<PAGE>
PAGE 1
FINANCIAL PLANNING
IDS Blue Chip Advantage Fund
1994 annual report
(prospectus enclosed)
(Icon of) Ribbon
The goal of IDS Blue Chip Advantage Fund, a part of IDS Market
Advantage Series, Inc., is to achieve a long-term total return
exceeding that of the U.S. stock market. The fund invests in
common stocks that are included in a broad market index.
IDS
Am American Express company
AMERICAN
EXPRESS
Distributed by IDS Financial Services Inc.<PAGE>
PAGE 2
(Icon of) Ribbon
The best of the biggest
If you were compiling a who's who of corporate American, a good
place to start would be the Standard & Poor's Index. Composed of
500 stocks representing a wide range of prominent companies, "the
S&P" is recognized as a good measure of overall stock market
performance. Of course, some of those stocks will fare better than
others. They're the ones that Blue Chip Advantage tries to
identify and build its portfolio around. Result: a fund that's
like the S&P . . . only better.<PAGE>
PAGE 3
Contents
(Icon of) One book inside of another and their both being opened
together.
The purpose of this annual report is to tell investors how the fund
performed.
The prospectus which is bound into the middle of this annual
report, describes the fund in detail.
1993 annual report
From the president 4
From the portfolio manager 4
Ten largest holdings 6
Making the most of your fund 7
Long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 17
IDS mutual funds 20
Federal income tax information 23
1994 prospectus
The fund in brief
Goal 3p
Types of fund investments 3p
Manager and distributor 3p
Portfolio manager 3p
Sales charge and fund expenses
Sales charge 4p
Operating expenses 4p
Performance
Financial highlights 5p
Total returns 6p
Key terms 7p
How to buy, exchange or sell shares
How to buy shares 8p
How to exchange shares 10p
How to sell shares 10p
Reductions of the sales charge 14p
Waivers of the sales charge 16p
Special shareholder services
Services 17p
Quick telephone reference 17p
Distributions and taxes
Dividend and capital gain distributions 18p
Reinvestments 19p
Taxes 20p<PAGE>
PAGE 4
Investment policies
Facts about investments and their risks 24p
Valuing assets 26p
How the fund is organized
Shares 27p
Voting rights 27p
Shareholder meetings 27p
Directors and officers 27p
Investment manager and transfer agent 29p
Distributor 30p
About IDS
General information 31p
<PAGE>
PAGE 5
To our shareholders
(Photo of) William R. Pearce, President of the Fund
(Photo of) Steve Merrell, Portfolio manager
From the president
As you read this report, you'll find it very different from those
you've received from us in the past. We've made substantial
changes in the design and organization to make the information
easier to find and understand.
The annual report and prospectus are combined into a single
document, and each provides information important to you. The
annual report gives you the fund's performance information and a
snapshot of its investments. A good place to begin is with the
portfolio manager's letter, which describes the events and
investment strategies that most influenced the fund's performance
during the year. The prospectus includes essential data such as
the fund's investment policies and service information.
In redesigning our reports, we asked IDS financial planners and
some of you for suggestions and recommendations. We believe that
you'll find the results of our work worthwhile.
William R. Pearce
From the portfolio manager
IDS Blue Chip Advantage Fund took advantage of a largely positive
environment for stocks and, consistent with its goal, outperformed
the broad stock market during the past fiscal year. In fact, the
fund's gain easily exceeded the Standard & Poor's 500 Stock Index's
advance. (The S&P 500 is commonly used to measure the stock
market's performance.)
The market, which followed an erratic course throughout the period,
got off to a good start in February of 1993, the beginning of the
fiscal year. Buoyed in part by a sense of optimism surrounding the
new presidential administration, stocks gained ground through
March. The next several months, however, proved to be essentially
unproductive. Stocks moved up and down in response to a variety of
political and economic developments, but could make little overall
headway.
It wasn't until the last two months of the fiscal year (December
1993 and January 1994) that the market was able to put together two
straight monthly gains. The period ended on a resoundingly
positive note in January, when the market recorded its second-
biggest advance of the 12 months.
Portfolio refinement
As always, the fund's performance largely moved in sync with the
market, but thanks to our highly selective and disciplined
portfolio-management approach, the overall result was better.
During the year, we refined our approach, which centers on
selecting what we anticipate will be the best-performing of the 500<PAGE>
PAGE 6
stocks included in the S&P 500. The select list of stocks for this
portfolio is the product of stock evaluations provided by IDS
investment research analysts. The result is that we are now able
to more efficiently construct an investment portfolio that we
believe has the potential to outperform the stock market as a whole
without taking on more investment risk than is inherent in the
market.
The refinement has meant that there are fewer holdings in the
portfolio; the number of stocks dropped from about 140 to just over
100 stocks during the year. Fewer stocks means lower trading
costs. That reduces fund expenses, and is also reflective of the
fact that the portfolio holds only those stocks that our analysts
believe have the best performance potential.
Big winners
Stocks in a wide variety of industries contributed to the fund's
positive results. Among our larger holdings, U.S. West and
McDonald's provided solid gains, while, among our smaller
positions, General Motors, Ford, Chrysler, Placer Dome (a gold-
mining company), Comcast (a cable-TV company), and Promus (a gaming
company) were strong performers.
As we begin the current fiscal period, the stock market will be
trying to record its fourth straight positive year. Despite some
observer's doubts about the continuation of this "bull" market, we
think stocks have a good chance to post another advance this year.
On the plus side are two important factors: The economy is gaining
momentum and corporate profits should improve. The biggest concern
is the potential for a substantial rise in long-term interest
rates, which could have detrimental impact on the stock market.
Steve Merrell
12-month performance
(All figures per share)
Net asset value (NAV)
Jan. 31, 1994 $ 6.58
Jan. 31, 1993 $ 6.20
Increase $ 0.38
Distributions
Feb. 1, 1993 - Jan. 31, 1994
From income $ 0.31
From capital gains $ 0.20
Total distributions $ 0.51
Total return* +14.7%
*If you purchased shares in the fund during this period, your
return also would have been affected by the sales charge, as
described in the prospectus.<PAGE>
PAGE 7
<TABLE><CAPTION>
IDS Blue Chip Advantage Fund
Your's fund's ten largest holdings
(Pie chart) The ten holdings listed here makeup 38.73% of the fund's net assets
Percent Value
(of fund's net assets)(as of Jan. 31, 1994)
____________________________________________________________________________________
<S> <C> <C>
Royal Dutch Petroleum 5.83% $8,624,000
Royal Dutch Petroleum Co., which includes Royal Dutch
(the Dutch version) and Shell Transport (the English
version) is a major oil company.
BellSouth 4.71 6,961,800
BellSouth provides telecommunications services to
Florida, Georgia, Louisiana, Tennessee, North
Carolina, Alabama, South Carolina, Kentucky and
Mississippi.
Procter & Gamble 4.28 6,318,900
Procter & Gamble is a major manufacturer of personal-care
products, detergents, diapers and food.
Coca-Cola 3.84 5,669,362
The world's largest producer and distributor of soft
drinks, concentrates and syrups.
U S West 3.82 5,648,125
U S West provides telecommunications services to more
than 40% of the United States in 14 western states.
Pfizer 3.55 5,241,088
A leading producer of pharmaceuticals, hospital products,
animal health items, non prescription medications and
specialty chemicals.
PepsiCo 3.47 5,135,700
A major consumer company with interests in snack foods,
soft drinks and restaurants.
Xerox 3.29 4,857,187
Xerox Corp. is a large, multinational company focused on
the document-processing business. The company also
operates several financial services businesses.
Federal National Mortgage 3.01 4,447,388
Federal National Mortgage Association (Fannie Mae) was
created by Congress as a government agency to create a
viable secondary mortgage market. The company holds a
large portfolio of mortgages for itself and securities
the balance, which it sells to investors.
McDonald's 2.93 4,325,400
McDonald's Corp. operates, licenses and services the
world's largest chain of fast-food restaurants.
</TABLE>
<PAGE>
PAGE 8
Making the most of your fund
Average annual total return
(Jan. 31, 1994)
1 year Since inception*
+9.0% +12.0%
*Period from March 5, 1990 to Jan. 31, 1994
Your investment and return value fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures reflect the deduction of the maximum 5% sales charge. This
was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.
Build your assets systematically
To keep your assets growing steadily, one of the best ways to use
the fund is by dollar-cost averaging -- a time-tested strategy that
can make market fluctuations work for you. To dollar-cost average,
simply invest a fixed amount of money regularly. You'll
automatically buy more shares when the fund's share price is low,
fewer shares when it is high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00
Feb 100 18 5.56
Mar 100 17 5.88
Apr 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more
shares when the per share market price is low
(arrow in table pointing to August) and fewer shares when the per
share market price is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
<PAGE>
PAGE 9
Three ways to benefit from a mutual fund:
o your shares increase in value when the fund's investments do
well
o you receive capital gains when the gains on investments sold
by the fund exceed losses
o you receive income when the fund's stock dividends, interest
and short-term gains exceed its expenses.
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gain distributions to buy additional shares
of the fund or another fund.
How your $10,000 has grown in IDS Blue Chip Advantage Fund
$15,000 $15,227
Blue Chip
S&P Advantage Fund
Stock Index
$9,500
$5,000
4/1/90 '91 '92 '93 '94
Assumes: Holding period from 4/1/90 to 1/31/94. Returns do not
reflect taxes payable on distributions. Also see "Performance" in
the fund's current prospectus. Reinvestment of all income and
capital gain distributions for the fund, with a value of $3,071.
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.
On the chart above you can see how the fund's total return compared
to a widely cited performance index, the S&P 500 Stock Index. In
comparing Blue Chip Advantage Fund to this index, you should take
into account the fact that the fund's performance reflects the
maximum sales charge of 5%, while such charges are not reflected in
the performance of the index. If you were actually to buy either
individual stocks or growth mutual funds, any sales charges that
you pay would reduce your total return as well.
Your investment and return value fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.<PAGE>
PAGE 10
Independent auditors' report
___________________________________________________________________
The board of directors and shareholders
IDS Market Advantage Series, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments in securities,
of IDS Blue Chip Advantage Fund (a series of IDS Market Advantage
Series, Inc.) as of January 31, 1994, and the related statement of
operations for the year then ended and the statements of changes in
net assets for each of the years in the two-year period ended
January 31, 1994, and the financial highlights for each of the
years in the three-year period ended January 31, 1994, and for the
period from March 5, 1990 (commencement of operations) to January
31, 1991. These financial statements and the financial highlights
are the responsibility of fund management. Our responsibility is to
express an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and the financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Investment securities held in custody are
confirmed to us by the custodian. 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.<PAGE>
PAGE 11
Independent auditors' report
___________________________________________________________________
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS
Blue Chip Advantage Fund at January 31, 1994, and the results of
its operations for the year then ended and the changes in its net
assets for each of the years in the two-year period ended January
31, 1994, and the financial highlights for the periods stated in
the first paragraph above, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick
Minneapolis, Minnesota
March 4, 1994<PAGE>
PAGE 12
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Blue Chip Advantage Fund
Jan. 31, 1994
Assets
__________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $133,897,354) $147,036,773
Cash in bank on demand deposit 620,371
Dividends receivable 324,501
Organizational costs (Note 4) 9,517
__________________________________________________________________________________________________________
Total assets 147,991,162
__________________________________________________________________________________________________________
Liabilities
__________________________________________________________________________________________________________
Payable to investment manager for organizational costs (Note 4) 10,283
Accrued investment management and services fee 60,450
Accrued distribution fee 10,918
Accrued transfer agency fee 27,296
Other accrued expenses 109,805
__________________________________________________________________________________________________________
Total liabilities 218,752
__________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $147,772,410
__________________________________________________________________________________________________________
Represented by
__________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 22,451,674 shares $ 224,517
Additional paid-in capital 128,180,444
Undistributed net investment income (Note 1) 205,735
Accumulated net realized gain on investments 5,999,745
Unrealized appreciation of investments (Note 5) 13,161,969
__________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $147,772,410
__________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 6.58
__________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 13
<TABLE>
<CAPTION>
Statement of operations
IDS Blue Chip Advantage Fund
Jan. 31, 1994
Investment income
__________________________________________________________________________________________________________
<S> <C>
Income:
Dividends (net of foreign taxes withheld of $37,364) $3,487,708
Interest 29,145
__________________________________________________________________________________________________________
Total income 3,516,853
__________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 678,653
Distribution fee 128,942
Transfer agency fee 320,969
Compensation of directors 12,435
Compensation of officers 1,612
Custodian fees 81,431
Postage 47,931
Registration fees 52,160
Reports to shareholders 20,536
Audit fees 16,000
Administrative 4,855
Other 17,186
__________________________________________________________________________________________________________
Total expenses 1,382,710
__________________________________________________________________________________________________________
Investment income -- net 2,134,143
__________________________________________________________________________________________________________
Realized and unrealized gain on investments -- net
__________________________________________________________________________________________________________
Net realized gain on security transactions (Note 3) 12,661,941
Net realized gain on closed stock index futures contracts 113,500
__________________________________________________________________________________________________________
Net realized gain on investments 12,775,441
Net change in unrealized appreciation or depreciation of investments 3,908,042
__________________________________________________________________________________________________________
Net gain on investments 16,683,483
__________________________________________________________________________________________________________
Net increase in net assets resulting from operations $18,817,626
__________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 14
Financial statements
<TABLE>
<CAPTION>
Statement of changes in net assets
IDS Blue Chip Advantage Fund
Year ended Jan. 31,
Operations and distributions 1994 1993
__________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 2,134,143 $ 1,682,214
Net realized gain on investments 12,775,441 6,540,033
Net change in unrealized appreciation or
depreciation of investments 3,908,042 2,474,997
__________________________________________________________________________________________________________
Net increase in net assets resulting from operations 18,817,626 10,697,244
__________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (2,043,210) (1,627,836)
Net realized gain on investments (8,629,922) (5,046,667)
__________________________________________________________________________________________________________
Total distributions (10,673,132) (6,674,503)
__________________________________________________________________________________________________________
Capital share transactions
__________________________________________________________________________________________________________
Proceeds from sales of
6,335,699 and 7,921,182 shares (Note 2) 40,812,605 48,126,719
Net asset value of 1,637,538 and 1,074,056 shares
issued in reinvestment of distributions 10,543,443 6,588,179
Payments for redemptions of
5,507,338 and 3,222,531 shares (35,563,796) (19,593,636)
__________________________________________________________________________________________________________
Increase in net assets from capital share transactions
representing net addition of
2,465,899 and 5,772,707 shares 15,792,252 35,121,262
__________________________________________________________________________________________________________
Total increase in net assets 23,936,746 39,144,003
__________________________________________________________________________________________________________
Net assets at beginning of year 123,835,664 84,691,661
__________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$205,735 and $106,367) $147,772,410 $123,835,664
__________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 15
Notes to financial statements
IDS Blue Chip Advantage Fund
___________________________________________________________________
1. Summary of significant accounting policies
The fund is a series of IDS Market Advantage
Series, Inc. and registered under the Investment
Company Act of 1940 (as amended) as a
diversified, open-end management investment
company. Significant accounting policies
followed by the fund are summarized below:
Valuation of securities
All securities are valued at the close of each
business day. Securities traded on national
securities exchanges or included in national
market systems are valued at the last quoted
sales price; securities for which market
quotations are not readily available are valued
at fair value according to methods selected in
good faith by the board of directors.
Determination of fair value involves, among other
things, reference to market indexes, matrixes and
data from independent brokers. Short-term
securities maturing in more than 60 days from the
valuation date are valued at the market price or
approximate market value based on current
interest rates; those maturing in 60 days or less
are valued at amortized cost.
Futures transactions
In order to gain exposure to or protect itself
from changes in the market, the fund may buy
stock index futures contracts. Risks of entering
into futures contracts include the possibility
that there may be an illiquid market and that a
change in the value of the contract may not
correlate with changes in the value of the
underlying securities.
Upon entering into a futures contract, the fund
is required to deposit either cash or securities
in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent
payments (variation margin) are made or received
by the fund each day. The variation margin
payments are equal to the daily changes in the
contract value and are recorded as unrealized
gains and losses. The fund recognizes a realized
gain or loss when the contract is closed or
expires.
<PAGE>
PAGE 16
Notes to financial statements
IDS Blue Chip Advantage Fund
___________________________________________________________________
Federal taxes
Since the fund's policy is to comply with all
sections of the Internal Revenue Code applicable
to regulated investment companies and to
distribute all of its taxable income to
shareholders, no provision for income or excise
taxes is required.
Net investment income (loss) and net realized
gains (losses) may differ for financial statement
and tax purposes primarily because of the
deferral of losses on certain futures contracts,
the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax
purposes, and losses deferred due to "wash sale"
transactions. The character of distributions
made during the year from net investment income
or net realized gains may differ from their
ultimate characterization for federal income tax
purposes. Also, due to the timing of dividend
distributions, the fiscal year in which amounts
are distributed may differ from the year that the
income or realized gains (losses) were recorded
by the fund.
On the statement of assets and liabilities, as a
result of permanent book-to-tax differences,
undistributed net investment income has been
increased by $8,435, resulting in a
reclassification adjustment to decrease paid-in-
capital by $8,435.
Dividends to shareholders
Dividends from net investment income, declared
and paid each calendar quarter, are reinvested in
additional shares of the fund at net asset value
or payable in cash. Capital gains, when
available, are distributed along with the last
income dividend of the calendar year.
Other
Security transactions are accounted for on the
date securities are purchased or sold. Dividend
income is recognized on the ex-dividend date and
interest income, including level-yield
amortization of premium and discount is accrued
daily.
<PAGE>
PAGE 17
Notes to financial statements
IDS Blue Chip Advantage Fund
___________________________________________________________________
2. Expenses and sales charges
Under terms of an agreement dated Nov. 14, 1991,
the fund pays IDS Financial Corporation (IDS) a
fee for managing its investments, recordkeeping
and other specified services. The fee is a
percentage of the fund's average daily net assets
consisting of a group asset charge in reducing
percentages from 0.46% to 0.32% annually on the
combined net assets of all non-money market funds
in the IDS MUTUAL FUND GROUP and an individual
annual asset charge of 0.1% of average daily net
assets.
The fund also pays IDS a distribution fee at an
annual rate of $6 per shareholder account and a
transfer agency fee at an annual rate of $15 per
shareholder account. The transfer agency fee is
reduced by earnings on monies pending shareholder
redemptions.
IDS will assume and pay any expenses (except
taxes and brokerage commissions) that exceed the
most restrictive applicable state expense
limitation.
Sales charges by IDS Financial Services Inc. for
distributing fund shares were $556,866 for the
year ended Jan. 31, 1994. The Fund also pays
custodian fees to IDS Bank & Trust, an affiliate
of IDS.
The fund has a retirement plan for its
independent directors. Upon retirement,
directors receive monthly payments equal to
one-half of the retainer fee for as many months
as they served as directors up to 120 months.
There are no death benefits. The plan is not
funded but the fund recognizes the cost of
payments during the time the directors serve on
the board. The retirement plan expense amounted
to $2,104 for the year ended Jan. 31, 1994.<PAGE>
PAGE 18
Notes to financial statements
IDS Blue Chip Advantage Fund
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of
securities (other than short-term obligations)
aggregated $214,759,109 and $208,564,811,
respectively, for the year ended Jan. 31, 1994.
Realized gains and losses are determined on an
identified cost basis.
___________________________________________________________________
4. Organization costs
Organization costs are being amortized over 60
months on a straight-line basis. If any of the
initial shares held by IDS are redeemed during
the amortization period, the redemption proceeds
will be reduced by a pro-rata portion of the
unamortized balance.
___________________________________________________________________
5. Stock index futures contracts
Investments in securities at Jan. 31, 1994,
included securities valued at $323,250 that were
pledged as collateral to cover initial margin
deposits on four purchase contracts. The market
value of the open contracts at Jan. 31, 1994, is
$963,400 with $22,550 unrealized gain.
___________________________________________________________________
6. Financial highlights
"Financial highlights" showing per share data and
selected information is presented on page 5 of
the prospectus.<PAGE>
PAGE 19
Investments in securities
<TABLE><CAPTION>
IDS Blue Chip Advantage Fund (Percentages represent value of
Jan. 31, 1994 investments compared to net assets)
__________________________________________________________________________________________________________
Common stocks (98.8%)
__________________________________________________________________________________________________________
Issuer Shares Value(a)
__________________________________________________________________________________________________________
<S> <C> <C>
Aerospace & defense (7.9%)
General Dynamics 13,100 $ 1,206,838
Grumman 19,300 788,887
Loral 32,000 1,276,000
Martin Marietta 44,300 1,987,963
McDonnell Douglas 5,300 605,525
Raytheon 41,500 2,811,625
Rockwell Intl 72,900 2,916,000
___________
11,592,838
__________________________________________________________________________________________________________
Airlines (0.1%)
AMR 2,300(b) 165,313
__________________________________________________________________________________________________________
Automotive & related (1.7%)
Chrysler 7,900 485,850
Ford Motor 6,700 448,900
General Motors 25,000 1,534,375
Navistar 500 13,000
____________
2,482,125
__________________________________________________________________________________________________________
Banks and savings & loans (6.3%)
Ahmanson (HF) 51,300 961,875
Bank of Boston 13,600 348,500
BankAmerica 20,200 939,300
Barnett Banks 5,300 223,925
Chase Manhattan 13,400 484,075
Chemical Banking 14,000 553,000
First Chicago 68,700 3,228,900
First Union 8,700 378,450
Fleet Financial Group 12,600 442,575
Great Western Financial 21,400 414,625
Nations Bank 17,000 862,750
PNC Bank 14,200 420,675
____________
9,258,650
__________________________________________________________________________________________________________
See accompanying notes to investments in securities.
/TABLE
<PAGE>
PAGE 20
Investments in securities
<TABLE><CAPTION>
IDS Blue Chip Advantage Fund (Percentages represent value of
Jan. 31, 1994 investments compared to net assets)
__________________________________________________________________________________________________________
Common stocks (cont'd)
__________________________________________________________________________________________________________
Issuer Shares Value(a)
__________________________________________________________________________________________________________
<S> <C> <C>
Beverages & tobacco (9.7%)
Coca-Cola 138,700 $ 5,669,362
PepsiCo 127,200 5,135,700
UST 125,500 3,576,750
____________
14,381,812
__________________________________________________________________________________________________________
Building materials (0.5%)
Boise Cascade 9,900 266,062
Tyco Laboratories 100 5,400
Weyerhaeuser 8,000 391,000
____________
662,462
__________________________________________________________________________________________________________
Chemicals (2.7%)
Dow Chemical 13,300 844,550
Great Lakes Chemical 39,500 3,115,562
____________
3,960,112
__________________________________________________________________________________________________________
Communications equipment (2.7%)
Andrew 13,300 588,525
Motorola 26,600 2,620,100
Scientific-Atlanta 25,700 729,238
___________
3,937,863
__________________________________________________________________________________________________________
Computers & office equipment (6.4%)
Pitney Bowes 80,500 3,612,438
Sun Microsystems 36,000 (b) 954,000
Xerox 49,500 4,857,187
____________
9,423,625
__________________________________________________________________________________________________________
See accompanying notes to investments in securities.
/TABLE
<PAGE>
PAGE 21
Investments in securities
<TABLE><CAPTION>
IDS Blue Chip Advantage Fund (Percentages represent value of
Jan. 31, 1994 investments compared to net assets)
__________________________________________________________________________________________________________
Common stocks (cont'd)
__________________________________________________________________________________________________________
Issuer Shares Value(a)
__________________________________________________________________________________________________________
<S> <C> <C>
Energy (8.6%)
Atlantic Richfield 3,000 $ 331,500
Chevron 11,000 1,027,125
Louisiana Land/Exp 7,200 299,700
Mobil 7,500 607,500
Occidental Petroleum 63,200 1,137,600
Phillips Petroleum 25,300 746,350
Royal Dutch Petroleum ADR 78,400 (c) 8,624,000
____________
12,773,775
__________________________________________________________________________________________________________
Energy equipment & services (0.2%)
Rowan 31,400 (b) 247,275
__________________________________________________________________________________________________________
Financial services (5.0%)
Dean Witter 35,800 1,373,825
Federal Natl Mtge 50,900 4,447,388
Household Intl 49,100 1,626,438
____________
7,447,651
__________________________________________________________________________________________________________
Furniture & appliances (--%)
Black & Decker 800 16,900
__________________________________________________________________________________________________________
Health care (5.7%)
Abbott Labs 24,400 719,800
Amgen 5,100 (b) 248,625
Johnson & Johnson 2,000 84,750
Medtronic 26,100 2,192,400
Pfizer 81,100 5,241,088
____________
8,486,663
__________________________________________________________________________________________________________
Health care services (1.6%)
Service Intl 90,500 2,386,938
__________________________________________________________________________________________________________
Household products (4.7%)
Procter & Gamble 106,200 6,318,900
Unilever NV ADR 4,900 (c) 582,487
____________
6,901,387
__________________________________________________________________________________________________________
See accompanying notes to investments in securities.
/TABLE
<PAGE>
PAGE 22
Investments in securities
<TABLE><CAPTION>
IDS Blue Chip Advantage Fund (Percentages represent value of
Jan. 31, 1994 investments compared to net assets)
__________________________________________________________________________________________________________
Common stocks (cont'd)
__________________________________________________________________________________________________________
Issuer Shares Value(a)
__________________________________________________________________________________________________________
<S> <C> <C>
Industrial equipment & services (1.9%)
Caterpillar 27,300 $ 2,842,612
__________________________________________________________________________________________________________
Industrial transportation (1.0%)
CSX 1,400 128,450
Norfolk Southern 4,900 360,762
Union Pacific 15,600 1,019,850
____________
1,509,062
__________________________________________________________________________________________________________
Insurance (0.7%)
Chubb 3,900 324,187
CNA Financial 7,900 (b) 642,862
Torchmark 1,900 90,488
____________
1,057,537
__________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
PAGE 23
Investments in securities
<TABLE><CAPTION>
IDS Blue Chip Advantage Fund (Percentages represent value of
Jan. 31, 1994 investments compared to net assets)
__________________________________________________________________________________________________________
Common stocks (cont'd)
__________________________________________________________________________________________________________
Issuer Shares Value(a)
__________________________________________________________________________________________________________
<S> <C> <C>
Leisure time & entertainment (1.8%)
Mattel 84,000 $ 1,911,000
Paramount Communications 6,400 509,600
Promus 4,400 222,750
____________
2,643,350
__________________________________________________________________________________________________________
Media (1.2%)
Comcast Cl A 42,800 1,342,850
Deluxe 7,100 247,612
Donnelly (RR) & Sons 1,300 40,300
Tele-Communications Cl A 1,400 (b) 38,150
Time Warner 3,100 124,000
____________
1,792,912
__________________________________________________________________________________________________________
Metals (2.8%)
Bethlehem Steel 7,400 (b) 174,825
Cyprus Minerals 16,100 483,000
Nucor 24,600 1,451,400
Placer Dome 69,500 (c) 1,763,563
USX-U.S. Steel Group 4,500 198,000
____________
4,070,788
__________________________________________________________________________________________________________
Multi-industry conglomerates (2.3%)
General Electric 28,700 (d) 3,092,425
ITT 3,600 354,150
____________
3,446,575
__________________________________________________________________________________________________________
Paper & packaging (0.6%)
Intl Paper 9,300 698,662
Union Camp 2,500 122,813
____________
821,475
__________________________________________________________________________________________________________
Restaurants & lodging (4.6%)
McDonalds 71,200 4,325,400
Shoneys 57,100 (b) 1,313,300
Wendy's Intl 67,400 1,154,225
____________
6,792,925
__________________________________________________________________________________________________________
See accompanying notes to investments in securities.
/TABLE
<PAGE>
PAGE 24
Investments in securities
<TABLE><CAPTION>
IDS Blue Chip Advantage Fund (Percentages represent value of
Jan. 31, 1994 investments compared to net assets)
__________________________________________________________________________________________________________
Common stocks (cont'd)
__________________________________________________________________________________________________________
Issuer Shares Value(a)
__________________________________________________________________________________________________________
<S> <C> <C>
Retail (3.2%)
Amer Stores 1,300 $ 55,088
Gap 1,300 54,925
Limited 17,900 317,725
Melville 19,500 775,125
Penney (JC) 3,200 167,600
Rite Aid 23,600 439,550
Super Valu Stores 200 7,800
Toys R Us 9,300 (b) 339,450
Walgreen 800 31,200
Wal-Mart Stores 96,900 2,567,850
____________
4,756,313
__________________________________________________________________________________________________________
Textiles & apparel (0.4%)
NIKE Cl B 8,100 405,000
Reebok Intl 5,300 170,263
____________
575,263
__________________________________________________________________________________________________________
Utilities-electric (0.8%)
Amer Electric Power 10,700 386,538
Entergy 6,100 227,225
Public Service Enterprises 17,300 547,112
____________
1,160,875
__________________________________________________________________________________________________________
Utilities-gas (0.4%)
Enron 3,500 115,062
Tenneco 9,400 540,500
____________
655,562
__________________________________________________________________________________________________________
Utilities-telephone (13.3%)
AT&T 13,100 743,425
BellSouth 113,200 6,961,800
MCI Communications 72,800 2,011,100
Pacific Telesis 75,000 4,321,875
U S West 129,100 5,648,125
____________
19,686,325
__________________________________________________________________________________________________________
Total common stocks
(Cost: $132,797,544)] $145,936,963
__________________________________________________________________________________________________________
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
PAGE 25
Investments in securities
<TABLE><CAPTION>
IDS Blue Chip Advantage Fund (Percentages represent value of
Jan. 31, 1994 investments compared to net assets)
__________________________________________________________________________________________________________
Short-term security (0.7%)
__________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency
Federal Home Loan Mtge
Disc Nt
02-03-94 3.12% $1,100,000 $ 1,099,810
__________________________________________________________________________________________________________
Total short-term security
(Cost: $1,099,810) $ 1,099,810
__________________________________________________________________________________________________________
Total investments in securities
(Cost: $133,897,354)(e) $147,036,773
__________________________________________________________________________________________________________
See accompanying notes to investments in securities.
/TABLE
<PAGE>
PAGE 26
Investments in securities
<TABLE>
IDS Blue Chip Advantage Fund
Jan. 31, 1994
Notes to investments in securities
__________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(d) Partially pledged as initial deposit on the following open stock index futures purchase
contracts (see Note 5 to the financial statements):
<CAPTION>
Type of security Contracts
___________________________________________________________________________________________
<S> <C>
Standard & Poor's 500 Stock Index, March 1994 4
___________________________________________________________________________________________
(e) At Jan. 31, 1994, the cost of securities for federal income tax purposes was
$134,044,623 and the aggregate gross unrealized appreciation and depreciation
based on that cost was:
<S> <C>
Unrealized appreciation] $14,684,098
Unrealized depreciation] (1,691,948)
___________________________________________________________________________________________
Net unrealized appreciation] $12,992,150
___________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 27
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conversation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposits (CDs) and
other bank securities.
(icon of) piggy bank
IDS Planned Investment Account
Invests in money market securities to provide maximum current
income consistent with liquidity and stability of principal of
principal, while serving as a base for systematic exchanges into
IDS fixed income and equity funds.
(icon of) stair steps
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
achieve high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed-income
securities in the lower rated, higher risk bond categories to
provide high current income. Secondary objective is capital
growth.
(icon of) cornucopia
<PAGE>
PAGE 28
Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher
rated, lower risk bond categories,or the equivalent, and in
government bonds.
(icon of) greek column
IDS Strategy Income Fund
Invests primarily in corporate and government bonds to seek high
current income while conserving capital. Also may seek capital
appreciation when consistent with its primary goals.
(icon of) chess piece
IDS Selective Fund, Inc.
Invests in high quality corporate bonds and other highly-rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund, Inc.
Invests primarily in securities issued or guaranteed as to
principal and interest by the U.S. government, its agencies and
instrumentalities. Seeks a high level of current income and safety
of principal consistent with its type of investments.
(icon of) federal building
IDS Strategy, Short-Term Income Fund
Invests primarily in short-term and intermediate-term bonds and
notes to seek a high level of current income.
(icon of) chess piece
Tax-exempt income investments
These funds provide tax-free income by investing in municipal
bonds. The income is generally free from federal income tax. Risk
varies by bond quality.
IDS High Yield Tax-Exempt Fund, Inc.
Invests primarily in medium- and lower-quality municipal bonds and
notes.
(icon of) shield with basket of apples enclosed
<PAGE>
PAGE 29
IDS State Tax-Exempt Funds
(California, Massachusetts, Michigan, Minnesota, New York, Ohio)
Invests primarily in high- and medium-grade municipal securities to
provide income to residents of each respective state that is exempt
from federal, state and local income taxes. (New York is the only
state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
IDS Tax-Exempt Bond Fund, Inc.
Invests mainly in bonds and notes of state or local government
units, with at least 75 percent in the four highest rated, lowest
risk bond categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the Fund but does not guarantee
the market value of the Fund's shares.
(icon of) shield with eagle head
Growth and income investments
These funds focus on securities of medium to large, well-
established companies that offer long-term growth of capital and
reasonable income from dividends and interest. Moderate risk.
IDS International Fund, Inc.
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The Fund may invest up to 20
percent of its assets in the U.S. market.
(icon of) three flags
IDS Strategy, Worldwide Growth Fund
Invests primarily in common stocks of companies throughout the
world that offer potential for superior growth. Holding may range
from small- to large-capitalization stocks, including those of
companies involve in areas of rapid economic growth.
(icon of) chess piece
IDS Managed Retirement Fund, Inc.
Invests in a combination of common stocks, fixed income investments
and money market securities to seek a maximum total return through
a combination of growth of capital and current income.
(icon of) bird in a nest<PAGE>
PAGE 30
IDS Equity Plus Fund, Inc.
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of capital and
income.
(icon of) three apple trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by IDS research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Stock Fund, Inc.
Invests primarily in common stocks of blue chip U.S. companies
representing almost every major sector of the economy. Seeks
current income and growth of capital.
(icon of) building with columns
IDS Strategy, Equity Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) chess piece
IDS Utilities Income Fund, Inc.
Invests primarily in the stocks of public utility companies to
provide high current income and growth of income and capital with
reduced volatility.
(icon of) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to provide high
current income and, secondarily to benefit from the growth
potential offered by stock investments.
(icon of) four puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
<PAGE>
PAGE 31
Growth funds
Funds in this group seek capital growth, primarily from common
stocks. They are high risk mutual funds with a potential for high
reward.
IDS Discovery Fund, Inc.
Invests in small and medium-sized, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Growth Fund, Inc.
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
IDS Strategy, Aggressive Equity Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
Portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS New Dimensions Fund, Inc.
Invests primarily in domestic companies with significant growth
potential due to superiority in technology, marketing or
management. The Fund frequently changes its industry mix.
(icon of) dimension
IDS Progressive Fund, Inc.
Invests primarily in undervalued common stocks. The Fund holds
stocks for the long-term with the goal of capital growth.
(icon of) shooting star
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy. These
companies offer above-average potential for long-term growth.
(icon of) world
<PAGE>
PAGE 32
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against
inflation.
IDS Precious Metals Fund, Inc.
Invests primarily in the securities of foreign or domestic
companies that explore for, mine and process or distribute gold and
other precious metals. This is the most aggressive and most
speculative IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including
charges and expenses, you can obtain a prospectus by contacting
your IDS personal financial planner or writing to IDS Shareholder
Service, P.O. Box 534, Minneapolis, MN 55440. Read it carefully
before you invest or send money.<PAGE>
PAGE 33
Federal income tax information
<TABLE>
IDS Blue Chip Advantage Fund
___________________________________________________________________
The fund is required by the Internal Revenue Code of 1986 to tell
its shareholders about the tax treatment of the dividends it pays
during its fiscal year. The dividends listed below were reported
to you on a Form 1099-DIV, Dividends and Distributions, last
January. Shareholders should consult a tax adviser on how to
report distributions for state and local purposes.
IDS Blue Chip Advantage Fund
Fiscal year ended Jan. 31, 1994
Income distributions
taxable as dividend income,
37.92% qualifying for deduction by corporations.
<CAPTION>
Payable date Per share
<S> <C>
March 29, 1993 $0.0200
June 28, 1993 0.0300
Sept. 27, 1993 0.0225
Dec. 29, 1993 0.2410
Total $0.3135
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 29, 1993 $0.1950
Total distributions $0.5085
The distribution of $0.4360 per share, payable Dec. 29, 1993,
consisted of $0.0260 derived from net investment income, $0.2150
from net short-term capital gains (a total of $0.2410 taxable as
dividend income) and $0.1950 from net long-term capital
gains./TABLE
<PAGE>
PAGE 34
Quick telephone reference
IDS Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
IDS Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
IDS Infoline
Automated account information (TouchToneR phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
Your IDS financial planner:
IDS Blue Chip Advantage Fund
IDS Tower 10
Minneapolis, MN 55440-0010<PAGE>
PAGE 35
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report and
prospectus are placed
in blue strip at the top
of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report and prospectus. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
