfolio would
not be free to sell them without being deemed an underwriter for
purposes of the Securities Act of 1933 (1933 Act) and without
registration of such securities or the filing of a notification
under that Act, or the taking of similar action under other
securities laws relating to the sale of securities.
Buy securities of an issuer if the officers and directors of the
Portfolio and of American Express Financial Corporation hold more
than a certain percent of the issuer's outstanding securities. The
holdings of all officers and directors of the Portfolio who own
more than 0.5% of an issuer's securities are added together and if
in total they own more than 5%, the Portfolio will not purchase
securities of that issuer.
Buy or sell real estate, unless acquired as a result of ownership
of securities or other instruments, except this shall not prevent
the portfolio from investing in securities or other instruments
backed by real estate or securities of companies engaged in the
real estate business.
<PAGE>
PAGE 40
Buy or sell physical commodities unless acquired as a result of
ownership of securities or other instruments, except this shall not
prevent the portfolio from buying or selling options and futures
contracts or from investing in securities or other instruments
backed by, or whose value is derived from, physical commodities.
Make cash loans if the total commitment amount exceeds 5% of the
portfolio's total assets.
Lend portfolio securities in excess of 30% of its net assets, at
market value. The current policy of the board of directors is to
make these loans, either long- or short-term, to broker-dealers.
In making such loans the portfolio gets the market price in cash,
U.S. government securities, letters of credit or such other
collateral as may be permitted by regulatory agencies and approved
by the board of directors. If the market price of the loaned
securities goes up, the portfolio will get additional collateral on
a daily basis. The risks are that the borrower may not provide
additional collateral when required or return the securities when
due. A loan will not be made unless the opportunity for additional
income outweighs the risks. During the existence of the loan, the
portfolio receives cash payments equivalent to all interest or
other distributions paid on the loaned securities.
Invest more than 5% of its total assets, at market value, in
securities of any one company, government or political subdivision
thereof, except the limitation will not apply to investments in
securities issued by the U.S. government, its agencies or
instrumentalities. Up to 25% of the portfolio's total assets may
be invested without regard to this 5% limitation.
Borrow money or property except as a temporary measure for
extraordinary or emergency purposes, and in an amount not exceeding
one-third of the market value of its total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing. The portfolio will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5%. The portfolio has not borrowed in the past and has no
present intention to borrow.
Concentrate its investments in any particular industry, but
reserves freedom of action to do so provided that not more than 25%
of its assets, taken at cost, may be so invested at any one time.
Purchase securities of any issuer if immediately after and as a
result of such purchase the portfolio would own more than 10% of
the outstanding voting securities of such issuer.
Unless changed by the board of directors, the following policies
apply to Income Portfolio:
The portfolio will not invest in companies for the purpose of, or
with the effect of, acquiring control.
The portfolio will not buy on margin or sell short.
<PAGE>
PAGE 41
The portfolio will not invest in securities of any investment
company except in the open market where no commission or profit to
a sponsor or dealer results from such purchase other than customary
broker's commission. The portfolio does not intend to invest in
such securities but may do so to the extent of not more than 5% of
its total assets (taken at market or other current value). The
portfolio may acquire limited amounts of securities of one or more
investment companies as permitted by the Investment Company Act of
1940 (1940 Act), in connection with the acquisition of or merger
with such companies. Except for these instances, the portfolio
will not purchase securities of investment companies.
The portfolio may make contracts to purchase securities for a fixed
price at a future date beyond normal settlement time (when issued
securities or forward commitments). A portfolio does not pay for
the securities or receive dividends or interest on them until the
contractual settlement date. The portfolio's custodian will
maintain, in a segregated account, cash or liquid high-grade debt
securities that are marked to market daily and are at least equal
in value to the portfolio's commitments to purchase the securities.
When-issued securities or forward commitments are subject to market
fluctuations and they may affect the portfolio's total assets the
same as owned securities.
The portfolio may maintain a portion of its assets in cash and
cash-equivalent investments. The cash-equivalent investments the
portfolio may use are short-term U.S. and Canadian government
securities and negotiable certificates of deposit, non-negotiable
fixed-time deposits, bankers' acceptances and letters of credit of
banks or savings and loan associations having capital, surplus and
undivided profits (as of the date of its most recently published
annual financial statements) in excess of $100 million (or the
equivalent in the instance of a foreign branch of a U.S. bank) at
the date of investment. Any cash-equivalent investments in foreign
securities will be subject to the limitations on foreign
investments described in the prospectus. The portfolio also may
purchase short-term corporate notes and obligations rated in the
top two classifications by Moody's Investors Service, Inc. or
Standard & Poor's Corporation or the equivalent and may use
repurchase agreements with broker-dealers registered under the
Securities Exchange Act of 1934 and with commercial banks. A risk
of a repurchase agreement is that if the seller seeks the
protection of the bankruptcy laws, the portfolio's ability to
liquidate the security involved could be impaired.
The portfolio may invest in Rule 144A securities, which are
unregistered securities offered to qualified institutional buyers,
and interest-only and principal-only fixed mortgage-backed
securities (IOs and POs) issued by the United States government or
its agencies and instrumentalities. In determining the liquidity
of Rule 144A securities, IOs and POs, the investment manager, under
guidelines established by the board of directors, will consider any
relevant factors including the frequency of trades, the number of
dealers willing to purchase or sell the security and the nature of
marketplace trades.
<PAGE>
PAGE 42
The portfolio may invest in commercial paper issued in transactions
not involving a public offering under Section 4(2) of the
Securities Act of 1933 (4(2) paper). In determining the liquidity
of 4(2) paper, the investment manager, under guidelines established
by the board of directors, will evaluate relevant factors such as
the issuer and the size and nature of its commercial paper
programs, the willingness and ability of the issuer or dealer to
repurchase the paper, and the nature of the clearance and
settlement procedures for the paper.
The portfolio will not invest in securities which are not readily
marketable (including restricted securities and repurchase
agreements over 7 days) without registration or the filing of a
notification under the 1933 Act, or the taking of similar action
under other securities laws relating to the sale of securities, if
immediately after the making of any such investment more than 10%
of the portfolio's net assets (taken at market or other current
value) are invested in such securities.
The portfolio will not invest in interests in oil, gas and other
mineral exploration or development programs.
Notwithstanding any of the portfolio's other investment policies,
the portfolio may invest its assets in an open-end management
investment company having substantially the same investment
objectives, policies and restrictions as the portfolio for the
purpose of having those assets managed as part of a combined pool.
Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of International Equity Portfolio agree to a change, International
Equity Portfolio will not:
Act as an underwriter (sell securities for others). However, under
the securities laws, the portfolio may be deemed to be an
underwriter when it purchases securities directly from the issuer
and later resells them. It may be considered an underwriter under
securities laws when its sells restricted securities.
Purchase securities of an issuer if the directors and officers of
the portfolio, American Express Financial Corporation and IDS Life
Insurance Company (IDS Life) hold more than a certain percentage of
the issuer's outstanding securities. The holdings of all officers
and directors of the portfolio, American Express Financial
Corporation and IDS Life who own more than 0.5% of an issuer's
securities are added together, and if in total they own more than
5%, the portfolio will not purchase securities of that issuer.
Buy or sell real estate, unless acquired as a result of ownership
of securities or other instruments, except this shall not prevent
the portfolio from investing in securities or other instruments
backed by real estate or securities of companies engaged in the
real estate business.
<PAGE>
PAGE 43
Buy or sell physical commodities unless acquired as a result of
ownership of securities or other instruments, except this shall not
prevent the portfolio from buying or selling options and futures
contracts or from investing in securities or other instruments
backed by, or whose value is derived from, physical commodities.
Make cash loans if the total commitment amount exceeds 5% of the
portfolio's total assets.
Lend portfolio securities in excess of 30% of its net assets, at
market value. The current policy of the board of directors is to
make these loans, either long- or short-term, to broker-dealers.
In making such loans the portfolio gets the market price in cash,
U.S. government securities, letters of credit or such other
collateral as may be permitted by regulatory agencies and approved
by the board of directors. If the market price of the loaned
securities goes up, the portfolio will get additional collateral on
a daily basis. The risks are that the borrower may not provide
additional collateral when required or return the securities when
due. A loan will not be made unless the opportunity for additional
income outweighs the risks. During the existence of the loan, the
portfolio receives cash payments equivalent to all interest or
other distributions paid on the loaned securities.
Invest more than 5% of its total assets, at market value, in
securities of any one company, government or political subdivision
thereof, except the limitation will not apply to investments in
securities issued by the U.S. government, its agencies or
instrumentalities. Up to 25% of the portfolio's total assets may
be invested without regard to this 5% limitation.
Borrow money or property except as a temporary measure for
extraordinary or emergency purposes, and in an amount not exceeding
one-third of the market value of its total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing. The portfolio will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5%. The portfolio has not borrowed in the past and has no
present intention to borrow.
Concentrate in any one industry. According to the present
interpretation by the Securities and Exchange Commission (SEC),
this means no more than 25% of a portfolio's total assets, based on
current market value at time of purchase, can be invested in any
one industry.
Purchase more than 10% of the outstanding voting securities of an
issuer.
Make a loan of any part of its assets to American Express Financial
Corporation, to its directors and officers or to its own directors
and officers.
<PAGE>
PAGE 44
Issue senior securities, except to the extent that borrowing from
banks, lending its securities, or entering into repurchase
agreements or options or futures contracts may be deemed to
constitute issuing a senior security.
Unless changed by the board of directors, the following policies
apply to International Equity Portfolio:
The portfolio will not invest more than 10% of the portfolio's net
assets in illiquid securities and derivative instruments that are
illiquid. For purposes of this policy illiquid securities include
some privately placed securities, public securities and Rule 144A
securities that for one reason or another may no longer have a
readily available market, repurchase agreements with maturities
greater than seven days, non-negotiable fixed-time deposits and
over-the-counter options.
The portfolio will not invest in a company to control or manage it.
The portfolio will not buy on margin or sell short, but the
portfolio may make margin payments in connection with transactions
in stock index futures contracts.
The portfolio will not invest more than 10% of its net assets, at
market, in securities of investment companies. To the extent the
portfolio were to make such investments, the shareholders may be
subject to duplicate advisory, administrative and distribution
fees.
The portfolio may make contracts to purchase securities for a fixed
price at a future date beyond normal settlement time (when issued
securities or forward commitments). A portfolio does not pay for
the securities or receive dividends or interest on them until the
contractual settlement date. The portfolio's custodian will
maintain, in a segregated account, cash or liquid high-grade debt
securities that are marked to market daily and are at least equal
in value to the portfolio's commitments to purchase the securities.
When-issued securities or forward commitments are subject to market
fluctuations and they may affect the portfolio's total assets the
same as owned securities.
The portfolio may maintain a portion of its assets in cash and
cash-equivalent investments. The cash-equivalent investments the
Portfolio may use are short-term U.S. and Canadian government
securities and negotiable certificates of deposit, non-negotiable
fixed-time deposits, bankers' acceptances and letters of credit of
banks or savings and loan associations having capital, surplus and
undivided profits (as of the date of its most recently published
annual financial statements) in excess of $100 million (or the
equivalent in the instance of a foreign branch of a U.S. bank) at
the date of investment. Any cash-equivalent investments in foreign
securities will be subject to the limitations on foreign
investments described in the prospectus. The portfolio also may
purchase short-term corporate notes and obligations rated in the
top two classifications by Moody's Investors Service, Inc. or
<PAGE>
PAGE 45
Standard & Poor's Corporation or the equivalent and may use
repurchase agreements with broker-dealers registered under the
Securities Exchange Act of 1934 and with commercial banks. A risk
of a repurchase agreement is that if the seller seeks the
protection of the bankruptcy laws, the portfolio's ability to
liquidate the security involved could be impaired.
The portfolio will not pledge or mortgage its assets beyond 15% of
the cost of its total assets. If the portfolio were ever to do so,
valuation of its assets would be based on market value and the
portfolio would comply with applicable state laws, one of which
requires 90% of the offering price to consist of net assets that
are not pledged or mortgaged. For the purpose of this restriction,
collateral arrangements with respect to margin for futures
contracts are not deemed to be a pledge of assets.
The portfolio may invest in Rule 144A securities, which are
unregistered securities offered to qualified institutional buyers,
and interest-only and principal-only fixed mortgage-backed
securities (IOs and POs) issued by the United States government or
its agencies and instrumentalities. In determining the liquidity
of Rule 144A securities, IOs and POs, the investment manager, under
guidelines established by the board of directors, will consider any
relevant factors including the frequency of trades, the number of
dealers willing to purchase or sell the security and the nature of
marketplace trades.
The portfolio may invest in commercial paper issued in transactions
not involving a public offering under Section 4(2) of the
Securities Act of 1933 (4(2) paper). In determining the liquidity
of 4(2) paper, the investment manager, under guidelines established
by the board of directors, will evaluate relevant factors such as
the issuer and the size and nature of its commercial paper
programs, the willingness and ability of the issuer or dealer to
repurchase the paper, and the nature of the clearance and
settlement procedures for the paper.
Notwithstanding any of the portfolio's other investment policies,
the portfolio may invest its assets in an open-end management
investment company having substantially the same investment
objectives, policies and restrictions as the portfolio for the
purpose of having those assets managed as part of a combined pool.
Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Managed Portfolio agree to a change, Managed Portfolio will not:
Act as an underwriter (sell securities for others). However, under
the securities laws, the portfolio may be deemed to be an
underwriter when it purchases securities directly from the issuer
and later resells them.
Buy securities of an issuer if the officers and directors of the
portfolio and of American Express Financial Corporation hold more
than a certain percentage of the issuer's outstanding securities.
<PAGE>
PAGE 46
The holdings of all officers and directors of the portfolio and of
American Express Financial Corporation who own more than 0.5% of an
issuer's securities are added together and if in total they own
more than 5%, the portfolio will not purchase securities of that
issuer.
Buy or sell real estate, unless acquired as a result of ownership
of securities or other instruments, except this shall not prevent
the portfolio from investing in securities or other instruments
backed by real estate or securities of companies engaged in the
real estate business.
Buy or sell physical commodities unless acquired as a result of
ownership of securities or other instruments, except this shall not
prevent the portfolio from buying or selling options and futures
contracts or from investing in securities or other instruments
backed by, or whose value is derived from, physical commodities.
Make cash loans if the total commitment amount exceeds 5% of the
portfolio's total assets.
Lend portfolio securities in excess of 30% of its net assets, at
market value. The current policy of the board of directors is to
make these loans, either long- or short-term, to broker-dealers.
In making such loans the portfolio gets the market price in cash,
U.S. government securities, letters of credit or such other
collateral as may be permitted by regulatory agencies and approved
by the board of directors. If the market price of the loaned
securities goes up, the portfolio will get additional collateral on
a daily basis. The risks are that the borrower may not provide
additional collateral when required or return the securities when
due. A loan will not be made unless the opportunity for additional
income outweighs the risks. During the existence of the loan, the
portfolio receives cash payments equivalent to all interest or
other distributions paid on the loaned securities.
Invest more than 5% of its total assets, at market value, in
securities of any one company, government or political subdivision
thereof, except the limitation will not apply to investments in
securities issued by the U.S. government, its agencies or
instrumentalities. Except for Money Market Portfolio, up to 25% of
each Portfolio's total assets may be invested without regard to
this 5% limitation.
Borrow money or property except as a temporary measure for
extraordinary or emergency purposes, and in an amount not exceeding
one-third of the market value of its total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing. The portfolio will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5%. The portfolio has not borrowed in the past and has no
present intention to borrow.
<PAGE>
PAGE 47
Concentrate in any one industry. (According to the present
interpretation of the staff of the Securities and Exchange
Commission this means no more than 25% of the portfolio's total
assets, based on current market value at the time of purchase, can
be invested in any one industry).
Make a loan of any part of its assets to American Express Financial
Corporation, to the officers and directors of American Express
Financial Corporation or to its own officers and directors.
Issue senior securities, except that this restriction shall not be
deemed to prohibit the portfolio from borrowing money from banks,
lending its securities, or entering into repurchase agreements or
options or futures contracts.
Unless changed by the board of directors, the following policies
apply to Managed Portfolio:
The portfolio will not invest in a company to get control or manage
it.
The portfolio will not buy on margin or sell short, but it may make
margin payments in connection with transactions in futures
contracts.
The portfolio will not invest in securities of investment companies
except by purchases in the open market where the dealer's or
sponsor's profit is just the regular commission.
The portfolio may make contracts to purchase securities for a fixed
price at a future date beyond normal settlement time (when issued
securities or forward commitments). A portfolio does not pay for
the securities or receive dividends or interest on them until the
contractual settlement date. The portfolio's custodian will
maintain, in a segregated account, cash or liquid high-grade debt
securities that are marked to market daily and are at least equal
in value to the portfolio's commitments to purchase the securities.
When-issued securities or forward commitments are subject to market
fluctuations and they may affect the portfolio's total assets the
same as owned securities.
The portfolio may maintain a portion of its assets in cash and
cash-equivalent investments. The cash-equivalent investments the
portfolio may use are short-term U.S. and Canadian government
securities and negotiable certificates of deposit, non-negotiable
fixed-time deposits, bankers' acceptances and letters of credit of
banks or savings and loan associations having capital, surplus and
undivided profits (as of the date of its most recently published
annual financial statements) in excess of $100 million (or the
equivalent in the instance of a foreign branch of a U.S. bank) at
the date of investment. Any cash-equivalent investments in foreign
securities will be subject to the limitations on foreign
investments described in the prospectus. The portfolio also may
purchase short-term corporate notes and obligations rated in the
top two classifications by Moody's Investors Service, Inc. or
<PAGE>
PAGE 48
Standard & Poor's Corporation or the equivalent and may use
repurchase agreements with broker-dealers registered under the
Securities Exchange Act of 1934 and with commercial banks. A risk
of a repurchase agreement is that if the seller seeks the
protection of the bankruptcy laws, the portfolio's ability to
liquidate the security involved could be impaired.
The portfolio will not invest more than 5% of its total assets,
taken at cost, in securities of companies, including any
predecessor, which have a record of less than three years
continuous operations.
The portfolio does not intend to invest in exploration or
development programs, such as oil, gas or mineral programs.
The portfolio may invest in repurchase agreements. Repurchase
agreements involve investment in debt securities whereby the seller
agrees to repurchase the securities at cost plus an agreed to
interest rate within a specified time. A risk of a repurchase
agreement is that if the party with whom this portfolio has entered
into such an agreement seeks the protection of bankruptcy laws, the
portfolio's ability to liquidate the security involved could be
temporarily impaired, and it subsequently may incur a loss if the
value of the security declines, or if the other party defaults on
its obligation. There also is the risk that the portfolio may be
delayed or prevented from exercising its rights to dispose of the
collateral securities.
The portfolio may invest in Rule 144A securities, which are
unregistered securities offered to qualified institutional buyers,
and interest-only and principal-only fixed mortgage-backed
securities (IOs and POs) issued by the United States government or
its agencies and instrumentalities. In determining the liquidity
of Rule 144A securities, IOs and POs, the investment manager, under
guidelines established by the board of directors, will consider any
relevant factors including the frequency of trades, the number of
dealers willing to purchase or sell the security and the nature of
marketplace trades.
The portfolio may invest in commercial paper issued in transactions
not involving a public offering under Section 4(2) of the
Securities Act of 1933 (4(2) paper). In determining the liquidity
of 4(2) paper, the investment manager, under guidelines established
by the board of directors, will evaluate relevant factors such as
the issuer and the size and nature of its commercial paper
programs, the willingness and ability of the issuer or dealer to
repurchase the paper, and the nature of the clearance and
settlement procedures for the paper.
The portfolio does not intend to invest in illiquid securities if,
immediately after making such an investment, more than 10% of the
portfolio's net assets, at market, would be invested in such
securities.
<PAGE>
PAGE 49
The portfolio will not pledge or mortgage its assets beyond 15% of
the cost of its gross assets taken at cost. For the purposes of
this restriction, collateral arrangements with respect to margin
for futures contracts are not deemed to be a pledge of assets.
Notwithstanding any of the portfolio's other investment policies,
the portfolio may invest its assets in an open-end management
investment company having substantially the same investment
objectives, policies and restrictions as the portfolio for the
purpose of having those assets managed as part of a combined pool.
Unless the holders of a majority of the outstanding shares (as
defined in the section entitled "Voting rights" of the prospectus)
of Money Market Portfolio agree to a change, Money Market Portfolio
will not:
Act as an underwriter (sell securities for others). However, under
securities laws the portfolio may be deemed to be an underwriter
when it purchases securities directly from the issuer and later
resells them.
Buy securities of an issuer if the directors and officers of the
portfolio and of American Express Financial Corporation hold more
than a certain percentage of the issuer's outstanding securities.
The holdings of all directors and officers of the portfolio who own
more than 0.5% of an issuer's securities are added together, and if
in total they own more than 5%, the portfolio will not purchase
securities of that issuer.
Buy or sell real estate, commodities, or commodity contracts.
Make cash loans. However, it does make short-term investments
which it may have an agreement with the seller to reacquire (See
Appendix B).
Lend portfolio securities in excess of 30% of its net assets, at
market value. The current policy of the board of directors is to
make these loans, either long- or short-term, to broker-dealers.
In making such loans the portfolio gets the market price in cash,
U.S. government securities, letters of credit or such other
collateral as may be permitted by regulatory agencies and approved
by the board of directors. If the market price of the loaned
securities goes up, the portfolio will get additional collateral on
a daily basis. The risks are that the borrower may not provide
additional collateral when required or return the securities when
due. A loan will not be made unless the opportunity for additional
income outweighs the risks. During the existence of the loan, the
portfolio receives cash payments equivalent to all interest or
other distributions paid on the loaned securities.
Invest more than 5% of its total assets, at market value, in
securities of any one company, government or political subdivision
thereof, except the limitation will not apply to investments in
securities issued by the U.S. government, its agencies or
instrumentalities.
<PAGE>
PAGE 50
Borrow money or property except as a temporary measure for
extraordinary or emergency purposes, and in an amount not exceeding
one-third of the market value of its total assets (including
borrowings) less liabilities (other than borrowings) immediately
after the borrowing. The portfolio will not purchase additional
portfolio securities at any time borrowing for temporary purposes
exceeds 5%. The portfolio has not borrowed in the past and has no
present intention to borrow.
Buy on margin or sell short.
Invest in exploration or development programs, such as oil, gas or
mineral programs.
Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds or debentures, state bonds, municipal
bonds, or industrial revenue bonds.
Pledge or mortgage portfolio assets beyond 15% of the cost of the
portfolio's gross assets. If the portfolio should engage in such
transactions, valuation of its assets for such purposes would be
based on their market value.
Invest in an investment company beyond 5% of its total assets taken
at market and then only on the open market where the dealer's or
sponsor's profit is just the regular commission. However, the
portfolio will not purchase or retain the securities of other open-
end investment companies.
Invest in a company to get control or manage it.
Invest more than 25% of the portfolio's assets taken at market
value in any particular industry, except there is no limitation
with respect to investing in U.S. government or agency securities
and bank obligations. Investments are varied according to what is
judged advantageous under different economic conditions.
Unless changed by the board of directors, the following policies
apply to Money Market Portfolio:
The portfolio will not invest in illiquid securities if,
immediately after making such an investment, more than 10% of the
portfolio's net assets, at market, would be invested in such
securities.
The portfolio may make contracts to purchase securities for a fixed
price at a future date beyond normal settlement time (when issued
securities or forward commitments). A portfolio does not pay for
the securities or receive dividends or interest on them until the
contractual settlement date. The portfolio's custodian will
maintain, in a segregated account, cash or liquid high-grade debt
<PAGE>
PAGE 51
securities that are marked to market daily and are at least equal
in value to the portfolio's commitments to purchase the securities.
When-issued securities or forward commitments are subject to market
fluctuations and they may affect the portfolio's total assets the
same as owned securities.
The portfolio may maintain a portion of its assets in cash and
cash-equivalent investments. The cash-equivalent investments the
portfolio may use are short-term U.S. and Canadian government
securities and negotiable certificates of deposit, non-negotiable
fixed-time deposits, bankers' acceptances and letters of credit of
banks or savings and loan associations having capital, surplus and
undivided profits (as of the date of its most recently published
annual financial statements) in excess of $100 million (or the
equivalent in the instance of a foreign branch of a U.S. bank) at
the date of investment. Any cash-equivalent investments in foreign
securities will be subject to the limitations on foreign
investments described in the prospectus. The portfolio also may
purchase short-term corporate notes and obligations rated in the
top two classifications by Moody's Investors Service, Inc. or
Standard & Poor's Corporation or the equivalent and may use
repurchase agreements with broker-dealers registered under the
Securities Exchange Act of 1934 and with commercial banks. A risk
of a repurchase agreement is that if the seller seeks the
protection of the bankruptcy laws, the portfolio's ability to
liquidate the security involved could be impaired.
The portfolio may invest in repurchase agreements. Repurchase
agreements involve investment in debt securities whereby the seller
agrees to repurchase the securities at cost plus an agreed to
interest rate within a specified time. A risk of a repurchase
agreement is that if the party with whom this portfolio has entered
into such an agreement seeks the protection of bankruptcy laws, the
portfolio's ability to liquidate the security involved could be
temporarily impaired, and it subsequently may incur a loss if the
value of the security declines, or if the other party defaults on
its obligation. There also is the risk that the portfolio may be
delayed or prevented from exercising its rights to dispose of the
collateral securities.
Notwithstanding any of the portfolio's other investment policies,
the portfolio may invest its assets in an open-end management
investment company having substantially the same investment
objectives, policies and restrictions as the portfolio for the
purpose of having those assets managed as part of a combined pool.
For a discussion on foreign currency transactions, see Appendix A.
For a discussion on money market securities, see Appendix B. For a
discussion on options and stock index futures contracts, see
Appendix C. For a discussion on options and interest rate futures
contracts, see Appendix D. For a discussion on mortgage-backed
securities, see Appendix E. For a discussion on dollar-cost
averaging, see Appendix F. For a description of corporate bond
ratings, see Appendix G.
<PAGE>
PAGE 52
PORTFOLIO TRANSACTIONS
Subject to policies set by the board of directors, IDS Life is
authorized to determine, consistent with each portfolio's
investment goals and policies, which securities shall be purchased,
held or sold. In determining where the buy and sell orders are to
be placed, IDS Life has been directed to use its best efforts to
obtain the best available price and the most favorable execution
except where otherwise authorized by the board of directors. IDS
Life intends to direct American Express Financial Corporation to
execute trades and negotiate commissions on its behalf. In
selecting broker-dealers to execute transactions, American Express
Financial Corporation may consider the price of the security,
including commission or mark-up, the size and difficulty of the
order, the reliability, integrity, financial soundness and general
operation and execution capabilities of the broker, the broker's
expertise in particular markets, and research services provided by
the broker. These services are covered by the Investment Advisory
agreement between American Express Financial Corporation and IDS
Life. When American Express Financial Corporation acts on IDS
Life's behalf for the Fund, it follows the rules described here for
IDS Life.
Because Income Portfolio's investments are primarily in bonds,
which are traded in the over-the-counter market, IDS Life generally
will deal through a dealer acting as a principal. The price
usually includes a dealer's mark-up without a separate brokerage
charge. When IDS Life believes that dealing through a broker as
agent for a commission will produce the best results, it will do
so. The portfolio also may buy securities directly from an issuing
company which may be resold only privately to other institutional
investors.
On occasion it may be desirable to compensate a broker for research
services or for brokerage services, by paying a commission which
might not otherwise be charged or a commission in excess of the
amount another broker might charge. The board of directors has
adopted a policy authorizing IDS Life to do so to the extent
authorized by law, if IDS Life determines, in good faith, that such
commission is reasonable in relation to the value of the brokerage
or research services provided by a broker or dealer, viewed either
in the light of that transaction or IDS Life's or American Express
Financial Corporation's overall responsibilities.
Research provided by brokers supplements IDS Life's own research
activities. Research services provided by brokers include economic
data on, and analysis of, U.S. and foreign economies; information
on specific industries; information about specific companies,
including earnings estimates; purchase recommendations for stock
and bonds; portfolio strategy services; political, economic,
business and industry trend assessments; historical statistical
information; market data services providing information on specific
issues and prices; and technical analysis of various aspects of the
securities markets, including technical charts. Research services
may take the form of written reports, computer software or personal
<PAGE>
PAGE 53
contact by telephone or at seminars or other meetings. IDS Life
has obtained and, in the near future, may obtain computer hardware
from brokers, including but not limited to personal computers that
will be used exclusively for investment decision-making purposes,
which include the research, portfolio management and trading
functions and other services to the extent permitted under an
interpretation by the Securities and Exchange Commission.
When paying a commission that might not otherwise be charged or a
commission in excess of that which another broker might charge, IDS
Life must follow procedures authorized by the board of directors.
To date, three procedures have been authorized. One procedure
permits IDS Life to direct an order to buy or sell a security
traded on a national securities exchange to a specific broker for
research services it has provided. The second procedure permits
IDS Life, in order to obtain research, to direct an order on an
agency basis to buy or sell a security traded only in the over-the-
counter market to a firm that does not make a market in the
security. The commission paid generally includes compensation for
research services. The third procedure permits IDS Life, in order
to obtain research and brokerage services, to cause a Portfolio to
pay a commission in excess of the amount another broker might have
charged. IDS Life has advised the Fund that it is necessary to do
business with a number of brokerage firms on a continuous basis to
obtain such services as: handling large orders; the willingness of
a broker to risk its own money by taking a position in a security;
and specialized handling of a particular group of securities that
only certain brokers may be able to offer. As a result of this
arrangement, some portfolio transactions may not be effected at
the lowest commission, but IDS Life believes it may obtain better
overall execution. IDS Life has assured the Fund that under all
three procedures the amount of commission paid will be reasonable
and competitive in relation to the value of the brokerage services
performed or research provided.
All other transactions shall be executed on the basis of the policy
to obtain the best available price and the most favorable
execution. In so doing, if, in the professional opinion of the
person responsible for selecting the broker or dealer, several
firms can execute the transaction on the same basis, consideration
will be given by such person to those firms offering research
services. Such services may be used by IDS Life and American
Express Financial Corporation in providing advice to all the funds
and other accounts advised by IDS Life even though it is not
possible to relate the benefits to any particular fund or account.
Each investment decision made for a Portfolio is made independently
from any decision made for another Portfolio or fund or other
account advised by IDS Life or any of its subsidiaries. When the
Portfolio buys or sells the same security as another fund or
account, IDS Life carries out the purchase or sale in a way the
Fund agrees in advance is fair. Although sharing in large
transactions may adversely affect the price or volume purchased or
sold by the Fund, the Fund hopes to gain an overall advantage in
execution. IDS Life has assured the Fund it will continue to seek
ways to reduce brokerage costs.<PAGE>
PAGE 54
On a periodic basis, IDS Life makes a comprehensive review of the
broker-dealers and the overall reasonableness of their commissions.
The review evaluates execution, back office efficiency and research
services.
The Fund paid total brokerage commissions of $210,093 for fiscal
year 1993, $405,141 for fiscal year 1994 and $947,711 for fiscal
year ended April 30, 1995. The majority of all firms through whom
transactions were executed provide research services. Transactions
amounting to $46,997,000 with related commissions of $74,532 were
directed to brokers by the Fund because of research services
received for the fiscal year ended April 30, 1995.
Income and Managed Portfolios' acquisition during the period ended
April 30, 1995, of securities of its regular brokers or dealers or
of the parents of those brokers or dealers that derive more than
15% of gross revenue from securities-related activities is
presented below:
Value of Securities
Owned at End of
Name of Issuer Fiscal Year
Bank America 495,000
Salomon Brothers 428,880
BROKERAGE COMMISSIONS PAID TO BROKERS AFFILIATED WITH IDS LIFE
Affiliates of American Express Company (of which IDS Life is a
wholly owned indirect subsidiary) may engage in brokerage and other
securities transactions on behalf of the Fund in accordance with
procedures adopted by the Fund's Board of Directors and to the
extent consistent with applicable provisions of the federal
securities laws. IDS Life will use an American Express affiliate
only if (i) IDS Life determines that the Fund will receive prices
and executions at least as favorable as those offered by qualified
independent brokers performing similar brokerage and other services
for the Fund and (ii) if such use is consistent with terms of the
Investment Management and Services Agreement.
AEFC may direct brokerage to compensate an affiliate. AEFC will
receive research on South Africa from New Africa Advisors, a
wholly-owned subsidiary of Sloan Financial Group. AEFC owns 100%
of IDS Capital Holdings Inc. which in turn owns 40% of Sloan
Financial Group. New Africa Advisors will send research to AEFC
and in turn American Express Financial Corporation will direct
trades to a particular broker. The broker will have an agreement
to pay New Africa Advisors. All transactions will be on a best
execution basis. Compensation received will be reasonable for the
services rendered.
Information about brokerage commissions paid by the Fund for the
last three fiscal years to brokers affiliated with IDS Life is
contained in the following table:
<PAGE>
PAGE 55
<TABLE>
<CAPTION>
For the Fiscal Year Ended April 30,
1995 1994 1993
Aggregate Percent of Aggregate Aggregate
Dollar Aggregate Dollar Dollar Dollar
Amount of Percent of Amount of Amount of Amount of
Nature Commissions Aggregate Transactions Commissions Commissions
of Paid to Brokerage Involving Payment Paid to Paid to
Broker Affiliation Broker Commissions of Commissions Broker Broker
<S> <C> <C> <C> <C> <C> <C>
American (2) $31,425 3.31 5.06 $19,878 $35,204
Enterprise
Investment
Services Inc.
Lehman (1) $18,512 1.95 2.07 $ 4,851 $ 8,390
Brothers
Inc.
The Robinson (3) $0 -- -- none none
Humphrey
Company, Inc.
</TABLE>
(1) Under common control with American Express Financial
Corporation as a subsidiary of American Express Company (American
Express) until July 30, 1993.
(2) Wholly owned subsidiary of American Express Financial
Corporation.
(3) Under common control with American Express Financial
Corporation as an indirect subsidiary of American Express until
July 30, 1993.
PERFORMANCE INFORMATION
Each Portfolio may quote various performance figures to illustrate
past performance. Average annual total return and current yield
quotations used by a Fund are based on standardized methods of
computing performance as required by the SEC. An explanation of
these and any other methods used by each Portfolio to compute
performance follows below.
CALCULATION OF TOTAL RETURN
Each Portfolio may calculate average annual total return for
certain periods by finding the average annual compounded rates of
return over the period that would equate the initial amount
invested to the ending redeemable value, according to the following
formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical
$1,000 payment at the beginning of a period, at
the end of the period (or fractional portion
thereof)
<PAGE>
PAGE 56
Aggregate total return
Each Portfolio may calculate aggregate total return for certain
periods representing the cumulative change in the value of an
investment in a Portfolio over a specified period of time according
to the following formula:
ERV - P
P
where: P = a hypothetical initial payment of $1,000
ERV = ending redeemable value of a hypothetical $1,000
payment at the beginning of a period, at the end of
the period (or fractional portion thereof)
CALCULATION OF YIELD
Government Securities and Income Portfolios - These portfolios may
calculate an annualized yield by dividing the average net
investment income per share earned during a 30-day period by the
net asset value per share on the last day of the period and
annualizing the results.
Yield is calculated according to the following formula:
Yield = 2[ (a-b + 1)6 - 1]
cd
where: a = dividends and interest earned during the period
b = expenses accrued for the period (net of
reimbursements)
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends
d = the maximum offering price per share on the
last day of the period
Government Securities Portfolio's yield was 7.14% for the 30-day
period ended April 30, 1995 and Income Portfolio's yield was 6.63%.
IDS Life has agreed to a voluntary limitation of non-advisory
expenses at an annual charge not to exceed 0.1 percent of the
average daily net assets of the Fund. If non-advisory expenses had
not been limited, Government Securities Portfolio's yield would
have been 7.11%. Income Portfolio's yield would have been 6.63*%.
*Expenses did not exceed .1% of average daily net assets.
Money Market Portfolio calculates annualized simple and compound
yields based on a seven-day period.
The simple yield is calculated by determining the net change in the
value of a hypothetical account having a balance of one share at
the beginning of the seven day period, dividing the net change in
account value by the value of the account at the beginning of the
<PAGE>
PAGE 57
period to obtain the return for the period, and multiplying that
return by 365/7 to obtain an annualized figure. The value of the
hypothetical account includes the amount of any declared dividends,
the value of any shares purchased with any dividend paid during the
period and any dividends declared for such shares. The Portfolio's
yield does not include any realized or unrealized gain or loss.
The Portfolio calculates its compound yield according to the
following formula:
Compound Yield = (return for seven day period + 1) 365/7 - 1
The Portfolio's simple annualized yield was 5.42% and its compound
yield was 5.57% on April 30, 1995, the last business day of the
fund's fiscal year. If direct expenses had not been limited, the
simple annualized yield would have been 5.33% and its compound
yield would have been 5.47%.
Yield, or rate of return, on Portfolio shares may fluctuate daily
and does not provide a basis for determining future yields.
However, it may be used as one element in assessing how the
Portfolio is meeting its goal. When comparing an investment in the
Portfolio with savings accounts and similar investment
alternatives, you must consider that such alternatives often
provide an agreed to or guaranteed fixed yield for a stated period
of time, whereas the Portfolio's yield fluctuates. In comparing
the yield of one money market fund to another, you should consider
each fund's investment policies, including the types of investments
permitted.
In its sales material and other communications, the Fund may quote
rankings, yields or returns as published by independent statistical
services or publishers and publications such as The Bank Rate
Monitor National Index, Barron's, Business Week, Donoghue's Money
Market Fund Report, Financial Services Week, Financial Times,
Financial World, Forbes, Fortune, Global Investor, Institutional
Investor, Investor's Daily, Kiplinger's Personal Finance, Lipper
Analytical Services, Money, Mutual Fund Forecaster, Newsweek, The
New York Times, Personal Investor, Shearson Lehman Aggregate Bond
Index, Stanger Report, Sylvia Porter's Personal Finance, USA Today,
U.S. News and World Report, The Wall Street Journal and
Wiesenberger Investment Companies Service.
VALUING EACH PORTFOLIO'S SHARES
The value of an individual share in the Equity, Income, Managed,
Government Securities and International Equity Portfolios, is
determined by using the net asset value before the shareholder
transactions for the day. On April 30, 1995 the computation looked
like this for Equity, Income, International Equity, Managed and
Government Securities Portfolios:
<PAGE>
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<TABLE>
<CAPTION>
Net assets before Shares outstanding Net asset
shareholder transactions at end of previous day value of one share
<S> <C> <C> <C> <C> <C>
Equity Portfolio 241,032,001 divided by 12,024,452 = 20.05
Income Portfolio 37,823,251 divided by 3,924,989 = 9.64
Managed Portfolio 219,986,058 divided by 15,589,271 = 14.11
Government Securities
Portfolio 11,440,464 divided by 1,160,975 = 9.85
International Equity
Portfolio 8,496,808 divided by 826,111 = 10.29
</TABLE>
The net asset value per share is determined by dividing the total
market value of the Fund's investments and other assets, less any
liabilities, by the number of outstanding shares of the Fund. To
establish the net assets, all securities are valued as of the close
of each business day, which is the closing time of the New York
Stock Exchange (currently 3 p.m. Central time). A business day for
the Fund is any day the New York Stock Exchange is open. The
portfolio securities are valued at amortized cost, which
approximates market value.
In determining net assets, the Fund's portfolio securities are
valued as follows:
`Stocks, convertible bonds, warrants, futures and options traded on
major exchanges are valued each day at their last quoted sales
price on their primary exchange as of the close of the New York
Stock Exchange. If the last quoted sales price is not readily
available for a particular security, the value is the average price
between the last offer to buy and the last offer to sell.
`Stocks, convertible bonds and warrants with readily available
market quotations but without a listing on an exchange are also
valued at the average between the last bid (offer to buy) and asked
(offer to sell) price at the time of the close of the New York
Stock Exchange.
`Short-term securities maturing in 60 days or less at the
acquisition date are valued at amortized cost. (Amortized cost is
an approximation of market value determined by systematically
increasing the carrying value of a security if acquired at a
discount, or systematically reducing the carrying value if acquired
at a premium, so that the carrying value is equal to maturity value
on the maturity date.)
`Securities without a readily available market price, bonds other
than convertibles and other assets are valued at fair value. In
valuing these, the Fund directors are responsible for selecting
methods which they believe give the fair value. For nonconvertible
bonds, the usual method is to use the pricing service of an outside
organization. Such pricing service may take into consideration
yield, quality, coupon, maturity, type of issue, trading
characteristics and other market data in determining valuations for
normal institutional-size trading units of debt securities and does
not rely exclusively on quoted prices.
`Generally, trading in foreign securities is substantially
completed each day at various times prior to the close of the New
York Stock Exchange. The values of such securities used in <PAGE>
PAGE 59
determining the net asset value of the Fund's shares are computed
as of such times. Occasionally, events affecting the value of such
securities may occur between such times and the close of the New
York Stock Exchange which will not be reflected in the computation
of the Fund's net asset value. If events materially affecting the
value of such securities occur during such period, then these
securities will be valued at their fair value according to
procedures decided upon in good faith by the Fund's Board of
Directors. Foreign securities quoted in foreign currencies are
translated into U.S. dollars at the current exchange rate.
Valuing Money Market Portfolio's shares
Money Market Portfolio intends to use its best efforts to maintain
a constant net asset value of $1 per share although there is no
assurance it will be able to do so. Accordingly, it uses the
amortized cost method in valuing its Portfolio.
Short-term securities maturing in 60 days or less are valued at
amortized cost. Amortized cost is an approximation of market value
determined by systematically increasing the carrying value of a
security if acquired at a discount, or reducing the carrying value
if acquired at a premium, so that the carrying value is equal to
maturity value on the maturity date. It does not take into
consideration unrealized capital gains or losses. All of the
securities in the portfolio will be valued at their amortized cost.
In addition, the portfolio must abide by certain conditions. It
must only invest in securities of high quality which present
minimal credit risks as determined by the board of directors. This
means that the rated commercial paper in the Fund's portfolio will
be issues that have been rated in the highest rating category by at
least two nationally recognized statistical rating organizations
(or by one if only one rating is assigned) and in unrated paper
determined by the Fund's board of directors to be comparable. The
portfolio must also purchase securities with original or remaining
maturities of no more than 13 months or less, and maintain a
dollar-weighted average portfolio maturity of 90 days or less.
In addition, the board of directors must establish procedures
designed to stabilize the portfolio's price per share for purposes
of sales and redemptions at $1 to the extent that it is reasonably
possible to do so. These procedures include review of the
portfolio securities by the board, at intervals deemed appropriate
by it, to determine whether the net asset value per share computed
by using the available market quotations deviates from a share
value of $1 as computed using the amortized cost method. The Board
must consider any deviation that appears, and if it exceeds 0.5
percent, it must determine what action, if any, needs to be taken.
If the board determines that a deviation exists that may result in
a material dilution of the holdings of current shareholders or
investors, or in other unfair consequences for such people, it must
undertake remedial action that it deems necessary and appropriate.
Such action may include withholding dividends, calculating net
asset value per share for purposes of sales and redemptions using
<PAGE>
PAGE 60
available market quotations, making redemptions in kind, and
selling portfolio securities before maturity in order to realize
capital gain or loss or to shorten average portfolio maturity.
In other words, while the amortized cost method provides certainty
and consistency in portfolio valuation, it may, from time to time,
result in valuations of portfolio securities which are either
somewhat higher or lower than the prices at which the securities
could be sold. This means that during times of declining interest
rates, the yield on the Portfolio's shares may be higher than if
valuations of securities were made based on actual market prices
and estimates of market prices. Accordingly, if use of the
amortized cost method were to result in a lower portfolio value at
a given time, a prospective investor would be able to obtain a
somewhat higher yield than he or she would get if portfolio
valuation were based on actual market values. Existing
shareholders, on the other hand, would receive a somewhat lower
yield than they would otherwise receive. The opposite would happen
during a period of rising interest rates.
INVESTING IN THE FUND
You cannot buy shares of the Fund directly. The only way you can
invest in the Fund at the present time is by buying a Variable Life
Insurance Policy from IDS Life or IDS Life of New York and
directing the allocation of part or all of your net purchase
payment to the Variable Accounts which will invest in shares of the
Fund. Read this fund's prospectus along with your Variable Life
Insurance Policy prospectus.
Sales Charges and Surrender Charges
The Fund does not assess any sales charge, either when it sells or
when it redeems securities. The surrender charges which may be
assessed under your Variable Life Insurance Policy are described in
the Variable Life Insurance Policy prospectus, as are mortality and
expense risk fees and other charges.
REDEEMING SHARES
The Fund will redeem any shares presented by the shareholders (the
Variable Accounts) for redemption. The Variable Accounts' policy
on when or whether to buy or redeem Fund shares is described in the
Variable Life Insurance Policy prospectus.
During an emergency the board of directors can suspend the
computation of net asset value, stop accepting payments for
purchase of shares, or suspend the duty of the Fund to redeem
shares for more than seven days. Such emergency situations would
occur if:
`The New York Stock Exchange closes for reasons other than the
usual weekend and holiday closings, or trading on the Exchange is
restricted,
<PAGE>
PAGE 61
`Disposal of the Fund's securities is not reasonably practicable,
or it is not reasonably practicable for the Fund to determine the
fair value of its net assets, or
`The Securities and Exchange Commission, under the provisions of
the Investment Company Act of 1940, declares a period of emergency
to exist.
Should the Fund stop selling shares, the directors may make a
deduction from the value of the assets held by the Fund to cover
the cost of future liquidations of the assets so as to distribute
fairly these costs among all contract owners.
CAPITAL GAINS AND LOSSES
For federal income tax purposes, Income and Managed Portfolios had
a capital loss carryover of $882,704 and $3,761,754 respectively,
at April 30, 1995, which, if not offset by subsequent capital
gains, will expire in 2000 through 2004. It is unlikely the board
of directors will authorize a distribution of any net realized gain
for these portfolio's until the capital loss carryover has been
offset or expires.
INVESTMENT MANAGEMENT AND OTHER SERVICES
Management and Services Agreement
The Fund does not maintain its own research department or record-
keeping services. These are provided by IDS Life under the
Investment Management and Services Agreement.
For its services, IDS Life is paid a fee based on the net assets of
the portfolios. The asset charge is based on the aggregate average
daily net assets of each of the portfolios at the following rates:
0.7 percent, on an annual basis, for Equity Portfolio;
0.7 percent, on an annual basis, for Income Portfolio;
0.95 percent, on an annual basis, for International Equity
Portfolio;
0.5 percent, on an annual basis, for Money Market Portfolio;
0.7 percent, on an annual basis, for Managed Portfolio; and
0.7 percent, on an annual basis, for Government Securities
Portfolio.
The management fee is paid monthly. The total amount paid for
fiscal year ended April 30, 1995 was $1,326,220 for Equity
Portfolio, $242,049 for Income Portfolio, $18,559 for International
Equity Portfolio, $48,493 for Money Market Portfolio, $1,339,464
for Managed Portfolio and $77,867 for Government Securities
Portfolio. The total amount paid for fiscal year ended April 30,
1994 was $850,524 for Equity Portfolio, $199,578 for Income
Portfolio, $41,168 for Money Market Portfolio, $920,594 for Managed
Portfolio, and $75,428 for Government Securities Portfolio. The
total amount paid for fiscal year ended April 30, 1993 was $504,402
<PAGE>
PAGE 62
for Equity Portfolio, $136,217 for Income Portfolio, $47,061 for
Money Market Portfolio, $596,745 for Managed Portfolio and $61,668
for Government Securities Portfolio.
All non-advisory expenses incurred by the Fund will be paid at an
annual charge not to exceed 0.1 percent of the aggregate average
daily net assets of the Fund. The voluntary limitation of 0.1
percent has been established by IDS Life at that figure and IDS
Life reserves the right to discontinue the voluntary limitation.
Investment Advisory Agreement
IDS Life and American Express Financial Corporation have an
Investment Advisory Agreement. It calls for IDS Life to pay
American Express Financial Corporation a fee for investment advice
about the Fund's Portfolios. American Express Financial
Corporation also executes purchases and sales and negotiates
brokerage as directed by IDS Life. The fee paid by IDS Life is
0.25 percent of the average net assets for the year of all
portfolios, except for International Equity. The fee paid by IDS
Life is 0.50 percent of International Equity portfolio's average
net assets.
IDS Life paid American Express Financial Corporation $1,119,466 for
investment advice for the fiscal year ended April 30, 1995. IDS
Life paid American Express Financial Corporation $751,255 for
investment advice for the fiscal year ended April 30, 1994. IDS
Life paid American Express Financial Corporation $487,415 for
investment advice for the fiscal year ended April 30, 1993.
Information concerning other funds advised by IDS Life or American
Express Financial Corporation is contained in the prospectus.
MANAGEMENT OF THE FUND
The Fund has a Board of Directors elected by policyholders that
oversees the operations of the Fund as required by state law. The
Board has named an executive committee of directors that has
authority to act on its behalf between meetings.
The Fund's directors and officers do not own any of the outstanding
shares of the Fund.
Directors of the Fund
The following is a list of the Fund's directors.
Carl N. Platou
President Emeritus and Chief Executive Officer, Fairview Hospital
and Healthcare Services, Retired 1990. Director, St. Thomas
University since 1990.
<PAGE>
PAGE 63
*Richard W. Kling
President, IDS Life since March 1994. Director and Executive Vice
President, Marketing and Products from January 1988 to March 1994.
Manager of IDS Life Variable Annuity Funds A&B.
Edward Landes
Retired, former Development Consultant.
*Janis E. Miller
Director and Executive Vice President, Variable Assets, IDS Life
since March 1994. Vice President, American Express Financial
Corporation since June 1990. Manager of IDS Life Variable Annuity
Funds A & B.
Gordon H. Ritz
President, Con Rad Broadcasting Corp. (radio broadcasting).
Director, Sunstar Foods and Mid-America Publishing.
*Interested person of IDS Life and of the Fund as the term
"interested person" is defined in the 1940 Act.
Officers of the Fund
Besides Mr. Kling, who is the President, the Fund's other executive
officers are listed below:
Colleen Curran
IDS Tower 10
Minneapolis, MN
Secretary
Senior Counsel, American Express Financial Corporation, since 1990.
Louis C. Fornetti
IDS Tower 10
Minneapolis, MN
Vice President
Director, IDS Life, since March 1994. Director and Senior Vice
President--Corporate Controller, American Express Financial
Corporation, since August 1988. Vice President--Corporate
Controller, from 1985 to 1988.
Morris Goodwin, Jr.
IDS Tower 10
Minneapolis, MN
Vice President and Treasurer
Vice President and Treasurer, IDS Life since March 1994. Vice
President and Corporate Treasurer, American Express Financial
Corporation, since July 1989. Chief Financial Officer and
Treasurer, American Express Trust Compapny, from 1988 to 1989.
<PAGE>
PAGE 64
Paul F. Kolkman
IDS Tower 10
Minneapolis, MN
Vice President and Chief Actuary
Director and Vice President--Finance, IDS Life. Vice President--
Insurance Finance, American Express Financial Corporation.
William A. Stoltzmann
IDS Tower 10
Minneapolis, MN
General Counsel and Assistant Secretary
General Counsel and Assistant Secretary, IDS Life. Vice President
and Assistant General Counsel, American Express Financial
Corporation.
Melinda S. Urion
IDS Tower
Minneapolis, MN
Vice President and Controller
Vice President and Corporate Controller, American Express Financial
Corporation, since April 1994; Vice President - Insurance
Controller, American Express Financial Corporation, from September
1991 to April 1994. Chief Accounting Officer for American Express
Financial Advisors, Inc. from July 1988 to September 1991.
Board Compensation Table for IDS Life Series Fund
for fiscal year ended April 30, 1995
The members of the IDS Life Series Fund board of directors also
serve on the boards for IDS Life Variable Annuity Fund A and IDS
Life Variable Annuity Fund B.
<TABLE>
<CAPTION>
Aggregate Compensation
Board Member from IDS Life Series Fund Total Cash Compensation
<S> <C> <C>
Edward Landes $4,000 $8,000
Carl N. Platou 4,000 7,500
Gordon H. Ritz 4,000 8,000
</TABLE>
Members of the Fund who are not salaried employees of IDS Life or
one of its affiliates receive $2,000 per year plus $500 per meeting
they attend and expenses. All officers are salaried employees of
IDS Life or American Express Financial Corporation and receive no
remuneration from the Fund.
There are no pension or retirement benefits accrued as part of fund
expenses.
CUSTODIAN
The Fund's securities and cash are held by American Express Trust
Company, 1200 Northstar Center West, 625 Marquette Ave.,
Minneapolis, MN 55402, through a custodian agreement. The
custodian is permitted to deposit some or all of its securities in
central depository systems as allowed by federal law.
<PAGE>
PAGE 65
The custodian has entered into a sub-custodian arrangement with
Morgan Stanley Trust Co. (Morgan Stanley), One Pierrepont Plaza,
8th Floor, Brooklyn, NY, 11201-2775. As part of this arrangement,
portfolio securities purchased outside the United States may be
held in custody and deposit accounts that have been established by
Morgan Stanley with one or more domestic or foreign banks, or
through the facilities of one or more clearing agencies or central
securities depositories as may be permitted by law and by the
Fund's sub-custodian agreement.
INDEPENDENT AUDITORS
The Fund's financial statements contained in its Annual Report to
shareholders at the end of its fiscal year are audited by
independent auditors, KPMG Peat Marwick LLP, 4200 Norwest Center,
90 South Seventh Street, Minneapolis, MN 55402-3900. IDS Life has
agreed that it will send a copy of this report and the unaudited
Semi-Annual Report to every Variable Life Insurance policyowner
having an interest in the Fund. The independent auditors also
provide other accounting and tax-related services as requested by
the Fund from time to time.
FINANCIAL STATEMENTS
The 1995 Annual Report to IDS Life Series Fund, Inc. shareholders,
filed pursuant to Section 30(d) of the 1940 Act, is hereby
incorporated in this Statement of Additional Information by
reference.
The prospectus dated June 29, 1995, is hereby incorporated in this
Statement of Additional Information by reference.
<PAGE>
PAGE 66
APPENDIX A
FOREIGN CURRENCY TRANSACTIONS, FOR INVESTMENTS OF EQUITY, INCOME,
MANAGED, AND INTERNATIONAL EQUITY PORTFOLIOS
Since investments in foreign countries usually involve currencies
of foreign countries, and since the Portfolio may hold cash and
cash-equivalent investments in foreign currencies, the value of the
Portfolio's assets as measured in U.S. dollars may be affected
favorably or unfavorably by changes in currency exchange rates and
exchange control regulations. Also, the Portfolio may incur costs
in connection with conversions between various currencies.
Spot Rates and Forward Contracts. The Portfolio conducts its
foreign currency exchange transactions either at the spot (cash)
rate prevailing in the foreign currency exchange market or by
entering into forward currency exchange contracts (forward
contracts) as a hedge against fluctuations in future foreign
exchange rates. A forward contract involves an obligation to buy
or sell a specific currency at a future date, which may be any
fixed number of days from the contract date, at a price set at the
time of the contract. These contracts are traded in the interbank
market conducted directly between currency traders (usually large
commercial banks) and their customers. A forward contract
generally has no deposit requirements. No commissions are charged
at any stage for trades.
The Portfolio may enter into forward contracts to settle a security
transaction or handle dividend and interest collection. When the
Portfolio enters into a contract for the purchase or sale of a
security denominated in a foreign currency or has been notified of
a dividend or interest payment, it may desire to lock in the price
of the security or the amount of the payment in dollars. By
entering into a forward contract, the Portfolio will be able to
protect itself against a possible loss resulting from an adverse
change in the relationship between different currencies from the
date the security is purchased or sold to the date on which payment
is made or received or when the dividend or interest is actually
received.
The Portfolio also may enter into forward contracts when management
of the Portfolio believes the currency of a particular foreign
country may suffer a substantial decline against another currency.
It may enter into a forward contract to sell, for a fixed amount of
dollars, the amount of foreign currency approximating the value of
some or all of the Portfolio's portfolio securities denominated in
such foreign currency. The precise matching of forward contract
amounts and the value of securities involved generally will not be
possible since the future value of such securities in foreign
currencies more than likely will change between the date the
forward contract is entered into and the date it matures. The
projection of short-term currency market movements is extremely
difficult and successful execution of a short-term hedging strategy
is highly uncertain. The Portfolio will not enter into such
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forward contracts or maintain a net exposure to such contracts when
consummating the contracts would obligate the Portfolio to deliver
an amount of foreign currency in excess of the value of the
Portfolio's portfolio securities or other assets denominated in
that currency.
The Portfolio will designate cash or securities in an amount equal
to the value of the Portfolio's total assets committed to
consummating forward contracts entered into under the second
circumstance set forth above. If the value of the securities
declines, additional cash or securities will be designated on a
daily basis so that the value of the cash or securities will equal
the amount of the Portfolio's commitments on such contracts.
At maturity of a forward contract, the Portfolio may either sell
the portfolio security and make delivery of the foreign currency or
retain the security and terminate its contractual obligation to
deliver the foreign currency by purchasing an offsetting contract
with the same currency trader obligating it to buy, on the same
maturity date, the same amount of foreign currency.
If the Portfolio retains the portfolio security and engages in an
offsetting transaction, the Portfolio will incur a gain or a loss
(as described below) to the extent there has been movement in
forward contract prices. If the Portfolio engages in an offsetting
transaction, it may subsequently enter into a new forward contract
to sell the foreign currency. Should forward prices decline
between the date the Portfolio enters into a forward contract for
selling foreign currency and the date it enters into an offsetting
contract for purchasing the foreign currency, the Portfolio will
realize a gain to the extent that the price of the currency it has
agreed to sell exceeds the price of the currency it has agreed to
buy. Should forward prices increase, the Portfolio will suffer a
loss to the extent the price of the currency it has agreed to buy
exceeds the price of the currency it has agreed to sell.
It is impossible to forecast what the market value of portfolio
securities will be at the expiration of a contract. Accordingly,
it may be necessary for the Portfolio to buy additional foreign
currency on the spot market (and bear the expense of such purchase)
if the market value of the security is less than the amount of
foreign currency the Portfolio is obligated to deliver and a
decision is made to sell the security and make delivery of the
foreign currency. Conversely, it may be necessary to sell on the
spot market some of the foreign currency received on the sale of
the portfolio security if its market value exceeds the amount of
foreign currency the Portfolio is obligated to deliver.
The Portfolio's dealing in forward contracts will be limited to the
transactions described above. This method of protecting the value
of the Portfolio's portfolio securities against a decline in the
value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate
of exchange that can be achieved at some point in time. Although
<PAGE>
PAGE 68
such forward contracts tend to minimize the risk of loss due to a
decline in value of hedged currency, they tend to limit any
potential gain that might result should the value of such currency
increase.
Although the Portfolio values its assets each business day in terms
of U.S. dollars, it does not intend to convert its foreign
currencies into U.S. dollars on a daily basis. It will do so from
time to time, and shareholders should be aware of currency
conversion costs. Although foreign exchange dealers do not charge
a fee for conversion, they do realize a profit based on the
difference (spread) between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a
foreign currency to the Portfolio at one rate, while offering a
lesser rate of exchange should the Portfolio desire to resell that
currency to the dealer.
Options on Foreign Currencies. The Portfolio may buy put and write
covered call options on foreign currencies for hedging purposes.
For example, a decline in the dollar value of a foreign currency in
which portfolio securities are denominated will reduce the dollar
value of such securities, even if their value in the foreign
currency remains constant. In order to protect against such
diminutions in the value of portfolio securities, the Portfolio may
buy put options on the foreign currency. If the value of the
currency does decline, the Portfolio will have the right to sell
such currency for a fixed amount in dollars and will thereby
offset, in whole or in part, the adverse effect on its portfolio
which otherwise would have resulted.
As in the case of other types of options, however, the benefit to
the Portfolio derived from purchases of foreign currency options
will be reduced by the amount of the premium and related
transaction costs. In addition, where currency exchange rates do
not move in the direction or to the extent anticipated, the
Portfolio could sustain losses on transactions in foreign currency
options which would require it to forego a portion or all of the
benefits of advantageous changes in such rates.
The Portfolio may write options on foreign currencies for the same
types of hedging purposes. For example, when the Portfolio
anticipates a decline in the dollar value of foreign-denominated
securities due to adverse fluctuations in exchange rates, it could,
instead of purchasing a put option, write a call option on the
relevant currency. If the expected decline occurs, the option will
most likely not be exercised and the diminution in value of
portfolio securities will be fully or partially offset by the
amount of the premium received.
As in the case of other types of options, however, the writing of a
foreign currency option will constitute only a partial hedge up to
the amount of the premium, and only if rates move in the expected
direction. If this does not occur, the option may be exercised and
the Portfolio would be required to buy or sell the underlying
<PAGE>
PAGE 69
currency at a loss which may not be offset by the amount of the
premium. Through the writing of options on foreign currencies, the
Portfolio also may be required to forego all or a portion of the
benefits which might otherwise have been obtained from favorable
movements on exchange rates.
All options written on foreign currencies will be covered. An
option written on foreign currencies is covered if the Portfolio
holds currency sufficient to cover the option or has an absolute
and immediate right to acquire that currency without additional
cash consideration upon conversion of assets denominated in that
currency or exchange of other currency held in its portfolio. An
option writer could lose amounts substantially in excess of its
initial investments, due to the margin and collateral requirements
associated with such positions.
Options on foreign currencies are traded through financial
institutions acting as market-makers, although foreign currency
options also are traded on certain national securities exchanges,
such as the Philadelphia Stock Exchange and the Chicago Board
Options Exchange, subject to SEC regulation. In an over-the-
counter trading environment, many of the protections afforded to
exchange participants will not be available. For example, there
are no daily price fluctuation limits, and adverse market movements
could therefore continue to an unlimited extent over a period of
time. Although the purchaser of an option cannot lose more than
the amount of the premium plus related transaction costs, this
entire amount could be lost.
Foreign currency option positions entered into on a national
securities exchange are cleared and guaranteed by the OCC, thereby
reducing the risk of counterparty default. Further, a liquid
secondary market in options traded on a national securities
exchange may be more readily available than in the over-the-counter
market, potentially permitting the Portfolio to liquidate open
positions at a profit prior to exercise or expiration, or to limit
losses in the event of adverse market movements.
The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of availability of a liquid
secondary market described above, as well as the risks regarding
adverse market movements, margining of options written, the nature
of the foreign currency market, possible intervention by
governmental authorities and the effects of other political and
economic events. In addition, exchange-traded options on foreign
currencies involve certain risks not presented by the over-the-
counter market. For example, exercise and settlement of such
options must be made exclusively through the OCC, which has
established banking relationships in certain foreign countries for
the purpose. As a result, the OCC may, if it determines that
foreign governmental restrictions or taxes would prevent the
orderly settlement of foreign currency option exercises, or would
result in undue burdens on OCC or its clearing member, impose
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special procedures on exercise and settlement, such as technical
changes in the mechanics of delivery of currency, the fixing of
dollar settlement prices or prohibitions on exercise.
Foreign Currency Futures and Related Options. The Portfolio may
enter into currency futures contracts to sell currencies. It also
may buy put and write covered call options on currency futures.
Currency futures contracts are similar to currency forward
contracts, except that they are traded on exchanges (and have
margin requirements) and are standardized as to contract size and
delivery date. Most currency futures call for payment of delivery
in U.S. dollars. The Portfolio may use currency futures for the
same purposes as currency forward contracts, subject to CFTC
limitations, including the limitation on the percentage of assets
that may be used, described in the prospectus. All futures
contracts are aggregated for purposes of the percentage
limitations.
Currency futures and options on futures values can be expected to
correlate with exchange rates, but will not reflect other factors
that may affect the values of the Portfolio's investments. A
currency hedge, for example, should protect a Yen-denominated bond
against a decline in the Yen, but will not protect the Portfolio
against price decline if the issuer's creditworthiness
deteriorates. Because the value of the Portfolio's investments
denominated in foreign currency will change in response to many
factors other than exchange rates, it may not be possible to match
the amount of a forward contract to the value of the Portfolio's
investments denominated in that currency over time.
The Portfolio will not use leverage in its options and futures
strategies. The Portfolio will hold securities or other options or
futures positions whose values are expected to offset its
obligations. The Portfolio will not enter into an option or
futures position that exposes the Portfolio to an obligation to
another party unless it owns either (i) an offsetting position in
securities or (ii) cash, receivables and short-term debt securities
with a value sufficient to cover its potential obligations.
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APPENDIX B
DESCRIPTION OF MONEY MARKET SECURITIES
Certificates of Deposit -- A certificate of deposit is a negotiable
receipt issued by a bank or savings and loan association in
exchange for the deposit of funds. The issuer agrees to pay the
amount deposited, plus interest, on the date specified on the
certificate.
Time Deposit -- A time deposit is a non-negotiable deposit in a
bank for a fixed period of time.
Bankers' Acceptances -- A bankers' acceptance arises from a short-
term credit arrangement designed to enable businesses to obtain
funds to finance commercial transactions. It is a time draft drawn
on a bank by an exporter or an importer to obtain a stated amount
of funds to pay for specific merchandise. The draft is then
"accepted" by a bank that, in effect, unconditionally guarantees to
pay the face value of the instrument on its maturity date.
Commercial Paper -- Commercial paper is generally defined as
unsecured short-term notes issued in bearer form by large well-
known corporations and finance companies. Maturities on commercial
paper range from one day to nine months.
Commercial paper rated A by Standard & Poor's Corporation has the
following characteristics: Liquidity ratios are better than the
industry average. Long-term senior debt rating is "A" or better.
The issuer has access to at least two additional channels of
borrowing. Basic earnings and cash flow have an upward trend with
allowances made for unusual circumstances. Typically, the issuer's
industry is well established, the issuer has a strong position
within its industry and the reliability and quality of management
is unquestioned. Issuers rated A are further rated by use of
numbers 1, 2 and 3 to denote relative strength within this highest
classification.
A Prime rating is the highest commercial paper rating assigned by
Moody's Investors Services Inc. Issuers rated Prime are further
rated by use of numbers 1, 2 and 3 to denote relative strength
within this highest classification. Among the factors considered
by Moody's in assigning ratings for an issuer are the following:
(1) management; (2) economic evaluation of the industry and an
appraisal of speculative type risks which may be inherent in
certain areas; (3) competition and customer acceptance of products;
(4) liquidity; (5) amount and quality of long-term debt; (6) ten
year earnings trends; (7) financial strength of a parent company
and the relationships which exist with the issuer; and (8)
recognition by management of obligations which may be present or
may arise as a result of public interest questions and preparations
to meet such obligations.
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Letters of Credit -- A letter of credit is a short-term note issued
in bearer form with a bank letter of credit which provides that the
bank pay to the bearer the amount of the note upon presentation.
U.S. Treasury Bills -- Treasury bills are issued with maturities of
any period up to one year. Three-month and six-month bills are
currently offered by the Treasury on 13-week and 26-week cycles
respectively and are auctioned each week by the Treasury. Treasury
bills are issued in book entry form and are sold only on a discount
basis, i.e. the difference between the purchase price and the
maturity value constitutes interest income for the investor. If
they are sold before maturity, a portion of the income received may
be a short-term capital gain.
U.S. Government Agency Securities -- Federal agency securities are
debt obligations which principally result from lending programs of
the U.S. government. Housing and agriculture have traditionally
been the principal beneficiaries of Federal credit programs, and
agencies involved in providing credit to agriculture and housing
account for the bulk of the outstanding agency securities.
Repurchase Agreements -- A repurchase agreement involves the
acquisition of securities by the Portfolio, with the concurrent
agreement by a bank (or securities dealer if permitted by law or
regulation), to reacquire the securities at the portfolio's cost,
plus interest, within a specified time. The Portfolio thereby
receives a fixed rate of return on this investment, one that is
insulated from market and rate fluctuations during the holding
period. In these transactions, the securities acquired by the
Portfolio have a total value equal to or in excess of the value of
the repurchase agreement and are held by the Portfolio's custodian
until required. Pursuant to guidelines established by the
Portfolio's Board of Directors, the creditworthiness of the other
party to the transaction is considered and the value of those
securities held as collateral is monitored to ensure that such
value is maintained at the required level.
If IDS Life becomes aware that a security owned by a portfolio is
downgraded below the second highest rating, IDS Life will either
sell the security or recommend to the Fund's Board of Directors why
it should not be sold.
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APPENDIX C
OPTIONS AND STOCK INDEX FUTURES CONTRACTS, FOR INVESTMENTS OF
EQUITY, MANAGED AND INTERNATIONAL EQUITY PORTFOLIOS
Each Portfolio may buy or write options traded on any U.S. or
foreign exchange or in the over-the-counter market. Each Portfolio
may enter into stock index futures contracts traded on any U.S. or
foreign exchange. Each Portfolio also may buy or write put and
call options on these futures and on stock indexes. Options in the
over-the-counter market will be purchased only when the investment
manager believes a liquid secondary market exists for the options
and only from dealers and institutions the investment manager
believes present a minimal credit risk. Some options are
exercisable only on a specific date. In that case, or if a liquid
secondary market does not exist, a Portfolio could be required to
buy or sell securities at disadvantageous prices, thereby incurring
losses. Managed Portfolio also may enter into interest rate
futures contracts (see Appendix D).
OPTIONS. An option is a contract. A person who buys a call option
for a security has the right to buy the security at a set price for
the length of the contract. A person who sells a call option is
called a writer. The writer of a call option agrees to sell the
security at the set price when the buyer wants to exercise the
option, no matter what the market price of the security is at that
time. A person who buys a put option has the right to sell a
security at a set price for the length of the contract. A person
who writes a put option agrees to buy the security at the set price
if the purchaser wants to exercise the option, no matter what the
market price of the security is at that time. An option is covered
if the writer owns the security (in the case of a call) or sets
aside the cash or securities of equivalent value (in the case of a
put) that would be required upon exercise.
The price paid by the buyer for an option is called a premium. In
addition, the buyer generally pays a broker a commission. The
writer receives a premium, less another commission, at the time the
option is written. The cash received is retained by the writer
whether or not the option is exercised. A writer of a call option
may have to sell the security for a below-market price if the
market price rises above the exercise price. A writer of a put
option may have to pay an above-market price for the security if
its market price decreases below the exercise price. The risk of
the writer is potentially unlimited, unless the option is covered.
Options can be used to produce incremental earnings, protect gains
and facilitate buying and selling securities for investment
purposes. The use of options and futures contracts may benefit a
Portfolio and its shareholders by improving the Portfolio's
liquidity and by helping to stabilize the value of its net assets.
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Buying options. Put and call options may be used as a trading
technique to facilitate buying and selling securities for
investment reasons. They also may be used for investment. Options
are used as a trading technique to take advantage of any disparity
between the price of the underlying security in the securities
market and its price on the options market. It is anticipated the
trading technique will be utilized only to effect a transaction
when the price of the security plus the option price will be as
good or better than the price at which the security could be bought
or sold directly. When the option is purchased, the Portfolio pays
a premium and a commission. It then pays a second commission on
the purchase or sale of the underlying security when the option is
exercised. For record keeping and tax purposes, the price obtained
on the purchase of the underlying security will be the combination
of the exercise price, the premium and both commissions. When
using options as a trading technique, commissions on the option
will be set as if only the underlying securities were traded.
Put and call options also may be held by a Portfolio for investment
purposes. Options permit a Portfolio to experience the change in
the value of a security with a relatively small initial cash
investment.
The risk a Portfolio assumes when it buys an option is the loss of
the premium. To be beneficial to a Portfolio, the price of the
underlying security must change within the time set by the option
contract. Furthermore, the change must be sufficient to cover the
premium paid, the commissions paid both in the acquisition of the
option and in a closing transaction or in the exercise of the
option and subsequent sale (in the case of a call) or purchase (in
the case of a put) of the underlying security. Even then, the
price change in the underlying security does not ensure a profit
since prices in the option market may not reflect such a change.
Writing covered options. Each Portfolio will write covered options
when it feels it is appropriate and will follow these guidelines:
'Underlying securities will continue to be bought or sold solely on
the basis of investment considerations consistent with each
Portfolio's goal.
'All options written by a Portfolio will be covered. For covered
call options, if a decision is made to sell the security, each
Portfolio will attempt to terminate the option contract through a
closing purchase transaction.
'Each Portfolio will deal only in standard option contracts traded
on national securities exchanges or those that may be quoted on
NASDAQ (a system of price quotations developed by the National
Association of Securities Dealers, Inc.)
'Each Portfolio will write options only as permitted under federal
laws or regulations, such as those that limit the amount of total
assets subject to the options. Some regulations also affect the
Custodian. When a covered option is written, the Custodian
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segregates the underlying securities, and issues a receipt. There
are certain rules regarding banks issuing such receipts that may
restrict the amount of covered call options written. Furthermore,
each Portfolio is limited to pledging not more than 15 percent of
the cost of its total assets.
Net premiums on call options closed or premiums on expired call
options are treated as short-term capital gains. Since each
Portfolio is taxed as a regulated investment company under the
Internal Revenue Code, any gains on options and other securities
held less than three months must be limited to less than 30 percent
of its annual gross income.
If a covered call option is exercised, the security is sold by the
Portfolio. The premium received upon writing the option is added
to the proceeds received from the sale of the security. The
Portfolio will recognize a capital gain or loss based upon the
difference between the proceeds and the security's basis. Premiums
received from writing outstanding options are included as a
deferred credit in the Statement of Assets and Liabilities and
adjusted daily to the current market value.
Options are valued at the close of the New York Stock Exchange. An
option listed on a national exchange, CBOE or NASDAQ will be valued
at the last-quoted sales price or, if such a price is not readily
available, at the mean of the last bid and asked prices.
STOCK INDEX FUTURES CONTRACTS. Stock index futures contracts are
commodity contracts listed on commodity exchanges. They currently
include contracts on the Standard & Poor's 500 Stock Index (S&P 500
Index) and other broad stock market indexes such as the New York
Stock Exchange Composite Stock Index and the Value Line Composite
Stock Index, as well as narrower sub-indexes such as the S&P 100
Energy Stock Index and the New York Stock Exchange Utilities Stock
Index. A stock index assigns relative values to common stocks
included in the index and the index fluctuates with the value of
the common stocks so included.
A futures contract is a legal agreement between a buyer or seller
and the clearinghouse of a futures exchange in which the parties
agree to make a cash settlement on a specified future date in an
amount determined by the stock index on the last trading day of the
contract. The amount is a specified dollar amount (usually $100 or
$500) multiplied by the difference between the index value on the
last trading day and the value on the day the contract was struck.
For example, the S&P 500 Index consists of 500 selected common
stocks, most of which are listed on the New York Stock Exchange.
The S&P 500 Index assigns relative weightings to the common stocks
included in the Index, and the Index fluctuates with changes in the
market values of those stocks. In the case of S&P 500 Index
futures contracts, the specified multiple is $500. Thus, if the
value of the S&P 500 Index were 150, the value of one contract
would be $75,000 (150 x $500). Unlike other futures contracts, a
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stock index futures contract specifies that no delivery of the
actual stocks making up the index will take place. Instead,
settlement in cash must occur upon the termination of the contract.
For example, excluding any transaction costs, if a Portfolio enters
into one futures contract to buy the S&P 500 Index at a specified
future date at a contract value of 150 and the S&P 500 Index is at
154 on that future date, the Portfolio will gain $500 x (154-150)
or $2,000. If the Portfolio enters into one futures contract to
sell the S&P 500 Index at a specified future date at a contract
value of 150 and the S&P 500 Index is at 152 on that future date,
the Portfolio will lose $500 x (152-150) or $1,000.
Unlike the purchase or sale of an equity security, no price would
be paid or received by the Portfolio upon entering into stock index
futures contracts. However, the Portfolio would be required to
deposit with its custodian, in a segregated account in the name of
the futures broker, an amount of cash or U.S. Treasury bills equal
to approximately 5 percent of the contract value. This amount is
known as initial margin. The nature of initial margin in futures
transactions is different from that of margin in security
transactions in that futures contract margin does not involve
borrowing funds by the Portfolio to finance the transactions.
Rather, the initial margin is in the nature of a performance bond
or good-faith deposit on the contract that is returned to the
Portfolio upon termination of the contract, assuming all
contractual obligations have been satisfied.
Subsequent payments, called variation margin, to and from the
broker would be made on a daily basis as the price of the
underlying stock index fluctuates, making the long and short
positions in the contract more or less valuable, a process known as
marking to market. For example, when a Portfolio enters into a
contract in which it benefits from a rise in the value of an index
and the price of the underlying stock index has risen, the
Portfolio will receive from the broker a variation margin payment
equal to that increase in value. Conversely, if the price of the
underlying stock index declines, the Portfolio would be required to
make a variation margin payment to the broker equal to the decline
in value.
How These Portfolios Would Use Stock Index Futures Contracts. The
Portfolios intend to use stock index futures contracts and related
options for hedging and not for speculation. Hedging permits a
Portfolio to gain rapid exposure to or protect itself from changes
in the market. For example, a Portfolio may find itself with a
high cash position at the beginning of a market rally.
Conventional procedures of purchasing a number of individual issues
entail the lapse of time and the possibility of missing a
significant market movement. By using futures contracts, the
Portfolio can obtain immediate exposure to the market and benefit
from the beginning stages of a rally. The buying program can then
proceed and once it is completed (or as it proceeds), the contracts
can be closed. Conversely, in the early stages of a market
decline, market exposure can be promptly offset by entering into
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stock index futures contracts to sell units of an index and
individual stocks can be sold over a longer period under cover of
the resulting short contract position.
A Portfolio may enter into contracts with respect to any stock
index or sub-index. To hedge the Portfolio's investment portfolio
successfully, however, the Portfolio must enter into contracts with
respect to indexes or sub-indexes whose movements will have a
significant correlation with movements in the prices of the
Portfolio's individual portfolio securities.
Special Risks of Transactions in Stock Index Futures Contracts.
1. Liquidity. Each Portfolio may elect to close some or all of
its contracts prior to expiration. The purpose of making such a
move would be to reduce or eliminate the hedge position held by the
Portfolio. The Portfolio may close its positions by taking
opposite positions. Final determinations of variation margin are
then made, additional cash as required is paid by or to the
Portfolio, and the Portfolio realizes a gain or a loss.
Positions in stock index futures contracts may be closed only on an
exchange or board of trade providing a secondary market for such
futures contracts. For example, futures contracts transactions can
currently be entered into with respect to the S&P 500 Stock Index
on the Chicago Mercantile Exchange, the New York Stock Exchange
Composite Stock Index on the New York Futures Exchange and the
Value Line Composite Stock Index on the Kansas City Board of Trade.
Although the Portfolios intend to enter into futures contracts only
on exchanges or boards of trade where there appears to be an active
secondary market, there is no assurance that a liquid secondary
market will exist for any particular contract at any particular
time. In such event, it may not be possible to close a futures
contract position, and in the event of adverse price movements, the
Portfolio would have to make daily cash payments of variation
margin. Such price movements, however, will be offset all or in
part by the price movements of the securities subject to the hedge.
Of course, there is no guarantee the price of the securities will
correlate with the price movements in the futures contract and thus
provide an offset to losses on a futures contract.
2. Hedging Risks. There are several risks in using stock index
futures contracts as a hedging device. One risk arises because the
prices of futures contracts may not correlate perfectly with
movements in the underlying stock index due to certain market
distortions. First, all participants in the futures market are
subject to initial margin and variation margin requirements.
Rather than making additional variation margin payments, investors
may close the contracts through offsetting transactions which could
distort the normal relationship between the index and futures
markets. Second, the margin requirements in the futures market are
lower than margin requirements in the securities market, and as a
result the futures market may attract more speculators than does
the securities market. Increased participation by speculators in
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the futures market also may cause temporary price distortions.
Because of price distortion in the futures market and because of
imperfect correlation between movements in stock indexes and
movements in prices of futures contracts, even a correct forecast
of general market trends may not result in a successful hedging
transaction over a short period.
Another risk arises because of imperfect correlation between
movements in the value of the stock index futures contracts and
movements in the value of securities subject to the hedge. If this
occurred, a Portfolio could lose money on the contracts and also
experience a decline in the value of its portfolio securities.
While this could occur, IDS Life believes that over time the value
of the Portfolio's investment portfolio will tend to move in the
same direction as the market indexes and will attempt to reduce
this risk, to the extent possible, by entering into futures
contracts on indexes whose movements it believes will have a
significant correlation with movements in the value of the
Portfolio's investment portfolio securities sought to be hedged.
It is also possible that if the Portfolio has hedged against a
decline in the value of the stocks held in its portfolio and stock
prices increase instead, the Portfolio will lose part or all of the
benefit of the increased value of its stock which it has hedged
because it will have offsetting losses in its futures positions.
In addition, in such situations, if the Portfolio has insufficient
cash, it may have to sell securities to meet daily variation
margin requirements. Such sales of securities may be, but will not
necessarily be, at increased prices which reflect the rising
market. The Portfolio may have to sell securities at a time when
it may be disadvantageous to do so.
OPTIONS ON STOCK INDEX FUTURES CONTRACTS. Options on stock index
futures contracts are similar to options on stock except that
options on futures contracts give the purchaser the right, in
return for the premium paid, to assume a position in a stock index
futures contract (a long position if the option is a call and a
short position if the option is a put) at a specified exercise
price at any time during the period of the option. If the option
is closed instead of exercised, the holder of the option receives
an amount that represents the amount by which the market price of
the contract exceeds (in the case of a call) or is less than (in
the case of a put) the exercise price of the option on the futures
contract. If the option does not appreciate in value prior to the
exercise date, the Portfolio will suffer a loss of the premium
paid.
OPTIONS ON STOCK INDEXES. Options on stock indexes are securities
traded on national securities exchanges. An option on a stock
index is similar to an option on a futures contract except all
settlements are in cash. A Portfolio exercising a put, for
example, would receive the difference between the exercise price
and the current index level. Such options would be used in the
same manner as options on futures contracts.
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SPECIAL RISKS OF TRANSACTIONS IN OPTIONS ON STOCK INDEX FUTURES
CONTRACTS AND OPTIONS ON STOCK INDEXES. As with options on stocks,
the holder of an option on a stock index futures contract or on a
stock index may terminate a position by selling an option covering
the same contract or index and having the same exercise price and
expiration date. The ability to establish and close out positions
on such options will be subject to the development and maintenance
of a liquid secondary market. The Portfolios will not purchase
options unless the market for such options has developed
sufficiently, so that the risks in connection with options are not
greater than the risks in connection with stock index futures
contracts transactions themselves. Compared to using futures
contracts, purchasing options involves less risk to the Portfolios
because the maximum amount at risk is the premium paid for the
options (plus transaction costs). There may be circumstances,
however, when using an option would result in a greater loss to a
Portfolio than using a futures contract, such as when there is no
movement in the level of the stock index.
TAX TREATMENT. As permitted under federal income tax laws, each
Portfolio intends to identify futures contracts as mixed straddles
and not mark them to market, that is, not treat them as having been
sold at the end of the year at market value. Such an election may
result in the Portfolio being required to defer recognizing losses
incurred by entering into futures contracts and losses on
underlying securities identified as being hedged against.
Federal income tax treatment of gains or losses from transactions
in options on futures contracts and stock indexes is currently
unclear, although the Portfolios' tax advisors currently believe
marking to market is not required. Depending on developments, a
Portfolio may seek IRS rulings clarifying questions concerning such
treatment. Certain provisions of the Code also may limit a
Portfolio's ability to engage in futures contracts and related
options transactions. For example, at the close of each quarter of
the Portfolio's taxable year, at least 50 percent of the value of
its assets must consist of cash, government securities and other
securities, subject to certain diversification requirements. Less
than 30 percent of its gross income must be derived from sales of
securities held less than three months.
The IRS has ruled publicly that an exchange-traded call option is a
security for purposes of the 50-percent-of-assets test and that its
issuer is the issuer of the underlying security, not the writer of
the option, for purposes of the diversification requirements. In
order to avoid realizing a gain within the three-month period, a
Portfolio may be required to defer closing out a contract beyond
the time when it might otherwise be advantageous to do so. The
Portfolio also may be restricted in purchasing put options for the
purpose of hedging underlying securities because of applying the
short sale holding period rules with respect to such underlying
securities.
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Accounting for futures contracts will be according to generally
accepted accounting principles. Initial margin deposits will be
recognized as assets due from a broker (the Portfolio's agent in
acquiring the futures position). During the period the futures
contract is open, changes in value of the contract will be
recognized as unrealized gains or losses by marking to market on a
daily basis to reflect the market value of the contract at the end
of each day's trading. Variation margin payments will be made or
received depending upon whether gains or losses are incurred. All
contracts and options will be valued at the last-quoted sales price
on their primary exchange.
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APPENDIX D
OPTIONS AND INTEREST RATE FUTURES CONTRACTS, FOR INVESTMENTS OF
INCOME, MANAGED AND GOVERNMENT SECURITIES PORTFOLIOS
Income and Managed Portfolios may buy or write options traded on
any U.S. or foreign exchange or in the over-the-counter market.
Each Portfolio may enter into interest rate futures contracts
traded on any U.S. or foreign exchange. Each Portfolio also may
buy or write put and call options on these futures. Options in the
over-the-counter market will be purchased only when the investment
manager believes a liquid secondary market exists for the options
and only from dealers and institutions the investment manager
believes present a minimal credit risk. Some options are
exercisable only on a specific date. In that case, or if a liquid
secondary market does not exist, a Portfolio could be required to
buy or sell securities at disadvantageous prices, thereby incurring
losses. Managed Portfolio also may enter into stock index futures
contracts (see Appendix C).
Government Securities Portfolio may buy or write options traded on
any U.S. exchange or in the over-the-counter market. The Portfolio
may enter into interest rate futures contracts traded on any U.S.
exchange. The Portfolio also may buy or write put and call options
on these futures. Options in the over-the-counter market will be
purchased only when the investment manager believes a liquid
secondary market exists for the options and only from dealers and
institutions the investment manager believes present a minimal
credit risk. Some options are exercisable only on a specific date.
In that case, or if a liquid secondary market does not exist, the
Portfolio could be required to buy or sell securities at
disadvantageous prices, thereby incurring losses.
OPTIONS. An option is a contract. A person who buys a call option
for a security has the right to buy the security at a set price for
the length of the contract. A person who sells a call option is
called a writer. The writer of a call option agrees to sell the
security at the set price when the buyer wants to exercise the
option, no matter what the market price of the security is at that
time. A person who buys a put option has the right to sell a
security at a set price for the length of the contract. A person
who writes a put option agrees to buy the security at the set price
if the purchaser wants to exercise the option, no matter what the
market price of the security is at that time. An option is covered
if the writer owns the security (in the case of a call) or sets
aside the cash (in the case of a put) that would be required upon
exercise.
The price paid by the buyer for an option is called a premium. In
addition the buyer generally pays a broker a commission. The
writer receives a premium, less a commission, at the time the
option is written. The cash received is retained by the writer
whether or not the option is exercised. A writer of a call option
may have to sell the security for a below-market price if the
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market price rises above the exercise price. A writer of a put
option may have to pay an above-market price for the security if
its market price decreases below the exercise price.
Options can be used to produce incremental earnings, protect gains
and facilitate buying and selling securities for investment
purposes. The use of options and futures contracts may benefit a
Portfolio and its shareholders by improving the Portfolio's
liquidity and by helping to stabilize the value of its net assets.
Buying options. Put and call options may be used as a trading
technique to facilitate buying and selling securities for
investment reasons. They also may be used for investment. Options
are used as a trading technique to take advantage of any disparity
between the price of the underlying security in the securities
market and its price on the options market. It is anticipated the
trading technique will be utilized only to effect a transaction
when the price of the security plus the option price will be as
good or better than the price at which the security could be bought
or sold directly. When the option is purchased, the Portfolio pays
a premium and a commission. It then pays a second commission on
the purchase or sale of the underlying security when the option is
exercised. For record keeping and tax purposes, the price obtained
on the purchase of the underlying security will be the combination
of the exercise price, the premium and both commissions. When
using options as a trading technique, commissions on the option
will be set as if only the underlying securities were traded.
Put and call options also may be held by a Portfolio for investment
purposes. Options permit the Portfolio to experience the change in
the value of a security with a relatively small initial cash
investment. The risk the Portfolio assumes when it buys an option
is the loss of the premium. To be beneficial to the Portfolio, the
price of the underlying security must change within the time set by
the option contract. Furthermore, the change must be sufficient to
cover the premium paid, the commissions paid both in the
acquisition of the option and in a closing transaction or in the
exercise of the option and sale (in the case of a call) or purchase
(in the case of a put) of the underlying security. Even then the
price change in the underlying security does not ensure a profit
since prices in the option market may not reflect such a change.
Writing covered options. A Portfolio will write covered options
when it feels it is appropriate and will follow these guidelines:
'Underlying securities will continue to be bought or sold solely on
the basis of investment considerations consistent with the
Portfolio's goal.
'All options written by the Portfolio will be covered. For covered
call options if a decision is made to sell the security, the
Portfolio will attempt to terminate the option contract through a
closing purchase transaction.
<PAGE>
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'The Portfolio will write options only as permitted under federal
laws or regulations, such as those that limit the amount of total
assets subject to the options. Some regulations also affect the
Custodian. When a covered call option is written, the Custodian
segregates the underlying securities and issues a receipt. There
are certain rules regarding banks issuing such receipts that may
restrict the amount of covered call options written. Furthermore,
a Portfolio is limited to pledging not more than 15 percent of the
cost of its total assets.
Net premiums on call options closed or premiums on expired call
options are treated as short-term capital gains. Since a Portfolio
is taxed as a regulated investment company under the Code, any
gains on options and other securities held less than three months
must be limited to less than 30 percent of its annual gross income.
If a covered call option is exercised, the security is sold by the
Portfolio. The Portfolio will recognize a capital gain or loss
based upon the difference between the proceeds and the security's
basis.
Options on many securities are listed on options exchanges. If a
Portfolio writes listed options, it will follow the rules of the
options exchange. Options are valued at the close of the New York
Stock Exchange. An option listed on a national exchange, CBOE or
NASDAQ will be valued at the last quoted sales price or, if such a
price is not readily available, at the mean of the last bid and
asked prices.
FUTURES CONTRACTS. A futures contract is an agreement between two
parties to buy and sell a security for a set price on a future
date. They have been established by boards of trade which have
been designated contracts markets by the Commodity Futures Trading
Commission (CFTC). Futures contracts trade on these markets in a
manner similar to the way a stock trades on a stock exchange, and
the boards of trade, through their clearing corporations, guarantee
performance of the contracts. Currently, there are futures
contracts based on such debt securities as long-term U.S. Treasury
bonds, Treasury notes, GNMA modified pass-through mortgate-backed
securities, three-month U.S. Treasury bills and bank certificates
of deposit. While futures contracts based on debt securities do
provide for the delivery and acceptance of securities, such
deliveries and acceptances are very seldom made. Generally, the
futures contract is terminated by entering into an offsetting
transaction. An offsetting transaction for a futures contract sale
is effected by the Portfolio entering into a futures contract
purchase for the same aggregate amount of the specific type of
financial instrument and same delivery date. If the price in the
sale exceeds the price in the offsetting purchase, the Portfolio
immediately is paid the difference and realizes a gain. If the
offsetting purchase price exceeds the sale price, the Portfolio
pays the difference and realizes a loss. Similarly, closing out a
futures contract purchase is effected by the Portfolio entering
into a futures contract sale. If the offsetting sale price
<PAGE>
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exceeds the purchase price, the Portfolio realizes a gain, and if
the offsetting sale price is less than the purchase price, the
Portfolio realizes a loss. At the time a futures contract is made,
a good-faith deposit called initial margin is set up within a
segregated account at the Portfolios' custodian bank. The initial
margin deposit is approximately 1.5 percent of a contract's face
value. Daily thereafter, the futures contract is valued and the
payment of variation margin is required so that each day the
Portfolio would pay out cash in an amount equal to any decline in
the contract's value or receive cash equal to any increase. At the
time a futures contract is closed out, a nominal commission is
paid, which is generally lower than the commission on a comparable
transaction in the cash markets.
The purpose of a futures contract, in the case of a fund holding
long-term debt securities, is to gain the benefit of changes in
interest rates without actually buying or selling long-term debt
securities. For example, if a Portfolio owned long-term bonds and
interest rates were expected to increase, it might enter into
futures contracts to sell securities which would have much the same
effect as selling some of the long-term bonds it owned. Futures
contracts are based on types of debt securities referred to above,
which have historically reacted to an increase or decline in
interest rates in a fashion similar to the debt securities the
Portfolio owns. If interest rates did increase, the value of the
debt securities in the portfolio would decline, but the value of
the Portfolio's futures contracts would increase at approximately
the same rate, thereby keeping the net asset value of the Portfolio
from declining as much as it otherwise would have. If, on the
other hand, the Portfolio held cash reserves and interest rates
were expected to decline, the Portfolio might enter into interest
rate futures contracts for the purchase of securities. If short-
term rates were higher than long-term rates, the ability to
continue holding these cash reserves would have a very beneficial
impact on the Portfolio's earnings. Even if short-term rates were
not higher, the Portfolio would still benefit from the income
earned by holding these short-term investments. At the same time,
by entering into futures contracts for the purchase of securities,
the Portfolio could take advantage of the anticipated rise in the
value of long-term bonds without actually buying them until the
market had stabilized. At that time, the futures contracts could
be liquidated and the Portfolio's cash reserves could then be used
to buy long-term bonds on the cash market. The Portfolio could
accomplish similar results by selling bonds with long maturities
and investing in bonds with short maturities when interest rates
are expected to increase or by buying bonds with long maturities
and selling bonds with short maturities when interest rates are
expected to decline. But by using futures contracts as an
investment tool, given the greater liquidity in the futures market
than in the cash market, it might be possible to accomplish the
same result more easily and more quickly. Successful use of
futures contracts depends on the investment manager's ability to
predict the future direction of interest rates. If the investment
manager's prediction is incorrect, the Portfolio would have been
better off had it not entered into futures contracts.
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OPTIONS ON FUTURES CONTRACTS. Options give the holder a right to
buy or sell futures contracts in the future. Unlike a futures
contract, which requires the parties to the contract to buy and
sell a security on a set date, an option on a futures contract
merely entitles its holder to decide on or before a future date
(within nine months of the date of issue) whether to enter into
such a contract. If the holder decides not to enter into the
contract, all that is lost is the amount (premium) paid for the
option. Furthermore, because the value of the option is fixed at
the point of sale, there are no daily payments of cash to reflect
the change in the value of the underlying contract.
However, since an option gives the buyer the right to enter into a
contract at a set price for a fixed period of time, its value does
change daily and that change is reflected in the net asset value of
the Portfolio.
RISKS. There are risks in engaging in each of the management tools
described above. The risk a Portfolio assumes when it buys an
option is the loss of the premium paid for the option. Purchasing
options also limits the use of monies that might otherwise be
available for long-term investments.
The risk involved in writing options on futures contracts the
Portfolio owns, or on securities held in its portfolio, is that
there could be an increase in the market value of such contracts or
securities. If that occurred, the option would be exercised and
the asset sold at a lower price than the cash market price. To
some extent, the risk of not realizing a gain could be reduced by
entering into a closing transaction. The Portfolio could enter
into a closing transaction by purchasing an option with the same
terms as the one it had previously sold. The cost to close the
option and terminate the Portfolio's obligation, however, might be
more or less than the premium received when it originally wrote the
option. Furthermore, the Portfolio might not be able to close the
option because of insufficient activity in the options market.
A risk in employing futures contracts to protect against the price
volatility of securities is that the prices of securities subject
to futures contracts may not correlate perfectly with the behavior
of the cash prices of the Portfolio's securities. The correlation
may be distorted because the futures market is dominated by short-
term traders seeking to profit from the difference between a
contract or security price and their cost of borrowed funds. Such
distortions are generally minor and would diminish as the contract
approached maturity.
Another risk is that the Portfolio's investment manager could be
incorrect in anticipating as to the direction or extent of various
interest rate movements or the time span within which the movements
take place. For example, if the Portfolio sold futures contracts
for the sale of securities in anticipation of an increase in
interest rates, and interest rates declined instead, the Portfolio
would lose money on the sale.
<PAGE>
PAGE 86
TAX TREATMENT. As permitted under federal income tax laws, each
Portfolio intends to identify futures contracts as mixed straddles
and not mark them to market, that is, not treat them as having been
sold at the end of the year at market value. Such an election may
result in the Portfolio being required to defer recognizing losses
incurred by entering into futures contracts and losses on
underlying securities identified as being hedged against.
Federal income tax treatment of gains or losses from transactions
in options on futures contracts and indexes currently is unclear,
although the Portfolios' tax advisors currently believe marking to
market is not required. Depending on developments, a Portfolio may
seek IRS rulings clarifying questions concerning such treatment.
Certain provisions of the Code also may limit a Portfolio's ability
to engage in futures contracts and related options transactions.
For example, at the close of each quarter of the Portfolio's
taxable year, at least 50 percent of the value of its assets must
consist of cash, government securities and other securities,
subject to certain diversification requirements. Less than 30
percent of its gross income must be derived from sales of
securities held less than three months.
The IRS has ruled publicly that an exchange-traded call option is a
security for purposes of the 50-percent-of-assets test and that its
issuer is the issuer of the underlying security, not the writer of
the option, for purposes of the diversification requirements. In
order to avoid realizing a gain within the three-month period, the
Portfolio may be required to defer closing out a contract beyond
the time when it might otherwise be advantageous to do so. The
Portfolio also may be restricted in purchasing put options for the
purpose of hedging underlying securities because of applying the
short sale holding period rules with respect to such underlying
securities.
Accounting for futures contracts will be according to generally
accepted accounting principles. Initial margin deposits will be
recognized as assets due from a broker (the Portfolio's agent in
acquiring the futures position). During the period the futures
contract is open, changes in value of the contract will be
recognized as unrealized gains or losses by marking to market on a
daily basis to reflect the market value of the contract at the end
of each day's trading. Variation margin payments will be made or
received depending upon whether gains or losses are incurred. All
contracts and options will be valued at the last-quoted sales price
on their primary exchange.
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APPENDIX E
MORTGAGE-BACKED SECURITIES AND ADDITIONAL INFORMATION ON INVESTMENT
POLICIES (FOR ALL PORTFOLIOS EXCEPT MONEY MARKET)
GNMA Certificates
The Government National Mortgage Association (GNMA) is a wholly
owned corporate instrumentality of the United States within the
Department of Housing and Urban Development. GNMA certificates are
mortgage-backed securities of the modified pass-through type, which
means that both interest and principal payments (including
prepayments) are passed through monthly to the holder of the
certificate. Each certificate evidences an interest in a specific
pool of mortgage loans insured by the Federal Housing
Administration or the Farmers Home Administration or guaranteed by
the Veterans Administration. The National Housing Act provides
that the full faith and credit of the United States is pledged to
the timely payment of principal and interest by GNMA of amounts due
on these certificates. GNMA is empowered to borrow without
limitation from the U.S. Treasury, if necessary, to make such
payments.
Underlying Mortgages of the Pool. Pools consist of whole mortgage
loans or participations in loans. The majority of these loans are
made to purchasers of 1-4 member family homes. The terms and
characteristics of the mortgage instruments generally are uniform
within a pool but may vary among pools. For example, in addition
to fixed-rate fixed-term mortgages, the Portfolio may purchase
pools of variable rate mortgages, growing equity mortgages,
graduated payment mortgages and other types.
All servicers apply standards for qualification to local lending
institutions which originate mortgages for the pools. Servicers
also establish credit standards and underwriting criteria for
individual mortgages included in the pools. In addition, many
mortgages included in pools are insured through private mortgage
insurance companies.
Average Life of GNMA Certificates. The average life of GNMA
certificates varies with the maturities of the underlying mortgage
instruments which have maximum maturities of 30 years. The average
life is likely to be substantially less than the original maturity
of the mortgage pools underlying the securities as the result of
prepayments or refinancing of such mortgages. Such prepayments are
passed through to the registered holder with the regular monthly
payments of principal and interest.
As prepayment rates vary widely, it is not possible to accurately
predict the average life of a particular pool. It is customary in
the mortgage industry in quoting yields on a pool of 30-year
mortgages to compute the yield as if the pool were a single loan
that is amortized according to a 30-year schedule and that is
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prepaid in full at the end of the 12th year. For this reason, it
is standard practice to treat GNMA certificates as 30-year
mortgage-backed securities which prepay fully in the 12th year.
Calculation of Yields. Yields on pass-through securities are
typically quoted based on the maturity of the underlying
instruments and the associated average life assumption.
Actual pre-payment experience may cause the yield to differ from
the assumed average life yield. When mortgage rates drop, pre-
payments will increase, thus reducing the yield. Reinvestment of
pre-payments may occur at higher or lower interest rates than the
original investment, thus affecting the yield of a Portfolio. The
compounding effect from reinvestments of monthly payments received
by the Portfolio will increase the yield to shareholders compared
to bonds that pay interest semi-annually. The yield also may be
affected if the certificate was issued at a premium or discount,
rather than at par. This also applies after issuance to
certificates trading in the secondary market at a premium or
discount.
"When-Issued" GNMA Certificates. Some U.S. government securities
may be purchased on a "when-issued" basis, which means that it may
take as long as 45 days after the purchase before the securities
are delivered to the Portfolio. Payment and interest terms,
however, are fixed at the time the purchaser enters into the
commitment. However, the yield on a comparable GNMA certificate
when the transaction is consummated may vary from the yield on the
GNMA certificate at the time that the when-issued transaction was
made. A Portfolio does not pay for the securities or start earning
interest on them until the contractual settlement date. When-
issued securities are subject to market fluctuations and they may
affect the Portfolio's gross assets the same as owned securities.
Market for GNMA Certificates. Since the inception of the GNMA
mortgage-backed securities program in 1970, the amount of GNMA
certificates outstanding has grown rapidly. The size of the market
and the active participation in the secondary market by securities
dealers and many types of investors make the GNMA certificates a
highly liquid instrument. Prices of GNMA certificates are readily
available from securities dealers and depend on, among other
things, the level of market interest rates, the certificate's
coupon rate and the prepayment experience of the pool of mortgages
underlying each certificate.
Stripped mortgage-backed securities. Generally, there are two
classes of stripped mortgage-backed securities: Interest Only (IO)
and Principal Only (PO). IOs entitle the holder to receive
distributions consisting of all or a portion of the interest on the
underlying pool of mortgage loans or mortgage-backed securities.
POs entitle the holder to receive distributions consisting of all
or a portion of the principal of the underlying pool of mortgage
loans or mortgage-backed securities. The cash flows and yields on
IOs and POs are extremely sensitive to the rate of principal
<PAGE>
PAGE 89
payments (including prepayments) on the underlying mortgage loans
or mortgage-backed securities. A rapid rate of principal payments
may adversely affect the yield to maturity of IOs. A slow rate of
principal payments may adversely affect the yield to maturity of
POs. If prepayments of principal are greater than anticipated, an
investor may incur substantial losses. If prepayments of principal
are slower than anticipated, the yield on a PO will be affected
more severely than would be the case with a traditional mortgage-
backed security.
Income, Managed and Government Securities Portfolios may invest in
securities called "inverse floaters". Inverse floaters are created
by underwriters using the interest payments on securities. A
portion of the interest received is paid to holders of instruments
based on current interest rates for short-term securities. What is
left over, less a servicing fee, is paid to holders of the inverse
floaters. As interest rates go down, the holders of the inverse
floaters receive more income and an increase in the price for the
inverse floaters. As interest rates go up, the holders of the
inverse floaters receive less income and a decrease in the price
for the inverse floaters.
Income, Managed and Government Securities Portfolios may purchase
some securities in advance of when they are issued. Price and rate
of interest are set on the date the commitments are given but no
payment is made or interest earned until the date the securities
are issued, usually within two months, but other terms may be
negotiated. The commitment requires the portfolio to buy the
security when it is issued so the commitment is valued daily the
same way as owning a security would be valued. The Portfolio's
custodian will maintain, in a segregated account, cash or liquid
high-grade debt securities that are marked to market daily and are
at least equal in value to the Portfolio's commitments to purchase
the securities. The Portfolio may sell the commitment just like it
can sell a security. Frequently, the Portfolio has the opportunity
to sell the commitment back to the institution that plans to issue
the security and at the same time enter into a new commitment to
purchase a when-issued security in the future. For rolling its
commitment forward, the Portfolio realizes a gain or loss on the
sale of the current commitment or receives a fee for entering into
the new commitment.
Income, Managed and Government Securities Portfolios may purchase
mortgage-backed security (MBS) put spread options and write covered
MBS call spread options. MBS spread options are based upon the
changes in the price spread between a specified mortgage-backed
security and a like-duration Treasury security. MBS spread options
are traded in the OTC market and are of short duration, typically
one to two months. The Portfolio would buy or sell covered MBS
call spread options in situations where mortgage-backed securities
are expected to under perform like-duration Treasury securities.
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APPENDIX F
DOLLAR-COST AVERAGING
A technique that works well for many investors is one that
eliminates random buy and sell decisions. One such system is
dollar-cost averaging. Dollar-cost averaging involves building a
portfolio through the investment of fixed amounts of money on a
regular basis regardless of the price or market condition. This
may enable an investor to smooth out the effects of the volatility
of the financial markets. By using this strategy, more units will
be purchased when the price is low and less when the price is high.
As the accompanying chart illustrates, dollar-cost averaging tends
to keep the average price paid for the units lower than the average
market price of units purchased, although there is no guarantee.
While this does not ensure a profit and does not protect against a
loss if the market declines, it is an effective way for many policy
owners who can continue investing through changing market
conditions to accumulate units to meet long term goals.
Dollar-cost averaging
Regular Market Price Units
Investment of a Unit Acquired
$100 $ 6.00 16.7
100 4.00 25.0
100 4.00 25.0
100 6.00 16.7
100 5.00 20.0
$500 $25.00 103.4
Average market price of a unit over 5 periods:
$5.00 ($25.00 divided by 5).
The average price you paid for each unit:
$4.84 ($500 divided by 103.4).
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APPENDIX G
Description of corporate bond ratings
Bond ratings concern the quality of the issuing corporation. They
are not an opinion of the market value of the security. Such
ratings are opinions on whether the principal and interest will be
repaid when due. A security's rating may change which could affect
its price. Ratings by Moody's Investors Service, Inc. are Aaa, Aa,
A, Baa, Ba, B, Caa, Ca, C and D. Ratings by Standard & Poor's
Corporation are AAA, AA, A, BBB, BB, B, CCC, CC, C and D.
Aaa/AAA - Judged to be of the best quality and carry the smallest
degree of investment risk. Interest and principal are secure.
Aa/AA - Judged to be high-grade although margins of protection for
interest and principal may not be quite as good as Aaa or AAA rated
securities.
A - Considered upper-medium grade. Protection for interest and
principal is deemed adequate but may be susceptible to future
impairment.
Baa/BBB - Considered medium-grade obligations. Protection for
interest and principal is adequate over the short-term; however,
these obligations may have certain speculative characteristics.
Ba/BB - Considered to have speculative elements. The protection of
interest and principal payments may be very moderate.
B - Lack characteristics of the desirable investments. There may
be small assurance over any long period of time of the payment of
interest and principal.
Caa/CCC - Are of poor standing. Such issues may be in default or
there may be risk with respect to principal or interest.
Ca/CC - Represent obligations that are highly speculative. Such
issues are often in default or have other marked shortcomings.
C - Are obligations with a higher degree of speculation. These
securities have major risk exposures to default.
D - Are in payment default. The D rating is used when interest
payments or principal payments are not made on the due date.
Definitions of Zero-Coupon and Pay-In-Kind Securities
A zero-coupon security is a security that is sold at a deep
discount from its face value and makes no periodic interest
payments. The buyer of such a security receives a rate of return
by gradual appreciation of the security, which is redeemed at face
value on the maturity date.
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A pay-in-kind security is a security in which the issuer has the
option to make interest payments in cash or in additional
securities. The securities issued as interest usually have the
same terms, including maturity date, as the pay-in-kind securities.
Non-rated securities will be considered for investment when they
possess a risk comparable to that of rated securities consistent
with the Fund's objectives and policies. When assessing the risk
involved in each non-rated security, the Fund will consider the
financial condition of the issuer or the protection afforded by the
terms of the security.
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Independent auditors' report
The board of directors and shareholders
IDS Life Series Fund, Inc.:
We have audited the accompanying statements of assets and
liabilities, including the schedules of investments in securities,
of the Equity, Income, Money Market, Managed, Government
Securities and International Equity Portfolios of IDS Life Series
Fund, Inc. at April 30, 1995, and the related statements of
operations for the year then ended (period from Oct. 28, 1994,
commencement of operations, to April 30, 1995 for the International
Equity Portfolio), the statements of changes in net assets for each
of the years in the two-year period ended April 30, 1995, (period
from Oct. 28, 1994 to April 30, 1995 for the International Equity
Portfolio) and the financial highlights for each of the years in
the nine-year period ended April 30, 1995 and the period from
January 20, 1986, commencement of operations, to April 30, 1986
(period from Oct. 28, 1994 to April 30, 1995 for the International
Equity Portfolio. These financial statements and the financial
highlights are the responsibility of the fund's 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 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, 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.
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In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of the Equity, Income, Money Market, Managed,
Government Securities and International Equity Portfolios of IDS
Life Series Fund, Inc. at April 30, 1995 and the results of their
operations, changes in their net assets, 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
June 2, 1995
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<TABLE>
<CAPTION>
Statements of assets and liabilities
IDS Life Series Fund, Inc.
April 30, 1995
Equity Income Money
Portfolio Portfolio Market
Assets Portfolio
__________________________________________________________________________________________________
<S> <C> <C> <C>
Investments in securities, at value (Note 1)
(identified cost: $207,731,436; $37,371,991 and
$9,808,677, respectively) $245,579,245 $37,426,924 $9,808,677
Cash in bank on demand deposit -- -- 70,833
Receivable for investment securities sold 10,449,514 149,154 --
Dividends and accrued interest receivable 36,589 647,384 --
Receivable for forward foreign currency
contracts held, at value (Notes 1 and 4) 326,716 -- --
Receivable (for capital stock sold) from:
IDS Life subaccounts 4,683,107 167,783 60,438
IDS Life of New York subaccounts 303,219 22,332 1,208
__________________________________________________________________________________________________
Total assets 261,378,390 38,413,577 9,941,156
__________________________________________________________________________________________________
Liabilities
__________________________________________________________________________________________________
Cash overdraft 1,004,015 15,538 --
Dividends payable to shareholders (Note 1) 5,455,378 201,412 39,595
Payable for investment securities purchased 13,395,486 344,396 --
Accrued investment management and services fee 127,264 20,054 3,703
Payable for forward foreign currency
contracts held, at value (Notes 1 and 4) 326,684 -- --
Payable (for capital stock redeemed) to:
IDS Life subaccounts 256 298 180
IDS Life of New York subaccounts 5,729 -- 10,770
Other accrued expenses 31,577 8,628 2,308
__________________________________________________________________________________________________
Total liabilities 20,346,389 590,326 56,556
__________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $241,032,001 $37,823,251 $9,884,600
__________________________________________________________________________________________________
Represented by
__________________________________________________________________________________________________
Capital stock - authorized 10,000,000,000 shares
of $.001 par value: outstanding, 12,024,452;
3,924,989 and 9,885,410 shares, respectively $ 12,024 $ 3,925 $ 9,885
Additional paid-in capital 203,235,999 38,670,953 9,875,368
Accumulated net realized loss on
investments (58,906) (882,704) (653)
Undistributed (excess of distributions over)
net investment income (5,633) (23,856) --
Unrealized appreciation of investments and on
translation of assets and liabilities in foreign
currencies (Note 4) 37,848,517 54,933 --
__________________________________________________________________________________________________
Total - representing net assets applicable to
outstanding capital stock $241,032,001 $37,823,251 $9,884,600
__________________________________________________________________________________________________
Net asset value per share of outstanding capital
stock $ 20.05 $ 9.64 $ 1.00
__________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
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Statements of assets and liabilities (continued)
IDS Life Series Fund, Inc.
April 30, 1995
Managed Government International
Portfolio Securities Equity
Assets Portfolio Portfolio
__________________________________________________________________________________________________
Investments in securities, at value (Note 1)
(identified cost: $212,608,496; $11,014,877 and
$7,853,396, respectively) $220,331,236 $11,127,752 $8,401,397
Cash in bank on demand deposit -- 148,703 299,186
Receivable for investment securities sold 2,822,310 -- 167,379
Dividends and accrued interest receivable 1,527,133 185,601 6,278
Receivable for forward foreign currency contracts
held, at value (Notes 1 and 4) -- -- 170,512
Receivable (for capital stock sold) from:
IDS Life subaccounts 1,570,539 50,961 145,960
IDS Life of New York subaccounts 102,032 3,395 --
__________________________________________________________________________________________________
Total assets 226,353,250 11,516,412 9,190,712
__________________________________________________________________________________________________
Liabilities
__________________________________________________________________________________________________
Cash overdraft 333,367 -- --
Dividends payable to shareholders (Note 1) 2,029,055 62,642 107,961
Payable for investment securities purchased 3,835,695 -- 411,450
Accrued investment management and services fee 116,638 6,109 5,493
Payable for forward foreign currency contracts held,
at value (Notes 1 and 4) -- -- 167,379
Payable (for capital stock redeemed) to:
IDS Life subaccounts 1,104 4,522 --
IDS Life of New York subaccounts 6,400 -- --
Other accrued expenses 44,933 2,675 1,621
__________________________________________________________________________________________________
Total liabilities 6,367,192 75,948 693,904
__________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $219,986,058 $11,440,464 $8,496,808
__________________________________________________________________________________________________
Represented by
__________________________________________________________________________________________________
Capital stock - authorized 10,000,000,000 shares
of $.001 par value: outstanding, 15,589,271;
1,160,975 and 826,111 shares, respectively $ 15,589 $ 1,161 $ 826
Additional paid-in capital 214,162,001 11,326,931 7,947,901
Accumulated net realized gain (loss)
on investments (1,956,179) 2,575 --
Undistributed (excess of distributions over)
net investment income 54,719 (3,078) --
Unrealized appreciation of investments and on
translation of assets and liabilities in foreign
currencies (Note 4) 7,709,928 112,875 548,081
__________________________________________________________________________________________________
Total - representing net assets applicable to
outstanding capital stock $219,986,058 $11,440,464 $8,496,808
__________________________________________________________________________________________________
Net asset value per share of outstanding capital
stock $ 14.11 $ 9.85 $ 10.29
__________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 97
Statements of operations
IDS Life Series Fund, Inc.
Year ended April 30, 1995
Equity Income Money
Portfolio Portfolio Market
Investment income Portfolio
__________________________________________________________________________________________________
Income:
Dividends (net of foreign taxes
withheld of $3,429 for Equity
Portfolio) $ 401,572 $ 17,291 $ --
Interest 2,124,480 2,775,891 491,065
__________________________________________________________________________________________________
Total income 2,526,052 2,793,182 491,065
__________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 1,326,220 242,049 48,493
Custodial fees 67,725 11,227 15,120
Audit fees 11,750 7,750 6,500
Registration fees 20,640 4,563 1,246
Directors fees 5,205 920 209
Printing and postage 34,797 9,737 3,059
Other 1,883 381 97
__________________________________________________________________________________________________
Total expenses 1,468,220 276,627 74,724
Less expenses reimbursed by IDS Life -- -- (16,532)
__________________________________________________________________________________________________
Total expenses - net 1,468,220 276,627 58,192
__________________________________________________________________________________________________
Investment income - net 1,057,832 2,516,555 432,873
__________________________________________________________________________________________________
Realized and unrealized gain (loss) on investments - net
__________________________________________________________________________________________________
Net realized gain (loss) on investments (Note 3) 5,224,750 (497,528) (454)
Net change in unrealized appreciation or depreciation
of investments and on translation of assets and
liabilities in foreign currencies 21,967,759 289,232 --
__________________________________________________________________________________________________
Net gain (loss) on investments 27,192,509 (208,296) (454)
_________________________________________________________________________________________________
Net increase in net assets resulting from
operations $28,250,341 $2,308,259 $432,419
__________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 98
Statements of operations (continued)
IDS Life Series Fund, Inc.
Year ended April 30, 1995
Managed Government International
Portfolio Securities Equity
Investment income Portfolio Portfolio*
__________________________________________________________________________________________________
Income:
Dividends (net of foreign taxes withheld of
$12,906 and $2,521 for Managed Portfolio
and International Equity Portfolio) $ 1,293,011 $ -- $101,492
Interest (net of foreign taxes withheld of
$4,406 for Managed Portfolio) 6,502,966 760,307 33,259
__________________________________________________________________________________________________
Total income 7,795,977 760,307 134,751
__________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 1,339,464 77,867 18,559
Custodial fees 75,467 6,826 10,840
Audit fees 11,750 7,250 3,500
Registration fees 27,911 1,595 600
Directors fees 5,450 268 50
Printing and postage 37,659 3,670 2,000
Other 1,513 110 50
__________________________________________________________________________________________________
Total expenses 1,499,214 97,586 35,599
Less expenses reimbursed by IDS Life -- (8,595) (15,419)
__________________________________________________________________________________________________
Total expenses - net 1,499,214 88,991 20,180
__________________________________________________________________________________________________
Investment income - net 6,296,763 671,316 114,571
__________________________________________________________________________________________________
Realized and unrealized gain (loss) on investments - net
__________________________________________________________________________________________________
Realized gain (loss) on security transactions (Note 3) (3,154,017) 6,871 1,014
Realized gain (loss) on foreign currency transactions 42,879 -- (107)
Realized gain on closed or expired options contracts
written (Note 5) 1,725,433 -- --
Realized gain on closed futures contracts 59,246 -- --
__________________________________________________________________________________________________
Net realized gain (loss) on investments (1,326,459) 6,871 907
Net change in unrealized appreciation or
depreciation of investments and on translation
of assets and liabilities in foreign currencies 5,313,579 (34,924) 548,081
__________________________________________________________________________________________________
Net gain (loss) on investments 3,987,120 (28,053) 548,988
__________________________________________________________________________________________________
Net increase in net assets resulting from
operations $10,283,883 $643,263 $663,559
__________________________________________________________________________________________________
*Period from Oct. 28, 1994 (commencement of operations) to April 30, 1995.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 99
<TABLE>
<CAPTION>
Statements of changes in net assets
IDS Life Series Fund, Inc.
Year ended April 30,
Equity Portfolio Income Portfolio
Operations and distributions 1995 1994 1995 1994
___________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Investment income - net $ 1,057,832 $ 399,133 $ 2,516,555 $ 1,955,311
Net realized gain (loss) on investments 5,224,750 15,326,818 (497,528) (52,946)
Net change in unrealized appreciation or
depreciation of investments 21,967,759 2,153,291 289,232 (1,813,728)
___________________________________________________________________________________________________
Net increase in net assets resulting from
operations 28,250,341 17,879,242 2,308,259 88,637
___________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (1,052,199) (399,133) (2,524,594) (1,955,311)
Excess distribution of net investment income (5,633) -- (8,964) --
Net realized gain on investments (5,287,266) (15,323,208) -- --
___________________________________________________________________________________________________
Total distributions (6,345,098) (15,722,341) (2,533,558) (1,955,311)
___________________________________________________________________________________________________
Capital share transactions (Note 6)
___________________________________________________________________________________________________
Proceeds from sales 65,702,029 49,951,411 5,810,955 13,258,320
Reinvested distributions at net asset value 6,345,098 15,722,341 2,533,558 1,955,311
Payments for redemptions (4,780,532) (3,712,328) (4,065,891) (2,218,371)
___________________________________________________________________________________________________
Increase in net assets from capital
share transactions 67,266,595 61,961,424 4,278,622 12,995,260
___________________________________________________________________________________________________
Total increase in net assets 89,171,838 64,118,325 4,053,323 11,128,586
___________________________________________________________________________________________________
Net assets at beginning of year 151,860,163 87,741,838 33,769,928 22,641,342
___________________________________________________________________________________________________
Net assets at end of year $241,032,001 $151,860,163 $ 37,823,251 $ 33,769,928
___________________________________________________________________________________________________
Undistributed (excess of distributions over)
net investment income $ (5,633) $ (5,633) $ (23,856) $ 8,039
___________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 100
Statements of changes in net assets (continued)
IDS Life Series Fund, Inc.
Year ended April 30,
Money Market Portfolio Managed Portfolio
Operations and distributions 1995 1994 1995 1994
___________________________________________________________________________________________________
Investment income - net $ 432,873 $ 215,399 $ 6,296,763 $ 3,737,551
Net realized gain (loss) on investments (454) (97) (1,326,459) 14,672,291
Net change in unrealized appreciation or
depreciation of investments -- -- 5,313,579 (4,972,356)
___________________________________________________________________________________________________
Net increase in net assets resulting from
operations 432,419 215,302 10,283,883 13,437,486
___________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (432,873) (215,399) (6,295,800) (3,765,550)
Excess distribution of net investment income -- -- (41,557) --
Net realized gain on investments -- -- (534,853) (14,672,291)
___________________________________________________________________________________________________
Total distributions (432,873) (215,399) (6,872,210) (18,437,841)
___________________________________________________________________________________________________
Capital share transactions (Note 6)
___________________________________________________________________________________________________
Proceeds from sales 6,252,661 5,854,599 55,602,457 51,937,576
Reinvested distributions at net asset value 432,873 215,399 6,872,210 18,437,841
Payments for redemptions (6,357,910) (4,693,099) (6,606,482) (4,807,830)
___________________________________________________________________________________________________
Increase in net assets from capital
share transactions 327,624 1,376,899 55,868,185 65,567,587
___________________________________________________________________________________________________
Total increase in net assets 327,170 1,376,802 59,279,858 60,567,232
___________________________________________________________________________________________________
Net assets at beginning of year 9,557,430 8,180,628 160,706,200 100,138,968
___________________________________________________________________________________________________
Net assets at end of year $ 9,884,600 $ 9,557,430 $219,986,058 $160,706,200
___________________________________________________________________________________________________
Undistributed (excess of distributions over)
net investment income $ -- $ -- $ 54,719 $ (963)
___________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 101
<TABLE>
<CAPTION>
Statements of changes in net assets (continued)
IDS Life Series Fund, Inc.
Year ended April 30,
Government Securities Portfolio International Equity Portfolio
Operations and distributions 1995 1994 1995
_______________________________________________________________________________________________________
<S> <C> <C> <C>
Investment income - net $ 671,316 $ 604,172 $ 114,571
Net realized gain on investments 6,871 112,301 907
Net change in unrealized appreciation or
depreciation of investments (34,924) (750,136) 548,081
_______________________________________________________________________________________________________
Net increase (decrease) in net assets resulting
from operations 643,263 (33,663) 663,559
_______________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (670,485) (604,172) (114,571)
Net realized gain on investments (7,702) (112,301) (907)
_______________________________________________________________________________________________________
Total distributions (678,187) (716,473) (115,478)
_______________________________________________________________________________________________________
Capital share transactions (Note 6)
_______________________________________________________________________________________________________
Proceeds from sales 1,451,214 3,250,828 7,869,306
Reinvested distributions at net asset value 678,187 716,473 115,478
Payments for redemptions (1,838,864) (1,651,297) (36,057)
_______________________________________________________________________________________________________
Increase in net assets from capital
share transactions 290,537 2,316,004 7,948,727
_______________________________________________________________________________________________________
Total increase in net assets 255,613 1,565,868 8,496,808
_______________________________________________________________________________________________________
Net assets at beginning of year 11,184,851 9,618,983 --
_______________________________________________________________________________________________________
Net assets at end of year $11,440,464 $11,184,851 $8,496,808
_______________________________________________________________________________________________________
Undistributed (excess of distributions over)
net investment income $ (3,078) $ (503) $ --
_______________________________________________________________________________________________________
*Period from Oct. 28, 1994 (commencement of operations) to April 30, 1995.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 102
Notes to financial statements
1. Summary of significant accounting policies
The fund is registered under the Investment Company Act of 1940, as
amended, (the 1940 Act), as a diversified, open-end management
investment company. Shares of each portfolio of the fund are sold
to IDS Life Insurance Company (IDS Life) subaccounts or IDS Life
Insurance Company of New York subaccounts in connection with the
sale of variable insurance contracts.
The significant accounting policies followed by the fund are
summarized as follows:
Valuation of securities
All securities are valued at the close of each business day.
Securities, other than bonds, traded on national securities
exchanges or included in the NASDAQ National Market System,
are valued at the last quoted sales price; securities traded in the
over-the-counter market and securities for which a last quoted
sales price is not readily available are valued at the mean of
the closing bid and asking prices; and bonds and other 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 in the
Equity, Income, Managed, Government Securities and International
Equity Portfolios 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. Pursuant to Rule 2a-7 of the 1940
Act, all securities in the Money Market Portfolio are valued daily
at amortized cost, which approximates market value, in order to
maintain a constant net asset value of $1 per share.
Options transactions
In order to produce incremental earnings, protect gains, and
facilitate buying and selling of securities for investment
purposes, the Equity, Income, Managed, Government Securities and
International Equity Portfolios 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 portfolio gives up the opportunity of profit if
the market price of the security increases. The risk in writing a
put option is that the portfolios 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 portfolios pay a premium
whether or not the option is exercised. The portfolios also have
the additional risk of not being able to enter into a closing
transaction if a liquid secondary market does not exist. The
portfolios also may write over-the-counter options where the
completion of the obligation is dependent upon the credit standing
of the other party.
Option contracts are valued daily at the closing prices on their
primary exchanges and unrealized appreciation or depreciation is
recorded. The portfolios will realize a gain or loss upon
expiration or closing of the option transaction. When an option is
<PAGE>
PAGE 103
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 Income, Managed, Government Securities and
International Equity Portfolios may buy and sell stock index and
interest rate future contracts. Risks of entering into future
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 portfolios are 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 portfolios
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 portfolios recognize a realized gain or loss when
the contract is closed or expires.
Foreign currency translations and forward 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 Equity, Income, Managed and International Equity Portfolios
also may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate
fluctuation. The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the portfolios and
the resulting unrealized appreciation or depreciation are
determined using foreign currency exchange rates from an
independent pricing service. The portfolios are subject to the
credit risk that the other party will not complete the obligations
of the contract.
Illiquid securities
At April 30, 1995, investments in securities for Managed Portfolio
included an issue that is illiquid. The portfolio 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 April 30, 1995 was $1,507,500, which represents 0.7%
<PAGE>
PAGE 104
of net assets for the Managed Portfolio. Pursuant to guidelines
adopted by the Board of Directors, certain unregistered securities
are determined to be liquid and are not included in the 10%
limitation specified above.
Federal income taxes
Since the fund's policy is to comply with all requirements of the
Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to shareholders, no
provision for income taxes is required. Each portfolio is treated
as a separate entity for federal income tax purposes.
Net investment income (loss) and net realized gains (losses) differ
for financial statement and tax purposes primarily because of wash
sale transactions, foreign currency exchange gains and losses, and
the timing and amount of market discount recognized as ordinary
income. 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) are recorded by the portfolios.
On the statements of assets and liabilities, as a result of
permanent book-to-tax differences, accumulated net realized gain
(loss) and undistributed net investment income have been
increased (decreased), resulting in net reclassification
adjustments to additional paid-in-capital by the following:
<TABLE>
<CAPTION>
Government
Income Managed Securities
Portfolio Portfolio Portfolio
________________________________________________________________________________________
<S> <C> <C> <C>
Accumulated net realized gain (loss) 14,892 (96,276) 3,406
Undistributed net investment income (14,892) 96,276 (3,406)
________________________________________________________________________________________
Additional paid-in-capital reduction (increase) -- -- --
________________________________________________________________________________________
</TABLE>
Dividends to shareholders
At April 30, 1995, dividends were declared of $.46 per share for
Equity, $.05 for Income, $.004 for Money Market, $.13 for Managed,
$.05 for Government Securities and $.13 for International Equity
Portfolio and were payable May 1, 1995. Distributions to
shareholders are recorded as of the close of business on the record
date and are payable on the first business day following the record
date. Dividends from net investment income are declared daily and
distributed monthly for the Money Market, Income and Government
Securities Portfolios and declared and distributed quarterly for
the Equity, Managed and International Equity Portfolios. Capital
gain distributions (if any) will be made annually. However,
additional capital gain distributions may be made periodically
during the fiscal year in order to comply with the Internal Revenue
Code as applicable to regulated investment companies.
<PAGE>
PAGE 105
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. Investment management and services agreement
The fund has an Investment Management and Services Agreement with
IDS Life. For its services, IDS Life is paid a fee based on the
aggregate average daily net assets of each of the portfolios. The
fee is 0.7% on an annual basis for the Equity, Income, Managed and
Government Securities Portfolios. For Money Market Portfolio the
fee is 0.5% on an annual basis. For International Equity Portfolio
the fee is 0.95% on an annual basis.
IDS Life and American Express Financial Corporation have an
Investment Advisory Agreement which calls for IDS Life to pay
American Express Financial Corporation a fee for investment advice
about the fund's portfolios. The fee paid by IDS Life is 0.25% of
Equity, Income, Money Market, Managed and Government Securities
Portfolios' average daily net assets for the year. The fee paid by
IDS Life is 0.5% of International Equity Portfolio's average daily
net assets for the year.
In addition to paying its own management fee, each portfolio also
pays its taxes, brokerage commissions and nonadvisory expenses.
Expenses that relate to a particular portfolio, such as custodian
fees and registration fees for shares, are paid by that portfolio.
Other expenses are allocated to the portfolios in an equitable
manner as determined by the fund's board. Each portfolio also pays
custodian fees to American Express Trust Company, an affiliate of
IDS Life.
The Investment Management and Services Agreement provides that IDS
Life will reimburse the portfolio, if in any year the aggregate
ordinary operating expenses of any portfolio exceed the most
restrictive expense limitations then in effect under any state
securities law or the regulations thereunder. However, commencing
April 5, 1989, IDS Life has voluntarily agreed to reimburse each
portfolio for operating expenses, excluding the investment
management and services fees, which exceed 0.1% on an annual basis
of average daily net assets of each portfolio.
3. Securities transactions
For the year ended April 30, 1995, cost of purchases and proceeds
from sales of securities aggregated $79,382,224 and $78,841,405 for
Money Market Portfolio; cost of purchases and proceeds from sales
of securities (other than short-term obligations) aggregated
$293,588,821 and $217,200,962 for Equity, $31,464,304 and
$17,124,616 for Income, $250,690,329 and $219,209,820 for Managed,
$3,855,723 and $1,111,502 for Government Securities and $8,727,759
and $1,474,952 for International Equity Portfolios. Realized gains
and losses are determined on an identified cost basis.
<PAGE>
PAGE 106
Brokerage commissions paid to brokers affiliated with IDS Life were
$37,616, $11,277 and $1,044 for Equity Portfolio, Managed Portfolio
and International Equity Portfolio, respectively, for the year
ended April 30, 1995.
4. Forward foreign currency contracts
At April 30, 1995, Equity Portfolio had entered into forward
foreign currency exchange contracts that obligate the portfolio to
deliver currencies at a specified future date. The unrealized
appreciaton of $32 on these contracts is included in the
accompanying financial statements. The terms of the open contracts
are as follows:
<TABLE>
<CAPTION>
U.S. Dollar Value U.S. Dollar Value
Currency to as of Currency to as of
Exchange date be delivered April 30, 1995 be received April 30, 1995
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
May 4, 1995 191,000 $140,493 140,086 $140,086
Canadian Dollar U.S. Dollar
May 5, 1995 253,127 186,191 186,630 186,630
Canadian Dollar U.S. Dollar
________ ________
$326,684 $326,716
</TABLE>
At April 30, 1995, International Equity Portfolio had entered into
forward foreign currency exchange contracts that obligate the
portfolio to deliver currencies at a specified future date. The
unrealized appreciation of $3,133 on these contracts is included in
the accompanying financial statements. The terms of the open
contracts are as follows:
<TABLE>
<CAPTION>
U.S. Dollar Value U.S. Dollar Value
Currency to as of Currency to as of
Exchange date be delivered April 30, 1995 be received April 30, 1995
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
May 2, 1995 1,386,042 $142,143 145,274 $145,274
Austrian Schilling U.S. Dollar
May 2, 1995 38,793,428 17,373 17,365 17,365
Indonesian Rupiah U.S. Dollar
May 3, 1995 19,433 7,863 7,873 7,873
Malaysian Dollar U.S. Dollar
________ ________
$167,379 $170,512
</TABLE>
5. Options contracts written
The number of contracts and premium amounts associated with option
contracts written by Equity Portfolio during the year ended April
30, 1995, is as follows:
<PAGE>
PAGE 107
<TABLE>
<CAPTION>
Calls
Contracts Premium
______________________________________________________________________________
<S> <C> <C>
Balance April 30, 1994 -- $ --
______________________________________________________________________________
Opened 350 58,186
Exercised (350) (58,186)
______________________________________________________________________________
Balance April 30, 1995 -- $ --
______________________________________________________________________________
</TABLE>
The number of contracts and premium amounts associated with option
contracts written by Managed Portfolio during the year ended April
30, 1995, is as follows:
<TABLE>
<CAPTION>
Puts Calls
Contracts Premium Contracts Premium
__________________________________________________________________________________
<S> <C> <C> <C> <C>
Balance April 30, 1994 -- $ -- -- $ --
__________________________________________________________________________________
Opened 41,843 3,139,644 18,341 1,725,313
Closed (19,420) (1,477,621) (8,400) (976,944)
Exercised (6,675) (808,442) (6,766) (574,835)
Expired (15,748) (853,581) (3,175) (173,534)
__________________________________________________________________________________
Balance April 30, 1995 -- $ -- -- $ --
__________________________________________________________________________________
</TABLE>
6. Capital share transactions
Transactions in shares of each Portfolio for the years ended April
30, 1995, and 1994 were as follows:
<TABLE>
<CAPTION>
Number of shares: Year ended April 30, 1995
Money Government International
Equity Income Market Managed Securities Equity
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio*
________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Shares at beginning of year 8,391,259 3,476,335 9,557,747 11,604,807 1,132,254 --
________________________________________________________________________________________________________________
Sold 3,567,088 610,628 6,253,135 3,963,862 148,783 818,487
Issued for reinvested
distributions 313,742 266,934 432,907 491,539 69,759 11,275
Redeemed (247,637) (428,908) (6,358,379) (470,937) (189,821) (3,651)
________________________________________________________________________________________________________________
Net increase 3,633,193 448,654 327,663 3,984,464 28,721 826,111
________________________________________________________________________________________________________________
Shares at end of year 12,024,452 3,924,989 9,885,410 15,589,271 1,160,975 826,111
________________________________________________________________________________________________________________
*Period from Oct. 28, 1994 (commencement of operations) to April 30, 1995.
<PAGE>
PAGE 108
Number of shares Year ended April 30, 1994
________________________________________________________________________________________________
Money Government
Equity Income Market Managed Securities
Portfolio Portfolio Portfolio Portfolio Portfolio
________________________________________________________________________________________________
Shares at beginning of year 5,202,534 2,222,158 8,180,775 7,237,215 912,972
________________________________________________________________________________________________
Sold 2,513,413 1,279,899 5,854,806 3,372,853 306,174
Issued for reinvested
distributions 872,481 189,664 215,404 1,316,899 68,402
Redeemed (197,169) (215,386) (4,693,238) (322,160) (155,294)
________________________________________________________________________________________________
Net increase 3,188,725 1,254,177 1,376,972 4,367,592 219,282
________________________________________________________________________________________________
Shares at end of year 8,391,259 3,476,335 9,557,747 11,604,807 1,132,254
________________________________________________________________________________________________
</TABLE>
7. Tax loss carryforward
For federal income tax purposes, the Income Portfolio and Managed
Portfolio had capital loss carryovers at April 30, 1995 of $882,704
and $3,761,754, respectively, which, if not offset by subsequent
capital gains, will expire in 2000 through 2004. It is unlikely
the Board of Directors will authorize a distribution of any net
realized gain until the portfolio's capital loss carryover has been
offset or expires.
8. Financial highlights
"Financial highlights" showing per share data and selected
information is presented on pages 5-10 of the prospectus.
<PAGE>
PAGE 109
<TABLE>
<CAPTION>
IDS Life Series Fund, Inc. (Percentages represent
April 30, 1995 value of investments
Equity Portfolio compared to net assets)
Common stocks (87.5%)
Issuer Shares Value(a)
_____________________________________________________________________________
<S> <C> <C>
Automotive related (1.0%)
Lund Intl Holdings 60,000 (b) $ 1,260,000
Miller Industries 70,000 (b) 1,268,750
Total 2,528,750
_____________________________________________________________________________
Banks and savings & loans (3.7%)
Bank of Boston 50,000 1,675,000
Citicorp 30,000 1,391,250
General Acceptance 40,000 (b) 1,050,000
Green Tree Financial 33,000 1,348,875
Mercantile Bancorp 35,000 1,277,500
Roosevelt Financial Group 130,000 2,080,000
Total 8,822,625
_____________________________________________________________________________
Beverages & tobacco (0.8%)
Canandaigua Wine Cl A 45,000 (b) 1,935,000
_____________________________________________________________________________
Building materials (0.5%)
Tyco Intl 25,000 1,312,500
_____________________________________________________________________________
Chemicals (1.5%)
Air Products & Chemical 25,000 1,259,375
IMC Global 25,000 1,228,125
US Filter 68,700 (b) 1,090,612
Total 3,578,112
_____________________________________________________________________________
Computers & office equipment (15.8%)
Affiliated Computer Services Cl A 45,000 (b) 1,226,250
Amdahl 47,400 (b) 562,875
American Management Systems 55,000 (b) 1,161,875
Broadway & Seymour 190,000 (b) 3,515,000
Brock Control Systems 60,000 (b) 420,000
BTG 110,000 (b) 1,017,500
Cabletron Systems 30,000 (b) 1,425,000
Ceridian 40,000 (b) 1,380,000
Cisco Systems 135,000 (b) 5,383,125
First Data 25,000 1,406,250
FTP Software 50,000 (b) 1,312,500
Intergraph 100,000 (b) 1,075,000
Komag 40,000 (b) 1,545,000
Madge NV 45,000 (b) 1,237,500
Mercury Interactive 70,000 (b) 1,505,000
Microdyne 70,000 (b) 1,172,500
Micronics Computers 100,000 (b) 475,000
Mustang Software 46,100 (b) 357,275
Pace Health Management 60,000 (b) 300,000
Parametric Technology 40,000 (b) 1,900,000
Sanmina 55,000 (b) 1,876,875
Sierra On-Line 80,000 (b) 1,510,000
State of the Art 80,000 (b) 880,000
Sterling Software 30,000 (b) 1,020,000
Sterling Software Escrow 80,000 (b,c) --
Synopsys 25,000 (b) 1,356,250
Telebit 110,000 (b) 715,000
3Com 40,000 (b) 2,240,000
Wonderware 5,000 (b) 143,125
Total 38,118,900
_____________________________________________________________________________
Electronics (11.9%)
Anadigies 68,000 (b) 909,500
Atmel 35,000 (b) 1,540,000
Cherry Cl B 74,000 (b) 1,073,000
Continental Circuits 85,000 (b) 966,875
Credence Systems 55,000 (b) 1,993,750
Electro Scientific 48,000 (b) 1,278,000
<PAGE>
PAGE 110
Fusion Systems 40,000 (b) 1,250,000
GaSonics Intl 55,000 (b) 1,265,000
Integrated Device Technologies 60,000 (b) 2,287,500
ITI Technologies 65,000 (b) 1,511,250
Lam Research 28,000 (b) 1,414,000
Linear Technology 20,000 1,195,000
Maxim Integrated Products 35,000 (b) 1,268,750
Medar 88,400 (b) 828,750
Microchip Technology 50,000 (b) 1,412,500
Molex 40,000 1,510,000
Richey Electronics 110,000 (b) 687,500
Tencor Instruments 20,000 (b) 1,355,000
Ultratech Stepper 25,000 (b) 1,400,000
Vishay Intertechnology 12,400 (b) 733,150
X-Rite 65,000 1,267,500
Xilinx 20,000 (b) 1,535,000
Total 28,682,025
_____________________________________________________________________________
Corrpro 75,000 (b) 1,387,500
_____________________________________________________________________________
Comdata Holdings 85,000 (b) 977,500
Olympic Financial 100,000 (b) 1,212,500
PMT Services 60,000 (b) 825,000
Regional Acceptance 80,000 (b) 1,120,000
Total 4,135,000
Foreign (5.8%)
Astra Cl A 55,000 1,603,910
Diamond Fields 40,000 (b) 1,335,048
Ethical Holdings 85,000 (b) 520,625
Helicopter Lines 250,000 806,500
Mutual Risk Management 42,000 1,291,500
Natuzzi 50,000 1,868,750
Nokia Preferred 70,000 2,870,000
Petroleum Geo Services 50,000 (b) 1,365,625
Renaissance Energy 55,000 (b) 1,244,023
Royal Plastic 103,700 (b) 1,106,033
Total 14,012,014
_____________________________________________________________________________
Cordis 18,000 (b) 1,291,500
Forest Labs 50,000 (b) 2,250,000
Gilead Sciences 60,000 (b) 900,000
Heart Technology 80,000 (b) 1,420,000
IDEXX Laboratories 100,000 (b) 4,300,000
Interpore Intl 43,000 (b) 241,875
Liposome 150,000 (b) 1,350,000
Ostex Intl 65,000 (b) 576,875
Sybron Intl 35,000 (b) 1,299,375
Target Therapeutics 40,000 (b) 1,460,000
Tecnol Medical Products 70,000 (b) 1,303,750
Teva Pharmaceutical Industries 50,000 1,712,500
Thermedics 100,000 (b) 1,887,500
Total 19,993,375
_____________________________________________________________________________
AM Home Patient 45,000 (b) 1,411,875
Cardinal Health 65,000 2,998,125
Coram Healthcare 50,000 (b) 1,025,000
Coventry 40,000 (b) 940,000
Equity Corp Intl 73,000 (b) 1,177,125
HBO & Company 40,000 1,830,000
Healthdyne 100,000 (b) 1,087,500
Healthsource 35,000 (b) 1,255,625
HEALTHSOUTH Rehabilitation 100,000 (b) 1,975,000
Humana 13,600 (b) 265,200
Lincare Holdings 40,000 (b) 1,235,000
Manor Care 40,000 1,175,000
Medaphis 40,000 (b) 2,280,000
PacifiCare Health Cl B 20,000 (b) 1,240,000
Stewart Enterprises Cl A 67,400 1,853,500
Sun Healthcare Group 50,000 (b) 1,206,250
Surgical Care Affiliates 55,000 1,278,750
Total 24,233,950
<PAGE>
PAGE 111
Industrial machines & services (6.0%)
Acme-Cleveland 90,000 1,867,500
Baldor Electric 45,000 1,327,500
Blount Cl A 30,000 1,338,750
Blyth Industries 40,000 (b) 1,110,000
Continental Waste 100,000 (b) 1,200,000
Empi 75,000 (b) 1,190,625
Greenfield Industries 50,000 1,475,000
Littelfuse 40,000 (b) 1,355,000
Polaris Industries 30,000 1,357,500
Sanifill 50,000 (b) 1,331,250
TETRA Technologies 45,000 (b) 916,875
Total 14,470,000
_____________________________________________________________________________
American Freightways 50,000 (b) 1,168,750
Feather Light 95,000 (b) 890,625
Total 2,059,375
_____________________________________________________________________________
Crop Growers 45,000 (b) 1,372,500
NAC Re 44,000 1,452,000
Total 2,824,500
_____________________________________________________________________________
Alliance Entertainment 180,000 (b) 1,282,500
_____________________________________________________________________________
DIMAC 95,000 (b) 1,484,375
Heritage Media Cl A 45,000 (b) 1,147,500
Movie Gallery 35,000 (b) 1,093,750
Total 3,725,625
_____________________________________________________________________________
Manpower 55,000 1,835,625
Veeco Instruments 85,000 (b) 1,221,875
Total 3,057,500
_____________________________________________________________________________
Crown Cork & Seal 50,000 (b) 2,137,500
_____________________________________________________________________________
Guest Supply 50,000 (b) 1,050,000
Hospitality Franchise Systems 50,000 1,518,750
Total 2,568,750
_____________________________________________________________________________
Retail (4.3%)
Big B 80,000 (b) 1,160,000
Circle K 70,000 (b) 1,163,750
CUC Intl 40,000 (b) 1,630,000
Dollar General 45,000 1,046,250
Friedmans Cl A 60,000(b) 1,065,000
Office Depot 40,900 (b) 930,475
OfficeMax 45,000 (b) 1,153,125
Profitts 45,000 (b) 1,113,750
Viking Office Products 40,000 (b) 1,100,000
Total 10,362,350
_____________________________________________________________________________
Telecom
Andrew 21,400 (b) 1,059,300
Ascend Communications 11,000 (b) 847,000
Brite Voice Systems 70,000 (b) 1,277,500
BroadBand Technologies 44,000 (b) 1,100,000
Cascade Communications 10,000 (b) 720,000
EIS Intl 100,000 (b) 1,650,000
Numerex Cl A 70,000 (b) 1,067,500
Palmer Wireless 85,000 (b) 1,423,750
Scientific-Atlanta 80,000 1,820,000
StrataCom 32,000 (b) 1,176,000
Video Telecommunications 100,000 (b) 962,500
Total 13,103,550
_____________________________________________________________________________
Conso Products 65,000 (b) 893,750
Nine West Group 40,000 (b) 1,300,000
Quiksilver 60,000 (b) 1,185,000
Total 3,378,750
_____________________________________________________________________________
<PAGE>
PAGE 112
LDDS Communications 50,000 (b) 1,200,000
MFS Communications 45,000 (b) 1,608,750
Millicom Intl Cellular 17,500 (b) 435,313
Total 3,244,063
_____________________________________________________________________________
(Cost: $172,976,949) $210,954,214
_____________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Put options purchased (0.1%)
Issuer Number Exercise Expiration Value (a)
of price date
contracts
<S> <C> <C> <C> <C>
Cisco Systems 675 $ 35 July 1995 $ 71,719
S&P 500 250 485 June 1995 40,625
Total options purchased
(Cost: $241,800) $112,344
__________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (14.3%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_________________________________________________________________________________
<S> <C> <C> <C>
Commercial paper (12.2%)
Avco
06-13-95 6.05 $2,200,000 $ 2,183,500
Carg Financial Markets
05-03-95 5.98 1,800,000 (d) 1,798,806
Fleet Funding
05-15-95 6.01 950,000 (d) 947,475
05-23-95 6.04 1,100,000 (d) 1,095,600
05-22-95 6.06 1,600,000 (d) 1,593,846
Ford Motor Credit
05-22-95 6.04 1,200,000 1,195,400
05-18-95 6.07 2,500,000 2,492,044
Household Finance
05-05-95 6.00 4,000,000 3,996,013
Paccar Financial
05-04-95 6.00 1,300,000 1,298,920
Penney (J.C.) Funding
05-11-95 5.99 1,900,000 1,896,219
Pepsico
05-17-95 5.98 800,000 797,616
St. Paul Companies
05-12-95 6.00 2,600,000 (d) 2,594,395
Sara Lee
05-11-95 5.99 3,250,000 3,243,533
UBS Finance
05-01-95 5.93 4,400,000 4,398,550
Total 29,531,917
__________________________________________________________________________________
Banker's acceptance (2.1%)
Republic National Bank
05-22-95 6.06 5,000,000 $ 4,980,770
__________________________________________________________________________________
Total short-term securities
(Cost: $34,512,687) $ 34,512,687
__________________________________________________________________________________
Total investments in securities
(Cost: $207,731,436)(e) $245,579,245
__________________________________________________________________________________
Notes to investments in securities
<PAGE>
PAGE 113
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing.
(c) Presently negligible market value.
(d) 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. "These
securities have been determined to be liquid under guidelines established by the board of directors.
(e) At April 30, 1995, the cost of securities for federal income tax purposes was $207,872,121 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation 40,864,862
Unrealized depreciation (3,157,738)
___________________________________________________________________
Net unrealized appreciation $37,707,124
___________________________________________________________________
</TABLE>
<PAGE>
PAGE 114
<TABLE>
<CAPTION>
IDS Life Series Fund, Inc. (Percentages represent
April 30, 1995 value of investments
Income Portfolio compared to total net assets)
Bonds (95.1%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
__________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S government obligations (30.2%)
U.S. Treasury Bond 8.125% 2019 $2,000,000 $ 2,145,460
U.S. Treasury Notes 6.375 2002 4,250,000 4,102,100
6.50 1999 2,000,000 1,978,600
Resolution Funding Corp 8.125 2019 3,000,000 3,184,020
Total 11,410,180
__________________________________________________________________________________
Mortgage backed securities (20.4%)
Federal Home Loan Mtge Corp 7.00 2008 963,822 944,845
8.00 2017 1,438,887 1,438,441
Collateralized Mtge Obligation 8.00 2020 185,000 183,940
8.50 2022 1,000,000 1,028,270
Federal Natl Mtge Assn 6.00 2024 987,183 883,223
6.50 2024 3,069,001 2,838,826
8.50 2023 9,936 10,107
Series Z 8.00 2021 378,547(g) 375,050
Total 7,702,702
__________________________________________________________________________________
Aerospace & defense (0.3%)
AEC Acquisition
Sr Sub 10.00 2003 100,000 111,125
__________________________________________________________________________________
Airlines (0.3%)
AMR 9.50 2001 100,000 105,882
__________________________________________________________________________________
Automotive (0.3%)
Exide 10.75 2002 100,000 104,000
__________________________________________________________________________________
Banks and savings & loans (2.0%)
Barclays NA Capital 9.75 2021 300,000 338,700
Corestates Capital 9.375 2003 200,000 222,314
Fleet Norstar Financial 9.00 2001 200,000 211,614
Total 772,628
__________________________________________________________________________________
Beverages & tobacco (0.8%)
RJR Nabisco 8.625 2002 300,000 299,883
__________________________________________________________________________________
Building materials (1.3%)
Owens Corning Fiberglass 9.375 2012 100,000 106,858
Pulte 7.00 2003 300,000 273,375
Schuller 10.875 2004 100,000 106,500
Total 486,733
__________________________________________________________________________________
Chemicals (0.4%)
B.F. Goodrich 9.625 2001 150,000 164,293
__________________________________________________________________________________
Electronics (1.0%)
Magnetek 10.75 1998 100,000 101,375
Reliance Electric 6.80 2003 300,000 287,391
Total 388,766
__________________________________________________________________________________
Energy (0.8%)
BP North America 9.50 1998 60,000 63,538
Clark Oil 9.50 2004 100,000 98,000
USX 9.80 2001 150,000 163,046
Total 324,584
__________________________________________________________________________________
<PAGE>
PAGE 115
Energy equipment & services (0.3%)
McDermott 9.375 2002 100,000 109,533
__________________________________________________________________________________
Financial services (5.4%)
Avco Financial 7.25 1999 300,000 299,994
Carco Auto 7.875 1998 300,000 302,637
Corporate Property Investors 7.18 2013 300,000(c) 265,770
Countrywide Funding 8.42 1999 300,000 310,929
First Union 8.875 2003 100,000 84,750
General Electric Capital
Reset Nt 8.65 2018 200,000(f) 203,886
Kearny (RE) LP Class B 6.55 2000 200,000 199,250
Kearny (RE) LP Class C 7.70 2001 100,000 99,750
Property Trust America 7.50 2014 300,000 262,500
Total 2,029,466
__________________________________________________________________________________
Food (0.7%)
ARA Group
Sr Sub Deb 12.00 2000 75,000 79,688
Chiquita Brands 9.625 2004 100,000 95,375
Specialty Foods 10.25 2001 100,000(c) 98,500
Total 273,563
__________________________________________________________________________________
Foreign (8.1%)(b)
Aegon
(U.S. Dollar) 4.75 2004 150,000(c) 173,812
Alcan Aluminum
(U.S. Dollar) 8.875 2022 200,000 207,390
Avenor (Can Pac For)
(U.S. Dollar) 9.375 2004 100,000 102,000
Banca Italy N.Y.
(U.S. Dollar) 8.25 2007 300,000 296,319
BNCE
(U.S. Dollar) 7.25 2004 100,000 67,750
Doman Industries
(U.S. Dollar) 8.75 2004 100,000 93,500
Guang Dong Enterprise
(U.S. Dollar) 8.75 2003 400,000(c) 344,620
Korean Electric Power
(U.S. Dollar) 8.00 2002 200,000 201,152
Methanex
(U.S. Dollar) 8.875 2001 100,000 104,125
Petroleos Mexicanos
(U.S. Dollar) 8.625 2023 300,000 183,000
Qantas Air
(U.S. Dollar) 7.50 2003 300,000(c) 285,594
Repap New Brunswick
(U.S. Dollar) 10.625 2005 100,000 101,875
Republic of Columbia
(U.S. Dollar) 7.25 2004 200,000 170,000
Republic of Italy
(U.S. Dollar) 6.875 2023 300,000 245,565
Republic of South Africa
(U.S. Dollar) 9.625 1999 250,000 244,165
WMC Finance USA
(U.S. Dollar) 7.25 2013 300,000 267,345
Total 3,088,212
__________________________________________________________________________________
Health care (0.7%)
Schering-Plough
Zero Coupon 7.31 1996 300,000(c,d) 270,537
__________________________________________________________________________________
Health care services (0.7%)
Healthtrust 10.75 2002 100,000 110,125
Hillhaven 10.125 2001 100,000 104,250
National Medical Enterprises
Sr Sub 10.125 2005 40,000 41,800
Total 256,175
__________________________________________________________________________________
<PAGE>
PAGE 116
Household products (0.3%)
First Brands 9.125 1999 100,000 101,250
__________________________________________________________________________________
Industrial transportation (1.3%)
Enterprise Rent-A -Car 8.750 1999 300,000 (c) 312,696
Ryder Systems 9.25 2001 150,000 162,893
Total 475,589
__________________________________________________________________________________
__________________________________________________________________________________
Insurance (1.3%)
Americo Life 9.25 2005 100,000 88,750
Leucadia National
Sub Nts 10.375 2002 100,000 107,375
SunAmerica 8.125 2023 300,000 279,483
Total 475,608
__________________________________________________________________________________
Leisure time & entertainment (1.2%)
Bally's Park Place 9.25 2004 100,000 90,375
Caesars World 8.875 2002 100,000 101,875
GB Property Funding
1st Mtge 10.875 2004 100,000 85,500
GNF Bally 10.625 2003 100,000 82,000
MGM Grand Hotel 12.00 2002 100,000 112,000
Total 471,750
__________________________________________________________________________________
Media (2.5%)
Ackerley Communications
Sr Secured Nts 10.75 2003 100,000(c) 103,000
Adelphia Communications 11.875 2004 100,000 95,500
Cablevision Systems 10.75 2004 100,000 104,625
Continental Cablevision
Sr Deb 8.875 2005 100,000 100,000
Continental Cablevision
Sr Sub Deb 11.00 2007 100,000 109,000
Outdoor Systems
Sr Nts 10.75 2003 100,000 94,500
Time Warner Entertainment 8.375 2033 250,000 224,688
Viacom Int'l
Sr Sub 10.25 2001 100,000 108,500
Total 939,813
__________________________________________________________________________________
Metals (0.3%)
Magma Copper 12.00 2001 100,000 109,500
__________________________________________________________________________________
Multi-industry (1.6%)
Coltec Industries 9.75 2000 100,000 101,250
Crane 7.25 1999 300,000 295,683
Fairchild 13.125 2006 65,000 52,975
Mark IV Industries 8.75 2003 100,000 98,000
Tally Industries
Zero Coupon 8.27 2005 100,000(e) 61,000
Total 608,908
__________________________________________________________________________________
Natural gas (0.3%)
Southwest Gas 9.75 2002 100,000 109,392
__________________________________________________________________________________
Paper & packaging (3.5%)
Chesapeake 9.875 2003 100,000 111,843
Container Corp America 9.75 2003 100,000 100,000
Federal Paper Board 10.00 2011 100,000 114,292
International Paper 5.125 2012 85,000 63,339
Owens Illinois
Sr Sub Nts 11.00 2003 150,000 163,125
Pope & Talbot 8.375 2013 300,000 288,009
S D Warren
Sr Nts 12.00 2004 100,000(c) 108,375
Scotia Pacific Holding 7.95 2015 277,072 269,173
Silgan
Sr Sub Nts 11.75 2002 100,000 104,875
Total 1,323,031
__________________________________________________________________________________
<PAGE>
PAGE 117
Restaurants & lodging (0.2%)
John Q Hammons Hotel
Sr Nts 8.875 2004 100,000 94,250
__________________________________________________________________________________
Retail (2.4%)
Di Giorgio 12.00 2003 100,000 86,000
Dominick's Finer 10.875 2005 100,000(c) 100,000
Pathmark Stores 9.625 2003 100,000 96,250
Penn Traffic 9.625 2005 100,000 93,500
Penn Traffic
Sr Nts 10.25 2002 100,000 101,250
Penny (JC) 9.05 2001 150,000 161,802
Safeway Stores 10.00 2001 100,000 109,000
Service Merchandise 9.00 2004 100,000 80,500
Stop & Shop 9.75 2002 75,000 79,781
Total 908,083
__________________________________________________________________________________
Telecommunication equipment & services (0.2%)
CenCall Communications
Zero Coupon 16.485 1999 150,000(e) 73,875
__________________________________________________________________________________
Textiles & apparel (0.3%)
Dominion Textiles 8.875 2003 100,000 95,000
__________________________________________________________________________________
Utilities - electric (4.9%)
Arizona Public Service 8.00 2025 200,000 189,802
Commonwealth Edison 9.875 2020 200,000 215,170
Houston Industries 9.375 2001 150,000 163,350
Long Island Lighting 9.625 2024 300,000 290,151
Midland Cogeneration Venture 11.75 2005 100,000 99,500
North Atlantic Energy
1st Mtge 9.05 2002 100,000 98,625
Northeast Utilities 8.58 2006 196,571 201,916
Pennsylvania Power & Light
1st Mtge 9.25 2019 100,000 105,909
Sithe Independence Funding 9.00 2013 100,000 101,648
Texas New Mexico Power
1st Mtge 9.25 2000 100,000 99,750
Texas Utilities Electric 9.750 2021 100,000 109,971
Texas Utilities
1st Mtge 7.375 2025 200,000 176,586
Total 1,852,378
__________________________________________________________________________________
Utilities - telephone (1.1%)
New York Telephone 9.375 2031 150,000 161,479
Pacific Bell Telephone 7.375 2043 300,000 270,390
Total 431,869
__________________________________________________________________________________
Total bonds
(Cost: $35,914,355) $35,968,558
__________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Preferred stocks (0.4%)
Issuer Shares Value(a)
__________________________________________________________________________________
<S> <C> <C> <C>
First Chicago
2.88 % Cv 500 $ 27,375
National Health Investors
8.50 % Cv 2,000 46,500
Public Service of New Hampshire
10.60 % 3,500 89,355
Total preferred stocks
(Cost: $162,500) $ 163,230
__________________________________________________________________________________
<PAGE>
PAGE 118
Short-term securities (3.4%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
U.S. government agency
Federal Home Bank
Disc Nts
05-22-95 5.88 500,000 498,131
Federal Natl Mtge Assn
Disc Nts
05-22-95 5.89 800,000 797,005
Total short-term securities
(Cost: $1,295,136) $ 1,295,136
__________________________________________________________________________________
Total investments in securities (98.9%)
(Cost: $37,371,991)(h) $37,426,924
__________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Foreign securities values are stated in U.S. dollars; principal amounts are denominated in the currency indicated.
(c) Represent securities sold under Rule 144A which are exempt from registration under the Securities Act of 1933, as amended.
These securities has been determined to be liquid under guidelines established by the board of directors.
(d) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition.
(e) For these zero coupon bonds, which become coupon paying at a future date, the interest rate disclosed represents the
annualized effective yield from the date of acquisition to interest reset date disclosed.
(f) Interest rate varies to reflect current market conditions; rate shown is the effective rate on April 30, 1995.
(g) This security is a collateralized mortgage obligation whose payment of principal has been deferred until the principle of
previous series within the trust has been paid off.
(h) At April 30, 1995, the cost of securities for federal income tax purposes was $37,347,769 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $ 812,322
Unrealized depreciation (733,167)
_________________________________________________________________________________
Net unrealized appreciation $ 79,155
_________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 119
<TABLE>
<CAPTION>
IDS Life Series Fund, Inc. (Percentages represent
April 30, 1995 value of investments
Money Market Portfolio compared to total net assets)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (11.6%)
Federal Home Loan
Bank Disc Nts
05-22-95 5.88% $300,000 $ 298,879
Federal Home Loan
Mtge Corp Disc Nts
05-01-95 6.19 850,000 849,712
__________________________________________________________________________________
Total U.S. government agencies
(Cost: $1,148,591) $1,148,591
__________________________________________________________________________________
Commercial paper (87.3%)
Automotive & related (4.0%)
Ford Motor Credit
05-18-95 6.07 400,000 $ 398,727
__________________________________________________________________________________
Banks and savings & loans (3.0%)
Commerzbank US Finance
05-11-95 6.02 300,000 299,400
__________________________________________________________________________________
Beverages & tobacco (7.5%)
Coca-Cola
05-10-95 5.96 445,000 444,191
PepsiCo
05-17-95 5.98 300,000 299,106
Total 743,297
__________________________________________________________________________________
Computers & office equipment (7.5%)
Hewlett-Packard
06-13-95 6.04 350,000 347,384
Pitney Bowes
05-25-95 5.98 400,000 398,281
Total 745,665
__________________________________________________________________________________
Financial services (28.7%)
American General
05-19-95 5.97 400,000(b) 398,678
See accompanying notes to investments in securities.
Avco
06-13-95 6.05 400,000 397,000
Ciesco
06-01-95 6.03 300,000(b) 298,355
Fleet Funding
05-22-95 6.05 300,000(b) 298,850
Household Finance
05-05-95 6.00 400,000 399,601
Penney (JC) Funding
05-15-95 5.98 300,000 299,205
Safeco Credit
06-23-95 6.05 300,000 297,250
USAA Capital
05-11-95 6.01 450,000 449,103
Total 2,838,042
__________________________________________________________________________________
Food (3.5%)
Sara Lee
05-01-95 5.99 350,000 349,884
__________________________________________________________________________________
<PAGE>
PAGE 120
Health care (10.6%)
Lilly (Eli)
05-02-95 6.22 450,000 449,770
Pfizer
05-10-95 5.97 300,000 299,455
Sandoz
05-25-95 5.97 300,000 298,711
Total 1,047,936
__________________________________________________________________________________
Industrial transportation (3.5%)
Consolidated Railway
06-14-95 6.07 350,000(b) 347,312
__________________________________________________________________________________
Insurance (4.5%)
St Paul Companies
05-12-95 6.00 450,000(b) 449,030
_________________________________________________________________________________
Media (4.0%)
Reed Publishing
07-03-95 6.11 400,000(b) 395,645
__________________________________________________________________________________
Retail (4.0%)
Wal-Mart Stores
05-09-95 5.97 400,000 399,339
__________________________________________________________________________________
Utilities - telephone (6.5%)
Southwestern Bell
05-15-95 5.99 300,000 299,204
Unilever Capital
06-26-95 6.10 350,000 346,605
Total 645,809
__________________________________________________________________________________
Total commercial paper
(Cost: $8,660,086) $8,660,086
__________________________________________________________________________________
Total investments in securities
(Cost: $9,808,677)(c) $9,808,677
__________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Commercial paper sold within terms of a private placement memorandum, exempt from
registration under section 4(2) ofthe Securities Act of 1933, as amended, and may be sold
only to dealers in that program or other "accredited investors." These securities have been
determined to be liquid under guidelines established by the board of directors.
(c) At April 30, 1995, this also represents the cost of securities for federal income tax purposes.
</TABLE>
<PAGE>
PAGE 121
<TABLE>
<CAPTION>
IDS Life Series Fund, Inc. (Percentages represent
April 30, 1995 value of investments
Managed Portfolio compared to total net assets)
Bonds (36.0%)
Issuer Coupon Maturity Principal Value (a)
rate year amount
__________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. government obligations (15.6%)
U.S. Treasury Bonds 8.875% 2017 $5,230,000 $ 6,027,052
9.375 2006 5,100,000 5,959,095
10.375 2012 500,000 623,450
U.S. Treasury Notes 4.625 1996 2,850,000 2,814,204
5.50 1996 8,340,000 8,274,031
5.625 1998 2,400,000 2,335,296
5.75 2003 500,000 459,655
7.125 1999 2,850,000 2,879,156
7.75 2000 4,700,000 4,862,526
7.50 2001 85,000 87,464
Total 34,321,929
__________________________________________________________________________________
Mortgage backed securities (5.1%)
Federal Home Loan Mtge Corp 8.00 2022 627,162 626,968
8.00 2024 593,488 593,304
10.00 2005 1,767,052 1,858,161
Federal Natl Mtge Assn 6.00 2024 1,974,367 1,766,446
8.00 2022 280,485 280,311
8.00 2024 995,235 994,618
8.50 2023 429,630 437,015
8.50 2024 988,459 1,005,450
9.00 2024 226,587 234,094
Series Z 6.50 2023 272,570(k) 197,081
7.00 2016 1,211,599(k) 1,109,255
Govt Natl Mtge Assn 9.00 2022 1,986,916 2,064,525
Total 11,167,228
__________________________________________________________________________________
Aerospace & defense (0.1%)
United Technologies 8.875 2019 300,000 324,258
__________________________________________________________________________________
Automotive related (0.4%)
GMAC 6.05 1996 750,000 745,298
8.375 1997 65,000 66,568
Total 811,866
__________________________________________________________________________________
Banks and savings & loans (0.2%)
First USA Bank 6.88 1996 300,000 300,477
Riggs National
Sub Nts 8.50 2006 100,000 93,000
See accompanying notes to investments in securities.
Total 393,477
__________________________________________________________________________________
Beverages & tobacco (0.1%)
RJR Nabisco 7.625 2003 125,000 116,413
8.625 2002 125,000 124,951
Total 241,364
__________________________________________________________________________________
Building materials (0.4%)
Building Materials
Zero Coupon Cv 11.75 1999 150,000(e,h) 87,000
Pulte 7.00 2003 500,000 455,625
Schuller Intl Group 10.875 2004 250,000 266,250
Total 808,875
__________________________________________________________________________________
Chemicals (0.1%)
Rexene 11.75 2004 250,000 268,125
__________________________________________________________________________________
Computers & office equipment (0.1%)
Alliant Techsystem
Sr Sub 11.75 2003 300,000(h) 312,750
__________________________________________________________________________________
<PAGE>
PAGE 122
Electronics (0.2%)
Reliance Electronics 6.80 2003 500,000 478,985
__________________________________________________________________________________
Energy (0.2%)
BP North America 9.50 1998 140,000 148,254
Standard Oil 9.00 2019 300,000 316,188
Total 464,442
__________________________________________________________________________________
Financial services (1.5%)
AVCO Financial 7.25 1999 250,000 249,995
Carco Auto
Asset-Backed Obligation 7.875 1998 250,000 252,198
Corporate Property Investors 7.18 2013 500,000(h) 442,950
First Union 8.875 2003 300,000 254,250
GE Capital
Reset Nt 8.65 1996 250,000(i) 254,858
Kearny (RE) LP Class B
Collateralized Mtge Obligation 6.55 2000 300,000 298,875
Kearny (RE) LP Class C
Collateralized Mtge Obligation 7.70 2001 150,000 149,625
Olympic Financial 13.00 2000 200,000 202,750
Property Trust America 7.50 2014 750,000 656,250
Salomon Brothers 6.75 2006 500,000 428,880
Total 3,190,631
__________________________________________________________________________________
Food (0.2%)
Specialty Foods 10.25 2001 400,000(h) 394,000
__________________________________________________________________________________
Foreign (3.5%)(c)
Argentina Republic
(U.S. Dollar) 7.312 2005 250,000(i) 148,594
Avenor
(U.S. Dollar) 9.375 2004 250,000 255,000
Banca Italy N.Y.
(U.S. Dollar) 8.25 2007 500,000 493,865
Banco Nacional de Mexico
(U.S. Dollar) Cv 7.00 1999 2,250,000(g) 1,507,500
BNCE
(U.S. Dollar) 7.25 2004 400,000 271,000
Doman Industries
(U.S. Dollar) 8.75 2004 200,000 187,000
Govt of Poland
(Euro Dollar) Stepup Nts 3.25 2014 400,000 189,000
Govt Trust Certificate Israel
(U.S. Dollar) 9.25 2001 275,000 293,969
Guang Dong Enterprise
(U.S. Dollar) 8.75 2003 750,000(h) 646,162
Hydro Quebec
(U.S. Dollar) 9.375 2030 500,000 554,100
KFW International Finance
(U.S. Dollar) 8.20 2006 250,000 260,880
LeGrand
(U.S. Dollar) 8.50 2025 200,000 203,902
Mexican U.S. Series D
(U.S. Dollar) 7.25 2019 250,000 164,375
Philippines Long Distance Telephone
(U.S. Dollar) 10.625 2004 100,000 98,500
PT Indah Kiat Pulp & Paper
(U.S. Dollar) 11.875 2002 250,000 247,500
Qantas Air
(U.S. Dollar) 7.50 2003 500,000(h) 475,990
Repap New Brunswick
(U.S. Dollar) 10.625 2005 500,000 509,375
Republic of Brazil
(U.S. Dollar) 6.75 2012 400,000(i) 200,000
Republic of Columbia
(U.S. Dollar) 7.25 2004 500,000 425,000
Republic of Italy
(U.S. Dollar) 6.875 2023 350,000 286,492
Rogers Cable System
(Canadian Dollar) 9.65 2014 600,000 370,722
Total 7,788,926
__________________________________________________________________________________
<PAGE>
PAGE 123
Health care (0.6%)
Johnson & Johnson 8.00 1998 1,000,000 1,021,200
Schering-Plough
Zero Coupon 7.31 1996 350,000(d,h) 315,627
Total 1,336,827
__________________________________________________________________________________
Health care services (0.3%)
Hillhaven 10.125 2001 500,000 521,250
Natl Medical Enterprise
Sr Sub 10.125 2005 160,000 167,200
Total 688,450
__________________________________________________________________________________
Insurance (0.5%)
Americo Life 9.25 2005 400,000 355,000
General American Life
Sub Cap Nts 7.625 2024 500,000(h) 425,000
New England Mutual
Credit Sensitive Notes 7.875 2024 250,000(h) 200,000
Principal Mutual 8.00 2044 250,000(h) 221,815
Total 1,201,815
__________________________________________________________________________________
Leisure time & entertainment (0.5%)
Bally's Grand
1st Mtge 10.375 2003 250,000 242,500
Bally's Park Place Funding
1st Mtge 9.25 2004 400,000 361,500
GB Property Funding
1st Mtge 10.875 2004 250,000 213,750
Kloster Cruise
Sr Secured Nts 13.00 2003 250,000 215,625
Total 1,033,375
__________________________________________________________________________________
Media (2.3%)
Ackerley Communications
Sr Secured Nts 10.75 2003 400,000(h) 412,000
Adelphia Communications
Pay-in-kind 9.50 2004 547,900 427,362
Amer Media Operations 11.625 2004 250,000 266,250
Benedek Broadcast 11.875 2005 300,000(h) 305,250
Continental Cablevision
Sr Deb 8.875 2005 250,000 250,000
News America Holdings 7.50 2000 250,000 248,125
Outdoor Systems
Sr Nts 10.75 2003 400,000 378,000
Tele-Communications 7.875 2013 500,000 433,565
Time Warner
Zero Coupon 6.63 2012 5,000,000(d) 1,618,750
Time Warner Entertainment 8.375 2033 500,000 449,375
Turner Broadcasting System
Sr Nts 8.375 2013 250,000 215,625
Total 5,004,302
__________________________________________________________________________________
Multi-industry (0.3%)
Crane 7.25 1999 250,000 246,402
Mark IV Industries 8.75 2003 400,000 392,000
Total 638,402
__________________________________________________________________________________
Natural gas (0.3%)
Coastal 10.25 2004 500,000 570,680
__________________________________________________________________________________
Paper & packaging (1.1%)
Container Corp America 9.75 2003 500,000 500,000
Sr Nts 10.75 2002 250,000 260,625
Federal Paperboard 10.00 2011 250,000 285,730
International Paper 5.125 2012 250,000 186,293
Pope & Talbot 8.375 2013 400,000 384,012
S D Warren
Sr Nts 12.00 2004 400,000(h) 433,500
Scotia Pacific Holding 7.95 2015 277,072 269,173
Stone Container
1st Mtge 10.75 2002 200,000 211,000
Total 2,530,333
__________________________________________________________________________________
<PAGE>
PAGE 124
Retail (0.6%)
Dominick's Finer 10.875 2005 400,000(h) 400,000
Food4Less Supermarket
Zero Coupon Cv 15.25 1997 150,000(e) 118,312
Pathmark Stores 9.625 2003 400,000 385,000
Penn Traffic 9.625 2005 300,000 280,500
Penney (JC) 9.05 2001 200,000 215,736
Total 1,399,548
__________________________________________________________________________________
Telecommunications equipment & services (0.1%)
CenCall Communications
Zero Coupon Cv 16.485 1999 400,000(e) 197,000
__________________________________________________________________________________
Utilities - electric (0.8%)
Alabama Power 9.00 2024 300,000 318,825
Commonwealth Edison 8.375 2023 250,000 244,293
Long Island Lighting 9.75 2021 300,000 294,717
Pennsylvania Power & Light 7.625 2002 50,000 50,500
RGS Funding I & M
Sale Lease-Back Obligation 9.82 2022 208,779 230,931
Sithe Independence Funding 9.00 2013 150,000(h) 152,472
Texas-New Mexico Power
1st Mtge 9.25 2000 400,000 399,000
Total 1,690,738
__________________________________________________________________________________
Utilities - telephone (0.4%)
GTE 9.375 2000 400,000 433,780
GTE Florida 9.625 2030 300,000 317,580
Mountain States Tel & Tel 5.50 2005 80,000 68,016
New England Tel & Tel 6.375 2008 70,000 61,710
New York Telephone 4.875 2006 130,000 104,591
Total 985,677
__________________________________________________________________________________
Miscellanous (0.5%)
Coty 10.25 2005 500,000 506,250
KinderKare Learning Center 10.375 2001 250,000 256,875
Standard Credit Card Trust 8.625 2002 250,000 258,398
Total 1,021,523
__________________________________________________________________________________
Total bonds
(Cost: $79,982,006) $ 79,265,526
__________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Common stocks (41.4%)
Issuer Shares Value(a)
___________________________________________________________________________
<S> <C> <C>
Aerospace & defense (1.2%)
Lockheed Martin 21,500 $ 1,241,625
United Technologies 18,300 1,338,188
Total 2,579,813
___________________________________________________________________________
Automotive related (0.2%)
Goodyear Tire & Rubber 11,000 418,000
___________________________________________________________________________
Banks and savings & loans (1.8%)
BankAmerica 10,000 495,000
Citicorp 20,800 964,600
Roosevelt Financial Group 150,000 2,400,000
Total 3,859,600
___________________________________________________________________________
Beverages & tobacco (0.9%)
Coca-Cola 8,000 465,000
Philip Morris 21,000 1,422,750
RJR Nabisco 5,400 147,825
Total 2,035,575
___________________________________________________________________________
Building materials (0.7%)
Tyco Intl 30,700 1,611,750
___________________________________________________________________________
<PAGE>
PAGE 125
Chemicals (1.5%)
Lubrizol 25,000 871,875
Morton Intl 25,000 775,000
Nalco Chemical 16,000 560,000
Praxair 46,000 1,092,500
Total 3,299,375
___________________________________________________________________________
Computers & office equipment (2.2%)
Bay Networks 14,500(b) 527,438
Cisco Systems 20,000(b) 797,500
Computer Sciences 10,000(b) 493,750
ParcPlace Systems 32,500(b) 381,875
Sanmina 22,000(b) 750,750
Sterling Software 25,000(b) 850,000
VMARK Software 47,500(b) 712,500
Wall Data 22,500(b) 433,125
Total 4,946,938
___________________________________________________________________________
Electronics (1.8%)
Applied Materials 14,000(b) 862,750
Credence Systems 28,000(b) 1,015,000
Intel 10,000 1,023,750
Zilog 32,000(b) 1,124,000
Total 4,025,500
___________________________________________________________________________
Energy (1.4%)
Amoco 12,000 787,500
Exxon 32,000 2,228,000
Total 3,015,500
___________________________________________________________________________
Energy equipment & services (1.4%)
Input/Output 90,000(b) 3,048,750
___________________________________________________________________________
Financial services (2.1%)
Federal Natl Mtge 22,200 1,959,150
Travelers 65,000 2,689,375
Total 4,648,525
___________________________________________________________________________
Food (0.5%)
Tyson Foods 49,000 1,163,750
___________________________________________________________________________
Foreign (3.4%)
Elsag Bailey Process Auto N.V. 80,000(b) 2,060,000
Mutual Risk Management 70,000 2,152,500
Repsol S. A. 70,000 2,240,000
YPF Sociedad Anonima 55,000 1,113,750
Total 7,566,250
___________________________________________________________________________
Health Care (2.4%)
Forest Labs 33,000 1,485,000
Johnson & Johnson 24,200 1,573,000
Merck 34,000 1,457,750
Pfizer 4,000 346,500
Schering Plough 6,500 489,938
Total 5,352,188
___________________________________________________________________________
Health care services (2.4%)
Columbia Healthcare 35,000 1,470,000
Horizon Healthcare 65,000(b) 1,356,875
Service Corp Intl 24,000 678,000
Stewart Enterprises 15,000 412,500
United Healthcare 35,000 1,268,750
Total 5,186,125
___________________________________________________________________________
Household Products (1.1%)
Avon Products 18,000 1,138,500
Duracell 28,500 1,254,000
Total 2,392,500
___________________________________________________________________________
<PAGE>
PAGE 126
Industrial machines & services (3.3%)
Caterpillar 35,000 2,047,500
General Signal 51,000 1,893,375
Greenfields 50,000 1,475,000
Stewart & Stevenson 47,000 1,762,500
Total 7,178,375
___________________________________________________________________________
Industrial transportation (2.6%)
CSX 16,500 1,313,812
Norfolk Southern 7,300 491,838
Trinity Industries 55,000 2,124,375
Wabash Natl 60,000 1,867,500
Total 5,797,525
___________________________________________________________________________
Insurance (0.8%)
American Intl Group 3,000 320,250
Equitable 23,000 546,250
Unum 18,300 784,612
Total 1,651,112
___________________________________________________________________________
Leisure time & entertainment (0.3%)
Coleman 18,400(b) 667,000
___________________________________________________________________________
Media (1.9%)
Amer Greetings 49,000 1,335,250
CBS 10,500 673,312
Tele-Communications 'A' 81,000(b) 1,549,125
Time Warner 19,000 695,875
Total 4,253,562
___________________________________________________________________________
Metals (1.3%)
Alumax 34,000(b) 960,500
Cyprus Minerals 65,000 1,811,875
Total 2,772,375
___________________________________________________________________________
Multi-industry (0.9%)
Albany Intl 55,000 1,203,125
Alco Standard 10,300 730,012
Total 1,933,137
___________________________________________________________________________
Paper & packaging (0.6%)
Kimberly Clark 25,000 1,415,625
___________________________________________________________________________
Restaurants & lodging (0.3%)
Hilton Hotels 10,000 763,750
___________________________________________________________________________
Retail (3.0%)
Barnes & Noble 51,000(b) 1,459,875
Gap 45,000 1,434,375
Meyer (Fred) 26,000(b) 812,500
OfficeMax 80,000(b) 2,050,000
Rite Aid 35,000 813,750
Total 6,570,500
___________________________________________________________________________
Telecommunication equipment & services (0.5%)
InterVoice 70,000(b) 1,058,750
___________________________________________________________________________
Utilities - telephone (0.9%)
AirTouch Communications 39,000(b) 1,048,125
LDDS Communications 38,000(b) 912,000
Total 1,960,125
____________________________________________________________________________
Total common stocks
(Cost: $81,658,619) $ 91,171,975
___________________________________________________________________________
</TABLE>
<PAGE>
PAGE 127
<TABLE>
<CAPTION>
Preferred stocks (2.5%)
Issuer Shares Value(a)
___________________________________________________________________________
<S> <C> <C>
COINTEL
5.04% 35,000(j) $ 1,758,750
First Nationwide Bank
11.50% 1,000 105,000
Kenetech
1.67% 110,000(j) 1,567,500
National Health Investors
8.50% Cv 10,000 232,500
Public Service of New Hampshire
10.6% 1,450 37,018
Snyder Oil
6% Cv 85,000 1,848,750
___________________________________________________________________________
Total preferred stocks
(Cost: $6,615,894) $ 5,549,518
___________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (20.2%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_______________________________________________________________________________
<S> <C> <C> <C>
U.S. government and agency (0.2%)
Federal Home Loan Mtge Corp
Disc Nts, 05-01-95 6.19% $ 400,000 $ 399,743
_______________________________________________________________________________
Commercial paper (17.7%)
AIG Funding
05-11-95 5.94 800,000 798,419
Avco
05-17-95 5.99 4,600,000 4,586,269
Cargill Financial Markets
05-03-95 5.98 4,000,000(f) 3,997,347
Fleet Funding
05-22-95 6.06 583,000(f) 580,758
Ford Motor Credit
05-01-95 5.64 500,000 499,844
05-18-95 6.07 1,200,000 1,196,181
Hewlett-Packard
06-13-95 6.04 2,700,000 2,676,592
Household Finance
05-05-95 6.00 4,700,000 4,695,316
Mobil Australia
05-18-95 5.98 5,000,000(f) 4,984,272
Penney (JC) Funding
05-11-95 5.99 700,000 698,607
PepsiCo
05-26-95 5.97 700,000 696,876
Pfizer
05-24-95 5.97 5,000,000(f) 4,979,340
Southwestern Bell
05-15-95 5.99 1,300,000 1,296,551
St. Paul Companies
05-12-95 6.00 2,000,000(f) 1,995,688
Sysco
05-01-95 6.02 4,000,000(f) 3,998,667
Unilever Capital
06-26-95 6.10 1,300,000 1,282,978
Total 38,963,705
_______________________________________________________________________________
Bankers Acceptance (2.3%)
Republic National Bank of New York
05-22-95 6.06 5,000,000 4,980,769
_______________________________________________________________________________
Total short-term securities
(Cost: $44,351,977) $ 44,344,217
_______________________________________________________________________________
Total investments in securities
(Cost: $212,608,496)(l) $220,331,236
_______________________________________________________________________________<PAGE>
PAGE 128
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 securities values are stated in U.S. dollars; principal amounts are denominated in the currency indicated.
(d) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition.
(e) For those zero coupon bonds which become coupon paying at a future date, the interest rate disclosed represents the annualized
effective yield from the date of acquisition to interest reset date disclosed.
(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." These
securities have been determined to be liquid under guidelines established by the board of directors.
(g) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the financial statements). Information
concerning such security holdings as of April 30, 1995, is as follows:
Security Acquisition Purchase
date cost
__________________________________________________________________________
Banco Nacional de Mexico
7.00%, 1999 02-04-93 to 10-20-94 $1,313,875
(h) Represents security sold under Rule 144A and 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.
(i) Interest rate varies to reflect current market conditions; rate shown is the effective rate on April 30, 1995.
(j) PRIDES -- Preferred Redeemed Increased Dividend Equity Securities are structured as convertible preferred securities issued
by a company. Investors receive an enhanced yield but based upon a specific formula, potential appreciation is limited.
PRIDES pay dividends, have voting rights, are noncallable for three years and upon maturity, convert into shares of common
stock.
(k) This security is a collateralized mortgage obligation whose payment of principal has been deferred until the principal of
previous series within the trust has been paid off.
(l) At April 30, 1995, the cost of securities for federal income tax purposes was $212,809,158 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $12,200,207
Unrealized depreciation (4,678,129)
___________________________________________________________
Net unrealized appreciation $ 7,522,078
___________________________________________________________
</TABLE>
<PAGE>
PAGE 129
<TABLE>
<CAPTION>
IDS Life Series Fund, Inc. (Percentages represent
April 30, 1995 value of investments
Government Securities Portfolio compared to total net assets)
Bonds (93.8%)
Issuer Coupon Maturity Principal Value (a)
rate year amount
__________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. government obligations (72.3%)
Resolution Funding 8.125% 2019 $ 400,000 $ 424,536
RFCO Strips 8.04 2012 1,300,000(b) 361,049
U.S. Treasury Bonds 10.375 2012 750,000 935,175
8.125 2019 500,000 536,365
7.50 2024 170,000 172,429
U.S. Treasury Notes 6.375 1997 850,000 846,609
7.375 1996 800,000 808,080
7.75 2001 1,510,000 1,570,158
8.875 1999 2,450,000 2,617,703
Total 8,272,104
__________________________________________________________________________________
Mortgage backed securities (21.5%)
Federal Home Loan Bank 7.32 1997 200,000 200,968
Federal Natl Mtge Assn 8.50 2023 1,343,264 1,366,354
9.00 2023 750,518 775,383
Govt Natl Mtge Assn 8.00 2017 113,587 113,729
Total 2,456,434
__________________________________________________________________________________
Total bonds
(Cost: $10,615,663) $10,728,538
__________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term security (3.5%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency
Federal Home Loan Mtge Corp
Disc Note
05-11-95 5.91% $400,000 $ 399,214
__________________________________________________________________________________
Total short-term security
(Cost: $399,214) $ 399,214
__________________________________________________________________________________
Total investments in securities
(Cost: $11,014,877)(c) $11,127,752
__________________________________________________________________________________
See accompanying notes to financial statements.
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition.
(c) At April 30, 1995, the cost of securities for federal income tax purposes was $11,036,572 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $144,227
Unrealized depreciation (53,047)
________________________________________________________________________________
Net unrealized appreciation $ 91,180
________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 130
<TABLE>
<CAPTION>
IDS Life Series Fund, Inc. (Percentages represent
April 30, 1995 value of investments
International Equity Portfolio compared to net assets)
Common stocks (91.8%)
Issuer Shares Value(a)
__________________________________________________________________________________
<S> <C> <C>
Argentina (8.8%)
Energy
Transportadora Gas 35,000 $ 345,625
YPF 20,000 405,000
Total 750,625
__________________________________________________________________________________
Australia (7.0%)
Energy (3.6 %)
Woodside Petroleum 75,000 306,525
Metals (3.4%)
Golden Shamrock Mines 425,000(b) 293,250
__________________________________________________________________________________
Bermuda (2.9%)
Industrial Transportation
Pacific Basin 18,500(b) 249,750
__________________________________________________________________________________
Canada (10.5%)
Energy (3.0%)
Gulf Canada 60,000(b) 255,000
Precious metals (7.5%)
Barrick Gold 5,000 120,625
Diamond Fields Resources 15,600(b) 520,669
Total 641,294
__________________________________________________________________________________
Denmark (1.6%)
Miscellaneous
Kobenhavns Lufthavre 2,100(b) 135,009
__________________________________________________________________________________
France (3.0%)
Energy
Total 8,000 251,000
__________________________________________________________________________________
Germany (4.5%)
Building materials (1.2%)
Kampa-Haus 190 105,921
Precious Metals (3.3%)
Sgl Carbon 7,000(b,c) 279,167
__________________________________________________________________________________
Hong Kong (5.7%)
Beverages & tobacco (1.0%)
San Miguel Brewery 139,200(b) 88,531
Financial Services (2.5%)
Amoy Properties 250,000 208,250
Industrial machines (2.2%)
Luks Industrial 1,500,000 187,500
__________________________________________________________________________________
Indonesia (1.5%)
Food
PT Sekar Bumi 100,000(b) 125,300
__________________________________________________________________________________
Japan (6.7%)
Automotive (1.2%)
Nippon Densan 5,000 100,535
Building materials (1.4%)
Chichibu Onoda Cement 20,000 116,580
Electronics (4.1%)
Kyocera 3,000 232,002
Sharp 7,000 114,926
Total 346,928
__________________________________________________________________________________
<PAGE>
PAGE 131
Luxembourg (2.1%)
Financial services
Espirito Santo Financial 13,000 178,750
__________________________________________________________________________________
Mexico (15.8%)
Banks & savings & loans (4.4%)
Grupo Fin Banamex 225,000 375,930
Beverages& tobacco (3.1%)
Panamerican Beverages Class A 10,000 260,000
Health care (1.1%)
Grupo Casa Autrey 6,000 92,250
Paper & packaging (3.6%)
Kimberly-Clark Class A 30,000 303,258
Precious Metals (3.2%)
Industrias Penoles 108,000 274,288
Restaurants & lodging (0.4%)
Grupo Situr Class B 80,000(b) 33,952
__________________________________________________________________________________
Philippines (3.8%)
Industrial transportation (1.0%)
JG Summit 270,000(b) 84,780
Miscellaneous (2.8%)
Bankard 1,100,000(b) 239,800
__________________________________________________________________________________
Singapore (5.2%)
Financial services (1.6%)
DBS Land 50,000 137,750
Paper & packaging (3.6%)
Asia Pacific Resources 20,000(b) 157,500
Asia Pulp & Paper 13,000(b) 147,875
Total 305,375
__________________________________________________________________________________
South Korea (3.4%)
Telecommunications
Korea Mobile Telecom 10,000(b,c) 291,250
__________________________________________________________________________________
Spain (1.4%)
Retail
Cortefiel 4,000 120,416
__________________________________________________________________________________
United Kingdom (4.8%)
Computers & office equipment (1.4%)
Rank Organisation 17,000 115,957
Health care (1.7%)
Glaxo PLC ADR 6,000 141,750
Multi-industry (1.7%)
Hanson PLC ADR 7,500 142,500
__________________________________________________________________________________
United States (3.1%)
Metals
Bohler-Uddeholm 4,400(b,c) 262,617
__________________________________________________________________________________
Total common stocks
(Cost: $7,253,787) $7,801,788
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 132
<TABLE>
<CAPTION>
Short-term security (7.1%)
Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency
FHLMC Disc Nts
05-03-95 5.87% $600,000 $ 599,609
__________________________________________________________________________________
Total short-term security
(Cost: $599,609) $ 599,609
__________________________________________________________________________________
Total investments in securities
(Cost: $7,853,396)(d) $ 8,401,397
__________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements. Foreign security values are
stated in U.S. Dollars.
(b) Presently non-income producing.
(c) 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 ofdirectors.
(d) At April 30, 1995, the cost of securities for federal income tax purposes was $7,853,396 and the aggregate gross
unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $ 810,937
Unrealized depreciation (262,936)
_________________________________________________________________________________
Net unrealized appreciation $ 548,001
_________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 133
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) FINANCIAL STATEMENTS:
List of financial statements filed as part of this Post-Effective
Amendment to the Registration Statement:
Independent Auditors Report, June 2, 1995.
Statements:
- Statements of assets and liabilities at April 30, 1995.
- Statements of operations, for the year ended April 30, 1995.
- Statements of changes in net assets, for the years ended
April 30, 1995 and April 30, 1994.
- Notes to financial statements.
Schedules:
- Investments in securities, April 30, 1995.
- Notes to investments in securities.
(b) EXHIBITS:
1. Copy of Articles of Incorporation as amended December 20,
1994, filed electronically herewith.
2. Copy of By-laws, filed electronically as Exhibit 2 with Post-
Effective Amendment No. 15 to Registration Statement No. 2-
97636, is incorporated herein by reference.
3. Not Applicable.
4. Copy of Stock Certificate, filed as Exhibit No. 3 to
Registrant's Registration Statement No. 2-97636, is
incorporated herein by reference.
5.(a) Copy of Investment Management and Services Agreement
between IDS Life Insurance Company and the Registrant
dated December 17, 1985, filed electronically as Exhibit
5(a) with Post-Effective Amendment No. 15 to Registration
Statement No. 2-97636, is incorporated herein by
reference.
(b) Copy of Investment Advisory Agreement between IDS Life
Insurance Company and IDS/American Express Inc., dated
July 11, 1984, filed electronically as Exhibit 5(b) with
Post-Effective Amendment No. 15 to Registration Statement
No. 2-97636, is incorporated herein by reference.
6. Not Applicable.
7. All employees are eligible to participate in a profit sharing
plan. Entry into the plan is Jan. 1 or July 1. The
Registrant contributes each year an amount equal to 15 percent
of their annual salaries, the maximum amount permitted under
Section 404 (a) of the Internal Revenue Code.<PAGE>
PAGE 134
8.(a) Copy of Custodian Agreement between IDS Trust Company and
Registrant dated January 1, 1986, filed electronically as
Exhibit 8 with Post-Effective Amendment No. 15 to
Registration Statement No. 2-97636, is incorporated
herein by reference.
(b) Copy of Custody Agreement between Morgan Stanley Trust
Company and IDS Bank and Trust, dated May 1993, is filed
electronically as Exhibit 8(b) with Post-Effective
Amendment No. 17 to Registration Statement No. 2-97636,
is incorporated herein by reference.
9. None.
10. Opinion and Consent of Counsel and consent to its use as to
the legality of the securities registered was filed with
Registrant's 24f-2 Notice on or about June 22, 1995.
11. Independent Auditors' Consent, is filed electronically
herewith.
12. None.
13. None.
14. None.
15. None.
16. Copy of Schedule for computation of each performance
quotation, filed electronically herewith.
17. Financial Data Schedule, filed electronically herewith.
18. Power of Attorney dated February 9, 1995, filed electronically
as Exhibit 18 with Post-Effective Amendment No. 17 to
Registration Statement No. 2-97636, is incorporated herein by
reference.
Item 25. Persons Controlled by or Under Common Control with
Registrant
Not Applicable.
Item 26. Number of Holders of Securities
(1) (2)
Number of Record Holders as
of May 31, 1995 for Equity,
Government Securities,
Income, Managed and Money
Title of Class Market Portfolios
Common Stock 5
Number of Record Holders as
of May 31, 1995 for
Title of Class International Equity Portfolio
Common Stock 2<PAGE>
PAGE 135
Item 27. Indemnification
The Articles of Incorporation of the registrant provide that the
Fund shall indemnify any person who was or is a party or is
threatened to be made a party, by reason of the fact that he is or
was a director, officer, employee or agent of the Fund, or is or
was serving at the request of the Fund as a director, officer,
employee or agent of another company, partnership, joint venture,
trust or other enterprise, to any threatened, pending or completed
action, suit or proceeding, wherever brought, and the Fund may
purchase liability insurance and advance legal expenses, all to the
fullest extent permitted by the laws of the State of Minnesota, as
now existing or hereafter amended.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
Any indemnification hereunder shall not be exclusive of any other
rights of indemnification to which the directors, officers,
employees or agents might otherwise be entitled. No
indemnification shall be made in violation of the Investment
Company Act of 1940.
<TABLE>
<CAPTION>
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)
Directors and officers of American Express Financial Corporation who are directors and/or
officers of one or more other companies:
Ronald G. Abrahamson, Vice President--Service Quality and Reengineering
<S> <C> <C>
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Service Quality
and Reengineering
American Express Service Corporation Vice President
Douglas A. Alger, Vice President--Total Compensation
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Total Compensation
<PAGE>
PAGE 136
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Jerome R. Amundson, Vice President--Investment Accounting
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Investment Accounting
Peter J. Anderson, Director and Senior Vice President--Investments
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Investments
IDS Advisory Group Inc. Director and Chairman
of the Board
IDS Capital Holdings Inc. Director and President
IDS International, Inc. Director, Chairman of the
Board and Executive Vice
President
IDS Securities Corporation Executive Vice President-
Investments
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Ward D. Armstrong, Vice President-Sales and Marketing, American Express Institutional Services
American Express Financial Advisors IDS Tower 10 Vice President-Sales and
Minneapolis, MN 55440 Marketing, American
Express Institutional
Services
Joseph M. Barsky III, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
IDS Advisory Group Inc. Vice President
Robert C. Basten, Vice President--Tax and Business Services
American Express Financial Advisors IDS Tower 10 Vice President-Tax
Minneapolis, MN 55440 and Business Services
American Express Tax & Business Director, President and
Services Inc. Chief Executive Officer
Timothy V. Bechtold, Vice President--Risk Management Products
American Express Financial Advisors IDS Tower 10 Vice President-Risk
Minneapolis, MN 55440 Management Products
IDS Life Insurance Company Vice President-Risk
Management Products
Carl E. Beihl, Vice President--Strategic Technology Planning
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Strategic Technology
Planning
<PAGE>
PAGE 137
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Alan F. Bignall, Vice President--Financial Planning Systems
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Financial Planning
Systems
American Express Service Corporation Vice President
John C. Boeder, Vice President--Mature Market Group
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mature Market Group
IDS Life Insurance Company of New York Box 5144 Director
Albany, NY 12205
Karl J. Breyer, Director and Senior Vice President--Corporate Affairs and General Counsel
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Corporate Affairs and
Special Counsel
American Express Minnesota Foundation Director
IDS Aircraft Services Corporation Director and President
Harold E. Burke, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
American Express Service Corporation Vice President
Daniel J. Candura, Vice President--Marketing Support
American Express Financial Advisors IDS Tower 10 Vice President-Marketing
Minneapolis, MN 55440 Support
Cynthia M. Carlson, Vice President--American Express Securities Services
American Enterprise Investment IDS Tower 10 Director, President and
Services Inc. Minneapolis, MN 55440 Chief Executive Officer
American Express Financial Advisors Vice President-American
Express Securities Services
Orison Y. Chaffee III, Vice President--Field Real Estate
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Real Estate
James E. Choat, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Minnesota Foundation Director
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President--North
Central Region
IDS Insurance Agency of Arkansas Inc. Vice President--North
Central Region
<PAGE>
PAGE 138
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
IDS Insurance Agency of Massachusetts Inc. Vice President--North
Central Region
IDS Insurance Agency of Nevada Inc. Vice President--North
Central Region
IDS Insurance Agency of New Mexico Inc. Vice President--North
Central Region
IDS Insurance Agency of North Carolina Inc. Vice President--North
Central Region
IDS Insurance Agency of Ohio Inc. Vice President--North
Central Region
IDS Insurance Agency of Wyoming Inc. Vice President-- North
Central Region
IDS Property Casualty Insurance Co. Director
Kenneth J. Ciak, Vice President and General Manager--IDS Property Casualty
American Express Financial Advisors IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Manager-IDS Property
Casualty
IDS Property Casualty Insurance Co. I WEG Blvd. Director and President
DePere, Wisconsin 54115
Alan R. Dakay, Vice President--Institutional Products Group
American Enterprise Life Insurance Co. IDS Tower 10 Director and President
Minneapolis, MN 55440
American Express Financial Advisors Vice President -
Institutional Products
Group
American Partners Life Insurance Co. Director and President
IDS Life Insurance Company Vice President -
Institutional Insurance
Marketing
Regenia David, Vice President--Systems Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
William H. Dudley, Director and Executive Vice President--Investment Operations
American Express Financial Advisors IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Investment Operations
IDS Advisory Group Inc. Director
IDS Capital Holdings Inc. Director
IDS Futures Corporation Director
IDS Futures III Corporation Director
IDS International, Inc. Director
IDS Securities Corporation Director, Chairman of the
Board, President and
Chief Executive Officer
<PAGE>
PAGE 139
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Roger S. Edgar, Director, Senior Vice President and Technology Advisor
American Express Financial Advisors IDS Tower 10 Senior Vice President and
Minneapolis, MN 55440 Technology Advisor
Gordon L. Eid, Director, Senior Vice President and Deputy General Counsel
American Express Financial Advisors IDS Tower 10 Senior Vice President and
Minneapolis, MN 55440 General Counsel
IDS Insurance Agency of Alabama Inc. Director and Vice President
IDS Insurance Agency of Arkansas Inc. Director and Vice President
IDS Insurance Agency of Massachusetts Inc. Director and Vice President
IDS Insurance Agency of Nevada Inc. Director and Vice President
IDS Insurance Agency of New Mexico Inc. Director and Vice President
IDS Insurance Agency of North Carolina Inc. Director and Vice President
IDS Insurance Agency of Ohio Inc. Director and Vice President
IDS Insurance Agency of Wyoming Inc. Director and Vice President
IDS Real Estate Services, Inc. Vice President
Investors Syndicate Development Corp. Director
Robert M. Elconin, Vice President--Government Relations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Government Relations
IDS Life Insurance Company Vice President
Mark A. Ernst, Vice President--Retail Services
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Vice President-
Retail Services
American Express Tax & Business Director and Chairman of
Services Inc. the Board
Gordon M. Fines, Vice President--Mutual Fund Equity Investments
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mutual Fund Equity
Investments
IDS Advisory Group Inc. Executive Vice President
IDS International, Inc. Vice President and
Portfolio Manager
Louis C. Fornetti, Director, Senior Vice President and Chief Financial Officer
American Enterprise Investment IDS Tower 10 Vice President
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Senior Vice President and
Chief Financial Officer
American Express Tax & Business Director
Services Inc.
American Express Trust Company Director
IDS Cable Corporation Director
IDS Cable II Corporation Director
<PAGE>
PAGE 140
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
IDS Capital Holdings Inc. Senior Vice President
IDS Certificate Company Vice President
IDS Insurance Agency of Alabama Inc. Vice President
IDS Insurance Agency of Arkansas Inc. Vice President
IDS Insurance Agency of Massachusetts Inc. Vice President
IDS Insurance Agency of Nevada Inc. Vice President
IDS Insurance Agency of New Mexico Inc. Vice President
IDS Insurance Agency of North Carolina Inc. Vice President
IDS Insurance Agency of Ohio Inc. Vice President
IDS Insurance Agency of Wyoming Inc. Vice President
IDS Life Insurance Company Director
IDS Life Series Fund, Inc. Vice President
IDS Life Variable Annuity Funds A&B Vice President
IDS Property Casualty Insurance Co. Director and Vice President
IDS Real Estate Services, Inc. Vice President
IDS Sales Support Inc. Director
IDS Securities Corporation Vice President
Investors Syndicate Development Corp. Vice President
Robert G. Gilbert, Vice President--Real Estate
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Real Estate
John J. Golden, Vice President--Field Compensation Development
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Compensation Development
Harvey Golub, Director
American Express Company American Express Tower Chairman and Chief
World Financial Center Executive Officer
New York, New York 10285
American Express Travel Chairman and Chief
Related Services Company, Inc. Executive Officer
National Computer Systems, Inc. 11000 Prairie Lakes Drive Director
Minneapolis, MN 55440
Morris Goodwin Jr., Vice President and Corporate Treasurer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Treasurer
American Enterprise Life Insurance Vice President and
Company Treasurer
American Express Financial Advisors Vice President and
Corporate Treasurer
American Express Minnesota Foundation Director, Vice President
and Treasurer
American Express Service Corporation Vice President and
Treasurer
American Express Tax & Business Vice President and
Services Inc. Treasurer
IDS Advisory Group Inc. Vice President and
Treasurer
<PAGE>
PAGE 141
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
IDS Aircraft Services Corporation Vice President and
Treasurer
IDS Cable Corporation Director, Vice President
and Treasurer
IDS Cable II Corporation Director, Vice President
and Treasurer
IDS Capital Holdings Inc. Vice President and
Treasurer
IDS Certificate Company Vice President and
Treasurer
IDS Deposit Corp. Director, President
and Treasurer
IDS Insurance Agency of Alabama Inc. Vice President and
Treasurer
IDS Insurance Agency of Arkansas Inc. Vice President and
Treasurer
IDS Insurance Agency of Massachusetts Inc. Vice President and
Treasurer
IDS Insurance Agency of Nevada Inc. Vice President and
Treasurer
IDS Insurance Agency of New Mexico Inc. Vice President and
Treasurer
IDS Insurance Agency of North Carolina Inc. Vice President and
Treasurer
IDS Insurance Agency of Ohio Inc. Vice President and
Treasurer
IDS Insurance Agency of Wyoming Inc. Vice President and
Treasurer
IDS International, Inc. Vice President and
Treasurer
IDS Life Insurance Company Vice President and
Treasurer
IDS Life Series Fund, Inc. Vice President and
Treasurer
IDS Life Variable Annuity Funds A&B Vice President and
Treasurer
IDS Management Corporation Director, Vice President
and Treasurer
IDS Partnership Services Corporation Director, Vice President
and Treasurer
IDS Plan Services of California, Inc. Vice President and
Treasurer
IDS Property Casualty Insurance Co. Vice President and
Treasurer
IDS Real Estate Services, Inc Vice President and
Treasurer
IDS Realty Corporation Director, Vice President
and Treasurer
IDS Sales Support Inc. Director, Vice President
and Treasurer
IDS Securities Corporation Vice President and
Treasurer
Investors Syndicate Development Corp. Vice President and
Treasurer
<PAGE>
PAGE 142
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
NCM Capital Management Group, Inc. 2 Mutual Plaza Director
501 Willard Street
Durham, NC 27701
Sloan Financial Group, Inc. Director
Suzanne Graf, Vice President--Systems Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
David A. Hammer, Vice President and Marketing Controller
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Marketing Controller
IDS Plan Services of California, Inc. Director and Vice President
Lorraine R. Hart, Vice President--Insurance Investments
American Enterprise Life IDS Tower 10 Vice President-Investments
Insurance Company Minneapolis, MN 55440
American Express Financial Advisors Vice President-Insurance
Investments
American Partners Life Insurance Co. Director and Vice
President-Investments
IDS Certificate Company Vice President-Investments
IDS Life Insurance Company Vice President-Investments
IDS Life Series Fund, Inc. Vice President-Investments
IDS Life Variable Annuity Funds A and B Vice President-Investments
IDS Property Casualty Insurance Company Vice President-Investment
Officer
Investors Syndicate Development Corp. Vice President-Investments
Scott A. Hawkinson, Vice President--Assured Assets Product Development and Management
American Express Financial Advisors IDS Tower 10 Vice President-Assured
Minneapolis, MN 55440 Assets Product
Development & Management
Raymond E. Hirsch, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
James G. Hirsh, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
IDS Securities Corporation Director, Vice President
and General Counsel
Darryl G. Horsman, Vice President--Product Development and Technology, American Express
Institutional Services
American Express Trust Company IDS Tower 10 Director and President
Minneapolis, MN 55440
<PAGE>
PAGE 143
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Kevin P. Howe, Vice President--Government and Customer Relations and Chief Compliance Officer
American Enterprise Investment IDS Tower 10 Vice President and
Services Inc. Minneapolis, MN 55440 Compliance Officer
American Express Financial Advisors Vice President-
Government and
Customer Relations
American Express Service Corporation Vice President
IDS Securities Corporation Vice President and Chief
Compliance Officer
David R. Hubers, Director, President and Chief Executive Officer
American Express Financial Advisors IDS Tower 10 Chairman, Chief Executive
Minneapolis, MN 55440 Officer and President
American Express Service Corporation Director and President
IDS Aircraft Services Corporation Director
IDS Certificate Company Director
IDS Life Insurance Company Director
IDS Plan Services of California, Inc. Director and President
IDS Property Casualty Insurance Co. Director
Marietta L. Johns, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
Douglas R. Jordal, Vice President--Taxes
American Express Financial Advisors IDS Tower 10 Vice President-Taxes
Minneapolis, MN 55440
IDS Aircraft Services Corporation Vice President
James E. Kaarre, Vice President--Marketing Information
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Marketing Information
Linda B. Keene, Vice President--Market Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Market Development
G. Michael Kennedy, Vice President--Investment Services and Investment Research
American Express Financial Advisors IDS Tower 10 Vice President-Investment
Minneapolis, MN 55440 Services and Investment
Research
Susan D. Kinder, Director and Senior Vice President--Human Resources
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Human Resources
American Express Minnesota Foundation Director
American Express Service Corporation Vice President
<PAGE>
PAGE 144
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Richard W. Kling, Director and Senior Vice President--Risk Management Products
American Enterprise Life Insurance Co. IDS Tower 10 Director and Chairman of
Minneapolis, MN 55440 the Board
American Express Financial Advisors Senior Vice President-
Risk Management Products
American Partners Life Insurance Co. Director and Chairman of
the Board
IDS Insurance Agency of Alabama Inc. Director and President
IDS Insurance Agency of Arkansas Inc. Director and President
IDS Insurance Agency of Massachusetts Inc. Director and President
IDS Insurance Agency of Nevada Inc. Director and President
IDS Insurance Agency of New Mexico Inc. Director and President
IDS Insurance Agency of North Carolina Inc. Director and President
IDS Insurance Agency of Ohio Inc. Director and President
IDS Insurance Agency of Wyoming Inc. Director and President
IDS Life Insurance Company Director and President
IDS Life Series Fund, Inc. Director and President
IDS Life Variable Annuity Funds A and B Chairman of the Board of
Managers and President
IDS Property Casualty Insurance Co. Director and Chairman of
the Board
IDS Life Insurance Company P.O. Box 5144 Director, Chairman of the
of New York Albany, NY 12205 Board and President
Paul F. Kolkman, Vice President--Actuarial Finance
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Actuarial Finance
IDS Life Insurance Company Director and Executive
Vice President
IDS Life Series Fund, Inc. Vice President and Chief
Actuary
Claire Kolmodin, Vice President--Service Quality
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Service Quality
Steven C. Kumagai, Director and Senior Vice President--Field Management and Business Systems
American Express Financial Advisors IDS Tower 10 Director and Senior Vice
Minneapolis, MN 55440 President-Field
Management and Business
Systems
American Express Service Corporation Vice President
Edward Labenski, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio
Manager
IDS Advisory Group Inc. Senior Vice President
<PAGE>
PAGE 145
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Kurt A. Larson, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio Manager
Lori J. Larson, Vice President--Variable Assets Product Development
American Express Financial Advisors IDS Tower 10 Vice President-Variable
Minneapolis, MN 55440 Assets Product
Development
IDS Cable Corporation Director and Vice President
IDS Cable II Corporation Director and Vice President
IDS Futures Brokerage Group Assistant Vice President-
General Manager/Director
IDS Futures Corporation Director and Vice President
IDS Futures III Corporation Director and Vice President
IDS Management Corporation Director and Vice President
IDS Partnership Services Corporation Director and Vice President
IDS Realty Corporation Director and Vice President
Ryan R. Larson, Vice President--IPG Product Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 IPG Product Development
IDS Life Insurance Company Vice President-
Annuity Product
Development
Daniel E. Laufenberg, Vice President and Chief U.S. Economist
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Chief U.S. Economist
Richard J. Lazarchic, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
Peter A. Lefferts, Director and Senior Vice President--Corporate Strategy and Development
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Corporate Strategy and
Development
American Express Service Corporation Director
American Express Trust Company Director
IDS Life Insurance Company Director and Executive
Vice President-Marketing
IDS Plan Services of California, Inc. Director
Investors Syndicate Development Corp. Director
Douglas A. Lennick, Director and Executive Vice President--Private Client Group
American Express Financial Advisors IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-Private
Client Group
American Express Service Corporation Vice President<PAGE>
PAGE 146
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Mary J. Malevich, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio
Manager
IDS International, Inc. Vice President and
Portfolio Manager
Fred A. Mandell, Vice President--Field Marketing Readiness
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Marketing Readiness
William J. McKinney, Vice President--Field Management Support
American Express Financial Advisors IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management Support
Thomas W. Medcalf, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-Senior
Minneapolis, MN 55440 Portfolio Manager
William C. Melton, Vice President-International Research and Chief International Economist
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 International Research
and Chief International
Economist
Janis E. Miller, Vice President--Variable Assets
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Variable Assets
IDS Cable Corporation Director and President
IDS Cable II Corporation Director and President
IDS Futures Corporation Director and President
IDS Futures III Corporation Director and President
IDS Life Insurance Company Director and Executive
Vice President-Variable
Assets
IDS Life Series Fund, Inc. Director
IDS Life Variable Annuity Funds A&B Director
IDS Management Corporation Director and President
IDS Partnership Services Corporation Director and President
IDS Realty Corporation Director and President
IDS Life Insurance Company of New York Box 5144 Executive Vice President
Albany, NY 12205
James A. Mitchell, Director and Executive Vice President--Marketing and Products
American Enterprise Investment IDS Tower 10 Director
Services Inc. Minneapolis, MN 55440
American Express Financial Advisors Executive Vice President-
Marketing and Products
<PAGE>
PAGE 147
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
American Express Tax and Business Director
Services Inc.
IDS Certificate Company Director and Chairman of
the Board
IDS Life Insurance Company Director, Chairman of
the Board and Chief
Executive Officer
IDS Plan Services of California, Inc. Director
IDS Property Casualty Insurance Co. Director
Pamela J. Moret, Vice President--Corporate Communications
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Communications
American Express Minnesota Foundation Director and President
Barry J. Murphy, Director and Senior Vice President--Client Service
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Client Service
IDS Life Insurance Company Director and Executive
Vice President-Client
Service
Robert J. Neis, Vice President--Information Systems Operations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Information Systems
Operations
James R. Palmer, Vice President--Insurance Operations
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Insurance Operations
IDS Life Insurance Company Vice President-Taxes
Carla P. Pavone, Vice President--Specialty Service Teams and Emerging Business
American Express Financial Advisors IDS Tower 10 Vice President-Specialty
Minneapolis, MN 55440 Service Teams and
Emerging Business
George M. Perry, Vice President--Corporate Strategy and Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Strategy
and Development
IDS Property Casualty Insurance Co. Director
Susan B. Plimpton, Vice President--Segmentation Development and Support
American Express Financial Advisors IDS Tower 10 Vice President--
Minneapolis, MN 55440 Segmentation Development
and Support
<PAGE>
PAGE 148
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Ronald W. Powell, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
IDS Cable Corporation Vice President and
Assistant Secretary
IDS Cable II Corporation Vice President and
Assistant Secretary
IDS Management Corporation Vice President and
Assistant Secretary
IDS Partnership Services Corporation Vice President and
Assistant Secretary
IDS Plan Services of California, Inc. Vice President and
Assistant Secretary
IDS Realty Corporation Vice President and
Assistant Secretary
James M. Punch, Vice President--TransAction Services
American Express Financial Advisors IDS Tower 10 Vice President-Trans
Minneapolis, MN 55440 Action Services
Frederick C. Quirsfeld, Vice President--Taxable Mutual Fund Investments
American Express Financial Advisors IDS Tower 10 Vice President--
Minneapolis, MN 55440 Taxable Mutual Fund
Investments
IDS Advisory Group Inc. Vice President
ReBecca K. Roloff, Vice President--1994 Program Director
American Express Financial Advisors IDS Tower 10 Vice President-1994
Minneapolis, MN 55440 Program Director
Stephen W. Roszell, Vice President--Advisory Institutional Marketing
American Express Financial Advisors IDS Tower 10 Vice President-Advisory
Minneapolis, MN 55440 Institutional Marketing
IDS Advisory Group Inc. President and Chief
Executive Officer
Robert A. Rudell, Vice President--American Express Institutional Services
American Express Financial Advisors IDS Tower 10 Vice President-American
Minneapolis, MN 55440 Express Institutional
Services
American Express Trust Company Director and Chairman of
the Board
IDS Sales Support Inc. Director and President
John P. Ryan, Vice President and General Auditor
American Express Financial Advisors IDS Tower 10 Vice President and General
Minneapolis, MN 55440 Auditor
<PAGE>
PAGE 149
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Erven A. Samsel, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-
New England Region
IDS Insurance Agency of Arkansas Inc. Vice President-
New England Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
New England Region
IDS Insurance Agency of Nevada Inc. Vice President-
New England Region
IDS Insurance Agency of New Mexico Inc. Vice President-
New England Region
IDS Insurance Agency of North Carolina Inc. Vice President-
New England Region
IDS Insurance Agency of Ohio Inc. Vice President-
New England Region
IDS Insurance Agency of Wyoming Inc. Vice President-
New England Region
Stuart A. Sedlacek, Vice President--Assured Assets
American Enterprise Life Insurance Co. IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President, Assured
Assets
American Express Financial Advisors Vice President-
Assured Assets
IDS Certificate Company Director and President
IDS Life Insurance Company Director and Executive
Vice President, Assured
Assets
Investors Syndicate Development Corp. Chairman of the Board
and President
Donald K. Shanks, Vice President--Property Casualty
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Property Casualty
IDS Property Casualty Insurance Co. Senior Vice President
F. Dale Simmons, Vice President--Senior Portfolio Manager, Insurance Investments
American Enterprise Life Insurance Co. IDS Tower 10 Vice President-Real
Minneapolis, MN 55440 Estate Loan Management
American Express Financial Advisors Vice President-Senior
Portfolio Manager,
Insurance Investments
American Partners Life Insurance Co. Vice President-Real
Estate Loan Management
IDS Certificate Company Vice President-Real
Estate Loan Management
IDS Life Insurance Company Vice President-Real
Estate Loan Management
<PAGE>
PAGE 150
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
IDS Partnership Services Corporation Vice President
IDS Real Estate Services Inc. Director and Vice President
IDS Realty Corporation Vice President
IDS Life Insurance Company of New York Box 5144 Vice President and
Albany, NY 12205 Assistant Treasurer
Judy P. Skoglund, Vice President--Human Resources and Organization Development
American Express Financial Advisors IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources and
Organization Development
Ben C. Smith, Vice President--Workplace Marketing
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Workplace Marketing
William A. Smith, Vice President and Controller--Private Client Group
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Controller-Private
Client Group
Bridget Sperl, Vice President--Human Resources Management Services
American Express Financial Advisors IDS Tower 10 Vice President-Human
Minneapolis, MN 55440 Resources Management
Services
Jeffrey E. Stiefler, Director
American Express Company American Express Tower Director and President
World Financial Center
New York, NY 10285
William A. Stoltzmann, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
American Partners Life Insurance Co. Director, Vice President,
General Counsel and
Secretary
IDS Life Insurance Company Vice President, General
Counsel and Secretary
American Enterprise Life Insurance P.O. Box 534 Director, Vice President,
Company Minneapolis, MN 55440 General Counsel
and Secretary
James J. Strauss, Vice President--Corporate Planning and Analysis
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Corporate Planning and
Analysis
<PAGE>
PAGE 151
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Jeffrey J. Stremcha, Vice President--Information Resource Management/ISD
American Express Financial Advisors IDS Tower 10 Vice President-Information
Minneapolis, MN 55440 Resource Management/ISD
Fenton R. Talbott, Director
ACUMA Ltd. ACUMA House President and Chief
The Glanty, Egham Executive Officer
Surrey TW 20 9 AT
UK
John R. Thomas, Director and Senior Vice President--Information and Technology
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Information and
Technology
IDS Bond Fund, Inc. Director
IDS California Tax-Exempt Trust Trustee
IDS Discovery Fund, Inc. Director
IDS Equity Select Fund, Inc. Director
IDS Extra Income Fund, Inc. Director
IDS Federal Income Fund, Inc. Director
IDS Global Series, Inc. Director
IDS Growth Fund, Inc. Director
IDS High Yield Tax-Exempt Fund, Inc. Director
IDS Investment Series, Inc. Director
IDS Managed Retirement Fund, Inc. Director
IDS Market Advantage Series, Inc. Director
IDS Money Market Series, Inc. Director
IDS New Dimensions Fund, Inc. Director
IDS Precious Metals Fund, Inc. Director
IDS Progressive Fund, Inc. Director
IDS Selective Fund, Inc. Director
IDS Special Tax-Exempt Series Trust Trustee
IDS Stock Fund, Inc. Director
IDS Strategy Fund, Inc. Director
IDS Tax-Exempt Bond Fund, Inc. Director
IDS Tax-Free Money Fund, Inc. Director
IDS Utilities Income Fund, Inc. Director
Melinda S. Urion, Vice President and Corporate Controller
American Enterprise Life IDS Tower 10 Vice President and
Insurance Company Minneapolis, MN 55440 Controller
American Express Financial Advisors Vice President and
Corporate Controller
American Partners Life Insurance Co. Director, Vice President,
Controller and Treasurer
IDS Life Insurance Company Director, Executive Vice
President and Controller
IDS Life Series Fund, Inc. Vice President and
Controller
<PAGE>
PAGE 152
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Wesley W. Wadman, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior Portfolio Manager
IDS Advisory Group Inc. Executive Vice President
IDS Fund Management Limited Director and Vice Chairman
IDS International, Inc. Senior Vice President
Michael L. Weiner, Vice President--Corporate Tax Operations
American Express Financial Advisors IDS Tower 10 Vice President-Corporate
Minneapolis, MN 55440 Tax Operations
IDS Capital Holdings Inc. Vice President
IDS Futures Brokerage Group Vice President
IDS Futures Corporation Vice President, Treasurer
and Secretary
IDS Futures III Corporation Vice President, Treasurer
and Secretary
Lawrence J. Welte, Vice President--Investment Administration
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Investment Administration
IDS Securities Corporation Director, Executive Vice
President and Chief
Operating Officer
Jeffry F. Welter, Vice President--Equity and Fixed Income Trading
American Express Financial Advisors IDS Tower 10 Vice President-Equity
Minneapolis, MN 55440 and Fixed Income Trading
William N. Westhoff, Director, Senior Vice President and Global Chief Investment Officer
American Enterprise Life Insurance IDS Tower 10 Director
Company Minneapolis, MN 55440
American Express Financial Advisors Senior Vice President and
Global Chief Investment
Officer
IDS Fund Management Limited Director
IDS International, Inc. Director
IDS Partnership Services Corporation Director and Vice President
IDS Real Estate Services Inc. Director, Chairman of the
Board and President
IDS Realty Corporation Director and Vice President
Investors Syndicate Development Corp. Director
Edwin M. Wistrand, Vice President and Assistant General Counsel
American Express Financial Advisors IDS Tower 10 Vice President and
Minneapolis, MN 55440 Assistant General Counsel
<PAGE>
PAGE 153
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Michael R. Woodward, Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President-
Minneapolis, MN 55440 Field Management
American Express Service Corporation Vice President
IDS Insurance Agency of Alabama Inc. Vice President-
North Region
IDS Insurance Agency of Arkansas Inc. Vice President-
North Region
IDS Insurance Agency of Massachusetts Inc. Vice President-
North Region
IDS Insurance Agency of Nevada Inc. Vice President-
North Region
IDS Insurance Agency of New Mexico Inc. Vice President-
North Region
IDS Insurance Agency of North Carolina Inc. Vice President-
North Region
IDS Insurance Agency of Ohio Inc. Vice President-
North Region
IDS Insurance Agency of Wyoming Inc. Vice President-
North Region
IDS Life Insurance Company Box 5144 Director
of New York Albany, NY 12205
</TABLE>
Item 29. The Fund has no principal underwriter.
Item 30. Location of Accounts and Records
American Express Financial Corporation
IDS Tower 10
Minneapolis, Minnesota
Item 31. Management Services
Not applicable
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) The Registrant undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders,
upon request and without charge.
<PAGE>
PAGE 154
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, IDS Life Series
Fund, Inc., certifies that it meets all of the requirements for
effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this
Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of
Minneapolis and State of Minnesota on the 22nd day of June, 1995.
IDS LIFE SERIES FUND, INC.
By /s/ Richard W. Kling
Richard W. Kling
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by
the following persons in the capacities indicated on the 22nd day
of June, 1995.
Signature Capacity
/s/ Richard W. Kling* President and Director
Richard W. Kling
/s/ Louis C. Fornetti* Vice President
Louis C. Fornetti
/s/ Morris Goodwin, Jr.* Vice President and
Morris Goodwin, Jr. Treasurer
/s/ Paul Kolkman* Vice President and Chief
Paul Kolkman Actuary
/s/ Melinda S. Urion* Vice President and
Melinda S. Urion Controller
/s/ Edward Landes* Director
Edward Landes
/s/ Carl N. Platou* Director
Carl N. Platou
/s/ Gordon H. Ritz* Director
Gordon H. Ritz
/s/ Janis E. Miller* Director
Janis E. Miller
*Signed pursuant to Power of Attorney dated February 9, 1995, filed
electronically as Exhibit 18 to Registrant's Post-Effective
Amendment No. 17 to Registration Statement No. 2-97636:
Mary Ellyn Minenko
<PAGE>
PAGE 155
CONTENTS OF THIS POST-EFFECTIVE AMENDMENT NO. 18
TO REGISTRATION STATEMENT NO. 2-97636
This Post-Effective Amendment comprises the following papers and
documents:
The facing sheet.
The cross-reference page.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements.
Part C.
Other Information.
The signatures.
<PAGE>
PAGE 1
EXHIBIT INDEX
Exhibit 1 Copy of Articles of Incorporation as amended
December 20, 1994.
Exhibit 11 Independent Auditors' Consent.
Exhibit 16 Copy of Schedule for computation of each performance
quotation.
Exhibit 17 Financial Data Schedule.
<PAGE>
PAGE 1
ARTICLES OF INCORPORATION
AS AMENDED DEC. 20, 1994
OF
IDS LIFE SERIES FUND, INC.
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned does hereby establish a corporation under
and by virtue of the Minnesota Business Corporation Act, Chapter
302A, Minnesota Statutes, and does hereby certify and adopt the
following Articles of Incorporation.
ARTICLE I - NAME AND TERM
The name of this corporation (hereinafter called the "Fund")
is:
IDS LIFE SERIES FUND, INC.
and it shall have perpetual existence.
ARTICLE II - LOCATION
The location of the registered office of the Fund is 2900 IDS
Tower, City of Minneapolis, County of Hennepin, State of Minnesota.
Principal places of business as well as branch offices may
hereafter be established at such other place or places, either
within or without the State of Minnesota, as may from time to time
be determined by the Board of Directors.
ARTICLE III - CAPITALIZATION
Section 1. The amount of the total authorized Capital Stock of
the Fund shall be $100,000,000, consisting of 10,000,000,000 shares
of the par value of one tenth of one cent ($.001) per share. Any or
all of said shares of Capital Stock may be issued in such classes
or series with such designations, preferences and relative,
participating, optional or other special rights, or qualifications,
limitations or restrictions thereof, as shall be stated and
expressed in a resolution or resolutions providing for the issuance
of such class or series of stock as may be adopted from time to
time by the Fund's Board of Directors pursuant to the authority
hereby vested in said Board. Each class or series of shares which
the Board of Directors may establish, as provided herein, may, if
the Board shall so determine by resolution, evidence an interest in
a separate and distinct portion of the Fund's assets, which may
take the form of a separate portfolio of investment securities and
cash. Authority to establish such separate portfolios is hereby
vested in the Board.
<PAGE>
PAGE 2
Section 2. At all meetings of the shareholders, each
shareholder of record entitled to vote thereat shall be entitled to
one vote (and a fractional vote for and equal to each fractional
share) for each share (or fractional share) of stock standing in
his name and entitled to vote at such meetings. At all elections of
directors, each shareholder shall be entitled to as many votes as
shall equal the number of his shares multiplied by the number of
directors to be elected and he may cast all of such votes for a
single director or may distribute them among the number to be voted
for, or any two or more of them, as he may see fit.
Section 3. No shareholder of the Fund as such shall have any
preemptive rights.
Section 4. The registered holder of a share of the Capital
Stock of the Fund may require the Fund to redeem the same by
delivering to the Fund at its designated principal place of
business a written request for redemption in a form satisfactory to
the Board of Directors, together with the certificate for or
evidence of ownership of such stock, if any, being properly signed
and endorsed, and the Fund, upon receipt of such request and
surrender of such certificate or evidence of ownership, promptly
shall pay to or upon the order of the registered holder thereof the
redemption price as hereinafter defined; provided, however, that
the Board of Directors or any duly authorized committee thereof or
any officer or officers of the Fund duly authorized by such Board
or Committee may defer payment of the redemption price for such
period, after receipt of such request and surrender of the
certificate or evidence of ownership, as may be permitted by
applicable law, and also may defer redemption during a "period of
emergency" as defined in the Investment Company Act of 1940. In all
cases,
(a) Shares shall be redeemed at the asset value thereof.
(b) All rights with respect to shares submitted for
redemption as provided hereunder, except the right to
receive the asset value thereof, shall cease and
terminate as of the close of business on the day upon
which a written request for redemption meeting the
requirements of the first paragraph of this Section 4 is
received. All shares redeemed by the Fund shall, upon
redemption, have the status of authorized and unissued
shares, and shall not be deemed to be treasury shares.
(c) The Fund may redeem the shares of a shareholder if the
amount invested is less than $1,000. This redemption
will be pursuant to applicable statutory or regulatory
authority, rules or regulations.
Section 5. The stock of this Fund, after the par value
thereof has been paid, shall not be subject to assessment to pay
the debts of the Fund, and no stock issued as fully paid shall be
assessable, nor shall the private property of any stockholder be
subject to the payment of corporate debts to any extent whatever.
<PAGE>
PAGE 3
Section 6. No share of stock issued by the Fund shall be sold
or exchanged by or on behalf of the Fund for any amount or value
less than the asset value thereof as of the close of business on
the day upon which application and payment or payment for such
share is received and accepted by the Fund, and if the day upon
which payment is so received shall not be a full business day, then
as of the close of business on the next succeeding full business
day.
ARTICLE IV - DIRECTORS
Section 1. The members of the governing board are styled
"directors", and the number, names and post office addresses of the
first Board of Directors, which shall be two in number, are as
follows:
Name Address
Paul D. Sabby 800 IDS Tower
80 South 8th Street
Minneapolis, Minnesota 55474
William A. Stoltzmann 800 IDS Tower
80 South 8th Street
Minneapolis, Minnesota 55474
Section 2. The directors, of which there shall be not less
than two nor more than fifteen, shall be elected at the first
meeting of the shareholders for an indefinite term and thereafter
at each regular meeting of shareholders, to hold office for an
indefinite term until the next regular meeting of shareholders, but
in any event, they shall hold office until their successors are
elected and qualify. The number of directors to be elected may be
increased or decreased from time to time by action of the board of
directors. If there be a vacancy in the Board by reason of death,
resignation or otherwise, such vacancy may be filled for the
unexpired term by a majority vote of the remaining directors,
though less than a quorum. The election and qualification of a
director or directors to fill any such vacancy or vacancies shall
be in conformity with the requirements of the Investment Company
Act of 1940, as amended.
Section 3. In furtherance and not in limitation of the powers
conferred by these Articles, the Board of Directors is expressly
authorized:
(a) To issue and dispose of and to enter into contracts for
the distribution, sale, exchange, purchase and resale of
the authorized securities of the Fund.
(b) To enter into a contract or contracts with any person,
firm, corporation, association or trust selected by it to
act as trustee or custodian for any of the assets of the
Fund pursuant to such terms and conditions and for such
compensation as the Board of Directors shall determine,
subject to any specific provisions of the Articles of
Incorporation or the By-laws with respect thereto.
<PAGE>
PAGE 4
(c) To enter into a contract or contracts wherein and whereby
a responsible person, entity, partnership, association or
corporation is designated and employed as the investment
manager or adviser for the Fund to act as investment
manager or adviser and to (i) manage the assets of the
Fund by counseling with and advising the Fund in
connection with the formulation of an investment program
designed to accomplish the Company's investment
objectives, by determining what securities shall be
purchased or sold, by causing the execution of purchase
and sell orders, and by determining what portion of the
assets shall be held uninvested, or to (ii) advise the
Fund by recommending which securities it should purchase
and/or sell, and to advise the Fund with respect to the
general and specific policies and transactions to be
followed in the purchasing, owning and handling of such
securities and other assets and the disposition thereof.
Such management or advisory activities shall be subject
always to the power of the Board of Directors of the Fund
to have full control over the affairs of the Fund and to
review periodically the portfolio of the Fund to see that
it is managed in the long-term interests of the Fund's
shareholders and in accordance with its investment
objectives.
(d) To declare and pay dividends in its discretion at any
time and from time to time to the extent and from such
sources as permitted by the laws of the State of
Minnesota. Whenever dividends are paid out of capital
gains, the payment shall be accompanied by a written
statement which clearly discloses such fact and the basis
of calculation of such gains.
Section 4. Any determination made in good faith by or pursuant
to the direction of the Board of Directors as to the amount of the
assets, debts, obligations or liabilities of the Fund, as to the
price or closing bid and asked prices, as to the value of any
security or asset of the Fund, or as to any other matters relating
to the issue, sale, redemption, liquidation, purchase and/or
acquisition or disposition of securities of the Fund, shall be
final and conclusive, and shall be binding upon the Fund and all
holders of securities issued by it, past, present and future, and
securities of the Fund shall be issued and sold on the condition
and understanding that any and all such determinations shall be
binding as aforesaid.
Section 5. The Fund shall indemnify any person who was or is a
party or is threatened to be made a party, by reason of the fact
that he is or was a director, officer, employee or agent of the
Fund, or is or was serving at the request of the Fund as a
director, officer, employee or agent of another company,
partnership, joint venture, trust or other enterprise, to any
threatened, pending or completed action, suit or proceeding,
wherever brought, and the Fund may purchase liability insurance and
advance legal expenses, all to the fullest extent permitted by the
laws of the State of Minnesota, as now existing or hereafter
amended. Any indemnification hereunder shall not be exclusive of
<PAGE>
PAGE 5
any other rights of indemnification to which the directors,
officers, employees or agents might otherwise be entitled. No
indemnification shall be made in violation of the Investment
Company Act of 1940.
Section 6. To the full extent permitted by the laws of the
State of Minnesota, as now existing or hereafter amended, no
director of the Fund shall be liable to the Fund or to its
shareholders for monetary damages for breach of fiduciary duty as a
director but such limit on liability shall be permitted only to the
extent allowable under the provisions of the Investment Company Act
of 1940.
ARTICLE V - INCORPORATOR
The name and post office address of the incorporator signing
these Articles of Incorporation is as follows:
Name Post Office Address
Paul D. Sabby 800 IDS Tower Annex
80 South 8th Street
Minneapolis, Minnesota 55474
ARTICLE VI - DEFINITIONS
Section 1. The terms "share", "shares", "holder",
"shareholder", "registered holder", "full business day" and "close
of business" as used in these Articles of Incorporation and in the
By-laws of the Fund shall mean and refer to such terms as defined
in the By-laws of the Fund.
Section 2. "Securities" as used herein shall have the same
meaning as the term "security" as defined in Section 2(1) of the
Securities Act of 1933, as amended.
ARTICLE VII - MEETINGS AND LOCATION OF BOOKS
The shareholders and directors shall have power to hold their
meetings, and to keep the books of the Fund (subject to the
provisions of the laws of the State of Minnesota) outside the State
of Minnesota at such places as may from time to time be designated
by the By-laws or by resolution of the Directors.
ARTICLE VIII - WRITTEN ACTION BY BOARD OF DIRECTORS
An action required or permitted to be taken by the Board of
Directors of this Corporation may be taken by written action signed
by that number of directors that would be required to take the same
action at a meeting of the Board at which all directors are
present, except as to those matters requiring shareholder approval,
in which case the written action must be signed by all members of
the Board of Directors then in office.
ARTICLE IX - AMENDMENTS
These Articles of Incorporation, or any provision hereof, may
be amended, altered, changed or repealed in the manner prescribed
by the laws of the State of Minnesota.
<PAGE>
PAGE 6
IN WITNESS WHEREOF. I have hereunto subscribed my name this
8th day of May, 1985.
/s/ Paul D. Sabby
Incorporator
STATE OF MINNESOTA )
) SS:
COUNTY OF HENNEPIN )
The foregoing was acknowledged before me this 8th day of May, 1985,
by Paul D. Sabby.
/s/ Judith G. Bryden
<PAGE>
PAGE 1
Independent Auditors' Consent
The Board of Directors
IDS Life Series Fund, Inc.:
We consent to the use of our report incorporated herein by
reference and to the references to our Firm under the headings
"Financial Highlights" in Part A and "Independent Auditors" in Part
B of the Registration Statement.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
June 20, 1995
<PAGE>
PAGE 1
IDS Life Series Funds Performance Calculations
NON-MONEY MARKET FUNDS
TOTAL RETURN
The total return is the percentage change between the initial
investment at the beginning of the period and the total value of
the investment at the end of the period.
Total Return = Ending Total Value - Initial Investment
Initial Investment
The ending total value includes income and capital gains
distributions treated as reinvested.
AVERAGE ANNUAL TOTAL RETURN
The average annual total return of the fund reflects the average
annual compounded rate of return of a hypothetical investment over
a period of one, five and ten years (or, if less, up to the life of
the subaccount), calculated according to the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of 1000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the
one, five or ten year periods (or fractional
portion thereof).
YIELD
Yield quotations will be based on all investment income earned
during a particular 30-day period, less expenses accrued during the
period (net investment income) and will be computed by dividing net
investment income per share by the value of a share on the last day
of the period, according to the following formula:
YIELD = 2 [( a - b + 1)6 - 1]
cd
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends.
d = the maximum offering price per share on the last day of
the period.
<PAGE>
PAGE 2
MONEY MARKET FUNDS
YIELD
Yield for the money market fund will be based on the net change in
the value of a hypothetical investment (exclusive of capital
changes) from the beginning of a seven day period for which the
return will be quoted. A prorata share of fund expenses accrued
over the seven day period is subtracted. The difference is divided
by the value of the fund at the beginning of the period to obtain
the base period return. The base period return is annualized by
multiplying by 365/7.
COMPOUND YIELD
Calculation of compound yield begins with the same base period
return used in the calculation of yield, which is then annualized
to reflect compounding according to the following formula:
Compound Yield = [Base Period Return + 1)365/7] - 1
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
PAGE 1
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> EQUITY PORTFOLIO
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 207731436
<INVESTMENTS-AT-VALUE> 245579245
<RECEIVABLES> 15799145
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 261378390
<PAYABLE-FOR-SECURITIES> 13395486
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6950903
<TOTAL-LIABILITIES> 20346389
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 203248023
<SHARES-COMMON-STOCK> 12024452
<SHARES-COMMON-PRIOR> 8391259
<ACCUMULATED-NII-CURRENT> (5633)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (58906)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 37848517
<NET-ASSETS> 241032001
<DIVIDEND-INCOME> 401572
<INTEREST-INCOME> 2124480
<OTHER-INCOME> 0
<EXPENSES-NET> (1468220)
<NET-INVESTMENT-INCOME> 1057832
<REALIZED-GAINS-CURRENT> 5224750
<APPREC-INCREASE-CURRENT> 21967759
<NET-CHANGE-FROM-OPS> 28250341
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1052199)
<DISTRIBUTIONS-OF-GAINS> (5287266)
<DISTRIBUTIONS-OTHER> (5633)
<NUMBER-OF-SHARES-SOLD> 3567088
<NUMBER-OF-SHARES-REDEEMED> (247637)
<SHARES-REINVESTED> 313742
<NET-CHANGE-IN-ASSETS> 89171838
<ACCUMULATED-NII-PRIOR> 399133
<ACCUMULATED-GAINS-PRIOR> 15326818
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1326220
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1468220
<AVERAGE-NET-ASSETS> 190183518
<PER-SHARE-NAV-BEGIN> 18.10
<PER-SHARE-NII> .10
<PER-SHARE-GAIN-APPREC> 2.40
<PER-SHARE-DIVIDEND> (.10)
<PER-SHARE-DISTRIBUTIONS> (.45)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.05
<EXPENSE-RATIO> .77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
PAGE 2
<ARTICLE> 6
<SERIES>
[NUMBER] 2
<NAME> INCOME PORTFOLIO
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
[INVESTMENTS-AT-COST] 37371991
[INVESTMENTS-AT-VALUE] 37426924
[RECEIVABLES] 986653
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 38413577
[PAYABLE-FOR-SECURITIES] 344396
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 245930
[TOTAL-LIABILITIES] 590326
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 38674878
[SHARES-COMMON-STOCK] 3924989
[SHARES-COMMON-PRIOR] 3476335
[ACCUMULATED-NII-CURRENT] (23856)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (882704)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 54933
[NET-ASSETS] 37823251
[DIVIDEND-INCOME] 17291
[INTEREST-INCOME] 2775891
[OTHER-INCOME] 0
[EXPENSES-NET] (276627)
[NET-INVESTMENT-INCOME] 2516555
[REALIZED-GAINS-CURRENT] (497528)
[APPREC-INCREASE-CURRENT] 289232
[NET-CHANGE-FROM-OPS] 2308259
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (2524594)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] (8964)
[NUMBER-OF-SHARES-SOLD] 610628
[NUMBER-OF-SHARES-REDEEMED] (428908)
[SHARES-REINVESTED] 266934
[NET-CHANGE-IN-ASSETS] 4053323
[ACCUMULATED-NII-PRIOR] 1955311
[ACCUMULATED-GAINS-PRIOR] (52946)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 242049
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 276627
[AVERAGE-NET-ASSETS] 34701486
[PER-SHARE-NAV-BEGIN] 9.71
[PER-SHARE-NII] .69
[PER-SHARE-GAIN-APPREC] (.07)
[PER-SHARE-DIVIDEND] (.69)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.64
[EXPENSE-RATIO] .80
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
PAGE 3
<ARTICLE> 6
<SERIES>
[NUMBER] 3
<NAME> MONEY MARKET PORTFOLIO
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
[INVESTMENTS-AT-COST] 9808677
[INVESTMENTS-AT-VALUE] 9808677
[RECEIVABLES] 61646
[ASSETS-OTHER] 70833
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 9941156
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 56556
[TOTAL-LIABILITIES] 56556
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 9885253
[SHARES-COMMON-STOCK] 9885410
[SHARES-COMMON-PRIOR] 9557747
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (653)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 9884600
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 491065
[OTHER-INCOME] 0
[EXPENSES-NET] (58192)
[NET-INVESTMENT-INCOME] 432873
[REALIZED-GAINS-CURRENT] (454)
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 432419
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (432873)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 6253135
[NUMBER-OF-SHARES-REDEEMED] (6358379)
[SHARES-REINVESTED] 432907
[NET-CHANGE-IN-ASSETS] 327170
[ACCUMULATED-NII-PRIOR] 215399
[ACCUMULATED-GAINS-PRIOR] (97)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 48493
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 58192
[AVERAGE-NET-ASSETS] 9727590
[PER-SHARE-NAV-BEGIN] 1.00
[PER-SHARE-NII] .04
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] (.04)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 1.00
[EXPENSE-RATIO] .60
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
PAGE 4
<ARTICLE> 6
<SERIES>
[NUMBER] 4
<NAME> MANAGED PORTFOLIO
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
[INVESTMENTS-AT-COST] 212608496
[INVESTMENTS-AT-VALUE] 220331236
[RECEIVABLES] 6022014
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 226353250
[PAYABLE-FOR-SECURITIES] 3835695
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 2531497
[TOTAL-LIABILITIES] 6367192
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 214177590
[SHARES-COMMON-STOCK] 15589271
[SHARES-COMMON-PRIOR] 11604807
[ACCUMULATED-NII-CURRENT] 54719
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (1956179)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 7709928
[NET-ASSETS] 219986058
[DIVIDEND-INCOME] 1293011
[INTEREST-INCOME] 6502966
[OTHER-INCOME] 0
[EXPENSES-NET] (1499214)
[NET-INVESTMENT-INCOME] 6296763
[REALIZED-GAINS-CURRENT] (1326459)
[APPREC-INCREASE-CURRENT] 5313579
[NET-CHANGE-FROM-OPS] 10283883
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (6295800)
[DISTRIBUTIONS-OF-GAINS] (534853)
[DISTRIBUTIONS-OTHER] (41557)
[NUMBER-OF-SHARES-SOLD] 3963862
[NUMBER-OF-SHARES-REDEEMED] (470937)
[SHARES-REINVESTED] 491539
[NET-CHANGE-IN-ASSETS] 59279858
[ACCUMULATED-NII-PRIOR] 3737551
[ACCUMULATED-GAINS-PRIOR] 14672291
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1339464
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1499214
[AVERAGE-NET-ASSETS] 192278029
[PER-SHARE-NAV-BEGIN] 13.85
[PER-SHARE-NII] .44
[PER-SHARE-GAIN-APPREC] .30
[PER-SHARE-DIVIDEND] (.44)
[PER-SHARE-DISTRIBUTIONS] (.04)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 14.11
[EXPENSE-RATIO] .78
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
PAGE 5
<ARTICLE> 6
<SERIES>
[NUMBER] 5
<NAME> GOVERNMENT SECURITIES PORTFOLIO
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
[INVESTMENTS-AT-COST] 11014877
[INVESTMENTS-AT-VALUE] 11127752
[RECEIVABLES] 239957
[ASSETS-OTHER] 148703
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 11516412
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 75948
[TOTAL-LIABILITIES] 75948
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 11328092
[SHARES-COMMON-STOCK] 1160975
[SHARES-COMMON-PRIOR] 1132254
[ACCUMULATED-NII-CURRENT] (3078)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 2575
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 112875
[NET-ASSETS] 11440464
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 760307
[OTHER-INCOME] 0
[EXPENSES-NET] (88991)
[NET-INVESTMENT-INCOME] 671316
[REALIZED-GAINS-CURRENT] 6871
[APPREC-INCREASE-CURRENT] (34924)
[NET-CHANGE-FROM-OPS] 643263
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (670485)
[DISTRIBUTIONS-OF-GAINS] (7702)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 148783
[NUMBER-OF-SHARES-REDEEMED] (189821)
[SHARES-REINVESTED] 69759
[NET-CHANGE-IN-ASSETS] 255613
[ACCUMULATED-NII-PRIOR] 604172
[ACCUMULATED-GAINS-PRIOR] 112301
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 77867
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 88991
[AVERAGE-NET-ASSETS] 11156700
[PER-SHARE-NAV-BEGIN] 9.88
[PER-SHARE-NII] .59
[PER-SHARE-GAIN-APPREC] (.03)
[PER-SHARE-DIVIDEND] (.59)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.85
[EXPENSE-RATIO] .80
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
PAGE 6
<ARTICLE> 6
<SERIES>
[NUMBER] 6
<NAME> INTERNATIONAL EQUITY PORTFOLIO
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-START> OCT-28-1994
<PERIOD-END> APR-30-1995
[INVESTMENTS-AT-COST] 7853396
[INVESTMENTS-AT-VALUE] 8401397
[RECEIVABLES] 490129
[ASSETS-OTHER] 299186
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 9190712
[PAYABLE-FOR-SECURITIES] 411450
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 282454
[TOTAL-LIABILITIES] 693904
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 7948727
[SHARES-COMMON-STOCK] 826111
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 548081
[NET-ASSETS] 8496808
[DIVIDEND-INCOME] 101492
[INTEREST-INCOME] 33259
[OTHER-INCOME] 0
[EXPENSES-NET] (20180)
[NET-INVESTMENT-INCOME] 114571
[REALIZED-GAINS-CURRENT] 907
[APPREC-INCREASE-CURRENT] 548081
[NET-CHANGE-FROM-OPS] 663559
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (114571)
[DISTRIBUTIONS-OF-GAINS] (907)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 818487
[NUMBER-OF-SHARES-REDEEMED] (3651)
[SHARES-REINVESTED] 11275
[NET-CHANGE-IN-ASSETS] 8496808
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 18559
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 20180
[AVERAGE-NET-ASSETS] 3990790
[PER-SHARE-NAV-BEGIN] 10.00
[PER-SHARE-NII] .15
[PER-SHARE-GAIN-APPREC] .29
[PER-SHARE-DIVIDEND] (.15)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.29
[EXPENSE-RATIO] 1.00
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
