PAGE
IDS
Blue Chip
Advantage
Fund
1994 semiannual report
(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.
Distributed by
IDS Financial Services Inc.
IDS
An American Express company
AMERICAN
EXPRESS
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(icon of) ribbon
The best of
the biggest
If you were compiling a who's who of corporate America, 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. Objective: a fund that's like the S&P . . . only
better.
Contents
From the president 3
From the portfolio manager 3
Ten largest holdings 5
Financial statements 6
Notes to financial statements 9
Investments in securities 13
Directors and officers 16
IDS mutual funds 17
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To our shareholders
William R. Pearce
President of the fund
Steve Merrell
Portfolio manager
From the president
As you read this semiannual report, you'll find that it complements
the newly designed annual report you received six months ago. We hope
the substantial changes we've made to the design and organization will
help make information easier to find and understand.
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 past period.
For a broader financial perspective, please consult your IDS financial
planner, who can help you make sure your investment and protection
strategies continue to meet the objectives in your financial plan.
William R. Pearce
From the portfolio manager
For the most part, the past six months proved to be a difficult period
for the stock market. The fundamental problem was rising interest
rates, which periodically spawned widespread stock-selling and,
ultimately, lower share prices. Although this market reaction resulted
in a moderate total-return loss for shareholders, the fund did, as it
is designed to do, fare better than the overall stock market (as
measured by the Standard & Poor's 500 Stock Index, an unmanaged group
of largely blue chips stocks used to gauge market performance).
Our better-than-market performance resulted from our investment style
of building a portfolio consisting solely of Standard & Poor's 500
stocks that carry our securities analysts' highest ratings. The result
is a fund that essentially tracks the movement of the stock market as
a whole, but also has the potential to outperform it.
The pattern for the period was set in early February (the start of the
fiscal year), as the Federal Reserve Board began raising short-term
interest rates to head off a potential increase in the rate of
inflation. As often happens during
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To our shareholders
interest-rate rises, the stock market went into a rapid retreat that
lasted through March. For those two months, the market as well as our
portfolio were down more than 6%. Stocks of health-care providers,
restaurants and consumer goods companies were among those hit hardest.
Spring upswing
The market righted itself in April and May, though, as the interest-
rate shock waves began to dissipate. This enabled the fund to make up
some lost ground. Among the main contributors to the gain were stocks
of telephone and electric utilities, and financial services and oil
companies.
The market stumbled again in June, however, when renewed concerns
about increasing inflation drove up interest rates again. Consumer
stocks, such as those in the beverage and restaurant sectors, were
particularly affected.
The roller-coaster ride continued in July, as the market rebounded
strongly, turning in its best performance of the six-month period. The
fund took full advantage of the positive environment and recorded a
gain of nearly 4%. This time, stocks in the communications equipment
and services and electric utilities sectors provided the biggest
boost.
Better times ahead?
The strong finish by the market and fund has improved our outlook for
the rest of the year. We expect that interest rates will continue to
be the key to the market's performance. If inflation appears to remain
under control, chances are that interest rates will not go
substantially higher. That would remove the highest hurdle for stocks.
The other supporting factor for stocks is corporate profits. Most
companies have enjoyed good, even excellent, results this year. A
continuation of that trend would go a long way toward justifying
higher stock prices. Naturally, there are always other variables, many
unpredictable, that could upset such a scenario. But, given what we
know at this writing, stocks appear to be in a better position to
sustain an advance than at any point since the start of the fiscal
year.
Steve Merrell
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6-month performance
(All figures per share)
Net asset value (NAV)
July 31, 1994 $ 6.37
Jan. 31, 1994 $ 6.58
Decrease $ (0.21)
Distributions
Feb. 1, 1994 - July 31, 1994
From income $ 0.05
From capital gains $ --
Total distributions $ 0.05
Total return* (2.4%)
*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.
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<TABLE>
IDS Blue Chip Advantage Fund
Your fund's ten largest holdings
<CAPTION>
(Pie chart) The ten holdings listed here make up 36.25% of the fund's net assets
Percent Value
(of fund's net assets)(as of July 31, 1994)
____________________________________________________________________________________
<S> <C> <C>
Royal Dutch Petroleum 5.86% $8,339,400
Royal Dutch Petroleum Co., which includes Royal Dutch
(the Dutch version) and Shell Transport (the English
version) is a major oil company.
General Electric 5.62 7,989,475
General Electric is a diversified company with interest in
manufacturing, broadcasting (NBC), financial services and
technology.
ITT 3.74 5,325,075
ITT Corp. is a diversified conglomerate with operations in
more than 100 countries. The company produces industrial
goods, such as automotive products and electronic components,
and provides services such as lodging, insurance and
communications.
PepsiCo 3.54 5,032,500
A major consumer company with interests in snack foods,
soft drinks and restaurants.
Procter & Gamble 3.42 4,861,400
Procter & Gamble is a major manufacturer of personal-care
products, detergents, diapers and food.
Wal-Mart Stores 3.16 4,497,500
Wal-Mart Stores, the world's largest retailer, operates a
chain of discount department stores under the names Wal-Mart,
Sam's Club and Bud's Warehouse Outlets located in 45 states
and Puerto Rico.
AirTouch Communications 2.95 4,193,800
A subsidiary of Pacific Telesis, AirTouch Communications
is engaged in non-regualted wireless communication operations,
with cellular interest in the United States, Germany, Japan,
Italy, South Korea and Belgium.
Pfizer 2.71 3,850,200
A leading producer of pharmaceuticals, hospital products,
animal health items, non prescription medications and
specialty chemicals.
NationsBank 2.66 3,785,425
A bank holding company with a strong presence in North
Carolina, South Carolina, Texas, Virginia, Florida and
Georgia.
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BankAmerica 2.59 3,676,650
A holding company that owns Bank of America
(one of the world's largest banks) and Seattle-First
National Bank.
</TABLE>
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<TABLE>
Financial statements
Statement of assets and liabilities
IDS Blue Chip Advantage Fund
July 31, 1994
<CAPTION>
Assets
_____________________________________________________________________________________________________________
(Unaudited)
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $136,223,645) $141,791,346
Cash in bank on demand deposit 8,102
Receivable for investment securities sold 439,915
Dividends receivable 166,967
Organizational costs (Note 4) 4,946
_____________________________________________________________________________________________________________
Total assets 142,411,276
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Payable to investment manager for organizational costs (Note 4) 5,661
Accrued investment management and services fee 54,741
Accrued distribution fee 9,833
Accrued transfer agency fee 24,539
Other accrued expenses 106,914
_____________________________________________________________________________________________________________
Total liabilities 201,688
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $142,209,588
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 22,315,286 shares $ 223,153
Additional paid-in capital 127,365,886
Undistributed net investment income (Note 1) 889,756
Accumulated net realized gain 8,170,192
Unrealized appreciation (Note 5) 5,560,601
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $142,209,588
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 6.37
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
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Statement of operations
IDS Blue Chip Advantage Fund
Six months ended July 31, 1994
Investment income
_____________________________________________________________________________________________________________
(Unaudited)
Income:
Dividends (net of foreign taxes withheld of $30,686) $ 1,634,312
Interest 787,923
_____________________________________________________________________________________________________________
Total income 2,422,235
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 339,849
Distribution fee 61,561
Transfer agency fee 153,590
Compensation of directors 1,488
Compensation of officers 760
Custodian fees 11,851
Postage 14,133
Registration fees 20,750
Reports to shareholders 3,822
Audit fees 8,000
Administrative 2,544
Other 6,936
_____________________________________________________________________________________________________________
Total expenses 625,284
_____________________________________________________________________________________________________________
Investment income -- net 1,796,951
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized gain on security transactions (Note 3) 2,277,811
Net realized loss on closed stock index futures contracts (107,364)
_____________________________________________________________________________________________________________
Net realized gain 2,170,447
Net change in unrealized appreciation or depreciation (7,601,368)
_____________________________________________________________________________________________________________
Net loss (5,430,921)
_____________________________________________________________________________________________________________
Net decrease in net assets resulting from operations $(3,633,970)
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
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Financial statements
Statement of changes in net assets
IDS Blue Chip Advantage Fund
<CAPTION>
Operations and distributions July 31, 1994 Jan. 31, 1994
_____________________________________________________________________________________________________________
Six months ended Year ended
(Unaudited)
<S> <C> <C>
Investment income -- net $ 1,796,951 $ 2,134,143
Net realized gain 2,170,447 12,775,441
Net change in unrealized appreciation or depreciation (7,601,368) 3,908,042
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations (3,633,970) 18,817,626
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (1,112,930) (2,043,210)
Net realized gain on investments -- (8,629,922)
_____________________________________________________________________________________________________________
Total distributions (1,112,930) (10,673,132)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
2,891,074 and 6,335,699 shares (Note 2) 18,254,281 40,812,605
Net asset value of 177,804 and 1,637,538 shares
issued in reinvestment of distributions 1,097,279 10,543,443
Payments for redemptions of
3,205,266 and 5,507,338 shares (20,167,482) (35,563,796)
_____________________________________________________________________________________________________________
Increase (decrease) in net assets from capital share transactions
representing net reduction of
136,388 and net addition of 2,465,899 shares (815,922) 15,792,252
_____________________________________________________________________________________________________________
Total increase (decrease) in net assets (5,562,822) 23,936,746
_____________________________________________________________________________________________________________
Net assets at beginning of period 147,772,410 123,835,664
Net assets at end of period
(including undistributed net investment income of
$889,756 and $205,735) $142,209,588 $147,772,410
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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Notes to financial statements
IDS Blue Chip Advantage Fund
(Unaudited as to July 31, 1994)
______________________________________________________________________________
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.
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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.
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.
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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 $262,516 for the six
months ended July 31, 1994. The fund also pays
custodian fees to IDS Trust Company, 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 $37 for the
six months ended July 31, 1994.<PAGE>
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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 $65,165,566 and $68,814,249, respectively,
for the six moths ended July 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 July 31, 1994, included
securities valued at $1,057,875 that were pledged as
collateral to cover initial margin deposits on 21
purchase contracts. The market value of the open
contracts at July 31, 1994, was $4,818,450 with
$7,100 unrealized loss.
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<TABLE>
Notes to financial statements
IDS Blue Chip Advantage Fund
<CAPTION>
_____________________________________________________________________________
6. Financial highlights
The table below shows certain important financial information
for evaluating the fund's results.
Fiscal year ended Jan. 31,
Per share income and capital changes*
1994** 1994 1993 1992 1991***
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $6.58 $6.20 $5.96 $5.25 $5.00
Income from investment operations:
Net investment income .08 .10 .10 .12 .10
Net gains (losses) on securities (both realized and unrealized) (.24) .79 .50 .96 .25
Total from investment operations (.16) .89 .60 1.08 .35
Less distributions:
Dividends from net investment income (.05) (.10) (.09) (.12) (.10)
Distributions from realized gains -- (.41) (.27) (.25) --
Total distributions (.05) (.51) (.36) (.37) (.10)
Net asset value, end of period $6.37 $6.58 $6.20 $5.96 $5.25
Ratios/supplemental data
1994** 1994 1992 1992 1991***
Net assets, end of period (in millions) $142 $148 $124 $85 $36
Ratio of expenses to average daily net assets .91%****1.03% 1.10% 1.11%++ .85%+
Ratio of net income to average daily net assets 2.62%****1.59% 1.63% 2.01%++ 2.93%****+
Portfolio turnover rate (excluding short-term securities) 48% 156% 202% 154% 103%
Total return+++ (2.4%)++++14.7% 10.2% 21.2% 7.0%++++
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Six months ended July 31, 1994 (Unaudited).
***Commencement of operations. Period from March 5, 1990 to Jan. 31, 1991.
****Adjusted to an annual basis.
+During the period from March 5, 1990 to Jan. 31, 1991, IDS reimbursed the fund
for expenses in excess of 0.85% of its average daily net assets. Had IDS
not done so, the ratios of expenses and net investment income would have been
1.35% and 2.39%, respectively.
++During the period from Feb. 1, 1991 to May 9, 1991, IDS reimbursed the fund for
expenses in excess of 0.85% of its average daily net assets. Had IDS not
done so, the ratios of expenses and net investment income would have been 1.17%
and 1.95%, respectively.
+++Total return does not reflect payment of a sales charge.
++++For the periods ended Jan. 31, 1991 and July 31, 1994, the annualized total returns
are 7.7% and (4.7%), respectively.
</TABLE> <PAGE>
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Investments in securities
<TABLE>
IDS Blue Chip Advantage Fund (Percentages represent value of
July 31, 1994 (Unaudited) investments compared to net assets)
<CAPTION>
_____________________________________________________________________________________________________________________________
Common stocks (96.3%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Aerospace & defense (0.5%)
Allied Signal 4,100 $ 156,825
Northrop 3,200 134,400
Raytheon 6,800 446,250
____________
Total 737,475
_____________________________________________________________________________________________________________________________
Airlines (1.0%)
AMR 25,100 (b) 1,436,975
_____________________________________________________________________________________________________________________________
Automotive & related (1.7%)
Chrysler 9,800 471,625
Ford Motor 25,600 812,800
General Motors 21,900 1,125,113
Goodyear Tire & Rubber 600 21,375
____________
Total 2,430,913
_____________________________________________________________________________________________________________________________
Banks and savings & loans (7.9%)
Ahmanson (HF) 24,600 488,925
Banc One 7,300 243,637
Bank of Boston 800 21,100
BankAmerica 76,200 3,676,650
Chase Manhattan 1,100 40,563
Citicorp 5,500 226,875
First Chicago 46,300 2,326,575
Great Western Financial 18,000 355,500
NationsBank 67,900 3,785,425
PNC Bank 2,100 60,375
Shawmut Natl 1,900 40,375
____________
Total 11,266,000
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
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Investments in securities
IDS Blue Chip Advantage Fund (Percentages represent value of
July 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (continued)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Beverages & tobacco (6.8%)
Coca-Cola 24,300 $ 1,078,313
PepsiCo 165,000 5,032,500
UST 125,200 3,615,150
____________
Total 9,725,963
_____________________________________________________________________________________________________________________________
Building materials (0.2%)
Boise Cascade 3,400 85,000
Centex 2,800 70,000
Masco 2,700 70,875
Weyerhaeuser 1,900 79,800
____________
Total 305,675
_____________________________________________________________________________________________________________________________
Chemicals (0.8%)
Dow Chemical 9,500 656,688
Engelhard 1,900 46,550
Morton Intl 500 42,000
Nalco Chemical 4,200 137,025
Rohm & Haas 3,100 200,725
____________
Total 1,082,988
_____________________________________________________________________________________________________________________________
Communications equipment (6.0%)
AirTouch Communications 161,300 (b) 4,193,800
Motorola 66,500 3,524,500
Northern Telecom 23,500 (c) 757,875
____________
Total 8,476,175
_____________________________________________________________________________________________________________________________
Computers & office equipment (3.7%)
Cisco Systems 42,400 (b) 890,400
Compaq Computer 29,500 (b) 932,938
Computer Associates 3,300 128,288
Hewlett-Packard 6,900 535,612
Oracle Systems 7,000 (b) 267,750
Pitney Bowes 70,200 2,474,550
____________
Total 5,229,538
_____________________________________________________________________________________________________________________________
Electronics (0.5%)
Intel 12,400 734,700
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
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Investments in securities
IDS Blue Chip Advantage Fund (Percentages represent value of
July 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (continued)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Energy (10.2%)
Atlantic Richfield 15,300 $ 1,650,488
Chevron 25,300 1,122,688
Louisiana Land/Exp 7,800 328,575
Mobil 14,100 1,182,637
Occidental Petroleum 46,800 930,150
Phillips Petroleum 20,700 677,925
Royal Dutch Petroleum ADR 73,800 (c) 8,339,400
Williams 9,900 322,987
____________
Total 14,554,850
_____________________________________________________________________________________________________________________________
Energy equipment & services (1.2%)
Baker Hughes 17,900 378,137
Halliburton 16,200 550,800
Rowan 4,200 (b) 34,650
Schlumberger 11,600 (c) 684,400
____________
Total 1,647,987
_____________________________________________________________________________________________________________________________
Financial services (3.4%)
Federal Natl Mtge 37,700 3,270,475
Household Intl 46,100 1,578,925
____________
Total 4,849,400
_____________________________________________________________________________________________________________________________
Food (0.3%)
Borden 40,100 471,175
_____________________________________________________________________________________________________________________________
Furniture & appliances (3.2%)
Black & Decker 85,900 1,771,688
Stanley Works 69,500 2,840,812
____________
Total 4,612,500
_____________________________________________________________________________________________________________________________
Health care (5.6%)
Abbott Laboratories 11,000 309,375
Johnson & Johnson 1,900 89,300
Medtronic 21,300 1,898,362
Merck 51,900 1,537,537
Pfizer 62,100 3,850,200
Warner-Lambert 3,100 201,500
____________
Total 7,886,274
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
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Investments in securities
IDS Blue Chip Advantage Fund (Percentages represent value of
July 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (continued)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Health care services (3.5%)
Columbia/HCA Healthcare 36,900 $ 1,494,450
Service Intl 79,600 2,099,450
U.S. HealthCare 34,800 1,318,050
_____________
Total 4,911,950
_____________________________________________________________________________________________________________________________
Household products (4.1%)
Procter & Gamble 87,200 4,861,400
Unilever NV ADR 9,100 (c) 973,700
____________
Total 5,835,100
_____________________________________________________________________________________________________________________________
Industrial transportation (5.8%)
Conrail 20,700 1,112,625
CSX 25,700 1,994,963
Norfolk Southern 30,600 1,927,800
Union Pacific 54,900 3,239,100
____________
Total 8,274,488
_____________________________________________________________________________________________________________________________
Insurance (0.7%)
Alexander & Alex Services 23,700 468,075
Providian 10,800 333,450
Torchmark 4,400 171,050
____________
Total 972,575
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
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Investments in securities
IDS Blue Chip Advantage Fund (Percentages represent value of
July 31, 1994 (Unaudited) investments compared to
net assets)
_____________________________________________________________________________________________________________________________
Common stocks (continued)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Leisure time & entertainment (1.2%)
Hasbro 56,400 $ 1,706,100
_____________________________________________________________________________________________________________________________
Media (0.2%)
Tele-Communications Cl A 12,000 (b) 279,750
Time Warner 900 33,412
____________
Total 313,162
_____________________________________________________________________________________________________________________________
Metals (2.1%)
Cyprus Minerals 4,400 137,500
Nucor 19,700 1,359,300
Phelps Dodge 600 37,050
Placer Dome 72,600 (c) 1,506,450
____________
Total 3,040,300
_____________________________________________________________________________________________________________________________
Multi-industry conglomerates (9.4%)
General Electric 158,600 (d) 7,989,475
ITT 62,100 5,325,075
____________
Total 13,314,550
_____________________________________________________________________________________________________________________________
Paper & packaging (0.1%)
Intl Paper 2,100 153,037
_____________________________________________________________________________________________________________________________
Restaurants & lodging (3.8%)
Hilton Hotels 19,100 1,205,688
McDonalds 95,800 2,598,575
Shoneys 47,500 (b) 670,937
Wendy's Intl 62,700 964,012
____________
Total 5,439,212
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities. <PAGE>
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Investments in securities
IDS Blue Chip Advantage Fund (Percentages represent value of
July 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (continued)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
Retail (6.5%)
Dayton Hudson 29,000 $ 2,392,500
Home Depot 55,400 2,271,400
Super Valu Stores 500 14,313
Wal-Mart Stores 179,900 4,497,500
____________
Total 9,175,713
_____________________________________________________________________________________________________________________________
Textiles & apparel (--%)
NIKE Cl B 800 49,200
_____________________________________________________________________________________________________________________________
Utilities-electric (1.1%)
Northern States Power 35,500 1,517,625
_____________________________________________________________________________________________________________________________
Utilities-gas (0.7%)
Enron 14,600 472,675
Pacific Enterprises 23,700 485,850
____________
Total 958,525
_____________________________________________________________________________________________________________________________
Utilities-telephone (4.1%)
BellSouth 32,500 2,031,250
McCaw Cellular Cl A 7,100 (b) 377,188
MCI Communications 30,000 682,500
Pacific Telesis 32,200 1,054,550
U S WEST 43,200 1,738,800
____________
Total 5,884,288
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $131,426,712) $136,994,413
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
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Investments in securities
<CAPTION>
IDS Blue Chip Advantage Fund (Percentages represent value of
July 31, 1994 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Short-term securities (3.4%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies
Federal Farm Credit Bank Disc Nt
08-02-94 4.19% $3,900,000 $ 3,898,641
Federal Home Loan Bank Disc Nt
08-15-94 4.29 900,000 898,292
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $4,796,933) $ 4,796,933
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $136,223,645)(e) $141,791,346
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
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Investments in securities
IDS Blue Chip Advantage Fund
July 31, 1994 (Unaudited)
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, Sept. 1994 21
___________________________________________________________________________________________
(e) At July 31, 1994, the cost of securities for federal income tax purposes was approximately
$136,224,000 and the approximate aggregate gross unrealized appreciation and depreciation
based on that cost was:
<CAPTION>
<S> <C>
Unrealized appreciation $8,756,000
Unrealized depreciation (3,189,000)
___________________________________________________________________________________________
Net unrealized appreciation $5,567,000
___________________________________________________________________________________________
</TABLE>
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Directors and officers
Directors and officers of the fund
_____________________________________________________________________
President and interested director
William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.
_____________________________________________________________________
Independent directors
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for
Public Policy Research.
Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.
Donald M. Kendall
Former chairman and chief executive officer, PepsiCo, Inc.
Melvin R. Laird
Senior counsellor for national and international affairs,
The Reader's Digest Association, Inc.
Lewis W. Lehr
Former chairman and chief executive officer,
Minnesota Mining and Manufacturing Company (3M).
Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
_____________________________________________________________________
Interested director who is a partner in a law firm that has
represented an IDS subsidiary
Anne P. Jones
Partner, law firm of Sutherland, Asbill & Brennan.
_____________________________________________________________________
Interested directors who are officers and/or employees of IDS
William H. Dudley
Executive vice president, IDS.
David R. Hubers
President and chief executive officer, IDS.
John R. Thomas
Senior vice president, IDS.
_____________________________________________________________________
Other officer
Leslie L. Ogg
Vice president of all funds in the IDS MUTUAL FUND GROUP and general
counsel and treasurer of the publicly offered funds.<PAGE>
PAGE
IDS mutual funds
Cash equivalent investments
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposit (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
Income investments
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income.
Secondary objective is capital growth. Risk varies by bond quality.
IDS Global Bond Fund
Invests primarily in debt securities of U.S. and foreign issuers to
seek high total return through income and growth of capital.
(icon of) globe
IDS Extra Income Fund
Invests mainly in long-term, high-yielding corporate fixed income
securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) cornucopia<PAGE>
PAGE
IDS mutual funds
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher rated,
lower risk bond categories, or the equivalent, and in government bonds.
(icon of) greek column
IDS 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
Invests in high-quality corporate bonds and other highly rated debt
instruments including government securities and short-term
investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests primarily in securities issued or guaranteed as to the timely
payment of principal and interest by the U.S. government, its agencies
and instrumentalities. Seeks a high level of current income and
safety of principal consistent with its type of investments.
(icon of) federal building
IDS Strategy, Short-Term Income Fund
Invests primarily in short-term and intermediate-term bonds and notes
to seek a high level of current income.
(icon of) chess piece
Tax-exempt income investments
These funds provide tax-free income by investing in municipal bonds.
The income is generally free from federal income tax. Risk varies
by bond quality.
IDS High Yield Tax-Exempt Fund
Invests primarily in medium- and lower-quality municipal bonds and
notes. Lower-quality securities generally involve greater risk of
principal and income.
(icon of) shield with basket of apples enclosed<PAGE>
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IDS mutual funds
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities
to provide income to residents of each respective state that is
exempt from federal, state and local income taxes. (New York
is the only state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government
units, with at least 75% in the four highest rated, lowest risk bond
categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the fund but does not guarantee
the market value of the fund's shares.
(icon of) shield with eagle head
Growth and income investments
These funds focus on securities of medium to large, well-established
companies that offer long-term growth of capital and reasonable income
from dividends and interest. Moderate risk.
IDS International Fund
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The fund may invest up to 20%
of its assets in the U.S. market.
(icon of) three flags
IDS Strategy, Worldwide Growth Fund
Invests primarily in common stocks of companies throughout the world
that offer potential for superior growth. Holdings may range from
small- to large-capitalization stocks, including those of companies
involved in areas of rapid economic growth.
(icon of) chess piece
IDS Managed Retirement Fund
Invests in a combination of common stocks, fixed-income
investments and money market securities to seek a maximum total
return through a combination of growth of capital and current income.
(icon of) bird in a nest<PAGE>
PAGE
IDS mutual funds
IDS Equity Plus Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of
capital and income.
(icon of) three apple trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by 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
Invests in common stocks of companies representing many
sectors 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
Invests primarily in the stocks of public utility companies to seek
high current income and growth of income and capital with reduced
volatility.
(icon of) electrical cord
IDS Diversified Equity Income Fund
Invests primarily in high-yielding common stocks to seek high current
income and, secondarily, to benefit from the growth potential offered
by stock investments.
(icon of) four puzzle pieces
IDS Mutual
Invests in a balance between common stocks and senior securities
(preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
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PAGE
IDS mutual funds
Growth investments
Funds in this group seek capital growth, primarily from common stocks.
They are high risk mutual funds with a potential for high reward.
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Strategy, Aggressive 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 Growth Fund
Invests primarily in companies that have above-average potential
for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) flower
IDS Global Growth Fund
Invests in stocks of companies throughout the world that are
positioned to meet market needs in a changing world economy.
These companies offer above-average potential for long-term growth.
(icon of) world
IDS New Dimensions Fund
Invests primarily in companies with significant growth
potential due to superiority in technology, marketing or management.
The fund frequently changes its industry mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The fund holds
stocks for the long term with the goal of capital growth.
(icon of) shooting star
<PAGE>
PAGE
Specialty growth investment
This fund aggressively seeks capital growth as a hedge against inflation.
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic companies
that explore for, mine and process or distribute gold and other
precious metals. This is the most aggressive and most speculative
IDS mutual fund.
(icon of) cart of precious gems
For more complete information about any of these funds, including charges
and expenses, you can obtain a prospectus by contacting your financial
planner or writing to IDS Shareholder Service, P.O. Box 534, Minneapolis,
MN 55440-0534. Read it carefully before you invest or send money.
<PAGE>
PAGE
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 (TouchTone phones only), including current
fund prices and performance, account values and recent account
transactions
National/Minnesota:
800-272-4445
Mpls./St. Paul area:
671-1630
Your IDS financial planner:
AN AMERICAN EXPRESS COMPANY
1894 IDS 1994
A CENTURY OF INVESTING IN THE FUTURE
IDS Blue Chip Advantage Fund
IDS Tower 10
Minneapolis, MN 55440-0010
