<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. 19 (File No. 2-97636) X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 19 (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 28, 1996 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, 1996 on or about June 20, 1996.
<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 28, 1996
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 28, 1996, 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 (AEFC). AEFC
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 year ended April 30,
Per share income and capital changes*
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 20.05 $ 18.10 $ 16.87 $ 16.01 $ 13.94 $ 12.77 $ 12.16 $ 10.79 $ 12.05 $ 9.94
Income (loss from
investment operations:
Net investment income .03 .10 .06 .03 .03 .13 .35 .36 .15 .16
Net gains (losses) on
securities (both realized
and unrealized 9.30 2.40 3.26 1.40 2.90 2.09 .61 1.37 (1.13) 2.17
Total from investment
operations 9.33 2.50 3.32 1.43 2.93 2.22 .96 1.73 (0.98) 2.33
Less distributions:
Dividends from net
investment income (.03) (.10) (.06) (.03) (.03) (.13) (.35) (.36) (.15) (.16)
Distributions from
realized gains (.01) (.45) (2.03) (.54) (.83) (.92) - - (.13) (.06)
Total distributions (.04) (.55) (2.09) (.57) (.86) (1.05) (.35) (.36) (.28) (.22)
Net asset value,
end of period $ 29.34 $ 20.05 $ 18.10 $ 16.87 $ 16.01 $ 13.94 $ 12.77 $ 12.16 $ 10.79 $12.05
Ratios/supplemental data
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net assets, end of period
(in thousands) $448,412 $241,032 $151,860 $87,742 $55,265 $33,933 $16,355 $11,620 $ 7,247 $2,984
Ratio of expenses to average
daily net assets .76% .77% .75% .79% .80% .80%+ .80%+ .80% 1.10% 1.23%
Ratio of net income to average
daily net assets .15% .56% .33% .21% .17% 1.03% 2.61% 3.32% 1.21% 1.40%
Portfolio turnover rate
(excluding short-term
securities) 184% 144% 109% 81% 52% 79% 190% 48% 57% 57%
Total return++ 46.62% 13.87% 19.72% 8.92% 21.06% 18.55% 7.84% 16.18% (8.04)% 23.66%
* For a share outstanding throughout the period. Rounded to the nearest cent.
+ 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.
++ 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 year ended April 30,
Per share income and capital changes*
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 9.64 $ 9.71 $ 10.19 $ 9.40 $ 9.19 $ 8.55 $ 8.93 $ 9.05 $ 9.42 $10.35
Income (loss) from
investment operations:
Net investment income .68 .69 .71 .76 .73 .75 .75 .70 .68 .74
Net gains (losses) on
securities (both realized
and unrealized) .29 (.07) (.48) .80 .21 .64 (.40) (.12) (.37) (.93)
Total from investment
operations .97 .62 .23 1.56 .94 1.39 .35 .58 .31 (.19)
Less distributions:
Dividends from net
investment income (.68) (.69) (.71) (.77) (.73) (.75) (.73) (.70) (.68) (.74)
Net asset value,
end of period $ 9.93 $ 9.64 $ 9.71 $ 10.19 $ 9.40 $ 9.19 $ 8.55 $ 8.93 $ 9.05 $ 9.42
Ratios/supplemental data
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net assets, end of period
(in thousands) $54,976 $37,823 $33,770 $22,641 $16,306 $11,949 $8,831 $6,203 $4,456 $2,397
Ratio of expenses to average
daily net assets .80% .80% .80% .80%+ 80%+ .80%+ .80%+ 1.11% 1.13% 1.72%
Ratio of net income to
average daily net assets 6.72% 7.23% 6.83% 7.66% 7.86% 8.41% 8.02% 7.87% 7.50% 6.27%
Portfolio turnover rate
(excluding short-term
securities) 36% 55% 60% 47% 75% 55% 60% 99% 64% 38%
Total return++ 10.02% 6.67% 2.12% 17.17% 10.60% 16.77% 3.75% 6.70% 3.59% (1.58)%
* For a share outstanding throughout the period. Rounded to the nearest cent.
+ 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.
++ 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 year ended April 30,
Per share income and capital changes*
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<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 .05 .04 .03 .03 .05 .07 .08 .07 .06 .05
Total from investment
operations .05 .04 .03 .03 .05 .07 .08 .07 .06 .05
Less distributions:
Dividends from net
investment income (.05) (.04) (.03) (.03) (.05) (.07) (.08) (.07) (.06) (.05)
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
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net assets, end of period
(in thousands) $14,318 $9,885 $9,557 $8,181 $9,771 $9,596 $6,321 $4,721 $2,748 $1,007
Ratio of expenses to
average daily net assets .60%+ .60%+ .60%+ .60%+ .60%+ .60%+ .60%+ 1.10%+ .96% 1.35%
Ratio of net income to
average daily net assets 5.04% 4.45% 2.61% 3.00% 4.60% 7.06% 8.26% 7.38% 5.89% 4.46%
Total return++ 5.03% 4.50% 2.61% 3.04% 4.71% 7.41% 8.61% 7.52% 6.13% 5.38%
* For a share outstanding throughout the period. Rounded to the nearest cent.
+ 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 0.73%, 0.77%, 0.71%, 0.74%, 0.75%,
0.86%, 0.96% and 1.35% for the years ended April 30, 1996, 1995, 1994, 1993, 1992, 1991, 1990 and 1989, respectively.
++ 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 year ended April 30,
Per share income and capital changes*
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 14.11 $ 13.85 $ 13.84 $ 13.55 $ 13.29 $ 12.80 $ 11.22 $ 10.42 $ 11.40 $ 10.06
Income (loss) from
investment operation:
Net investment income .57 .44 .42 .44 .48 .57 .57 .61 .42 .40
Net gains (losses) on
securities (both realized
and unrealized) 2.51 .30 1.40 1.44 1.87 1.90 1.58 .80 (.84) 1.41
Total from investment
operations 3.08 .74 1.82 1.88 2.35 2.47 2.15 1.41 (.42) 1.81
Less distributions:
Dividends from net
investment income (.57) (.44) (.42) (.44) (.48) (.57) (.57) (.61) (.42) (.40)
Distributions from
realized gains (.13) (.04) (1.39) (1.15) (1.61) (1.41) - - (.14) (.07)
Total distributions (.70) (.48) (1.81) (1.59) (2.09) (1.98) (.57) (.61) (.56) (.47)
Net asset value,
end of period $ 16.49 $ 14.11 $ 13.85 $ 13.84 $ 13.55 $ 13.29 $ 12.80 $ 11.22 $ 10.42 $ 11.40
Ratios/supplemental data
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net assets, end of period
(in thousands) $316,732 $219,986 $160,706 $100,139 $72,366 $51,442 $32,725 $25,807 $21,901 $10,779
Ratio of expenses to
average daily net assets .78% .78% .77% .79% .80% .80%+ .80%+ .72%+ 1.03% 1.30%
Ratio of net income to
average daily net assets 3.73% 3.27% 2.83% 3.15% 3.40% 4.38% 4.54% 5.76% 3.86% 3.53%
Portfolio turnover rate
(excluding short-term
securities) 83% 143% 106% 118% 122% 71% 107% 58% 67% 43%
Total return++ 22.27% 5.47% 13.30% 14.03% 17.84% 20.18% 19.37% 13.88% (3.57%) 18.32%
* For a share outstanding throughout the period. Rounded to the nearest cent.
+ 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.
++ 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 year ended April 30,
Per share income and capital changes*
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 9.85 $ 9.88 $ 10.54 $ 9.69 $ 9.44 $ 8.88 $ 8.97 $ 9.00 $ 9.40 $10.32
Income (loss) from
investment operations:
Net investment income .61 .59 .60 .63 .66 .67 .69 .64 .64 .66
Net gains (losses) on
securities (both realized
and unrealized) .13 (.03) (.56) .94 .28 .56 (.09) (.03) (.40) (.92)
Total from investment
operations .74 .56 .04 1.57 .94 1.23 .60 .61 .24 (.26)
Less distributions:
Dividends from net
investment income (.61) (.59) (.60) (.63) (.66) (.67) (.69) (.64) (.64) (.66)
Distributions from
realized gains -- -- (.10) (.09) (.03) - - - - -
Total distributions (.61) (.59) (.70) (.72) (.69) (.67) (.69) (.64) (.64) (.66)
Net asset value,
end of period $ 9.98 $ 9.85 $ 9.88 $10.54 $ 9.69 $ 9.44 $ 8.88 $ 8.97 $ 9.00 $ 9.40
Ratios/supplemental data
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net assets, end of period
(in thousands) $12,464 $11,440 $11,185 $9,619 $7,853 $6,314 $3,184 $2,773 $2,170 $1,230
Ratio of expenses to
average daily net assets .80%+ .80%+ .80%+ .80%+ .80%+ .80%+ .80%+ 1.12%+ 1.13% 1.56%
Ratio of net income to
average daily net assets 5.98% 6.02% 5.59% 6.10% 6.79% 7.24% 7.34% 7.19% 7.04% 5.90%
Portfolio turnover rate
(excluding short-term
securities) 38% 12% 32% 15% 11% 18% 18% 14% 13% 43%
Total return++ 7.45% 5.98% 0.16% 16.58% 10.20% 14.30% 6.50% 7.12% 2.77% (2.73)%
* For a share outstanding throughout the period. Rounded to the nearest cent.
+ 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 0.88%, 0.87, 0.85%, 0.88%, 0.92%, 1.08%,
1.12%, and 1.21% for the years ended April 30, 1996, 1995, 1994, 1993, 1992, 1991, 1990 and 1989 respectively.
++ 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*
1996 1995**
<S> <C> <C>
Net asset value, beginning of period $10.29 $10.00
Income (loss) from investment operations:
Net investment income .11 .15
Net gains (losses) on securities (both
realized and unrealized) 6.08 .29
Total from investment operations 6.19 .44
Less Distributions:
Dividends from net investment income (.13) (.15)
Distributions from realized gains -- --
Total distributions (.13) (.15)
Net asset value, end of period $16.35 $ 10.29
Ratios/supplemental data
1995**
Net assets, end of period (in thousands) $52,061 $ 8,497
Ratio of expenses to average daily 1.05%*** 1.00%+***
net assets
Ratio of net income to average daily
net assets .92% 5.66%+
Portfolio turnover rate (excluding
short-term securities) 172% 40%
Total return++ 60.47% 4.38%
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Commencement of operations. Period from Oct. 28, 1994 to April 30, 1995.
***IDS Life voluntarily limited total operating expenses. Had IDS Life not done
so, the ratio of expenses to average daily net assets would have been 1.32% and
1.76% for the years ended April 30, 1996 and 1995, respectively.
+ Adjusted to an annual basis.
++ 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, 1996
Purchase 1 year 5 years 10 years
made ago ago ago
Equity Portfolio +46.62% +21.39% +16.11%
S&P 500 +29.91% +14.89% +14.24%
Lipper Growth
and Income Fund
Index +27.05% +14.42% +12.72%
Cumulative total returns as of April 30, 1996
Purchase 1 year 5 years 10 years
made ago ago ago
Equity Portfolio +46.62% +163.54% +345.49%
S&P 500 +29.91% +100.35% +278.94%
Lipper Growth
and Income Fund
Index +27.05% + 96.11% +231.00%
Average annual total returns as of April 30, 1996
Purchase 1 year 5 years 10 years
made ago ago ago
Income Portfolio +10.02% +9.20% +7.43%
Lehman Aggregate
Bond Index + 8.30% +8.06% +8.46%
Cumulative total returns as of April 30, 1996
Purchase 1 year 5 years 10 years
made ago ago ago
Income Portfolio +10.02% +55.29% +104.69%
Lehman Aggregate
Bond Index + 8.30% +47.39% +125.48%
<PAGE>
PAGE 16
Average annual total returns as of April 30, 1996
Purchase 1 year 5 years 10 years
made ago ago ago
Managed Portfolio +22.27% +14.45% +13.85%
S&P 500 +29.91% +14.89% +14.24%
Lipper Balanced
Fund Index +18.98% +11.45% +10.88%
Cumulative total returns as of April 30, 1996
Purchase 1 year 5 years 10 years
made ago ago ago
Managed Portfolio +22.27% + 96.35% +265.81%
S&P 500 +29.91% +100.35% +278.94%
Lipper Balanced
Fund Index +18.98% + 71.94% +180.85%
Average annual total returns as of April 30, 1996
Purchase 1 year 5 years 10 years
made ago ago ago
Government
Securities Portfolio +7.45% +7.94% +6.68%
Merrill Lynch 1-3
Govt Index +6.89% +6.34% +7.31%
Cumulative total returns as of April 30, 1996
Purchase 1 year 5 years 10 years
made ago ago ago
Government
Securities Portfolio +7.45% +46.52% + 90.98%
Merrill Lynch 1-3
Govt Index +6.89% +35.97% +102.55%
<PAGE>
PAGE 17
Average annual total returns as of April 30, 1996
Purchase 1 year Since
made ago inception*
International Equity Portfolio +60.47% +40.83%
Goldman Sachs Extended Global
Market Index ex. U.S. + 8.08% + 4.88%
Goldman Sachs Extended Global
Market Index ex. U.S. with
Japanese Modification + 8.77% + 5.37%
Cumulative total returns as of April 30, 1996
Purchase 1 year Since
made ago inception*
International Equity Portfolio +60.47% +67.51%
Goldman Sachs Extended Global
Market Index ex. U.S. + 8.08% + 7.44%
Goldman Sachs Extended Global
Market Index ex. U.S. with
Japanese Modification + 8.77% + 8.20%
*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 primarily in U.S. common stocks 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 both U.S. and foreign 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.
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 primarily in securities
that are issued or guaranteed by a U.S. governmental unit. The<PAGE>
PAGE 21
portfolio 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 65% 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 or stocks of companies experiencing
significant growth and operating in areas of financial and
technological change may be subject to more abrupt or erratic price
movements than stocks of larger, established companies or the stock
market as a whole. Also, small companies often have limited <PAGE>
PAGE 22
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.
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, 1996 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>
44.85% AAA Highest quality 0.05%
5.42 AA High quality --
12.75 A Upper medium grade --
16.18 BBB Medium grade 0.38
8.04 BB Moderately speculative --
6.14 B Speculative --
0.57 CCC Highly speculative 0.22
-- CC Poor quality --
-- C Lowest quality --
-- D In default --
0.65 unrated Unrated securities --
* AEFC's assessment of unrated securities.
</TABLE>
<PAGE>
PAGE 23
Bond ratings of holdings for fiscal year ended
April 30, 1996 for Managed 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>
16.83% AAA Highest quality 0.01%
1.41 AA High quality --
4.08 A Upper medium grade --
5.00 BBB Medium grade 0.10
3.93 BB Moderately speculative --
4.05 B Speculative 0.07
0.17 CCC Highly speculative 0.12
-- CC Poor quality --
-- C Lowest quality --
-- D In default --
0.43 unrated Unrated securities 0.13
* AEFC's assessment of unrated securities.
</TABLE>
(See Appendix G to the SAI for further information regarding
ratings.)
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<PAGE>
PAGE 24
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: For all Funds except Money Market, 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 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.
<PAGE>
PAGE 25
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.
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.
<PAGE>
PAGE 26
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.
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.
<PAGE>
PAGE 27
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.
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. All portfolios began operations on Jan.
20, 1986 except International Equity Portfolio which began
operations on Oct. 28, 1994. 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.<PAGE>
PAGE 28
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 AEFC 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.
Income Portfolio
Lorraine Hart joined AEFC 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 AEFC in 1984 and serves as portfolio manager.
He has managed this portfolio since 1992. He also manages the
short-term investments and debt for AEFC, American Express
Financial Advisors Inc., IDS Life and IDS Certificate Company.
Managed Portfolio
Scott Schroepfer joined AEFC in 1990 and serves as portfolio
manager. He has managed the fixed income portfolio of Managed
Portfolio since 1995 and as associate portfolio manager since 1994.
Prior to that he served as a high-yield corporate bond analyst.
Betty Tebault joined AEFC 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 AEFC 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 AEFC, he had been a Quantitative Investment
Analyst at Harris Trust.
International Equity Portfolio
Richard Lazarchic joined AEFC 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.
<PAGE>
PAGE 29
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, 1996 the fund's directors and officers did not own any
shares of the fund.
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 .76%, .80%, .60%, .78%, .80% and 1.05% of
average daily net assets for Equity, Income, Money Market, Managed,
Government Securities and International Equity Portfolios;
respectively for the period ended April 30, 1996.
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 AEFC have an Investment Advisory Agreement that calls
for IDS Life to pay AEFC 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 0.35%
of International Equity portfolio's average net assets for the
year. AEFC 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.
<PAGE>
PAGE 30
About IDS Life and American Express Financial Corporation
General information
IDS Life Series Fund is managed by IDS Life, a wholly owned
subsidiary of AEFC, which itself is a wholly owned subsidiary of
the American Express Company (American Express), a financial
services company headquartered in New York City.
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 AEFC family of companies offers not only insurance and
annuities, but also mutual funds, investment certificates and a
broad range of financial management services.
AEFC has been providing financial services since 1894. Besides
managing investments for all publicly offered funds in the IDS
MUTUAL FUND GROUP, AEFC also manages investments for itself and its
subsidiaries, IDS Certificate Company and IDS Life. Total assets
under management on April 30, 1996 were more than $133 billion.
American Express Financial Advisors Inc. serves individuals and
businesses through its nationwide network of more than 175 offices
and more than 7,800 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 28, 1996
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 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 28,
1996, and is to be used with the Fund's Prospectus dated June 28,
1996 and the Fund's Annual Report for the fiscal year ended April
30, 1996.
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 (AEFC) hold
more than a certain percent of the issuer's outstanding securities.
If the holdings of all officers and directors of the Portfolio and
of AEFC 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 AEFC hold more than a certain percent of the
issuer's outstanding securities. If the holdings of all officers
and directors of the portfolio and of AEFC 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 AEFC, to the officers and
directors of AEFC 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 AEFC 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 Securities 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 AEFC hold more than a certain percent of the
issuer's outstanding securities. If the holdings of all officers
and directors of the Portfolio and of AEFC 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.
'Buy securities of an issuer if the directors and officers of the
portfolio, AEFC and IDS Life Insurance Company (IDS Life) hold more
than a certain percentage of the issuer's outstanding securities.
If the holdings of all officers and directors of the portfolio,
AEFC 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 AEFC, 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.
'Purchase more than 10% of the outstanding voting securities of an
issuer.
<PAGE>
PAGE 46
'Buy securities of an issuer if the officers and directors of the
portfolio and of AEFC hold more than a certain percentage of the
issuer's outstanding securities. If the holdings of all officers
and directors of the portfolio and of AEFC 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. Up to 25% of this 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 AEFC, to the officers and
directors of AEFC 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 AEFC hold more than a certain percentage of the
issuer's outstanding securities. If the holdings of all directors
and officers of the portfolio and of AEFC 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 AEFC to execute trades and negotiate
commissions on its behalf. In selecting broker-dealers to execute
transactions, AEFC 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 AEFC and IDS Life. When AEFC 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 AEFC'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
contact by telephone or at seminars or other meetings. IDS Life <PAGE>
PAGE 53
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 AEFC 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 $405,141 for fiscal
year 1994, $947,711 for fiscal year 1995 and $1,546,768 for fiscal
year ended April 30, 1996. The majority of all firms through whom
transactions were executed provide research services. Transactions
amounting to $14,220,000 with related commissions of $40,681 were
directed to brokers by the Fund because of research services
received for the fiscal year ended April 30, 1996.
Income, Money Market, Managed and International Equity Portfolios'
acquisition during the period ended April 30, 1996, 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 1,684,543
Salomon Brothers 455,785
Merrill Lynch 6,907,077
Charles Schwab 1,347,500
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 AEFC 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,
1996 1995 1994
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) $50,443 2.58 4.47 $31,425 $19,878
Enterprise
Investment
Services Inc.
Lehman (1) 0 -- -- $18,512 $ 4,851
Brothers
Inc.
The Robinson (3) 0 -- -- $0 none
Humphrey
Company, Inc.
</TABLE>
(1) Under common control with AEFC as a subsidiary of American
Express Company (American Express) until July 30, 1993.
(2) Wholly owned subsidiary of AEFC.
(3) Under common control with AEFC 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 6.29% for the 30-day
period ended April 30, 1996 and Income Portfolio's yield was 7.22%.
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 6.22%. Income Portfolio's yield would have been 7.22*%.
*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 4.80% and its compound
yield was 4.92% on April 30, 1996, the last business day of the
fund's fiscal year. If direct expenses had not been limited, the
simple annualized yield would have been 4.69% and its compound
yield would have been 4.80%.
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, 1996 the computation looked
like this for Equity, Income, International Equity, Managed and
Government Securities Portfolios:
<PAGE>
PAGE 58
<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 448,412,399 divided by 15,283,655 = 29.34
Income Portfolio 54,976,163 divided by 5,537,490 = 9.93
Managed Portfolio 316,732,293 divided by 19,205,327 = 16.49
Government Securities
Portfolio 12,464,405 divided by 1,249,455 = 9.98
International Equity
Portfolio 52,061,435 divided by 3,184,151 = 16.35
</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 Portfolio had a capital
loss carryover of $565,172 at April 30, 1996, which, if not offset
by subsequent capital gains, will expire in 2003. 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, 1996 was $2,334,846 for Equity
Portfolio, $332,795 for Income Portfolio, $220,659 for
International Equity Portfolio, $64,350 for Money Market Portfolio,
$1,894,796 for Managed Portfolio and $86,352 for Government
Securities Portfolio.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
<PAGE>
PAGE 62
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.
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 AEFC have an Investment Advisory Agreement. It calls
for IDS Life to pay AEFC a fee for investment advice about the
Fund's Portfolios. AEFC 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 0.35 percent of International Equity portfolio's average
net assets.
IDS Life paid AEFC $1,773,553 for investment advice for the fiscal
year ended April 30, 1996.IDS Life paid AEFC $1,119,466 for
investment advice for the fiscal year ended April 30, 1995. IDS
Life paid AEFC $751,255 for investment advice for the fiscal year
ended April 30, 1994.
Information concerning other funds advised by IDS Life or AEFC 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.
*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.
<PAGE>
PAGE 63
Edward Landes
Development consultant. Director of Endowment Development, YMCA of
Metropolitan Minneapolis. Former sales manager -- Supplies
Division and district manager -- Data Processing Division of IBM
Corporation. Retired 1983.
*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
Director, Mid-America Publishing and Atrix International, Inc.
Former president, Com Rad Broadcasting Corp. Former 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:
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 Company, from 1988 to 1989.
Lorraine R. Hart
IDS Tower 10
Minneapolis, MN
Vice President and Controller
Vice President--Insurance Investments, American Express Financial
Corporation, since 1989. Vice President--Investments, IDS Life,
since 1992.
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.
<PAGE>
PAGE 64
Timothy S. Meehan
IDS Tower 10
Minneapolis, MN
Secretary
Secretary, American Express Financial Corporation, since October
1995. Senior Counsel to American Express Financial Corporation
since 1995. Counsel from 1990 to 1995.
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, 1996
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 8,000
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 AEFC 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 1996 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 28, 1996, 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
<PAGE>
PAGE 67
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 mortgage-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.
<PAGE>
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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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PAGE 88
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.
Equity, Income, International Equity, 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, 1996, and the related statements of
operations for the year then ended the statements of changes in net
assets for each of the years in the two-year period ended April 30,
1996, (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 ten-year period ended April 30, 1996 and
for the one-year period ended April 30, 1996 and for the period
from Oct. 28, 1994 (commencement of operations) 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.
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, 1996 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 7, 1996
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<TABLE>
<CAPTION>
Statements of assets and liabilities
IDS Life Series Fund, Inc.
April 30, 1996
Equity Income Money
Portfolio Portfolio Market
Portfolio
Assets
__________________________________________________________________________________________________
<S> <C> <C> <C>
Investments in securities, at value (Note 1)
(identified cost: $360,891,530; $53,693,951 and
$14,267,447, respectively) $451,377,475 $54,134,004 $14,267,447
Cash in bank on demand deposit -- 72,934 100,860
Receivable for investment securities sold 7,407,450 -- --
Dividends and accrued interest receivable 55,482 835,984 --
Unrealized appreciation on foreign currency contracts
held, at value (Notes 1 and 4) 212 -- --
Receivable (for capital stock sold) from:
IDS Life subaccounts -- 291,657 48,576
IDS Life of New York subaccounts -- 23,466 --
__________________________________________________________________________________________________
Total assets 458,840,619 55,358,045 14,416,883
__________________________________________________________________________________________________
Liabilities
__________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 3,176,002 -- --
Dividends payable to shareholders (Note 1) -- 322,162 60,612
Payable for investment securities purchased 6,543,480 -- --
Unrealized depreciation on foreign currency contracts
held, at value (Notes 1 and 4) 532 -- --
Accrued investment management and services fee 260,126 33,446 6,352
Payable (for capital stock redeemed) to:
IDS Life subaccounts 376,147 369 24,253
IDS Life of New York subaccounts 21,230 -- --
Other accrued expenses 50,703 25,905 7,311
__________________________________________________________________________________________________
Total liabilities 10,428,220 381,882 98,528
__________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $448,412,399 $54,976,163 $14,318,355
__________________________________________________________________________________________________
Represented by
__________________________________________________________________________________________________
Capital stock - authorized 10,000,000,000 shares
of $.001 par value: outstanding, 15,283,655; 5,537,490
and 14,319,618 shares, respectively $ 15,284 $ 5,537 $ 14,320
Additional paid-in capital 284,236,095 55,096,557 14,304,772
Excess of distributions over net investment income (47) (811) --
Accumulated net realized gain (loss) on
investments 73,675,122 (565,173) (737)
Unrealized appreciation of investments and on
translation of assets and liabilities in foreign
currencies (Note 4) 90,485,945 440,053 --
__________________________________________________________________________________________________
Total - representing net assets applicable to
outstanding capital stock $448,412,399 $54,976,163 $14,318,355
__________________________________________________________________________________________________
Net asset value per share of outstanding capital
stock $ 29.34 $ 9.93 $ 1.00
__________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 95
Statements of assets and liabilities (continued)
IDS Life Series Fund, Inc.
April 30, 1996
Managed Government International
Portfolio Securities Equity
Portfolio Portfolio
Assets
__________________________________________________________________________________________________
Investments in securities, at value (Note 1)
(identified cost: $286,292,247; $11,967,807 and
$47,589,707, respectively) $318,342,181 $12,084,535 $53,453,226
Cash in bank on demand deposit 167,606 220,439 49,549
Receivable for investment securities sold 936,018 -- 1,323,710
Dividends and accrued interest receivable 2,025,399 177,370 108,542
Unrealized appreciation on foreign currency contracts
held, at value (Notes 1 and 4) -- -- 40,613
Receivable (for capital stock sold) from:
IDS Life subaccounts 1,873,791 57,664 305,903
IDS Life of New York subaccounts 133,552 2,892 19,656
__________________________________________________________________________________________________
Total assets 323,478,547 12,542,900 55,301,199
__________________________________________________________________________________________________
Liabilities
__________________________________________________________________________________________________
Dividends payable to shareholders (Note 1) 2,477,957 64,513 164,336
Payable for investment securities purchased 3,996,428 -- 3,007,265
Accrued investment management and services fee 190,826 7,685 39,210
Unrealized depreciation on foreign currency contracts
held, at value (Notes 1 and 4) -- -- 12,773
Payable (for capital stock redeemed) to:
IDS Life subaccounts 2,895 -- --
IDS Life of New York subaccounts -- -- --
Other accrued expenses 78,148 6,297 16,180
__________________________________________________________________________________________________
Total liabilities 6,746,254 78,495 3,239,764
__________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $316,732,293 $12,464,405 $52,061,435
__________________________________________________________________________________________________
Represented by
__________________________________________________________________________________________________
Capital stock - authorized 10,000,000,000 shares
of $.001 par value: outstanding, 19,205,327; 1,249,455
and 3,184,151 shares, respectively $ 19,205 $ 1,249 $ 3,184
Additional paid-in capital 270,548,886 12,249,619 40,260,363
Undistributed (excess of distributions over)
net investment income (54,812) (6,489) 623
Accumulated net realized gain on investments 13,854,981 103,298 5,909,647
Unrealized appreciation of investments and on
translation of assets and liabilities in foreign
currencies (Notes 4 & 5) 32,364,033 116,728 5,886,806
__________________________________________________________________________________________________
Total - representing net assets applicable to
outstanding capital stock $316,732,293 $12,464,405 $52,056,869
__________________________________________________________________________________________________
Net asset value per share of outstanding capital
stock $ 16.49 $ 9.98 $ 16.35
__________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 96
Statements of operations
IDS Life Series Fund, Inc
Year ended April 30, 1996
Equity Income Money
Portfolio Portfolio Market
Portfolio
Investment income
__________________________________________________________________________________________________
Income:
Dividends (net of foreign taxes
withheld of $1,964 for Equity
Portfolio) $ 714,920 $ 7,287 $ --
Interest 2,307,957 3,549,730 723,013
__________________________________________________________________________________________________
Total income 3,022,877 3,557,017 723,013
__________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 2,334,846 332,795 64,350
Custodian fees 99,401 16,367 15,950
Audit fees 13,321 9,058 7,018
Registration fees 20,000 4,010 1,003
Directors fees 7,822 4,046 1,091
Printing and postage 56,929 13,385 4,226
Other 727 676 57
__________________________________________________________________________________________________
Total expenses 2,533,046 380,337 93,695
Less expenses voluntarily reimbur
sed by IDS Life -- -- (16,475)
__________________________________________________________________________________________________
Total expenses - net 2,533,046 380,337 77,220
__________________________________________________________________________________________________
Investment income - net 489,831 3,176,680 645,793
__________________________________________________________________________________________________
Realized and unrealized gain (loss) on investments - net
__________________________________________________________________________________________________
Net realized gain (loss) on security and
foreign currency transactions (Note 3) 73,815,809 327,190 (84)
Net change in unrealized appreciation of
investments and on translation of assets
and liabilities in foreign currencies 52,637,428 385,120 --
__________________________________________________________________________________________________
Net gain (loss) on investments 126,453,237 712,310 (84)
__________________________________________________________________________________________________
Net increase in net assets resulting from
operations $126,943,068 $ 3,888,990 $ 645,709
__________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 97
Statements of operations (continued)
IDS Life Series Fund, Inc
Year ended April 30, 1996
Managed Government International
Portfolio Securities Equity
Portfolio Portfolio
Investment income
__________________________________________________________________________________________________
Income:
Dividends (net of foreign taxes withheld of
$15,569 and $28,309 for Managed Portfolio
and International Equity Portfolio, respectively)$ 1,897,885 $ -- $ 284,229
Interest 10,242,510 831,629 172,610
__________________________________________________________________________________________________
Total income 12,140,395 831,629 456,839
__________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 1,894,796 86,352 220,659
Custodian fees 89,197 6,445 67,288
Audit fees 13,334 8,020 5,000
Registration fees 25,056 1,503 8,000
Directors fees 7,419 1,214 1,025
Printing and postage 64,871 4,257 5,354
Other 1,123 63 26
__________________________________________________________________________________________________
Total expenses 2,095,796 107,854 307,352
Less expenses voluntarily reimbursed by IDS Life -- (9,166) (63,466)
__________________________________________________________________________________________________
Total expenses - net 2,095,796 98,688 243,884
__________________________________________________________________________________________________
Investment income - net 10,044,599 732,941 212,955
__________________________________________________________________________________________________
Realized and unrealized gain (loss) on investments - net
__________________________________________________________________________________________________
Net realized gain (loss) on security and foreign
currency transactions (including foreign exchange
gain (loss) of ($41,913) and $78,698 for Managed
Portfolio and International Equity Porfolio,
respectively (Note 3) 14,380,142 97,312 5,839,649
Realized gain on closed futures contracts 3,505,726 -- 147,884
__________________________________________________________________________________________________
Net realized gain on investments 17,885,868 97,312 5,987,533
Net change in unrealized appreciation of
investments and on translation of assets
and liabilities in foreign currencies 24,654,105 3,853 5,339,537
__________________________________________________________________________________________________
Net gain on investments 42,539,973 101,165 11,327,070
__________________________________________________________________________________________________
Net increase in net assets resulting from
operations $ 52,584,572 $ 834,106 $11,540,025
__________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 98
<TABLE>
<CAPTION>
Statements of changes in net assets
IDS Life Series Fund, Inc.
Year ended April 30,
Equity Portfolio Income Portfolio
Operations and distributions 1996 1995 1996 1995
____________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Investment income - net $ 489,831 $ 1,057,832 $ 3,176,680 $ 2,516,555
Net realized gain (loss) on investments 73,815,809 5,224,750 327,190 (497,528)
Net change in unrealized appreciation of
investments and on translation of assets
and liabilities in foreign currencies 52,637,428 21,967,759 385,120 289,232
____________________________________________________________________________________________________
Net increase in net assets resulting from
operations 126,943,068 28,250,341 3,888,990 2,308,259
____________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (484,198) (1,052,199) (3,152,824) (2,524,594)
Excess distribution of net investment income (26,661) (5,633) (10,470) (8,964)
Net realized gain on investments (76,149) (5,287,266) -- --
____________________________________________________________________________________________________
Total distributions (587,008) (6,345,098) (3,163,294) (2,533,558)
____________________________________________________________________________________________________
Capital share transactions (Note 6)
____________________________________________________________________________________________________
Proceeds from sales 88,096,157 65,702,029 16,653,461 5,810,955
Reinvested distributions at net asset value 587,008 6,345,098 3,163,294 2,533,558
Payments for redemptions (7,658,827) (4,780,532) (3,389,539) (4,065,891)
____________________________________________________________________________________________________
Increase in net assets from capital
share transactions 81,024,338 67,266,595 16,427,216 4,278,622
____________________________________________________________________________________________________
Total increase in net assets 207,380,398 89,171,838 17,152,912 4,053,323
____________________________________________________________________________________________________
Net assets at beginning of year 241,032,001 151,860,163 37,823,251 33,769,928
____________________________________________________________________________________________________
Net assets at end of year $448,412,399 $241,032,001 $ 54,976,163 $ 37,823,251
____________________________________________________________________________________________________
Excess of distributions over net investment
income $ (47) $ (5,633) $ (811) $ (23,856)
____________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 99
Statements of changes in net assets (continued)
IDS Life Series Fund, Inc.
Year ended April 30,
Money Market Portfolio Managed Portfolio
Operations and distributions 1996 1995 1996 1995
____________________________________________________________________________________________________
Investment income - net $ 645,793 $ 432,873 $ 10,044,599 $ 6,296,763
Net realized gain (loss) on investments (84) (454) 17,885,868 (1,326,459)
Net change in unrealized appreciation of
investments and on translation of assets
and liabilities in foreign currencies -- -- 24,654,105 5,313,579
____________________________________________________________________________________________________
Net increase in net assets resulting from
operations 645,709 432,419 52,584,572 10,283,883
____________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (645,793) (432,873) (10,002,686) (6,295,800)
Excess distribution of net investment income -- -- -- (41,557)
Net realized gain on investments -- -- (2,226,152) (534,853)
____________________________________________________________________________________________________
Total distributions (645,793) (432,873) (12,228,838) (6,872,210)
____________________________________________________________________________________________________
Capital share transactions (Note 6)
____________________________________________________________________________________________________
Proceeds from sales 12,705,078 6,252,661 54,477,756 55,602,457
Reinvested distributions at net asset value 645,793 432,873 12,228,838 6,872,210
Payments for redemptions (8,917,032) (6,357,910) (10,316,093) (6,606,482)
____________________________________________________________________________________________________
Increase in net assets from capital
share transactions 4,433,839 327,624 56,390,501 55,868,185
____________________________________________________________________________________________________
Total increase in net assets 4,433,755 327,170 96,746,235 59,279,858
____________________________________________________________________________________________________
Net assets at beginning of year 9,884,600 9,557,430 219,986,058 160,706,200
____________________________________________________________________________________________________
Net assets at end of year $ 14,318,355 $ 9,884,600 $316,732,293 $219,986,058
____________________________________________________________________________________________________
Undistributed (excess of distributions
over) net investment income $ -- $ -- $ (54,812) $ 54,719
____________________________________________________________________________________________________
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,
Government Securities International Equity
Portfolio Portfolio
Operations and distributions 1996 1995 1996 1995*
____________________________________________________________________________________________________
Investment income - net $ 732,941 $ 671,316 $ 212,955 $ 114,571
Net realized gain on investments 97,312 6,871 5,987,533 907
Net change in unrealized appreciation or
depreciation of investments and on translation
of assets and liabilities in foreign currencies 3,853 (34,924) 5,339,537 548,081
____________________________________________________________________________________________________
Net increase in net assets resulting
from operations 834,106 643,263 11,540,025 663,559
____________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (729,863) (670,485) (212,955) (114,571)
Excess distribution of net investment income (3,078) -- (77,263) --
Net realized gain on investments -- (7,702) -- (907)
____________________________________________________________________________________________________
Total distributions (732,941) (678,187) (290,218) (115,478)
____________________________________________________________________________________________________
Capital share transactions (Note 6)
____________________________________________________________________________________________________
Proceeds from sales 2,091,806 1,451,214 32,311,329 7,869,306
Reinvested distributions at net asset value 732,941 678,187 290,218 115,478
Payments for redemptions (1,901,971) (1,838,864) (286,727) (36,057)
____________________________________________________________________________________________________
Increase in net assets from capital
share transactions 922,776 290,537 32,314,820 7,948,727
____________________________________________________________________________________________________
Total increase in net assets 1,023,941 255,613 43,564,627 8,496,808
____________________________________________________________________________________________________
Net assets at beginning of year 11,440,464 11,184,851 8,496,808 --
____________________________________________________________________________________________________
Net assets at end of year $ 12,464,405 $ 11,440,464 $ 52,061,435 $ 8,496,808
____________________________________________________________________________________________________
Undistributed (excess of distributions over)
net investment income $ (6,489) $ (3,078) $ 623 $ --
____________________________________________________________________________________________________
*Period from Oct. 28, 1994 (commencement of operations) to April 30, 1995.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 101
Notes to financial statements
IDS Life Series Fund, Inc.
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. It has six portfolios whose goals are as
follows: Equity Portfolio invests primarily in U.S. common stocks
and securities convertible into common stock; Income Portfolio
invests in corporate bonds of the four highest ratings; Money
Market Portfolio invest in high-quality short-term debt securities;
Managed Portfolio invests in common and preferred stocks,
convertible securities, debt securities and money market
instruments; Government Securities Portfolio invests in debt
obligations issued or guaranteed by U.S. governmental units;
International Equity Portfolio invests primarily in common stocks
of foreign issuers. 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:
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statments and the reported
amounts of increase and decrease in net assets from operations
during the period. Actual results could differ from those
estimates.
Valuation of securities
All securities are valued at the close of each business day.
Securities, 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.
<PAGE>
PAGE 102
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
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 Equity, 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.
Securities purchased on a when-issued basis
Delivery and payment for securities that have been purchased by the
portfolios on a forward-commitment or when-issued basis can take
place one month or more after the transaction date. During this
period, such securities are subject to market fluctuations, and
they may affect the portfolio's net assets the same as owned
securities. The portfolios designate cash or liquid high-grade
short-term debt securities at least equal to the amount of its
commitment. At April 30, 1996, Managed Portfolio had entered into
outstanding when-issued or forward-commitments of $987,500.
<PAGE>
PAGE 103
Foreign currency translations and foreign currency contracts
Securities and other assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the closing
rate of exchange. Foreign currency amounts related to the purchase
or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in
foreign exchange rates on realized and unrealized security gains or
losses is reflected as a component of such gains or losses. In the
statement of operations, net realized gains or losses from foreign
currency transactions may arise from sales of foreign currency,
closed forward contracts, exchange gains or losses realized between
the trade date and settlement dates on securities transactions, and
other translation gains or losses on dividends, interest income and
foreign withholding taxes.
The 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, 1996, investments in securities for Income Portfolio
and Managed Portfolio included issues that are illiquid. The
portfolios currently limit 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, 1996 was
$700,000 and $1,236,630, which represents 1.3% and 0.4% of net
assets for the Income Portfolio and Managed Portfolio,
respectively. 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.
<PAGE>
PAGE 104
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 International
Equity Income Managed Securities Equity
Portfolio Portfolio Portfolio Portfolio Portfolio
_______________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Accumulated net realized gain (loss) (5,632) (9,659) 151,444 3,411 (77,886)
Undistributed net investment income 26,614 9,659 (151,444) (3,411) 77,886
_______________________________________________________________________________________________________________
Additional paid-in-capital reduction (increase) 20,982 -- -- -- --
_______________________________________________________________________________________________________________
</TABLE>
Dividends to shareholders
At April 30, 1996 dividends were declared of $.06 for Income, $.004
for Money Market, $.13 for Managed, $.05 for Government Securities
and $.05 for International Equity Portfolio and were payable May 1,
1996. 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.
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 0.35% of International Equity Portfolio's average daily
net assets for the year.
<PAGE>
PAGE 105
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, 1996, cost of purchases and proceeds
from sales of securities aggregated $138,818,496 and $134,359,643
for Money Market Portfolio; cost of purchases and proceeds from
sales of securities (other than short-term obligations) aggregated
$627,841,100 and $547,536,493 for Equity, $28,247,656 and
$16,126,899 for Income, $234,695,757 and $177,948,075 for Managed,
$5,662,961 and $4,408,135 for Government Securities and $68,155,408
and $36,627,999 for International Equity Portfolios. Realized
gains and losses are determined on an identified cost basis.
Brokerage commissions paid to brokers affiliated with IDS Life were
$49,148, $1,120 and $175 for Equity Portfolio, Managed Portfolio
and International Equity Portfolio, respectively, for the year
ended April 30, 1996.
4. Foreign currency contracts
At April 30, 1996, Equity Portfolio and International Equity
Portfolio had entered into foreign currency exchange contracts that
obligate the portfolio to deliver currencies at a specified future
date. The unrealized appreciaton (depreciation) on these contracts
is included in the accompanying financial statements. The terms of
the open contracts are as follows:
<PAGE>
PAGE 106
<TABLE>
<CAPTION>
Equity Portfolio
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
____________________________________________________________________________
<S> <C> <C> <C> <C>
May 1, 1996 226,572 308,477 $ 41 $ --
U.S. Dollar Canadian Dollar
May 2, 1996 28,138 38,310 5 --
U.S. Dollar Canadian Dollar
May 2, 1996 75,559 1,909,418 84 --
U.S. Dollar Thai Bhat
May 3, 1996 129,414 3,266,832 4 --
U.S. Dollar Thai Bhat
May 7, 1996 145,540 3,676,184 78 --
U.S. Dollar Thai Bhat
May 14, 1996 73,638 2,301,374 -- 532
U.S. Dollar Belgian Franc
_________ _________
$ 212 $ 532
International Equity Portfolio
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
____________________________________________________________________________
May 1, 1996 748,284 96,736 $ 3 $ --
Hong Kong Dollar U.S. Dollar
May 1, 1996 619,241 842,880 -- 45
U.S. Dollar Canadian Dollar
May 2, 1996 194,887 293,617 448 --
British Pound U.S. Dollar
May 2, 1996 1,108,104 143,245 15 --
Hong Kong Dollar U.S. Dollar
May 2, 1996 29,699,363 281,551 -- 2,369
Japanese Yen U.S. Dollar
May 2, 1996 2,276,652 305,284 -- 1,130
Mexican Peso U.S. Dollar
May 2, 1996 500,259 52,769,842 4,209 --
U.S. Dollar Japanese Yen
May 2, 1996 492,705 51,972,959 4,145 --
U.S. Dollar Japanese Yen
May 2, 1996 95,729 2,414,289 -- 85
U.S. Dollar Thai Baht
May 2, 1996 88,609 120,615 -- 3
U.S. Dollar Canadian Dollar
May 2, 1996 61,812 6,524,556 561 --
U.S. Dollar Japanese Yen
May 2, 1996 7,173 187,859 5 --
U.S. Dollar Philippine Peso
May 3, 1996 129,540 195,660 793 --
British Pound U.S. Dollar
May 3, 1996 60,898 82,899 -- 44
U.S. Dollar Canadian Dollar
<PAGE>
PAGE 107
May 3, 1996 25,005 654,938 21 --
U.S. Dollar Philippine Peso
May 6, 1996 104,088 162,646,530 -- 61
U.S. Dollar Italian Lira
May 7, 1996 532,302 55,601,627 -- 3,116
U.S. Dollar Japanese Yen
May 7, 1996 56,355 1,475,480 37 --
U.S. Dollar Philippine Peso
May 7, 1996 34,994 54,733,710 13 --
U.S. Dollar Italian Lira
May 8, 1996 42,367 66,187,769 27 --
U.S. Dollar Italian Lira
June 28, 1996 4,900,000 734,655 13,338 --
Swedish Krona U.S. Dollar
July 5, 1996 25,650,000 241,412 -- 5,920
Japanese Yen U.S. Dollar
July 19, 1996 4,500,000 885,548 12,192 --
French Franc U.S. Dollar
July 19,1996 2,500,000 490,004 4,806 --
French Franc U.S. Dollar
_________ _________
$40,613 $12,773
</TABLE>
5. Stock index futures contracts
At April 30, 1996, investments in securities in Managed Portfolio
included securities valued at $2,049,820 that were pledged as
collateral to cover initial margin deposits on 65 purchase
contracts. The market value of the open contracts on April 30, 1996
was $21,282,625 (6.7% of net assets) with a net unrealized gain of
$313,625. To cover these long futures positions, Managed Portfolio
maintains short-term securities amounts at least equal to the
market value of the outstanding contracts. Included in the open
contracts are S&P 500 Index futures.
6. Capital share transactions
Transactions in shares of each Portfolio for the years ended April
30, 1996 and 1995 were as follows:
<TABLE><CAPTION>
Number of shares: Year ended April 30, 1996
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 12,024,452 3,924,989 9,885,410 15,589,271 1,160,975 826,111
___________________________________________________________________________________________________________
Sold 3,543,079 1,633,884 12,706,236 3,492,833 203,165 2,358,924
Issued for reinvested
distributions 22,323 311,618 645,835 788,557 71,365 21,630
Redeemed (306,199) (333,001) (8,917,863) (665,334) (186,050) (22,514)
___________________________________________________________________________________________________________
Net increase 3,259,203 1,612,501 4,434,208 3,616,056 88,480 2,358,040
___________________________________________________________________________________________________________
Shares at end of year 15,283,655 5,537,490 14,319,618 19,205,327 1,249,455 3,184,151
___________________________________________________________________________________________________________
<PAGE>
PAGE 108
Number of shares: Year ended April 30, 1995
Money Government International
Equity Income Market Managed Securities Equity
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio*
___________________________________________________________________________________________________________
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.
</TABLE>
7. Tax loss carryforward
For federal income tax purposes, the Income Portfolio had a capital
loss carryover at April 30, 1996 of $565,173, which, if not offset
by subsequent capital gains, will expire in 2003. It is unlikely
the board 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 value of investments
April 30, 1996 compared to net assets)
Equity Portfolio
Common stocks (92.7%)
Issuer Shares Value(a)
__________________________________________________________________________________
<S> <C> <C>
Airlines (1.3%)
Mesa Air Group 80,000(b) $ 980,000
Reno Air 200,000(b) 2,550,000
Southwest Airlines 70,000 2,082,500
Total 5,612,500
__________________________________________________________________________________
Aerospace & defense (1.6%)
Loral 80,000(b) 1,150,000
Rohr 120,000(b) 2,190,000
Sundstrand 52,000 1,911,000
Thiokol 42,000 1,795,500
Total 7,046,500
__________________________________________________________________________________
Automotive related (1.2%)
Gentex 14,700(b) 580,650
Miller Industries 100,000(b) 2,787,500
Snap On 45,000 2,160,000
Total 5,528,150
__________________________________________________________________________________
Banks and savings & loans (0.8%)
Cal Fed Bancorp 131,000(b) 2,341,625
RAC Financial 40,000(b) 1,235,000
Total 3,576,625
__________________________________________________________________________________
Building materials (1.7%)
American Homestar 90,000(b) 2,025,000
NCI Building Systems 75,000(b) 2,718,750
Tyco Intl 75,000 2,896,875
Total 7,640,625
__________________________________________________________________________________
Chemicals (1.5%)
Pall 80,000 2,240,000
Raychem 30,000 2,336,250
Sigma-Aldrich 40,000 2,160,000
Total 6,736,250
__________________________________________________________________________________
Computers & office equipment (10.4%)
America Online 30,000 1,920,000
American Management Systems 110,000(b) 2,928,750
BTG 125,000(b) 1,515,625
Broadway & Seymour 117,500(b) 1,645,000
Cheyenne Software 50,000(b) 1,137,500
Cisco Systems 120,000(b) 6,225,000
Cylink 75,000(b) 1,368,750
Exabyte 170,000(b) 2,975,000
First Data 30,000 2,280,000
FORE Systems 27,000(b) 2,133,000
INSO 30,000(b) 1,627,500
Intl Imaging Materials 70,000(b) 1,330,000
Mylex 100,000(b) 2,437,500
Network General 50,000(b) 2,206,250
Parametric Technology 70,000(b) 2,817,500
PeopleSoft 40,000(b) 2,520,000
Prism Solutions 50,000(b) 1,631,250
Profit Recovery Group Intl 55,200(b) 1,097,100
Sanmina 64,000(b) 2,272,000
SunGard Data Systems 65,000(b) 2,161,250
U.S. Robotics 7,300(b) 1,142,450
Worldtalk Communications 110,000(b) 1,430,000
Total 46,801,425
__________________________________________________________________________________
<PAGE>
PAGE 110
Electronics (3.0%)
ADT 130,000(b) 2,210,000
Ancor Communications 150,000(b) 1,462,500
BI 200,000(b) 2,425,000
Computer Products 131,000(b) 2,120,563
Dynatech 90,000(b) 2,317,500
Richey Electronics 110,000(b) 1,430,000
Symbol Technologies 30,700(b) 1,419,875
Total 13,385,438
__________________________________________________________________________________
Energy (1.6%)
Barrett Resources 80,000(b) 2,220,000
Nabors Industries 170,000 2,613,750
Pogo Producing 70,000 2,528,750
Total 7,362,500
__________________________________________________________________________________
Energy equipment & services (8.1%)
Camco Intl 90,000 3,206,250
Digicon 84,000 1,291,500
Dresser Industries 75,000 2,390,625
ENSCO Intl 100,000(b) 3,000,000
Global Marine 275,000 3,128,125
Halliburton 46,000 2,639,250
Input/Output 70,000(b) 2,432,500
Marine Drilling 210,600(b) 2,079,675
Noble Drilling 165,000(b) 2,475,000
Oceaneering Intl 100,000(b) 1,575,000
Pride Petroleum Services 150,000(b) 2,456,250
Rowan Companies 200,000(b) 2,950,000
Smith Intl 41,000(b) 1,219,750
Tidewater 65,000 2,762,500
Tuboscope Vetco Intl 220,000(b) 2,860,000
Total 36,466,425
__________________________________________________________________________________
Financial services (0.9%)
AMRESCO 100,000 1,712,500
Green Tree Financial 80,000 2,193,750
Total 3,906,250
__________________________________________________________________________________
Foreign (11.1%)
Accor 14,000 1,944,181
Adidas ADR 60,000(b,d) 2,269,848
American Mineral 58,200(b) 634,909
Ashanti Goldfields 81,000(b) 1,771,875
Astra Cl A 55,000 2,444,895
Baan 39,300(b) 2,358,000
Banco de Galicia 93,000 2,185,500
Barco 7,500 1,182,894
Biochem Pharma 50,000(b) 2,275,000
Bufete Industrial ADR 60,000 1,050,000
Danka Business Systems 100,000 4,800,000
Elan ADR 30,000(b) 1,983,750
Empresas ICA 200,000 2,775,000
Grupo Televisa GDS 90,000 2,790,000
Home Centers 100,000(b) 587,500
Krung Thai Bank 212,000(b) 1,041,418
Nera AS ADR 50,000 1,837,500
Nevsun Resources 249,000(b) 1,984,682
Panamerican Beverages 55,000 2,413,125
Royal Plastic 120,000(b) 1,830,000
Schibsted Group 70,000(b,d) 1,022,979
SGS-Thomson Microelectronics 60,000(b) 2,820,000
Siam City Bank 643,500(b) 771,154
Sun Intl 30,000(b) 1,282,500
Taisei 190,000(b) 1,471,248
Teva Pharmaceutical Industries ADR 30,000(b) 1,346,250
Thai Farmers Bank 91,000(b) 1,045,459
Total 49,919,667
__________________________________________________________________________________
Health care (7.7%)
ALZA 65,000(b) 1,852,500
CNS 72,000(b) 1,422,000
Coherent 50,000(b) 2,681,250
Columbia Laboratories 160,000(b) 1,980,000
<PAGE>
PAGE 111
Conmed 67,550(b) 2,009,612
CytoTherapeutics 73,000(b) 1,076,750
DENTSPLY Intl 31,600 1,319,300
Gilead Sciences 90,000(b) 2,745,000
Guidant 45,000 2,525,625
Hologic 90,000(b) 2,655,000
IDEXX Laboratories 29,500(b) 1,312,750
Kinetic Concepts 140,000 2,065,000
Matritech 200,000(b) 3,075,000
Mentor 75,000 1,771,875
Possis Medical 120,000(b) 2,220,000
Sofamor Danek Group 64,000(b) 2,096,000
Watson Pharmaceuticals 41,400(b) 1,966,500
Total 34,774,162
__________________________________________________________________________________
Health care services (7.3%)
Apria Healthcare Group 68,000(b) 2,312,000
Cardinal Health 40,000 2,510,000
Genesis Health Ventures 75,000(b) 2,221,875
HBO & Company 99,700 11,839,375
HEALTHSOUTH 60,000(b) 2,227,500
Health Management Associates 73,000(b) 2,336,000
Healthsource 55,000(b) 1,876,875
Medaphis 27,400(b) 1,263,825
OrNda Healthcorp 75,000(b) 2,062,500
Tenet Healthcare 95,000(b) 1,947,500
Vivra 70,000(b) 2,213,750
Total 32,811,200
__________________________________________________________________________________
Industrial machines & services (1.4%)
Sanifill 57,100(b) 2,476,712
Thermo Sentron 135,000(b) 2,126,250
Wolverine Tube 50,000(b) 1,837,500
Total 6,440,462
__________________________________________________________________________________
Insurance (2.3%)
ACE Limited 48,200 2,120,800
Prudential Reinsurance Holdings 90,000(b) 2,047,500
Risk Capital Holdings 85,000(b) 1,689,375
TIG Holdings 72,000 2,187,000
UNUM 35,000 2,082,500
Total 10,127,175
__________________________________________________________________________________
Leisure time & entertainment (2.1%)
Grand Casinos 60,800(b) 1,968,400
Harley-Davidson 65,000 2,868,125
Marriot Intl 45,000 2,193,750
National Education 93,100(b) 1,384,862
Stratosphere 80,000(b) 870,000
Total 9,285,137
__________________________________________________________________________________
Media (1.8%)
American Radio Systems 60,000(b) 2,025,000
Argyl Television 110,000(b) 2,516,250
Infinity Broadcasting 120,000(b) 3,480,000
Total 8,021,250
__________________________________________________________________________________
Metals (1.4%)
Nucor 32,000 1,800,000
Stillwater Mining 100,000(b) 2,400,000
UCAR Intl 53,000(b) 2,173,000
Total 6,373,000
__________________________________________________________________________________
Multi-industry (2.1%)
AccuStaff 67,000(b) 1,993,250
Alco Standard 45,000 2,604,375
Olsten 75,000 2,278,125
Wackenhut Corrections 45,000(b) 2,407,500
Total 9,283,250
__________________________________________________________________________________
<PAGE>
PAGE 112
Paper & packaging (1.0%)
Crown Cork & Seal 50,000 2,356,250
Sealed Air 61,000(b) 2,157,875
Total 4,514,125
__________________________________________________________________________________
Restaurants & lodging (4.3%)
Boston Chicken 8,600(b) 275,200
HFS 90,000(b) 4,623,750
Logan's Roadhouse 120,000(b) 3,570,000
Longhorn Steaks 130,000(b) 3,526,250
Manhattan Bagel 120,000(b) 3,360,000
Outback Steakhouse 52,000(b) 2,086,500
Rainforest Cafe 50,000(b) 1,850,000
Total 19,291,700
__________________________________________________________________________________
Retail (9.3%)
Bombay 106,400(b) 1,236,900
Borders Group 70,000(b) 2,240,000
Corporate Express 108,000(b) 4,036,500
Friedman's 42,500(b) 1,094,375
Gap 90,000 2,711,250
General Nutrition 73,100(b) 1,425,450
Home Shopping Network 110,000(b) 1,292,500
Kohl's 84,000(b) 2,887,500
May Dept Stores 50,000 2,550,000
Pacific Sunwear of California 154,000(b) 2,502,500
Pep Boys 70,000 2,336,250
PETsMART 35,000(b) 1,553,125
Rexall Sundown 135,000(b) 3,847,500
Richfood Holdings 70,000 2,283,750
Sunglass Hut Intl 62,000(b) 1,813,500
Thifty PayLess Holdings 120,000(b) 1,620,000
TJX Companies 115,000 3,392,500
Viking Office Products 45,000(b) 2,671,875
Total 41,495,475
__________________________________________________________________________________
Telecommunication equipment & services (5.9%)
Andrew 60,000(b) 2,880,000
Ascend Communications 47,000(b) 2,890,500
Cascade Communications 22,500(b) 2,255,625
FastComm Communications 100,000(b) 1,750,000
Gandalf Technologies 125,000(b) 2,218,750
Natural Microsystems 80,000(b) 3,020,000
StrataCom 54,000(b) 2,808,000
TCSI 85,000(b) 2,783,750
Tel-Save Holdings 105,000(b) 1,758,750
VeriFone 100,000(b) 4,200,000
Total 26,565,375
__________________________________________________________________________________
Utilities-gas (0.7%)
Seagull Energy 110,000(b) 2,681,250
Sonat 7,300 318,463
Total 2,999,713
__________________________________________________________________________________
Utilities-telephone (1.0%)
Millicom Intl Cellular 53,900(b) 2,546,775
Century Telephone Enterprises 55,000 1,801,250
Total 4,348,025
__________________________________________________________________________________
Miscellaneous (1.2%)
Chicago Miniature Lamp 60,000(b) 2,460,000
Infonautics 17,500(b) 245,000
Philip Environmental 275,000(b) 1,925,000
Planning Sciences Intl 5,200(b) 83,200
Polycom 6,300(b) 55,913
Spectralink 50,000(b) 468,750
Sykes Enterprises 2,000(b) 71,000
Transition Systems 9,700(b) 235,225
Total 5,544,088
__________________________________________________________________________________
Total common stocks
(Cost: $325,740,589) $415,856,492
__________________________________________________________________________________
/TABLE
<PAGE>
PAGE 113
<TABLE>
<CAPTION>
Bonds (0.4%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
__________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Industrial machinery & services
Thermo Electron 4.25 2003 1,600,000(e) 1,976,000
Total bonds
(Cost: $1,600,000) $ 1,976,000
__________________________________________________________________________________
Short-term securities (7.5%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
U.S. government and agency (0.3%)
Federal Home Loan Mtge Corp Disc Nt
05-20-96 5.20% $1,400,000 $ 1,396,173
__________________________________________________________________________________
Commercial paper (7.2%)
A.I. Credit 5.28 3,700,000 3,692,959
05-14-96
Albertson's 5.35 1,800,000 1,798,138
05-08-96
Ameritech Capital 5.29 3,400,000(d) 3,395,512
05-10-96
Bell South Telecommunications 5.30 700,000 699,180
05-09-96
Ciesco 5.30 1,200,000 1,194,896
05-30-96
Coca-Cola 5.31 1,800,000 1,782,650
06-14-96
Lilly (Eli) 5.28 400,000 396,948
06-20-96
Pacific Mutual Life 5.32 2,500,000 2,500,000
05-01-96
Penney (J.C.) Funding 5.30 5,300,000 5,279,012
05-28-96
Transamerica 5.32 5,000,000 4,963,333
04-25-96
USAA Capital 5.31 2,500,000 2,489,733
05-29-96
USL Capital 5.41 3,960,000 3,956,449
05-07-96
Total 32,148,810
__________________________________________________________________________________
Total short-term securities
(Cost: $33,550,941) $ 33,544,983
__________________________________________________________________________________
Total investments in securities
(Cost: $360,891,530)(e) $451,377,475
__________________________________________________________________________________
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) Commercial paper sold within terms of a private placement memorandum, exempt from registration under section
4(2) of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited
investors." This security has been determined to be liquid under guidelines established by the board.
(d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933,
as amended. Unless otherwise noted, this security has been determined to be liquid under guidelines established by
the board.
(e) At April 30, 1996, the cost of securities for federal income tax purposes was $361,054,556 and the aggregate
gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $94,692,377
Unrealized depreciation (4,369,458)
________________________________________________________________________________
Net unrealized appreciation $90,322,919
________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 114
<TABLE>
<CAPTION>
IDS Life Series Fund, Inc. (Percentages represent value of investments
April 30, 1996 compared to total net assets)
Income Portfolio
Bonds (88.6%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
__________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S government obligations (17.8%)
Resolution Funding 8.125% 2019 $3,000,000 $ 3,300,990
U.S. Treasury Bonds 6.25 2023 650,000 586,566
8.125 2019 1,750,000 1,952,580
U.S. Treasury Notes 6.375 2002 3,950,000 3,918,321
Total 9,758,457
__________________________________________________________________________________
Mortgage backed securities (19.2%)
Federal Home Loan Mtge Corp 5.50 2009 924,582 859,575
Collateralized Mtge Obligation 8.00 2020 185,000 186,641
8.50 2022 1,000,000 1,039,880
Federal Natl Mtge Assn 6.00 2024 940,748 857,548
6.50 2010-24 4,387,116 4,160,033
7.00 2026 2,952,719 2,848,458
Series Z 8.00 2021 407,252(g) 414,521
Merrill Lynch Mtge Investors 8.29 2021 250,000(c) 222,266
Total 10,588,922
__________________________________________________________________________________
Airlines (2.1%)
AMR 9.75 2021 450,000 522,184
Continental Air 6.94 2015 400,000(h) 379,700
United Air Lines 10.67 2004 200,000 232,892
Total 1,134,776
__________________________________________________________________________________
Aerospace & defense (0.8%)
Airplanes GPA 10.875 2019 100,000 104,500
BE Aerospace 9.875 2006 100,000(c) 100,250
Northrop Grumman 7.75 2016 250,000(c) 239,023
Total 443,773
__________________________________________________________________________________
Banks and savings & loans (2.4%)
Barclays NA Capital 9.75 2021 300,000 342,846
First Bank System 6.875 2007 400,000 384,588
Fleet Norstar Financial 9.00 2001 200,000 218,672
Norwest
Medium Term Nts 6.375 2002 400,000 391,692
Total 1,337,798
__________________________________________________________________________________
Building materials (1.2%)
Owens Corning Fiberglass 9.375 2012 100,000 110,570
Peters (JM) 12.75 2002 100,000 94,625
Pulte 7.00 2003 300,000 283,584
Schuller Intl 10.875 2004 100,000 108,500
Southdown 10.00 2006 50,000(c) 50,250
Total 647,529
__________________________________________________________________________________
Chemicals (0.3%)
Goodrich (BF) 9.625 2001 150,000 166,164
__________________________________________________________________________________
Electronics (1.4%)
Magnetek 10.75 1998 100,000 96,250
Reliance Electric 6.80 2003 300,000 297,357
Thomas & Betts 6.50 2006 400,000 374,284
Total 767,891
__________________________________________________________________________________
Energy (1.6%)
BP North America 9.50 1998 60,000 62,878
Clark Oil 9.50 2004 100,000 101,125
<PAGE>
PAGE 115
Honam Oil Refinery 7.125 2005 250,000(c) 239,327
Parker & Parsley 8.25 2007 300,000 299,286
USX 9.80 2001 150,000 166,401
Total 869,017
__________________________________________________________________________________
Energy equipment & services (0.7%)
Foster Wheeler 6.75 2005 400,000 381,372
__________________________________________________________________________________
Financial services (2.5%)
AVCO Financial 7.25 1999 300,000 306,018
Carco Auto
Asset-backed obligation 7.875 1998 300,000 300,786
Corporate Property Investors 7.18 2013 300,000(c) 282,222
Countrywide Funding
Medium Term Nts 8.42 1999 300,000 313,281
GE Capital
Reset Nt 8.65 2018 200,000(f) 199,238
Total 1,401,545
__________________________________________________________________________________
Food (0.3%)
Chiquita Brands 9.625 2004 100,000 99,625
Specialty Foods 10.25 2001 100,000(c) 91,250
Total 190,875
__________________________________________________________________________________
Foreign (9.9%)(b)
Alcan Aluminum
(U.S. Dollar) 8.875 2022 200,000 209,900
Argentina Euro
(U.S. Dollar) 6.31 2005 250,000 190,781
Banca Italy N.Y.
(U.S. Dollar) 8.25 2007 300,000 301,896
Bank of China
(U.S. Dollar) 8.25 2014 200,000 182,478
CAF
(U.S. Dollar) 7.10 2003 300,000 287,583
China Light & Power
(U.S. Dollar) 7.50 2006 300,000 295,251
Dominion Textiles
(U.S. Dollar) 8.875 2003 100,000 97,625
Fresh Delmonte
(U.S. Dollar) 10.00 2003 200,000 187,750
Guang Dong Enterprise
(U.S. Dollar) 8.75 2003 400,000(c) 363,828
Korea Electric Power
(U.S. Dollar) 8.00 2002 200,000 208,322
Mexican U.S. Series A
(U.S. Dollar) 6.25 2019 250,000 165,625
Peoples Republic of China
(U.S. Dollar) 9.00 2096 200,000 184,944
Petronas
(U.S. Dollar) 7.75 2015 300,000(c) 298,461
Poland Euro
(U.S. Dollar) 3.75 2014 650,000(f) 498,469
Quno
(U.S. Dollar) Sr Nts 9.125 2005 100,000 99,250
Reliance Industries
(U.S. Dollar) 8.125 2005 250,000(c) 243,195
Repap New Brunswick
(U.S. Dollar) 10.625 2005 100,000 95,000
Republic of Brazil
(U.S. Dollar) 6.812 2024 200,000(f) 135,375
Republic of Columbia
(U.S. Dollar) 7.25 2004 200,000 185,910
Republic of Italy
(U.S. Dollar) 6.875 2023 300,000 263,592
Republic of South Africa
(U.S. Dollar) 9.625 1999 250,000 262,103
State of Israel
(U.S. Dollar) 6.375 2005 200,000 186,830
Telekom Malaysia
(U.S. Dollar) 7.875 2025 200,000(c) 198,716
WMC Finance USA
(U.S. Dollar) 7.25 2013 300,000 290,187
Total 5,433,071
__________________________________________________________________________________
<PAGE>
PAGE 116
Furniture & appliances (0.2%)
Interface 9.50 2005 100,000 98,250
__________________________________________________________________________________
Health care (1.2%)
Lilly (Eli) 6.77 2036 400,000 362,184
Schering-Plough
Zero Coupon 7.31 1996 300,000(c,d) 289,878
Total 652,062
__________________________________________________________________________________
Health care services (0.8%)
Columbia/HCA Healthcare 6.91 2005 100,000 97,425
La Petite Holdings 9.625 2001 100,000 94,000
Merit Behavorial Care 11.50 2005 100,000 104,875
Tenet Healthcare
Sr Sub 10.125 2005 150,000 160,875
Total 457,175
__________________________________________________________________________________
Household products (0.4%)
First Brands 9.125 1999 100,000 102,500
Sweetheart Cup
Sr Sub Nts 10.50 2003 100,000 100,250
Total 202,750
__________________________________________________________________________________
Industrial machines & services (0.9%)
Agco 8.50 2006 100,000(c) 100,625
Case 7.25 2005 400,000 394,656
Total 495,281
__________________________________________________________________________________
Industrial transportation (1.5%)
Burlington Northern 7.00 2025 400,000 360,228
Enterprise Rent-A-Car 8.75 1999 300,000(c) 316,674
Ryder Systems 9.25 2001 150,000 164,837
Total 841,739
__________________________________________________________________________________
Insurance (2.5%)
Aetna Life & Casualty 7.25 2023 300,000 280,458
American United Life 7.75 2026 200,000(c,h) 184,802
Americo Life 9.25 2005 100,000 96,875
Equitable Life 7.70 2015 250,000(c) 243,820
SunAmerica 8.125 2023 300,000 298,206
Medium Term Nts 7.34 2005 300,000 297,564
Total 1,401,725
__________________________________________________________________________________
Leisure time & entertainment (0.7%)
Bally's Park Place Funding 9.25 2004 100,000 102,500
Premier Parks 12.00 2003 100,000 108,250
Trump AC Funding 11.25 2006 150,000 153,375
Total 364,125
__________________________________________________________________________________
Media (4.1%)
Ackerley Communications
Sr Secured Nts 10.75 2003 100,000(c) 104,250
Adelphia Communications 11.875 2004 100,000 101,500
CAI Wireless Systems
Sr Nts 12.25 2002 100,000 104,750
Cablevision Systems 10.75 2004 100,000 105,000
Continental Cablevision
Sr Deb 8.875 2005 100,000 106,000
Sr Sub Deb 11.00 2007 100,000 113,250
Cox Communications 7.625 2025 500,000 484,900
Echostar Communications
Zero Coupon Cv 10.75 2000 300,000(c,e) 186,750
Outdoor Systems
Sr Nts 10.75 2003 100,000 101,000
TCI Communications 8.75 2015 300,000 293,124
Time Warner Entertainment 8.375 2033 250,000 245,882
United Artists Theatre Center 9.30 2015 100,000(c) 94,625
Viacom Int'l 8.00 2006 100,000 93,250
Sr Sub 10.25 2001 100,000 110,750
Total 2,245,031
__________________________________________________________________________________
<PAGE>
PAGE 117
Metals (0.2%)
Magma Copper 12.00 2001 100,000 109,375
__________________________________________________________________________________
Multi-industry conglomerates (1.2%)
Coltec Industries 9.75 2000 100,000 102,750
Crane 7.25 1999 300,000 302,025
Fairchild 13.125 2006 65,000 61,019
Mark IV Industries 8.75 2003 100,000 101,000
Talley Industries
Zero Coupon Cv 8.27 1998 100,000(e) 77,750
Total 644,544
__________________________________________________________________________________
Natural gas (1.2%)
Columbia Gas 7.32 2010 500,000 473,880
Southwest Gas 9.75 2002 100,000 110,501
Trans Texas Gas
Sr Sub Nts 11.50 2002 100,000 100,750
Total 685,131
__________________________________________________________________________________
Paper & packaging (2.1%)
Chesapeake 9.875 2003 100,000 113,553
Federal Paper Board 10.00 2011 100,000 121,318
Gaylord
Zero Coupon Cv 11.13 2005 100,000(e) 104,250
International Paper 5.125 2012 85,000 66,725
Pope and Talbot 8.375 2013 300,000 275,010
S D Warren
Sr Nts 12.00 2004 100,000 103,750
Scotia Pacific Holding 7.95 2015 266,291 265,383
Silgan
Sr Sub Nts 11.75 2002 100,000 105,875
Total 1,155,864
__________________________________________________________________________________
Real estate investment trust (0.7%)
First Union 8.875 2003 100,000 95,250
Property Trust America 7.50 2014 300,000 271,992
Total 367,242
__________________________________________________________________________________
Restaurants & lodging (0.3%)
Flagstar 10.875 2002 100,000 90,750
John Q Hammons Hotel
Sr Nts 8.875 2004 100,000 96,125
Total 186,875
__________________________________________________________________________________
Retail (1.8%)
Di Giorgio 12.00 2003 100,000 92,500
Hills Stores
Sr Nts 12.50 2003 75,000(c) 77,250
Penn Traffic 9.625 2005 200,000 172,000
Penney (JC) 9.05 2001 150,000 163,218
Pep Boys 7.00 2005 300,000 292,527
Safeway Stores 10.00 2001 100,000 109,750
Stop & Shop 9.75 2002 75,000 82,313
Total 989,558
__________________________________________________________________________________
Telecommunications (0.7%)
Comcast Cellular
Zero Coupon with attached put 6.95 1998 100,000(d) 76,250
GST Telecommunications
Zero Coupon Cv with warrants 13.875 2000 180,000(c,e) 110,000
Shared Technologies
Zero Coupon Cv 3.57 1999 250,000(c,e) 178,125
Total 364,375
__________________________________________________________________________________
Textiles & apparel (0.4%)
Dominion Textiles 9.25 2006 200,000 198,500
__________________________________________________________________________________
Utilities - electric (5.2%)
Arizona Public Service 8.00 2025 200,000 197,304
Cleveland Electric 9.50 2005 100,000 98,866
Commonwealth Edison 9.875 2020 200,000 222,852
El Paso Electric 8.90 2006 100,000 100,125
<PAGE>
PAGE 118
First Palo Verde Funding 10.15 2016 200,000 191,604
Houston Industries 9.375 2001 150,000 164,924
Jersey Central Power & Light 6.75 2025 300,000 263,220
Long Island Lighting 9.625 2024 300,000 300,213
Midland Cogeneration Venture 11.75 2005 100,000 105,375
North Atlantic Energy
1st Mtge 9.05 2002 94,000 96,567
Pacicfic Gas & Electric 7.25 2026 300,000 272,247
Pennsylvania Power & Light
1st Mtge 9.25 2019 100,000 107,998
Sithe Independent Funding 9.00 2013 100,000(c) 100,630
Texas New Mexico Power
1st Mtge 9.25 2000 100,000 103,875
Texas Utilities Electric
1st Mtge 7.375 2025 200,000 184,018
1st Collateral Trust 9.750 2021 100,000 110,411
Wisconsin Electric Power 6.875 2095 300,000 263,535
Total 2,883,764
__________________________________________________________________________________
Utilities - telephone (1.9%)
Arch Communications
Zero Coupon Cv 4.46 2001 200,000(e) 112,000
BellSouth 7.00 2095 400,000 368,404
Intermedia Communications 13.50 2005 100,000 113,500
New York Telephone 9.375 2031 150,000 163,140
Pacific Bell Telephone 7.375 2043 300,000 281,922
Total 1,038,966
__________________________________________________________________________________
Miscellaneous (0.4%)
Adams Outdoor Advertising 10.75 2006 100,000(c,h) 101,500
Coty 10.25 2005 100,000 104,750
Total 206,250
__________________________________________________________________________________
Total bonds
(Cost: $48,282,145) $48,709,772
__________________________________________________________________________________
Preferred stocks & other (0.6%)
Issuer Shares Value(a)
__________________________________________________________________________________
Intermedia Communications
Warrants Exp 06/01/00 100 $ 3,000
National Health Investors
8.50% Cv 2,000 60,250
Time Warner
10.25% Pay-in-kind 250(c,i) 250,625
__________________________________________________________________________________
Total preferred stocks & other
(Cost: $301,025) $ 313,875
</TABLE>
<TABLE><CAPTION>
__________________________________________________________________________________
Short-term securities (9.3%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (9.3%)
Federal Home Loan Bank Disc Note
06-25-96 5.25 $ 320,000 $ 317,034
Federal Home Loan Mtge Corp Disc Notes
05-16-96 5.19 1,000,000 997,842
05-20-96 5.20 500,000 498,633
05-20-96 5.21 300,000 299,178
05-01-96 5.25 1,500,000 1,500,000
05-15-96 5.25 500,000 498,985
05-10-96 5.28 1,000,000 998,685
__________________________________________________________________________________
Total short-term securities
(Cost: $5,110,781) $ 5,110,357
__________________________________________________________________________________
Total investments in securities
(Cost: $53,693,951)(j) $54,134,004
__________________________________________________________________________________
Notes to investments in securities
<PAGE>
PAGE 119
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Foreign securities values are stated in U.S. dollars. For debt securities, principal amounts are denominated in the currency
indicated.
(c) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended.
Unless otherwise noted, this security has been determined to be liquid under guidelines established by the board.
(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 either based on a predetermined schedule, or to reflect current market conditions; rate shown is the
effective rate on April 30, 1996.
(g) This security is a collateralized mortgage obligation that pays no interest or principal during its initial accrual period
until payment of a previous series within the trust have been paid off. Interest is accrued at an effective yield.
(h) 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, 1996, is as follows:
Security Acqusition Purchase
date Cost
__________________________________________________________________________________
Adams Outdoor Advertising
10.75%, 2006 03-05-96 $100,000
American United Life
7.75%, 2026 02-13-96 200,000
Continental Air
6.94%, 2015 01-24-96 400,000
(i) Pay-in-kind securities are securities in which the issuer has the option to make interest payments in
cash or in additional securities. These securities issued as interest usually have the same terms,
including maturity date, as the pay-in-kind securities.
(j) At April 30, 1996, the cost of securities for federal income tax purposes was approximately $53,654,700 and the approximate
aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $1,393,538
Unrealized depreciation (914,234)
__________________________________________________________________________________
Net unrealized appreciation $ 479,304
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 120
<TABLE>
<CAPTION>
IDS Life Series Fund, Inc. (Percentages represent value of investments
April 30, 1996 compared to total net assets)
Money Market Portfolio
Short-term securities (99.6%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
Commercial paper (94.7%)
Automotive & related (4.9%)
USL Capital
06-06-96 5.33% $700,000 $ 696,290
__________________________________________________________________________________
Beverages & tobacco (5.0%)
PepsiCo
05-29-96 5.33 725,000(b) 722,011
__________________________________________________________________________________
Commercial finance (2.8%)
Ciesco LP
05-30-96 5.30 400,000 398,299
__________________________________________________________________________________
Computers & office equipment (5.0%)
Hewlett-Packard
07-29-96 5.41 725,000 715,447
__________________________________________________________________________________
Energy (4.8%)
Chevron Transportation
06-28-96 5.34 700,000(b) 694,045
__________________________________________________________________________________
Financial services (35.8%)
A.I. Credit
06-04-96 5.33 725,000 721,371
Avco
05-06-96 5.34 700,000 699,483
Fleet Funding
05-16-96 5.38 700,000(b) 698,440
General Electric Capital
08-08-96 5.39 700,000 689,798
Merrill Lynch
07-22-96 5.36 500,000 493,964
PACCAR Financial
05-15-96 5.33 700,000 698,554
Penney (JC) Funding
05-17-96 5.33 730,000 728,277
USAA Capital
06-05-96 5.30 400,000 397,951
Total 5,127,838
__________________________________________________________________________________
See accompaning notes to investments in securities.
<PAGE>
PAGE 121
Food (4.8%)
CPC Intl
08-16-96 5.35 700,000(b) 689,035
__________________________________________________________________________________
Health care (8.6%)
Glaxo Wellcome
07-23-96 5.34 600,000(b) 592,710
Lilly (Eli)
06-20-96 5.28 650,000 645,297
Total 1,238,007
__________________________________________________________________________________
Insurance (8.4%)
Pacific Mutual Life
05-01-96 5.32 500,000 500,000
SAFECO Credit
05-20-96 5.35 700,000 698,034
Total 1,198,034
__________________________________________________________________________________
Media (4.9%)
Gannett
05-22-96 5.30 700,000 697,844
__________________________________________________________________________________
Transportation (4.8%)
Norfolk Southern
07-08-96 5.32 700,000(b) 693,058
__________________________________________________________________________________
Utilities - electric (4.9%)
Northern States Power
05-23-96 5.29 700,000 697,746
__________________________________________________________________________________
Total commercial paper
(Cost: $13,567,654) $13,567,654
__________________________________________________________________________________
Letter of Credit (4.9%)
Bank of America-
AES Barbers Point
05-03-96 5.34 700,000 699,793
Total letter of credit
(Cost: $699,793) $ 699,793
__________________________________________________________________________________
Total investments in securities
(Cost: $14,267,447)(c) $14,267,447
__________________________________________________________________________________
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) of the Securities Act of 1933, as amended, and may be sold
only to dealers in that program or other "accredited investors." This security has been
determined to be liquid under guidelines established by the board.
(c) At April 30, 1996, this also represents the cost of securities for federal income tax purposes.
</TABLE>
<PAGE>
PAGE 122
<TABLE>
<CAPTION>
IDS Life Series Fund, Inc. (Percentages represent value of
Apri1 30, 1996 investments compared to total net assets)
Managed Portfolio
Bonds (33.1.%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
__________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. government obligations (7.9%)
U.S. Treasury Bonds 5.625% 2000 $3,600,000 $ 3,490,488
6.25 2023 1,600,000 1,443,856
6.50 2005 1,800,000 1,775,160
7.25 2016 1,000,000 1,019,080
7.50 2005 2,000,000 2,104,680
9.375 2006 1,830,000 2,178,450
10.375 2012 1,600,000 2,032,880
U.S. Treasury Notes 5.75 2003 4,350,000 4,135,849
7.125 1999 2,850,000(l) 2,920,993
7.50 2001 85,000 88,977
7.75 2000 3,700,000 3,871,125
Total 25,061,538
__________________________________________________________________________________
Mortgage-backed securities (5.5%)
Federal Home Loan Mtge Corp 8.00 2022 576,239 583,085
8.00 2024 534,352 540,700
Federal Natl Mtge Assn 5.50 2009 1,945,085 1,808,929
6.00 2024 1,881,497 1,715,097
6.50 2010 1,812,129 1,756,641
6.50 2025 1,174,057 1,102,146
7.00 2025 988,922 954,003
7.00 2025 2,462,978 2,376,010
7.00 2026 984,240 949,486
7.00 2026 1,009,999 973,387
7.50 2025 1,000,000(m) 987,500
8.00 2022 245,935 248,549
8.50 2023 354,062 363,909
8.50 2025 954,382 980,923
9.00 2024 182,905 191,251
Series Z 6.50 2023 289,257(j) 224,779
7.00 2016 1,291,651(j) 1,236,562
Merrill Lynch Mtge Investors 8.29 2021 400,000(h) 355,625
Total 17,348,582
__________________________________________________________________________________
Aerospace & defense (0.8%)
Airplanes GPA Cl D 10.875 2019 300,000 313,500
Alliant Techsystem
Sr Sub 11.75 2003 300,000 327,375
BE Aerospace
Sr Sub 9.875 2006 400,000(h) 401,000
Northrop Grumman 7.75 2016 500,000(h) 478,045
See accompanying notes to investments in securities.
<PAGE>
PAGE 123
Sequa 9.625 1999 500,000 508,750
United Technologies 8.875 2019 300,000 343,065
Total 2,371,735
__________________________________________________________________________________
Airlines (0.5%)
AMR 9.75 2021 800,000 928,328
Continental Air Lines 6.94 2015 500,000(g) 474,625
United Air Lines 10.67 2004 200,000 232,892
Total 1,635,845
__________________________________________________________________________________
Automotive related (--%)
GMAC 8.375 1997 65,000 66,676
__________________________________________________________________________________
Banks and savings & loans (0.8%)
First Bank System 6.875 2007 1,000,000 961,470
First Nationwide Bank
Sr Nts 12.50 2003 350,000(h) 357,000
First USA Bank 6.88 1996 300,000 300,459
Norwest 6.375 2002 800,000 783,384
Riggs Natl
Sub Nts 8.50 2006 100,000 101,625
Total 2,503,938
__________________________________________________________________________________
Building materials (0.5%)
AAF-McQuay
Sr Nts 8.875 2003 500,000 483,125
Pulte 7.00 2003 500,000 472,640
Schuller Intl Group 10.875 2004 250,000 271,250
Southdown
Sr Sub Nts 10.00 2006 200,000(h) 201,000
Total 1,428,015
__________________________________________________________________________________
Communications equipment (0.3%)
Geotek Communications
Cv 12.00 2001 250,000(g,h) 300,000
GST Telecommunications
Zero Coupon Cv with warrants 13.875 2005 450,000(e,h) 275,000
TCI Communications
Cv Sr Deb 4.50 2006 250,000 234,687
Total 809,687
__________________________________________________________________________________
Computers & office equipment (0.2%)
Unisys 15.00 1997 550,000 585,750
__________________________________________________________________________________
Electronics (0.3%)
Reliance Electric 6.80 2003 500,000 495,595
Thomas & Betts 6.50 2006 400,000 374,284
Total 869,879
__________________________________________________________________________________
Energy (0.6%)
BP North America 9.50 1998 140,000 146,714
Honam Oil Refinery 7.125 2005 1,000,000(h) 957,310
Parker & Parsley 8.25 2007 500,000 498,810
Standard Oil 9.00 2019 300,000 317,751
Total 1,920,585
__________________________________________________________________________________
Energy equipment & services (0.3%)
Foster Wheeler 6.75 2005 1,000,000 953,430
__________________________________________________________________________________
Financial services (1.1%)
AVCO Financial 7.25 1999 250,000 255,015
Carco Auto
Asset-backed obligation 7.875 1998 250,000 250,655
Corporate Property Investors 7.18 2013 500,000(h) 470,370
First Union REIT 8.875 2003 300,000 285,750
GE Capital
Reset Nt 8.65 1996 250,000(i) 249,048
KFW Intl Finance 8.00 2010 250,000 268,618
Olympic Financial 13.00 2000 400,000 433,500
<PAGE>
PAGE 124
Property Trust of America REIT 7.50 2014 750,000 679,980
Salomon Brothers 6.75 2006 500,000 455,785
Standard Credit Card Trust 8.625 2002 250,000 254,475
Total 3,603,196
__________________________________________________________________________________
Food (0.1%)
Specialty Foods 10.25 2001 400,000(h) 365,000
__________________________________________________________________________________
Foreign (3.2%)(c)
Banca Italy N.Y.
(U.S. Dollar) 8.25 2007 500,000 503,160
Banco Nacional de Comercio Exterior
(U.S. Dollar) 7.25 2004 500,000 415,625
Bank of China
(U.S. Dollar) 8.25 2014 300,000 273,717
China Light & Power
(U.S. Dollar) 7.50 2006 500,000 492,085
Clearnet Communications
(U.S. Dollar)
Zero Coupon Cv with warrants 14.75 2000 400,000(e) 246,000
Fresh Del Monte
(U.S. Dollar) 10.00 2003 500,000 469,375
Govt of Poland
(U.S. Dollar) 3.75 2014 260,000(i) 199,387
(U.S. Dollar) 6.81 2024 250,000 232,344
Govt Trust Certificate Israel
(U.S. Dollar) 9.25 2001 275,000 297,129
Guang Dong Enterprise
(U.S. Dollar) 8.75 2003 750,000(h) 682,178
Korea Electric Power
(U.S. Dollar) 7.75 2013 250,000 245,820
Mexican U.S.
(U.S. Dollar) 6.25 2019 600,000 397,500
(U.S. Dollar) 7.25 2019 250,000(i) 200,937
Mutual Risk Management
(U.S. Dollar)Zero Coupon Cv 7.03 2015 1,200,000(e,h) 448,500
Petronas
(U.S. Dollar) 7.75 2015 850,000(h) 845,640
Pueblo Xtra Intl
(U.S. Dollar)Sr Nts 9.50 2003 400,000 369,000
Quno
(U.S. Dollar) 9.125 2005 400,000 397,000
Reliance Industries
(U.S. Dollar) 8.125 2005 250,000(h) 243,195
Republic of Argentina
(U.S. Dollar) 6.31 2005 350,000(i) 267,094
Republic of Brazil
(U.S. Dollar) 6.875 2012 1,200,000(i) 774,750
(U.S. Dollar) 6.81 2024 500,000(i) 338,437
Republic of Columbia
(U.S. Dollar) 7.25 2004 500,000 464,775
Republic of Italy
(U.S. Dollar) 6.875 2023 350,000 307,524
Rogers Cable System
(Canadian Dollar) 9.65 2014 600,000 379,063
State of Israel
(U.S. Dollar) 6.375 2005 350,000 326,952
Telekom Malaysia
(U.S. Dollar) 7.875 2025 425,000(h) 422,272
Total 10,239,459
__________________________________________________________________________________
Furniture (0.1%)
Interface
Sr Sub Nts 9.50 2005 400,000 393,000
__________________________________________________________________________________
Health care (0.6%)
Johnson & Johnson 8.00 1998 1,000,000 1,005,470
Lilly (Eli) 6.77 2036 500,000 452,730
Schering-Plough
Zero Coupon 7.31 1996 350,000(d,h) 338,191
Total 1,796,391
__________________________________________________________________________________
Health care services (0.5%)
Columbia/HCA Healthcare 7.69 2025 400,000 391,316
Merit Behavioral Care
Sr Sub Nts 11.50 2005 350,000 367,062
<PAGE>
PAGE 125
Tenet Healthcare
Sr Sub 10.125 2005 800,000 858,000
Total 1,616,378
__________________________________________________________________________________
Industrial machines & services (0.4%)
Case 7.25 2005 850,000 838,644
Specialty Equipment
Sr Sub Deb 11.375 2003 500,000 514,375
Total 1,353,019
__________________________________________________________________________________
Industrial transportation (0.2%)
Burlington Northern Santa Fe 7.00 2025 500,000 450,285
Teekay Shipping 8.32 2008 300,000 286,500
Total 736,785
__________________________________________________________________________________
Insurance (1.1%)
Aetna Life & Casualty 7.25 2023 500,000 467,430
American United Life 7.75 2026 500,000(g,h) 462,005
Americo Life 9.25 2005 600,000 581,250
Equitable Life Assurance 7.70 2015 300,000(h) 292,584
General American Life
Sub Cap Nts 7.625 2024 500,000(h) 442,830
New England Mutual
Credit Sensitive Nts 7.875 2024 250,000(h) 240,843
Principal Mutual 8.00 2044 250,000(h) 232,207
SunAmerica
Medium Term Nts 7.34 2005 700,000 694,316
Total 3,413,465
__________________________________________________________________________________
Leisure time & entertainment (0.5%)
Alliance Entertainment 11.25 2005 250,000(h) 252,188
Plitt Theaters
Sr Sub Nts 10.875 2004 500,000 510,000
Premier Parks 12.00 2003 300,000 324,750
Trump AC Funding 11.25 2006 350,000 357,875
United Artists Theatre 9.30 2015 250,000(h) 236,563
Total 1,681,376
__________________________________________________________________________________
Media (2.3%)
Ackerley Communications
Sr Secured Nts 10.75 2003 400,000(h) 417,000
Adelphia Communications
Pay-in-kind 9.50 2004 601,186(k) 536,558
American Telecasting
Zero Coupon Cv 11.75 2000 500,000(e) 325,000
Bell & Howell
Zero Coupon Cv 10.98 2000 1,000,000(e,h) 672,500
Cablevision Systems 9.25 2005 750,000 735,000
Continental Cablevision
Sr Deb 8.875 2005 250,000 265,000
Cox Communication 7.625 2025 750,000 727,350
Echostar Satellite Broadcasting
Zero Coupon Cv 13.125 2000 850,000(e,h) 529,125
News American Holdings 7.50 2000 250,000 253,595
Outdoor Systems
Sr Nts 10.75 2003 400,000 404,000
Paramount Communications 7.00 2003 500,000 464,335
People's Choice TV
Zero Coupon Cv 11.60 2000 250,000(e) 155,000
Tele-Communications 8.75 2023 500,000 472,895
Time Warner Entertainment 8.375 2033 500,000 491,765
Turner Broadcasting System
Sr Nts 8.375 2013 250,000 244,515
Viacom 8.00 2006 500,000 466,250
Total 7,159,888
__________________________________________________________________________________
Metals (0.2%)
Bar Technologies 13.50 2001 500,000(h) 502,500
__________________________________________________________________________________
Miscellaneous (0.7%)
Adams Outdoor Advertising
Sr Nts 10.75 2006 300,000(h) 304,500
Coty 10.25 2005 500,000 523,750
<PAGE>
PAGE 126
KinderKare Learning Center 10.375 2001 250,000 258,750
La Petite Holdings 9.625 2001 600,000 564,000
Norcal Waste Systems
Sr Nts 12.50 2005 500,000(h,i) 522,500
Total 2,173,500
__________________________________________________________________________________
Multi-industry conglomerates(0.2%)
Crane 7.25 1999 250,000 251,688
Mark IV Industries 8.75 2003 400,000 404,000
Total 655,688
__________________________________________________________________________________
Paper & packaging (0.8%)
Federal Paperboard 10.00 2011 250,000 303,295
Gaylord Container
Zero Coupon Cv 11.23 1996 500,000(e) 521,250
International Paper 5.125 2012 250,000 196,250
Plastic Container 10.75 2001 600,000 609,750
Pope and Talbot 8.375 2013 400,000 366,680
Scotia Pacific Holding 7.95 2015 266,291 265,383
Warren (S.D.)
Sr Nts 12.00 2004 400,000 415,000
Total 2,677,608
__________________________________________________________________________________
Restaurants & lodging (0.1%)
Flagstar 10.875 2002 400,000 363,000
__________________________________________________________________________________
Retail (0.6%)
Hills Stores
Sr Nts 12.50 2003 175,000(h) 180,250
Kash N' Karry
Pay-in-kind 11.50 2003 500,000(k) 502,500
Penn Traffic 9.625 2005 300,000 258,000
Penney (JC) 9.05 2001 200,000 217,624
Pep Boys 7.00 2005 500,000 487,545
White Rose Foods
Zero Coupon 26.29 1998 650,000(d) 407,063
Total 2,052,982
__________________________________________________________________________________
Textiles (0.1%)
Dominion Textile USA 9.25 2006 300,000 297,750
__________________________________________________________________________________
Utilities - electric (1.9%)
Alabama Power 9.00 2024 300,000 315,972
California Energy 9.875 2003 250,000 255,937
Cleveland Electric 9.50 2005 250,000 247,165
Commonwealth Edison 8.375 2023 250,000 244,857
El Paso Electric
1st Mtge 8.90 2006 650,000 650,813
First Palo Verde Funding 10.15 2016 400,000 383,208
Jersey Central Power & Light 6.75 2025 1,000,000 877,400
Long Island Lighting 9.75 2021 300,000 302,496
Niagara Mohawk Power 7.75 2006 700,000 615,671
Pacific Gas & Electric
1st Ref Mtge 7.25 2026 700,000 635,243
RGS Funding I & M
Sale Lease-Back Obligation 9.82 2022 208,753 246,385
Salton Sea 7.84 2010 300,000 288,633
Sithe Independence Funding 9.00 2013 150,000(h) 150,945
Texas-New Mexico Power
1st Mtge 9.25 2000 400,000 415,500
Wisconsin Electric Power 6.875 2095 400,000 351,380
Total 5,981,605
__________________________________________________________________________________
Utilities - natural gas (0.3%)
Coastal 7.75 2035 250,000 241,943
10.25 2004 300,000 352,572
Trans Texas Gas
Sr Nts 11.50 2002 400,000 403,000
Total 997,515
__________________________________________________________________________________
Utilities - telephone (0.4%)
BellSouth 7.00 2095 500,000 460,505
GTE 9.375 2000 400,000 437,096
<PAGE>
PAGE 127
Mountain States Tel & Tel 5.50 2005 80,000 70,218
New England Tel & Tel 6.375 2008 70,000 64,679
New York Telephone 4.875 2006 130,000 110,010
Total 1,142,508
__________________________________________________________________________________
Total bonds
(Cost: $105,472,652) $104,758,273
__________________________________________________________________________________
Common stocks (51.0%)
Issuer Shares Value(a)
__________________________________________________________________________________
Aerospace & defense (3.7%)
Boeing 41,000 $ 3,367,125
General Motors, Cl H 30,000 1,833,750
Lockheed Martin 30,000 2,418,750
Precision Castparts 48,000 2,082,000
United Technologies 17,800 1,966,900
Total 11,668,525
__________________________________________________________________________________
Airlines (0.5%)
Southwest Airlines 56,000 1,666,000
__________________________________________________________________________________
Automotive related (1.5%)
Ford Motor 17,000 609,875
General Motors 12,000 651,000
Goodyear Tire & Rubber 16,000 834,000
Snap-On 53,000 2,544,000
Total 4,638,875
__________________________________________________________________________________
Banks and savings & loans (2.2%)
Bank One 18,700 649,825
BankAmerica 13,000 984,750
Citicorp 29,800 2,346,750
First Union 28,500 1,752,750
Washington Mutual 44,000 1,221,000
Total 6,955,075
__________________________________________________________________________________
Beverages & tobacco (1.8%)
Coca-Cola 13,400 1,092,100
PepsiCo 32,000 2,032,000
Philip Morris 28,000 2,523,500
Total 5,647,600
__________________________________________________________________________________
Building materials (1.3%)
Tyco Intl 108,300 4,183,088
__________________________________________________________________________________
Chemicals (1.1%)
Morton Intl 33,000 1,167,375
Praxair 59,000 2,278,875
Total 3,446,250
__________________________________________________________________________________
Computers & office equipment (4.6%)
Checkfree 89,300(b) 1,719,025
Cisco Systems 40,000(b) 2,075,000
Compaq Computer 24,000(b) 1,119,000
Computer Sciences 42,000(b) 3,108,000
First Data 17,000 1,292,000
Hewlett-Packard 10,000 1,058,750
IBM 12,000 1,290,000
Oracle 20,000(b) 675,000
Sterling Software 27,000(b) 2,099,250
Total 14,436,025
__________________________________________________________________________________
Electronics (1.0%)
Intel 30,000 2,032,500
Itron 20,000(b) 1,175,000
Total 3,207,500
__________________________________________________________________________________
Energy (0.5%)
Amoco 22,000 1,606,000
__________________________________________________________________________________
<PAGE>
PAGE 128
Energy equipment & services (1.7%)
Baker Hughes 33,000 1,047,750
Input/Output 70,000(b) 2,432,500
McDermott Intl 63,000 1,323,000
Reading & Bates 30,000(b) 735,000
Total 5,538,250
__________________________________________________________________________________
Financial services (1.6%)
Natl Auto Credit 63,800(b) 909,150
Schwab (Charles) 55,000 1,347,500
Travel/Aetna Property Casualty 24,200(b) 668,525
Travelers Group 34,000 2,091,000
Total 5,016,175
__________________________________________________________________________________
Food (0.4%)
Sara Lee 45,000 1,395,000
__________________________________________________________________________________
Foreign (1.6%)
Mutual Risk Management 32,000 1,264,000
SGS-Thompson Microelectronics 20,000(b) 940,000
Telefonica de Espana 41,000 2,157,625
Toyota Motor ADR 18,000 819,000
Total 5,180,625
__________________________________________________________________________________
Health Care (5.8%)
American Home Products 28,500 3,006,750
Amgen 30,000(b) 1,725,000
Forest Labs 17,000(b) 784,125
Guidant 25,000 1,403,125
Johnson & Johnson 28,200 2,608,500
Merck 43,000 2,601,500
Perclose 50,000(b) 1,025,000
Pharmacia & Upjohn 37,000 1,415,250
Pfizer 29,500 2,031,813
Schering Plough 30,600 1,755,675
Total 18,356,738
__________________________________________________________________________________
Health care services (1.8%)
Columbia Healthcare 39,000 2,071,875
Service Corp Intl 48,000 2,550,000
Stewart Enterprises 21,500 983,625
Total 5,605,500
__________________________________________________________________________________
Household products (1.1%)
Avon Products 25,500 2,266,312
Revlon 40,000(b) 1,080,000
Revlon Group 8,000 210,000
Total 3,556,312
__________________________________________________________________________________
Industrial machines & services (2.1%)
AGCO 51,000 1,287,750
Caterpillar 15,000 960,000
Greenfield Inds 77,000 2,926,000
Pentair 35,000 953,750
WMX Technologies 19,000 660,250
Total 6,787,750
__________________________________________________________________________________
Insurance (1.9%)
Exel 23,000 1,656,000
Risk Capital Holdings 44,400(b) 882,450
UNUM 55,800 3,320,100
Total 5,858,550
__________________________________________________________________________________
Media (1.9%)
Sinclair Broadcasting 41,500(b) 1,582,187
Liberty Media Cl A 26,250(b) 718,594
Time Warner 90,000 3,678,750
Total 5,979,531
__________________________________________________________________________________
<PAGE>
PAGE 129
Metals (1.7%)
ALCOA 40,500 2,526,188
UCAR Intl 70,000(b) 2,870,000
Total 5,396,188
__________________________________________________________________________________
Miscellaneous industry (0.7%)
Federal Signal 87,000 2,272,875
__________________________________________________________________________________
Multi-industry conglomerates(1.9%)
Alco Standard 48,600 2,812,725
Emerson Electric 38,000 3,177,750
Total 5,990,475
__________________________________________________________________________________
Paper & packaging (1.8%)
Crown Cork & Seal 42,500 2,002,812
James River 71,000 1,899,250
Kimberly-Clark 24,000 1,743,000
Total 5,645,062
__________________________________________________________________________________
Restaurants & lodging (1.0%)
Boston Chicken 45,000(b) 1,440,000
Red Lion 80,900(b) 1,779,800
Total 3,219,800
__________________________________________________________________________________
Retail (2.7%)
Albertson's 40,000 1,540,000
Barnes & Noble 40,000(b) 1,385,000
Gap 80,000 2,410,000
Home Depot 19,000 900,125
Nordstrom 12,000 610,500
Rite Aid 56,500 1,673,813
Total 8,519,438
__________________________________________________________________________________
Textiles & apparel (1.2%)
Gucci 37,700(b) 2,049,937
Tommy Hilfiger 36,000(b) 1,638,000
Total 3,687,937
__________________________________________________________________________________
Utilities - electric (0.4%)
CMS Energy 46,000 1,339,750
__________________________________________________________________________________
Utilities - natural gas (0.5%)
Enron 39,000 1,569,750
__________________________________________________________________________________
Utilities - telephone (1.0%)
AirTouch Communications 39,000(b) 1,218,750
WorldCom 43,000(b) 2,021,000
Total 3,239,750
__________________________________________________________________________________
Total common stocks
(Cost: $129,397,589) $161,610,394
__________________________________________________________________________________
Preferred stocks (1.2%)
Issuer Shares Value(a)
__________________________________________________________________________________
Alco Standard
6.50% Cm Cv 16,000 $ 1,584,000
Cablevision Systems
Pay-in-kind 5,071(h,k) 496,965
11.125%
First Nationwide Bank
11.50% 1,000 112,250
Greenfield Capital Trust
3% Cm Cv 25,000(h) 1,431,250
National Health Investors
8.50% Cv 10,000 301,250
__________________________________________________________________________________
Total preferred stocks
(Cost: $3,348,349) $ 3,925,715
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 130
<TABLE><CAPTION>
Short-term securities (15.2%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (0.4%)
Federal Home Loan Mtge Corp Disc Note
5-10-96 5.28% $1,300,000 $ 1,298,291
__________________________________________________________________________________
Commercial paper (14.8%)
A.I. Credit
05-14-96 5.28% 1,600,000 1,596,955
Albertson's
05-08-96 5.35 4,500,000 4,495,345
Ameritech
05-10-96 5.29 500,000(f) 499,340
CPC Intl
08-16-96 5.35 1,000,000(f) 983,500
Campbell Soup
05-14-96 5.32 1,200,000 1,197,703
Coca-Cola
06-14-96 5.31 400,000 396,145
Fleet Funding
05-16-96 5.38 3,900,000(f) 3,891,306
06-10-96 5.32 1,000,000(f) 994,122
Ford Motor Credit
05-09-96 5.35 800,000 799,054
06-14-96 5.31 4,000,000 3,962,282
GE Capital
08-08-96 5.39 4,600,000 4,529,722
Hewlett-Packard
07-29-96 5.41 1,800,000 1,775,250
Merrill Lynch
07-22-96 5.36 5,000,000 4,935,222
Norfolk Southern
07-08-96 5.32 4,800,000(f) 4,749,400
Penney (J.C.) Funding
05-24-96 5.34 2,000,000 1,993,215
05-28-96 5.30 2,200,000 2,191,288
Transamerica Financial
06-07-96 5.31 4,300,000 4,276,665
USL Capital
05-20-96 5.34 400,000 398,877
USAA Capital
06-05-96 5.30 3,100,000 3,084,117
Total 46,749,508
__________________________________________________________________________________
Total short-term securities
(Cost: $48,073,657) $ 48,047,799
__________________________________________________________________________________
Total investments in securities
(Cost: $286,292,247)(n) $318,342,181
__________________________________________________________________________________
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. For debt securities, 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 that 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." This
security has been determined to be liquid under guidelines established by the board.
(g) Identifies issues considered to be illiquid (see Note 1 to the financial statements). Information concerning such security
holdings at April 30, 1996, is as follows:
Security Acquisition Cost
date
_______________________________________________________________________________
American United Life
7.75%, 2026 02-13-96 500,000
Continental Air Lines
6.94%, 2015 01-24-95 500,000
Geotek Communications
12.0%, 2001 03-04-96 250,000 <PAGE>
PAGE 131
(h) Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended.
Unless otherwise noted, this security has been determined to be liquid under guidelines established by the board.
(i) Interest rate varies either based on a predetermined schedule, or to reflect current market conditions; rate shown is the
effective rate on April 30, 1996.
(j) This security is a collateralized mortgage obligation that pays no interest or principal during its initial accrual period
until payment of a previous series within the trust have been paid off. Interest is accrued at an effective yield, similar to a
zero coupon bond.
(k) Pay-in-kind securities are securities in which the issuer has the option to make interest payments in cash or in additional
securities. These securities issued as interest usually have the same terms, including maturity date, as the pay-in-kind
securities.
(l) Partially pledged as inital deposit on the following open stock index futures purchase contracts (see Note 5 to the financial
statements):
Type of security Contracts
__________________________________________________________________________________
S & P 500, June 1996 65
(m) At April 30, 1996, the cost of securities purchased on a when-issued basis was $987,500.
(n) At April 30, 1996, the cost of securities for federal income tax purposes was $286,342,879 and the aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $35,138,521
Unrealized depreciation (3,139,219)
__________________________________________________________________________________
Net unrealized appreciation $31,999,302
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 132
<TABLE>
<CAPTION>
IDS Life Series Fund, Inc. Percentages represent value of investments
April 30, 1996 compared to total net assets)
Government Securities Portfolio
Bonds (97.0%)
Issuer Coupon Maturity Principal Value (a)
rate year amount
__________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. government obligations (67.2%)
Resolution Funding 8.125% 2019 $ 400,000 $ 440,132
RFCO Strips
Zero Coupon 7.18 2009 2,660,000(b) 1,034,926
U.S. Treasury Bonds 6.125 1997 750,000 753,098
10.375 2012 750,000 952,912
U.S. Treasury Notes 7.375 1996 250,000 250,255
7.75 2001 2,210,000 2,330,136
8.875 1999 2,450,000 2,614,444
Total 8,375,903
__________________________________________________________________________________
Mortgage backed securities (29.8%)
Federal Natl Mtge Assn 6.50 2010 453,032 439,160
6.82 2005 1,100,000 1,088,681
7.00 2025 290,803 280,535
8.50 2023-25 1,071,185 1,100,974
9.00 2023 215,566 225,402
Govt Natl Mtge Assn 7.50 2025 485,972 480,505
8.00 2017 92,137 93,375
Total 3,708,632
__________________________________________________________________________________
Total bonds
(Cost: $11,967,807) $12,084,535
__________________________________________________________________________________
Total investments in securities
(Cost: $11,967,807)(c) $12,084,535
__________________________________________________________________________________
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, 1996, the cost of securities for federal income tax purposes was $11,965,032 and the
aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $206,837
Unrealized depreciation (87,334)
__________________________________________________________________
Net unrealized appreciation $119,503
__________________________________________________________________
</TABLE>
<PAGE>
PAGE 133
<TABLE>
<CAPTION>
IDS Life Series Fund, Inc. (Percentages represent value of
April 30, 1996 investments compared to net assets)
International Equity Portfolio
Common stocks (95.7%)
Issuer Shares Value(a)
____________________________________________________________________
<S> <C> <C>
Argentina (1.1%)
Utilities - telephone
Telecom Argentina ADR 12,000 $ 543,000
____________________________________________________________________
Australia (2.1%)
Metals
Golden Shamrock Mines 600,000 570,309
Pasminco 360,000(b) 526,004
Total 1,096,313
____________________________________________________________________
Austria (1.7%)
Chemicals (0.5%)
BWT 2,000 254,469
Textiles & apparel (1.2%)
Wolford 2,900 630,230
____________________________________________________________________
Bahamas (2.9%)
Industrial transportation (0.8%)
Teekay Shipping 15,000 416,250
Restaurants & lodging (2.1%)
Sun Intl Hotels 25,000(b) 1,068,750
____________________________________________________________________
Belgium (0.8%)
Multi-industry conglomerates
Barco 2,700 425,842
____________________________________________________________________
Brazil (1.8%)
Telecommunications (1.0%)
Telebras ADR 10,000 541,250
Retail (0.8%)
Lojas Arapua ADR 40,000(c) 411,268
____________________________________________________________________
Canada (12.1%)
Chemicals (1.2%)
Asia-Pacific Res 80,000(b) 617,079
Energy (0.5%)
Renaissance Energy 8,900(b) 235,045
Health care (1.9%)
Biovail 35,000(b) 988,750
Metals (7.6%)
American Mineral Fields 35,000 462,809
Arequipa Special Warrants 35,000 509,091
Argosy Mining 267,200(b) 498,577
Bre-X Minerals 800(b) 117,539
Cambior 35,000 491,093
Dayak Goldfield 250,000(b,c) 250,000
Java Gold 250,000(b,c) 250,000
Oliver Gold 300,000(b) 903,579
TVI Pacific 180,000(b,c) 310,743
TVI Pacific 95,000(b) 164,003
Total 3,957,434
Utilities - electric (0.9%)
Centrais ele Bras 38,000(b) 468,920
____________________________________________________________________
Denmark (1.0%)
Multi-industry conglomerates
Sophus Berendsen 4,200(b) 515,302
____________________________________________________________________
France (3.1%)
Chemicals (1.2%)
Compagnie Gen 6,000 652,187
<PAGE>
PAGE 134
Electronics (0.9%)
SGS Thomson Microelectronics 10,000(b) 470,000
Multi-industry conglomerates (1.0%)
Lagardere Group 19,000 509,700
____________________________________________________________________
Hong Kong (13.0%)
Beverage & tobacco (1.8%)
China Apollo 2,000,000(b) 555,878
Vitasoy Intl 1,000,000 387,822
Total 943,700
Building materials (0.2%)
Paul-Y 500,000 106,651
Financial services (2.1%)
Cheung Kong 70,000 499,968
Sun Hung Kai Properties 62,000(b) 591,106
Total 1,091,074
Food (2.5%)
NG Fung Hong 1,100,000 526,145
Tingyi Holdings 2,700,000(b,c) 750,435
Total 1,276,580
Household products (1.2%)
Mondragon Intl 750,000(b) 608,999
Industrial machines (1.1%)
Johnson Electric 260,000 588,197
Leisure time & entertainment (0.9%)
Harbour Ring 4,500,000 494,474
Multi-industy conglomerates (1.0%)
Henderson China 180,000(b) 499,127
Retail (1.1%)
Guangnan 1,000,000(b) 568,806
Textiles & apparel (1.1%)
Chaifa 2,000,000 555,878
____________________________________________________________________
India (1.2%)
Automotive & Related
Mahindra & Mahindra 10,500 110,250
Bajaj Auto 15,000 536,250
Total 646,500
____________________________________________________________________
Indonesia (6.9%)
Banks and savings & loans (1.2%)
Modernbank 700,000 631,036
Food (1.9%)
Pt Smart 750,000(b) 587,573
Sekar Bumi 500,000(b) 407,813
Total 995,386
Industrial transporation (1.5%)
Steady Safe Transportation 500,000(b) 745,868
Metals (1.6%)
Pt Tambang Timah 50,000(b,c) 859,500
Miscellaneous (0.8%)
Kawason Inds 195,000 393,432
____________________________________________________________________
Italy (2.6%)
Banks and savings & loans (1.0%)
Credit Italiano 430,000 548,122
Energy (1.2%)
ENI 150,000(b) 647,585
<PAGE>
PAGE 135
Paper & packaging (0.4%)
Industria Macchine Automatic 26,000(b) 182,923
____________________________________________________________________
Japan (4.6%)
Building materials (1.0%)
Taisei 65,000 503,322
Electronics (0.9%)
NEC 38,000 483,151
Furniture & appliances (0.5%)
Matsushita Electric 15,000 265,284
Media (1.0%)
Dai Nippon Printing 26,000 489,651
Textiles & apparel (1.2%)
World 15,000 629,511
____________________________________________________________________
Malaysia (2.1%)
Industrial machines (1.0%)
United Engineers 78,000 534,911
Industrial transportation (1.1%)
Malaysian Resources 225,000 577,501
____________________________________________________________________
Mexico (--%)
Restaurants & lodging
Grupo Posadas rights 3,182,666(b) 3
____________________________________________________________________
Norway (2.4%)
Health care (1.4%)
Hafslund Nycomed 26,000 734,500
Telecommunications (1.0%)
Nera Telecommunications 14,000 514,500
____________________________________________________________________
Philippines (9.0%)
Banks and savings & loans (1.1%)
Philippine Savings 240,000 586,932
Beverages & tobacco (0.7%)
Cosmo Bottling 3,000,000 338,172
Building materials (4.8%)
Alsons Cement 1,162,000(b,c) 543,924
C & P Homes 600,000 515,858
Davao Union Cement 2,390,000 831,065
Fil-estate 600,000(b) 630,493
Total 2,521,340
Financial services (1.0%)
Filinvest 600,000(b,c) 527,321
Paper & packaging (1.4%)
Intl Container Terminal Services 1,000,000(b) 697,363
____________________________________________________________________
Singapore (2.9%)
Electronics (1.9%)
Clipsal Inds 210,000 518,700
Flex Tech 800,000 483,812
Total 1,002,512
Food (1.0%)
Cerebos Pacific 60,000 542,156
____________________________________________________________________
South Africa (2.1%)
Energy (1.2%)
Energy Africa GDS 50,000(b) 612,500
Restaurants & lodging (0.9%)
Sun Intl 350,000 443,979
____________________________________________________________________
Spain (1.0%)
Utilities-telephone
Telefonica de Espana ADR 10,000 526,250
____________________________________________________________________
<PAGE>
PAGE 136
Sweden (2.2%)
Banks and savings & loans (0.6%)
Nordbanken ADR 9,000(b,c) 307,125
Metals (1.0%)
Hoganas 16,000 530,778
Miscellaneous (0.6%)
Medical Investment 15,000 287,504
____________________________________________________________________
Thailand (2.5%)
Building materials (1.1%)
Italian Thailand Development 60,000(b) 551,450
Industrial transporation (0.8%)
Precious Shipping 80,000 437,357
Leisure time & entertainment (0.6%)
Grammy Entertainment 26,300(b) 327,102
____________________________________________________________________
United Kingdom (13.6%)
Automotive & related (1.1%)
BBA Group 110,000(b) 575,846
BBA Group 1,436(b,d) 7,517
Total 583,363
Computers & office equipment (2.2%)
JBA Holdings 83,000 639,267
Psion 30,000(b) 516,727
Total 1,155,994
Health care (2.4%)
British Biotech 20,000(b) 880,016
Medeva ADR 25,000 381,250
Total 1,261,266
Metals (1.1%)
Ashanti Goldfields 25,000 546,875
Multi-industry conglomerates (4.6%)
Capita Group 60,000 322,221
Davis Service 140,000 526,505
Hays 100,000 648,353
Serco Group 40,000 314,098
Thorn 20,360 564,466
Total 2,375,643
Restaurants & lodging (1.2%)
Millennium & Copthorn 33,500(b) 647,060
Utilities - electric (1.0%)
National Power 15,000 502,500
____________________________________________________________________
United States (3.0%)
Metals (2.2%)
Firstmiss Gold 15,000(b) 461,250
Pittston Minerals 50,000 675,000
Total 1,136,250
Paper & packaging (0.8%)
Cronos 50,000(b) 437,500
Total common stocks
(Cost: $44,043,986) $49,804,253
<PAGE>
PAGE 137
____________________________________________________________________
Bonds (1.2%)
Issuer and Principal Value(a)
coupon rate amount
____________________________________________________________________
Hong Kong (1.2%)
Multi-industry
China Res
(U.S. Dollar)
3.00% Cv 2005 $500,000(c) $ 605,000
Total bonds (Cost: $500,000) $ 605,000
____________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (5.8%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_______________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (4.1%)
Federal Home Loan Bank Disc Nts
05-08-96 5.23% $300,000 $ 299,696
05-08-96 5.27 510,000 509,480
Federal Home Loan Mtge Corp Disc Nts
05-09-96 5.10 486,000 485,364
06-24-96 5.26 360,000 355,834
U.S. Treasury Bills
08-01-96 4.91 500,000 493,599
Total 2,143,973
_______________________________________________________________________________
Commercial paper (1.7%)
Merrill Lynch 5.35 900,000 900,000
05-01-96
_______________________________________________________________________________
Total short-term securities
(Cost: $3,045,721) $ 3,043,973
_______________________________________________________________________________
Total investments in securities
(Cost: $47,589,707)(e) $53,453,226
_______________________________________________________________________________
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 of directors.
(d) Identifies issues considered to be illiquid (Note 1 to the financial statements).
Information concerning such security holdings at April 30, 1996 is as follows:
Security Acquisition Date Cost
_________________________________________________________________________
BBA Group 03-11-96 7,041
(e) At April 30, 1996, the cost of securities for federal income tax purposes was $47,640,016
and the aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $6,577,615
Unrealized depreciation (764,405)
___________________________________________________________________
Net unrealized appreciation $5,813,210
___________________________________________________________________
</TABLE>
<PAGE>
PAGE 138
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 7, 1996.
Statements:
- Statements of assets and liabilities at April 30, 1996.
- Statements of operations, for the year ended April 30, 1996.
- Statements of changes in net assets, for the years ended
April 30, 1996 and April 30, 1995.
- Notes to financial statements.
Schedules:
- Investments in securities, April 30, 1996.
- Notes to investments in securities.
(b) EXHIBITS:
1. Copy of Articles of Incorporation as amended December 20,
1994, filed electronically as Exhibit 1 with Post-Effective
Amendment No. 18 to Registration Statement No. 2-97636, is
incorporated herein by reference.
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.
<PAGE>
PAGE 139
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.
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 20, 1996.
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 as Exhibit 8(b) with Post-
Effective Amendment No. 18 to Registration Statement No. 2-
97636, is incorporated herein by reference.
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.
<PAGE>
PAGE 140
Item 26. Number of Holders of Securities
(1) (2)
Number of Record Holders as
of May 31, 1996 for Equity,
Government Securities,
Income, Managed and Money
Title of Class Market Portfolios
Common Stock 5
Number of Record Holders
as of May 31, 1996 for
Title of Class International Equity Portfolio
Common Stock 2
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.
<PAGE>
PAGE 141
<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
Douglas A. Alger, Vice President--Total Compensation
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Total Compensation
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
<PAGE>
PAGE 142
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
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
Alan F. Bignall, Vice President--Technology and Development
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Technology and
Development
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, 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
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
<PAGE>
PAGE 143
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
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 Insurance Agency of Nevada Inc. Vice President--North
Central Region
American Express Minnesota Foundation Director
IDS Insurance Agency of Alabama Inc. Vice President--North
Central Region
IDS Insurance Agency of Arkansas Inc. Vice President--North
Central Region
IDS Insurance Agency of Massachusetts 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
Kenneth J. Ciak, Vice President and General Manager--IDS Property Casualty
AMEX Assurance Co. Director and President
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
Colleen Curran, 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 and Chief
Legal Counsel
Alan R. Dakay, Vice President--Institutional Products Group
American Centurion Life Assurance Co. IDS Tower 10 Director and Vice Chairman
Minneapolis, MN 55440 and President, Financial
Institutions Division
American Enterprise Life Insurance Co. Director and President
IDS Life Insurance Company Vice President -
Institutional Insurance
Marketing
American Express Financial Advisors Vice President -
Institutional Products
Group
Regenia David, Vice President--Systems Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Systems Services
<PAGE>
PAGE 144
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
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
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
American Express Insurance Agency of Nevada Inc. Director and Vice President
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 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
Robert G. Gilbert, Vice President--Real Estate
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Real Estate
<PAGE>
PAGE 145
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
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
Morris Goodwin Jr., Vice President and Corporate Treasurer
American Centurion Life Assurance Co. Vice President and
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 Insurance Agency of Nevada Inc. Vice President and
Treasurer
American Express Minnesota Foundation Vice President and
Treasurer
American Express Tax & Business Vice President and
Services Inc. Treasurer
American Partners Life Insurance Co. Vice President and
Treasurer
AMEX Assurance Co. Vice President and
Treasurer
IDS Advisory Group Inc. Vice President and
Treasurer
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 Futures Corp. Director
IDS Futures III Corp. Director
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
<PAGE>
PAGE 146
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
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
National Computer Systems, Inc. 11000 Prairie Lakes Drive Director
Minneapolis, MN 55440
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
<PAGE>
PAGE 147
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
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
AMEX Assurance Co. 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. Director and 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
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 Retirement Services
American Express Trust Company IDS Tower 10 Director and President
Minneapolis, MN 55440
Kevin P. Howe, Vice President--Government and Customer Relations and Chief Compliance Officer
American Enterprise Investment IDS Tower 10 Vice President and Chief
Services Inc. Minneapolis, MN 55440 Compliance Officer
American Express Financial Advisors Vice President-
Government and
Customer Relations
American Express Service Corporation Vice President and Chief
Compliance Officer
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 Executive Vice
President
<PAGE>
PAGE 148
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
AMEX Assurance Co. Director
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
James E. Kaare, Vice President--Marketing Promotions
American Express Financial Advisors IDS Tower 10 Vice President-Marketing
Minneapolis, MN 55440 Promotions
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
Richard W. Kling, Director and Senior Vice President--Risk Management Products
American Centurion Life Assurance Co. Director
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 Express Insurance Agency of Nevada Inc. Director and President
American Express Service Corporation Vice President
American Partners Life Insurance Co. Director and Chairman of
the Board
AMEX Assurance Co. Director and Chairman of
the Board
IDS Certificate Company 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 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<PAGE>
PAGE 149
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
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 Director and Chairman of
the Board 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
IDS Property Casualty Insurance Company Director
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
Edward Labenski, Jr., 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
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<PAGE>
PAGE 150
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
IDS Partnership Services Corporation Director and Vice President
IDS Realty Corporation Director and Vice President
Ryan R. Larson, Vice President--IPG Product Development
American Centurion Life Assurance Co. Director and
Vice President-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 Trust Company Director
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
Jonathan S. Linen, Director
Mary J. Malevich, Vice President--Senior Portfolio Manager
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Senior 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
<PAGE>
PAGE 151
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
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
American Express Service Corporation Senior Vice President
American Express Tax and Business Director
Services Inc.
AMEX Assurance Co. Director
IDS Certificate Company Director
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
<PAGE>
PAGE 152
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Pamela J. Moret, Vice President--Services
American Express Financial Advisors IDS Tower 10 Vice President-Services
Minneapolis, MN 55440
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
Mary Owens Neal, Vice President--Mature Market Segment
American Express Financial Advisors Inc. IDS Tower 10 Vice President-
Minneapolis, MN 55440 Mature Market Segment
Robert J. Neis, Vice President--Technology Services
American Express Financial Advisors IDS Tower 10 Vice President-
Minneapolis, MN 55440 Technology Services
James R. Palmer, Vice President--Taxes
American Express Financial Advisors IDS Tower 10 Vice President-Taxes
Minneapolis, MN 55440
IDS Aircraft Services Corp. Vice President
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
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
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<PAGE>
PAGE 153
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
IDS Plan Services of California, Inc. Vice President and
Assistant Secretary
IDS Realty Corporation Vice President and
Assistant Secretary
James M. Punch, Vice President--Geographic Service Teams
American Express Financial Advisors IDS Tower 10 Vice President-Geographic
Minneapolis, MN 55440 Services Teams
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--Private Client Group
American Express Financial Advisors IDS Tower 10 Vice President-Private
Minneapolis, MN 55440 Client Group
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
IDS International, Inc. Director
IDS Fund Management Limited Director
Robert A. Rudell, Vice President--American Express Institutional Retirement 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
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 Insurance Agency of Nevada Inc. Vice President-
New England Region
IDS Insurance Agency of Alabama Inc. Vice President-
New England Region
IDS Insurance Agency of Arkansas Inc. Vice President-
New England Region
<PAGE>
PAGE 154
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
IDS Insurance Agency of Massachusetts 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 Centurion Life Assurance Co. Director and Chairman
and President
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
American Partners Life Insurance Co. Director and President
IDS Certificate Company Director and President
IDS Life Insurance Company Director and Executive
Vice President, Assured
Assets
Investors Syndicate Development Corp. Director and 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
AMEX Assurance Co. Vice President
IDS Certificate Company Vice President-Real
Estate Loan Management
IDS Life Insurance Company Vice President-Real
Estate Loan Management
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
<PAGE>
PAGE 155
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
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
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
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
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
<PAGE>
PAGE 156
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
Melinda S. Urion, Director, Senior Vice President and Chief Financial Officer
American Enterprise Life IDS Tower 10 Vice President and
Insurance Company Minneapolis, MN 55440 Controller
American Express Financial Advisors Senior Vice President and
Chief Financial Officer
American Express Trust Company Director
American Partners Life Insurance Co. Director and Vice President
IDS Life Insurance Company Director, Executive Vice
President and Controller
IDS Life Series Fund, Inc. Vice President and
Controller
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
Norman Weaver Jr., Director and Senior Vice President--Field Management
American Express Financial Advisors IDS Tower 10 Senior Vice President--
Minneapolis, MN 55440 Field Management
American Express Insurance Agency of Nevada Inc. Vice President-Southeast
Region
IDS Insurance Agency of Alabama Inc. Vice President-Pacific
Region
IDS Insurance Agency of Arkansas Inc. Vice President-Pacific
Region
IDS Insurance Agency of Massachusetts Inc. Vice President-Pacific
Region
IDS Insurance Agency of New Mexico Inc. Vice President-Pacific
Region
IDS Insurance Agency of North Carolina Inc. Vice President-Pacific
Region
IDS Insurance Agency of Ohio Inc. Vice President-Pacific
Region
IDS Insurance Agency of Wyoming Inc. Vice President-Pacific
Region
Michael L. Weiner, Vice President--Tax Research and Audit
American Express Financial Advisors IDS Tower 10 Vice President-Tax Research
Minneapolis, MN 55440 and Audit
American Express Service Corporation Assistant Treasurer
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
<PAGE>
PAGE 157
Item 28. Business and Other Connections of Investment Adviser (American Express Financial
Corporation)(cont'd)
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
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 Insurance Agency of Nevada Inc. Vice President-
North Region
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 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
<PAGE>
PAGE 158
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 159
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 26th day of June, 1996.
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 26th day
of June, 1996.
Signature Capacity
/s/ Richard W. Kling* President and Director
Richard W. Kling
/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 160
CONTENTS OF THIS POST-EFFECTIVE AMENDMENT NO. 19
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 11: Independent Auditors' Consent.
Exhibit 17: Financial Data Schedule.
<PAGE>
PAGE 1
INDEPENDENT AUDITORS' CONSENT
___________________________________________________________________
The Board and Shareholders
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 26, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> EQUITY PORTFOLIO
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> APR-30-1996
<INVESTMENTS-AT-COST> 360891530
<INVESTMENTS-AT-VALUE> 451377475
<RECEIVABLES> 7462932
<ASSETS-OTHER> 212
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 458840619
<PAYABLE-FOR-SECURITIES> 6543480
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3884740
<TOTAL-LIABILITIES> 10428220
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 284251379
<SHARES-COMMON-STOCK> 15283655
<SHARES-COMMON-PRIOR> 12024452
<ACCUMULATED-NII-CURRENT> (47)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 73675075
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 90485945
<NET-ASSETS> 448412399
<DIVIDEND-INCOME> 714920
<INTEREST-INCOME> 2307957
<OTHER-INCOME> 0
<EXPENSES-NET> (2533046)
<NET-INVESTMENT-INCOME> 489831
<REALIZED-GAINS-CURRENT> 73815809
<APPREC-INCREASE-CURRENT> 52637428
<NET-CHANGE-FROM-OPS> 126943068
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (484198)
<DISTRIBUTIONS-OF-GAINS> (76149)
<DISTRIBUTIONS-OTHER> (26661)
<NUMBER-OF-SHARES-SOLD> 3543079
<NUMBER-OF-SHARES-REDEEMED> (306199)
<SHARES-REINVESTED> 22323
<NET-CHANGE-IN-ASSETS> 207380398
<ACCUMULATED-NII-PRIOR> 1057832
<ACCUMULATED-GAINS-PRIOR> 5224750
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2334846
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<GROSS-EXPENSE> 2533046
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<PER-SHARE-NAV-BEGIN> 20.05
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 9.30
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<PAGE>
<ARTICLE> 6
<SERIES>
[NUMBER] 2
<NAME> INCOME PORTFOLIO
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> APR-30-1996
[INVESTMENTS-AT-COST] 53693951
[INVESTMENTS-AT-VALUE] 54134004
[RECEIVABLES] 1151107
[ASSETS-OTHER] 72934
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[TOTAL-ASSETS] 55358045
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 381882
[TOTAL-LIABILITIES] 381882
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 55102094
[SHARES-COMMON-STOCK] 5537490
[SHARES-COMMON-PRIOR] 3924989
[ACCUMULATED-NII-CURRENT] (811)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (565173)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 440053
[NET-ASSETS] 54976163
[DIVIDEND-INCOME] 7287
[INTEREST-INCOME] 3549730
[OTHER-INCOME] 0
[EXPENSES-NET] (380337)
[NET-INVESTMENT-INCOME] 3176680
[REALIZED-GAINS-CURRENT] 327190
[APPREC-INCREASE-CURRENT] 385120
[NET-CHANGE-FROM-OPS] 3888990
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (3152824)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] (10470)
[NUMBER-OF-SHARES-SOLD] 1633889
[NUMBER-OF-SHARES-REDEEMED] (333001)
[SHARES-REINVESTED] 311618
[NET-CHANGE-IN-ASSETS] 17152912
[ACCUMULATED-NII-PRIOR] 2516555
[ACCUMULATED-GAINS-PRIOR] (497528)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 332795
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 380337
[AVERAGE-NET-ASSETS] 47297762
[PER-SHARE-NAV-BEGIN] 9.64
[PER-SHARE-NII] .68
[PER-SHARE-GAIN-APPREC] .29
[PER-SHARE-DIVIDEND] (.68)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.93
[EXPENSE-RATIO] .80
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
<ARTICLE> 6
<SERIES>
[NUMBER] 3
<NAME> MONEY MARKET PORTFOLIO
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> APR-30-1996
[INVESTMENTS-AT-COST] 14267447
[INVESTMENTS-AT-VALUE] 14267447
[RECEIVABLES] 48576
[ASSETS-OTHER] 100860
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 14416883
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 98528
[TOTAL-LIABILITIES] 98528
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 14319092
[SHARES-COMMON-STOCK] 14319618
[SHARES-COMMON-PRIOR] 9885410
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (737)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 14318355
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 723013
[OTHER-INCOME] 0
[EXPENSES-NET] (77220)
[NET-INVESTMENT-INCOME] 645793
[REALIZED-GAINS-CURRENT] (84)
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 645709
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (645793)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 12705078
[NUMBER-OF-SHARES-REDEEMED] (8916663)
[SHARES-REINVESTED] 645793
[NET-CHANGE-IN-ASSETS] 4433755
[ACCUMULATED-NII-PRIOR] 432873
[ACCUMULATED-GAINS-PRIOR] (454)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 64350
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 77220
[AVERAGE-NET-ASSETS] 12805382
[PER-SHARE-NAV-BEGIN] 1.00
[PER-SHARE-NII] .05
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] (.05)
[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>
<ARTICLE> 6
<SERIES>
[NUMBER] 4
<NAME> MANAGED PORTFOLIO
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> APR-30-1996
[INVESTMENTS-AT-COST] 286292247
[INVESTMENTS-AT-VALUE] 318342181
[RECEIVABLES] 4968760
[ASSETS-OTHER] 167606
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 323478547
[PAYABLE-FOR-SECURITIES] 3996428
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 2749826
[TOTAL-LIABILITIES] 6746254
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 270568091
[SHARES-COMMON-STOCK] 19205327
[SHARES-COMMON-PRIOR] 15589271
[ACCUMULATED-NII-CURRENT] (54812)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 13854981
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 32364033
[NET-ASSETS] 316732293
[DIVIDEND-INCOME] 1897885
[INTEREST-INCOME] 10242510
[OTHER-INCOME] 0
[EXPENSES-NET] (2095796)
[NET-INVESTMENT-INCOME] 10044599
[REALIZED-GAINS-CURRENT] 17885868
[APPREC-INCREASE-CURRENT] 24654105
[NET-CHANGE-FROM-OPS] 52584572
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (10002686)
[DISTRIBUTIONS-OF-GAINS] (2226152)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 3492833
[NUMBER-OF-SHARES-REDEEMED] (665334)
[SHARES-REINVESTED] 788557
[NET-CHANGE-IN-ASSETS] 96746235
[ACCUMULATED-NII-PRIOR] 6296763
[ACCUMULATED-GAINS-PRIOR] (1326459)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1894796
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 2095796
[AVERAGE-NET-ASSETS] 269278824
[PER-SHARE-NAV-BEGIN] 14.11
[PER-SHARE-NII] .57
[PER-SHARE-GAIN-APPREC] 2.51
[PER-SHARE-DIVIDEND] (.57)
[PER-SHARE-DISTRIBUTIONS] (.13)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 16.49
[EXPENSE-RATIO] .78
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
<ARTICLE> 6
<SERIES>
[NUMBER] 5
<NAME> GOVERNMENT SECURITIES PORTFOLIO
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> APR-30-1996
[INVESTMENTS-AT-COST] 11967807
[INVESTMENTS-AT-VALUE] 12084535
[RECEIVABLES] 237926
[ASSETS-OTHER] 220439
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 12542900
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 78495
[TOTAL-LIABILITIES] 78495
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 12250868
[SHARES-COMMON-STOCK] 1249455
[SHARES-COMMON-PRIOR] 1160975
[ACCUMULATED-NII-CURRENT] (6489)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 103298
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 116728
[NET-ASSETS] 12464405
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 831629
[OTHER-INCOME] 0
[EXPENSES-NET] (98688)
[NET-INVESTMENT-INCOME] 732941
[REALIZED-GAINS-CURRENT] 97312
[APPREC-INCREASE-CURRENT] 3853
[NET-CHANGE-FROM-OPS] 834106
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (729863)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] (3078)
[NUMBER-OF-SHARES-SOLD] 203165
[NUMBER-OF-SHARES-REDEEMED] (186050)
[SHARES-REINVESTED] 71365
[NET-CHANGE-IN-ASSETS] 1023941
[ACCUMULATED-NII-PRIOR] 671316
[ACCUMULATED-GAINS-PRIOR] 6871
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 86352
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 98688
[AVERAGE-NET-ASSETS] 12254123
[PER-SHARE-NAV-BEGIN] 9.85
[PER-SHARE-NII] .61
[PER-SHARE-GAIN-APPREC] .13
[PER-SHARE-DIVIDEND] (.61)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.98
[EXPENSE-RATIO] .80
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
<ARTICLE> 6
<SERIES>
[NUMBER] 6
<NAME> INTERNATIONAL EQUITY PORTFOLIO
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> APR-30-1996
[INVESTMENTS-AT-COST] 47589707
[INVESTMENTS-AT-VALUE] 53453226
[RECEIVABLES] 1757811
[ASSETS-OTHER] 90162
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 55301199
[PAYABLE-FOR-SECURITIES] 3007265
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 232499
[TOTAL-LIABILITIES] 3239764
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 40263547
[SHARES-COMMON-STOCK] 3184151
[SHARES-COMMON-PRIOR] 826111
[ACCUMULATED-NII-CURRENT] 623
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 5909647
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 5886806
[NET-ASSETS] 52061435
[DIVIDEND-INCOME] 284229
[INTEREST-INCOME] 172610
[OTHER-INCOME] 0
[EXPENSES-NET] (243884)
[NET-INVESTMENT-INCOME] 212955
[REALIZED-GAINS-CURRENT] 5987533
[APPREC-INCREASE-CURRENT] 5339537
[NET-CHANGE-FROM-OPS] 11540025
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (212955)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] (77263)
[NUMBER-OF-SHARES-SOLD] 2358924
[NUMBER-OF-SHARES-REDEEMED] (18662)
[SHARES-REINVESTED] 17778
[NET-CHANGE-IN-ASSETS] 43564627
[ACCUMULATED-NII-PRIOR] 114571
[ACCUMULATED-GAINS-PRIOR] 907
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 220659
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 243884
[AVERAGE-NET-ASSETS] 23270380
[PER-SHARE-NAV-BEGIN] 10.29
[PER-SHARE-NII] .11
[PER-SHARE-GAIN-APPREC] 6.08
[PER-SHARE-DIVIDEND] (.13)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 16.35
[EXPENSE-RATIO] 1.05
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
