IDS
Blue Chip
Advantage
Fund
1995 semiannual report
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
American Express
Financial Advisors Inc.
<PAGE>
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 16
Directors and officers 20
IDS mutual funds 21
<PAGE>
To our shareholders
William R. Pearce
President of the fund
Guru Baliga
Portfolio manager
From the president
As I indicated in the fund's previous reports, new agreements between
the fund and American Express Financial Corporation (AEFC) were
approved by shareholders in November 1994. The new agreements became
effective when the fund began offering multiple classes of shares on
March 20, 1995.
The advantage of offering more than a single class of shares is that
investors may choose how they wish to pay sales charges. A portion of
these charges compensates your American Express financial advisor
(formerly called your IDS planner), who is committed to providing you
with outstanding services.
Adding new classes of mutual fund shares does make the presentation of
financial information in this report more complex. However, we will
continue our effort to make the reports easier to read and understand.
Meanwhile, your American Express financial advisor is available to
answer your questions.
William R. Pearce
From the portfolio manager
Six months ago in the annual report to shareholders, I offered an
investment outlook that centered on modest economic growth, restrained
inflation and stable-to-declining long-term interest rates. In such an
environment, I noted that I thought stocks would generate a positive
return during the first half of the fund's fiscal year (February
through July 1995).
As it turned out, I was right about the investment environment but
underestimated the stock market; it performed extraordinarily well,
turning in its most sustained advance in years. Although unable to
match the market's remarkable pace, IDS Blue Chip Advantage Fund
produced a 12.6% gain for Class A shares that proved to be its
strongest six-month performance since the fund's inception in early
1990.
Technology leads the way
The first indication that stocks were ready to move markedly higher
came in the opening weeks of 1995, as a more stable interest-rate
picture sparked a brief market rally. By February, stocks were on a
roll that, aside from May, included solid gains in every month.
Most of the time, technology stocks, buoyed by consistently strong
corporate profit reports and overall enthusiasm related to industry
growth opportunities, were at the head of the market's parade. While
the fund owned a number of technology stocks, its exposure on a
percentage basis was less than that of the Standard & Poor's 500 Stock
Index, the market index I use for performance comparisons.
(The portfolio structure resembles the S&P 500 in that the fund
invests only in stocks included in that index. I establish one or more
industry classifications - technology, for example - for each company
whose common stock makes up the index. The stocks that carry the
highest investment rating, as determined by the research analysts,
ultimately comprise the portfolio.)
The fund's "under-weighting" in technology, combined with what turned
out to be premature sell decisions regarding a few spectacular
gainers, tempered its overall performance. On the other hand, it had
above-market exposure to financial services stocks, which proved to be
extremely beneficial to the fund. As for other important stock
sectors, telecommunications, pharmaceuticals and industrial machinery
were quite good, while the fund's retailing and health-care services
holdings were generally weak.
Slower pace likely
Looking to the rest of the fiscal year, while I don't see major
problems for the stock market, I also don't see as positive an
environment as the fund enjoyed during the first several months of the
year. I expect interest rates, whose substantial decline in early 1995
provided a powerful stimulant for the market, to come down modestly,
if at all. The other major factor behind the market's surge, corporate
profits, should continue to be generally good instead of extremely
strong, as they were over the spring and summer. All in all, I think
that will result in a less impressive, though still positive, stock
market performance in the months ahead.
Such a scenario would increase the likelihood of the fund
outperforming the market. That's because, in a slower-moving market,
stocks of a broader range of solid companies usually attract more
investment interest than when the market is swept up in a flood of
momentum, as happened with technology stocks in 1995. I continue to
emphasize stocks of fundamentally sound companies with what I believe
are bright business prospects.
Guru Baliga
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
July 31, 1995 $7.03
Jan. 31, 1995 $5.97
Increase $1.06
Distributions
Feb. 1, 1995 - July 31, 1995
From income $0.05
From capital gains $ --
Total distributions $0.05
Total return** +12.6%***
Class B
March 20, 1995 - July 31, 1995
(All figures per share)
Net asset value (NAV)
July 31, 1995 $7.01
March 20, 1995* $6.30
Increase $0.71
Distributions
March 20, 1995* - July 31, 1995
From income $0.04
From capital gains $ --
Total distributions $0.04
Total return** +11.9%***
Class Y
March 20, 1995 - July 31, 1995
(All figures per share)
Net asset value (NAV)
July 31, 1995 $7.03
March 20, 1995* $6.30
Increase $0.73
Distributions
March 20, 1995* - July 31, 1995
From income $0.05
From capital gains $ --
Total distributions $0.05
Total return** +12.4%***
*Inception date.
**The prospectus discusses the effects of sales
charges, if any, on the various classes.
***The total return is a hypothetical investment in
the fund with all distributions reinvested.<PAGE>
PAGE
<TABLE>
<CAPTION>
IDS Blue Chip Advantage Fund
(Pie chart) The ten holdings listed here make up 29.20% of the fund's net assets
Your's fund's ten largest holdings
Percent Value
(of fund's net assets)(as of July 31, 1995)
__________________________________________________________________________________________
<S> <C> <C>
General Electric 5.01% $10,572,800
A diversified company with interest in manufacturing,
broadcasting (NBC), financial services and technology.
Royal Dutch Petroleum 3.67 7,734,300
A major oil company that includes Royal Dutch
(the Dutch version) and Shell Transport (the English
version).
Mobil 3.27 6,910,925
Among the largest oil companies, with world-scale refining
and marketing operations.
Procter & Gamble 2.79 5,888,813
A major manufacturer of personal-care products, detergents,
diapers and food.
Philip Morris 2.78 5,873,250
The largest cigarette company that has become the second
largest packaged-food company in the world as a result of
the Kraft acquisition.
Merck 2.62 5,534,200
One of the world's largest drug manufacturers.
BankAmerica 2.46 5,189,400
A holding company that owns Bank of America (one of the
world's largest banks) and Seattle-First National Bank.
McDonalds 2.33 4,924,688
A corporation that operates, licenses and services the world's
largest chain of fast-food retaurants.
Johnson & Johnson 2.19 4,620,700
A major producer of health-care products, including consumer
products, medical and dental devices and products, and a wide
variety of ethical and over-the-counter drugs.
AirTouch Communications 2.08 4,387,950
A subsidiary of Pacific Telesis that is engaged in
non-regulated wireless communication operations, with cellular
interest in the United States, Germany, Japan, Italy,
South Korea and Belgium.
/TABLE
<PAGE>
PAGE
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Blue Chip Advantage Fund
July 31, 1995
Assets
_____________________________________________________________________________________________________________
<S> <C>
(Unaudited)
Investments in securities, at value (Note 1)
(identified cost $184,476,550) $210,744,064
Cash in bank on demand deposit 270,950
Dividends receivable 260,678
_____________________________________________________________________________________________________________
Total assets 211,275,692
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Variation margin payable 20,950
Accrued investment management services fee 10,207
Accrued distribution fee 931
Accrued service fee 3,641
Accrued transfer agency fee 4,256
Accrued administrative services fee 928
Other accrued expenses 127,720
_____________________________________________________________________________________________________________
Total liabilities 168,633
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $211,107,059
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value; $ 300,530
Additional paid-in capital 176,365,866
Undistributed net investment income (Note 1) 290,479
Accumulated net realized gain 7,740,267
Unrealized appreciation (Note 4) 26,409,917
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $211,107,059
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $177,647,270
Class B $ 11,749,125
Class Y $ 21,710,664
Net asset value per share of outstanding capital stock: Class A 25,287,601 $ 7.03
Class B 1,675,507 $ 7.01
Class Y 3,089,855 $ 7.03
See accompanying notes to financial statements. <PAGE>
PAGE
Statement of operations
IDS Blue Chip Advantage Fund
Six months ended July 31, 1995
Investment income
_____________________________________________________________________________________________________________
(Unaudited)
Income:
Dividends (net of foreign taxes withheld of $32,389) $ 2,064,274
Interest 314,960
_____________________________________________________________________________________________________________
Total income 2,379,234
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 399,380
Distribution fee
Class A 16,555
Class B 13,938
Transfer agency fee 173,285
Incremental transfer agency fee - Class B 372
Service fee
Class A 103,359
Class B 3,252
Administrative services fee 27,261
Compensation of directors 1,881
Compensation of officers 829
Custodian fees 3,540
Postage 16,302
Registration fees 45,522
Reports to shareholders 101,394
Audit fees 9,500
Administrative 1,222
Other 4,604
_____________________________________________________________________________________________________________
Total expenses 922,196
_____________________________________________________________________________________________________________
Investment income -- net 1,457,038
_____________________________________________________________________________________________________________
Realized and unrealized gain -- net
_____________________________________________________________________________________________________________
Net realized gain on security transactions (Note 3) 5,174,009
Net realized gain on closed stock index futures contracts 1,278,166
_____________________________________________________________________________________________________________
Net realized gain on investments 6,452,175
Net change in unrealized appreciation or depreciation 22,299,099
_____________________________________________________________________________________________________________
Net gain on investments 28,751,274
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $ 30,208,312
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE
<TABLE>
<CAPTION>
Financial statements
Statement of changes in net assets
IDS Blue Chip Advantage Fund
_____________________________________________________________________________________________________________
Operations and distributions July 31, 1995 Jan. 31, 1995
_____________________________________________________________________________________________________________
<S> <C> <C>
Six months ended Year ended
(Unaudited)
Investment income -- net $ 1,457,038 $ 2,523,198
Net realized gain on investments 6,452,175 6,256,917
Net change in unrealized appreciation or depreciation 22,299,099 (9,051,151)
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations 30,208,312 (271,036)
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (1,144,560) (2,588,135)
Class B (25,162) --
Class Y (148,603) --
Net realized gain
Class A -- (10,968,570)
_____________________________________________________________________________________________________________
Total distributions (1,318,325) (13,556,705)
_____________________________________________________________________________________________________________
Capital share transactions (Note 5)
_____________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 34,805,071 40,945,271
Class B shares 11,638,032 --
Class Y shares 21,541,746 --
Reinvestment of distributions at net asset value
Class A shares 1,128,888 13,406,634
Class B shares 24,980 --
Class Y shares 148,603 --
Payments for redemptions
Class A shares (35,773,720) (36,914,829)
Class B shares (Note 2) (519,918) --
Class Y shares (2,158,355) --
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions 30,835,327 17,437,076
_____________________________________________________________________________________________________________
Total increase in net assets 59,725,314 3,609,335
Net assets at beginning of period 151,381,745 147,772,410
_____________________________________________________________________________________________________________
Net assets at end of period
(including undistributed net investment income of
$290,479 and $151,766) $211,107,059 $151,381,745
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE
Notes to financial statements
IDS Blue Chip Advantage Fund
(Unaudited as to July 31, 1995)
______________________________________________________________________________
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. The fund offers Class A, Class B and Class Y
shares. Class A shares are sold with a front-end sales charge. Class B
shares, which the fund began offering on March 20, 1995, may be subject to a
contingent deferred sales charge. Class B shares automatically convert to
Class A after eight years. Class Y shares, which the fund also began offering
on March 20, 1995, have no sales charge and are offered only to qualifying
institutional investors.
All classes of shares have identical voting, dividend, liquidation and other
rights, and the same terms and conditions, except that the level of
distribution fee, transfer agency fee and service fee (class specific
expenses) differs among classes. Income, expenses (other than class specific
expenses) and realized and unrealized gains or losses on investments are
allocated to each class of shares based upon its relative net assets.
Significant accounting policies followed by the fund are summarized below:
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.
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.
______________________________________________________________________________
2. Expenses and sales charges
Under terms of a prior agreement that ended March 19, 1995, the fund paid
American Express Financial Corporation (AEFC) a fee for managing its
investments, recordkeeping and other specified services. The fee was 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.
Also under the terms of a prior agreement, the fund paid AEFC 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 was
reduced by earnings on monies pending shareholder redemptions.
Effective March 20, 1995, when the fund began offering multiple classes of
shares, the fund entered into agreements with AEFC for managing its portfolio,
providing administrative servies and serving as transfer agent as follows:
Under its Investment Management Services Agreement, AEFC determines which
securities will be purchased, held or sold. The management fee is a
percentage of the fund's daily net assets in reducing percentages from 0.44%
to 0.34% annually. Under an Administrative Services Agreement, the fund pays
AEFC for administration and accounting services at a percentage of the fund's
average daily net assets in reducing percentages from 0.04% to 0.02% annually.
Under a separate Transfer Agency Agreement, AEFC maintains shareholder
accounts and records. The fund pays AEFC an annual fee per shareholder
account for this service as follows:
o Class A $15
o Class B $16
o Class Y $15
Also effective March 20, 1995, the fund entered into agreements with American
Express Financial Advisors Inc. for distribution and shareholder servicing-
related services as follows: Under a Plan and Agreement of Distribution, the
fund pays a distribution fee at an annual rate of 0.75% of the fund's average
daily net assets attributable to Class B shares for distribution-related
services.
Under a Shareholder Service Agreement, the fund pays a fee for service
provided to shareholders by financial advisors and other servicing agents.
The fee is calculated at a rate of 0.175% of the fund's average daily net
assets attributable to Class A and Class B shares.
AEFC will assume and pay any expenses (except taxes and brokerage commissions)
that exceed the most restrictive applicable state expense limitation.
Sales charges by American Express Financial Advisors Inc. for distributing
fund shares were $476,956 for Class A and $206 for Class B for the six months
ended July 31, 1995.
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.
______________________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $116,791,637 and $89,155,595, respectively, for the
six months ended July 31, 1995. Realized gains and losses are determined on an
identified cost basis.
______________________________________________________________________________
4. Stock index futures contracts
Investments in securities at July 31, 1995, included securities valued at
$1,298,000 that were pledged as collateral to cover initial margin deposits on
36 purchase contracts. The market value of the open contracts at July 31, 1995
was $10,136,700 with $142,403 unrealized gain.
______________________________________________________________________________
5. Capital share transactions
<TABLE>
<CAPTION>
Transactions in shares of capital stock for the periods indicated are as
follows:
________________________________________________________________________________________
<S> <C> <C> <C> <C>
Six months ended July 31, 1995 Year ended
01/31/95
Class A Class B* Class Y* Class A
________________________________________________________________________________________
Sold 5,338,710 1,748,957 3,392,901 6,515,919
Issued for reinvested 171,910 3,704 22,588 2,259,469
distributions
Redeemed (5,573,775) (77,154) (325,634) (5,876,306)
_______________________________________________________________________________________
Net increase (decrease) (63,155) 1,675,507 3,089,855 2,899,082
_______________________________________________________________________________________
*Inception date was March 20, 1995.
_______________________________________________________________________________________
</TABLE>
<PAGE>
6. Financial highlights
<TABLE>
<CAPTION>
The table below shows certain important financial information for evaluating the fund's results.
Fiscal period ended Jan. 31,
Per share income and capital changes*
1995*** 1995 1994 1993 1992 1991**
Classes
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A B Y
Net asset value, $5.97 $6.30 $6.30 $6.58 $6.20 $5.96 $5.25 $5.00
beginning of period
Income from investment operations:
Net investment income .05 .03 .05 .11 .10 .10 .12 .10
Net gains (losses) 1.06 .72 .73 (.13) .79 .50 .96 .25
(both realized
and unrealized)
Total from investment 1.11 .75 .78 (.02) .89 .60 1.08 .35
operations
Less distributions:
Dividends from net (.05) (.04) (.05) (.11) (.10) (.09) (.12) (.10)
investment income
Distributions from -- -- -- (.48) (.41) (.27) (.25) --
realized gains
Total distributions (.05) (.04) (.05) (.59) (.51) (.36) (.37) (.10)
Net asset value, $7.03 $7.01 $7.03 $5.97 $6.58 $6.20 $5.96 $5.25
end of period
Ratios/supplemental data
1995*** 1995 1994 1993 1992 1991**
Classes
A B Y
Net assets, end of period $178 $12 $22 $151 $148 $124 $85 $36
(in millions)
Ratio of expenses to 1.08%# 1.63%# .67%# .89% 1.03% 1.10% 1.11%+ .85%+
average daily net assets
Ratio of net income 1.67%# .89%# 1.86%# 1.77% 1.59% 1.63% 2.01%+ 2.93%+#
to average daily net assets
Portfolio turnover rate 52% 52% 52% 122% 156% 202% 154% 103%
(excluding short-term
securities)
Total return## 12.6%++ 11.9% 12.4% (0.2%) 14.7% 10.2% 21.2% 7.0%++
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Inception date. Period from March 5, 1990 to Jan. 31, 1991.
***Six months ended July 31, 1995 for Class A and inception date was
March 20, 1995 for Class B and Y (Unaudited).
+During portions of the fiscal periods ended Jan. 31, 1992 and 1991,
AEFC voluntarily reimbursed the fund for certain expenses. Had AEFC not done
so, the annual ratios of expenses and net investment income would have been
1.17% and 1.95% in 1992 and 1.35% and 2.39% in 1991.
++For the periods ended Jan. 31, 1991 and July 31, 1995 for Class A, the
annualized returns are 7.7% and 25.2%, respectively.
#Adjusted to an annual basis.
##Total return does not reflect payment of a sales charge.
/TABLE
<PAGE>
PAGE
<TABLE>
<CAPTION>
Investments in securities
IDS Blue Chip Advantage Fund (Percentages represent value of
July 31, 1995 (Unaudited) investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (94.7%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Aerospace & defense (5.0%)
AlliedSignal 2,800 $ 130,900
Boeing 44,400 2,974,800
General Dynamics 48,500 2,364,375
Lockheed Martin 900 56,587
Loral 8,500 476,000
McDonnell Douglas 1,600 132,200
Raytheon 5,400 446,175
Rockwell Intl 85,600 3,905,500
United Technologies 1,000 84,000
____________
Total 10,570,537
_____________________________________________________________________________________________________________________________
Airlines (0.2%)
AMR 3,600 (b) 270,000
Delta Airlines 1,300 103,025
____________
Total 373,025
_____________________________________________________________________________________________________________________________
Automotive & related (0.4%)
Dana 5,800 171,100
Echlin 6,900 269,100
General Motors 5,900 287,625
Goodyear Tire & Rubber 2,500 108,437
____________
Total 836,262
_____________________________________________________________________________________________________________________________
Banks and savings & loans (6.2%)
Ahmanson (HF) 28,600 639,925
Bank of Boston 54,000 2,342,250
BankAmerica 96,100 5,189,400
Citicorp 13,900 867,012
First Chicago 60,700 3,687,525
NationsBank 3,100 173,988
Shawmut Natl 2,100 64,837
____________
Total 12,964,937
_____________________________________________________________________________________________________________________________
Beverages & tobacco (5.5%)
Coca-Cola 57,600 3,794,400
Philip Morris 82,000 5,873,250
UST 72,400 1,972,900
____________
Total 11,640,550
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
Building materials (1.3%)
Masco 94,500 2,457,000
Weyerhauser 6,500 303,875
____________
Total 2,760,875
_____________________________________________________________________________________________________________________________
Chemicals (1.5%)
DuPont (EI) 17,300 1,159,100
Praxair 74,700 2,091,600
____________
Total 3,250,700
_____________________________________________________________________________________________________________________________
Communications equipment (2.6%)
AirTouch Communications 139,300 (b) 4,387,950
Andrew 2,700 (b) 160,312
DSC Communications 2,300 (b) 123,625
Northern Telecom 21,100 (c) 793,888
Scientific-Atlanta 3,700 79,550
____________
Total 5,545,325
_____________________________________________________________________________________________________________________________
Computers & office equipment (5.9%)
Cisco Systems 34,700 (b) 1,930,187
Compaq Computer 6,800 (b) 345,100
Computer Associates 21,500 1,577,562
Hewlett-Packard 23,700 1,845,638
Microsoft 22,600 (b) 2,045,300
Oracle Systems 16,200 (b) 678,375
Pitney Bowes 95,800 3,843,975
Silicon Graphics 5,500 (b) 231,000
____________
Total 12,497,137
_____________________________________________________________________________________________________________________________
Electronics (0.3%)
Micron Technology 11,200 700,000
_____________________________________________________________________________________________________________________________
Energy (8.8%)
Amoco 13,900 934,775
Exxon 37,100 2,689,750
Louisiana Land/Exp 6,200 246,450
Mobil 70,700 6,910,925
Royal Dutch Petroleum ADR 60,900 (c) 7,734,300
____________
Total 18,516,200
_____________________________________________________________________________________________________________________________
Energy equipment & services (1.1%)
Fluor 41,900 2,367,350
_____________________________________________________________________________________________________________________________
Financial services (0.9%)
Dean Witter, Discover & Co 3,000 151,500
Federal Home Loan Mtge 5,100 334,050
Federal Natl Mtge 9,900 926,887
Travelers 10,300 487,963
____________
Total 1,900,400
_____________________________________________________________________________________________________________________________
Food (0.2%)
ConAgra 5,900 222,725
Pioneer Hi-Bred 1,500 63,375
Wrigley (Wm) Jr 2,600 115,700
____________
Total 401,800
_____________________________________________________________________________________________________________________________
Health care (10.0%)
Amgen 15,900 (b) 1,353,487
Biomet 44,900 (b) 684,725
Johnson & Johnson 64,400 4,620,700
Lilly (Eli) 40,700 3,184,775
Medtronic 21,400 1,754,800
Merck 107,200 5,534,200
Pfizer 76,800 3,878,400
____________
Total 21,011,087
_____________________________________________________________________________________________________________________________
Health care services (2.3%)
Service Intl 109,300 3,729,863
U.S. HealthCare 26,200 1,185,550
_____________
Total 4,915,413
_____________________________________________________________________________________________________________________________
Household products (2.8%)
Clorox 300 19,687
Procter & Gamble 85,500 5,888,813
____________
Total 5,908,500
_____________________________________________________________________________________________________________________________
Industrial equipment & services (3.7%)
Caterpillar 39,500 2,779,813
Deere 30,400 2,732,200
General Signal 63,400 2,337,875
____________
Total 7,849,888
_____________________________________________________________________________________________________________________________
Industrial transportation (4.4%)
Conrail 31,300 1,932,775
Federal Express 2,600 (b) 175,500
Norfolk Southern 39,600 2,875,950
Union Pacific 67,000 4,363,375
____________
Total 9,347,600
_____________________________________________________________________________________________________________________________
Insurance (1.9%)
General Re 3,500 464,187
Lincoln Natl 7,200 296,100
UNUM 68,700 3,323,363
____________
Total 4,083,650
_____________________________________________________________________________________________________________________________
Leisure time & entertainment (0.9%)
Harrah's Entertainment 1,000 (b) 26,875
Hasbro 57,300 1,783,463
Marriott Intl 2,500 90,625
____________
Total 1,900,963
_____________________________________________________________________________________________________________________________
Media (1.2%)
Capital Cities/ABC 3,500 408,625
Comcast Cl A 3,900 78,975
Donnelley (RR) & Sons 500 18,687
Harcourt General 4,300 193,500
Tele-Communications Cl A 25,100 (b) 627,500
Time Warner 8,100 347,288
Viacom Cl B 16,200 (b) 822,150
____________
Total 2,496,725
_____________________________________________________________________________________________________________________________
Metals (2.6%)
Alcan Aluminum 4,100 138,887
Barrick Gold 59,900 (c) 1,490,013
Bethlehem Steel 45,600 (b) 718,200
Inland Steel Inds 32,400 931,500
Nucor 22,100 1,187,875
USX-U.S. Steel Group 32,000 1,060,000
____________
Total 5,526,475
_____________________________________________________________________________________________________________________________
Multi-industry conglomerates (6.7%)
General Electric 179,200 (d) 10,572,800
Seagram 98,200 3,522,925
____________
Total 14,095,725
_____________________________________________________________________________________________________________________________
Paper & packaging (1.4%)
Champion Intl 5,200 293,150
Crown Cork & Seal 41,400 (b) 1,868,175
James River 1,100 36,713
Stone Container 36,800 795,800
____________
Total 2,993,838
_____________________________________________________________________________________________________________________________
Restaurants & lodging (2.3%)
McDonald's 127,500 4,924,688
Wendy's Intl 100 1,862
____________
Total 4,926,550
_____________________________________________________________________________________________________________________________
Retail (6.0%)
Albertson's 118,300 3,519,425
Dayton Hudson 43,700 3,304,813
Home Depot 89,600 3,931,200
Lowes 300 11,062
May Dept Store 1,400 60,725
Penney (JC) 4,100 198,337
Pep Boys 53,700 1,510,313
____________
Total 12,535,875
_____________________________________________________________________________________________________________________________
Utilities-electric (2.5%)
Cinergy 52,400 1,362,400
Northern States Power 21,600 955,800
SCE 73,100 1,251,838
Texas Utilities 47,400 1,605,675
____________
Total 5,175,713
_____________________________________________________________________________________________________________________________
Utilities-gas (0.4%)
Enron 13,500 469,125
Pacific Enterprises 7,700 185,762
Tenneco 3,200 158,400
____________
Total 813,287
_____________________________________________________________________________________________________________________________
Utilities-telephone (5.7%)
AT&T 77,300 4,077,575
BellSouth 28,300 1,917,325
MCI Communications 121,200 2,908,800
SBC Communications 35,100 1,689,188
U S WEST 34,400 1,474,900
____________
Total 12,067,788
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $173,706,661) $199,974,175
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (5.1%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (1.4%)
Federal Natl Mtge Assn Disc Nt
08-14-95 5.66% $2,400,000 $ 2,395,120
08-15-95 5.70 600,000 598,675
Total 2,993,795
_____________________________________________________________________________________________________________________________
Commercial paper (3.7%)
Bell Atlantic Network Funding
08-30-95 5.76 2,000,000 1,990,768
Commerzbank U.S. Finance
08-21-95 5.76 2,600,000 2,591,723
Mobil Australia Finance (Delaware)
08-22-95 5.75 1,000,000 996,664
SAFECO Credit
08-01-95 5.98 1,000,000 1,000,000
Toyota Motor Credit
08-17-95 5.76 1,200,000 1,196,939
Total 7,776,094
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $10,769,889) $ 10,769,889
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $184,476,550)(e) $210,744,064
_____________________________________________________________________________________________________________________________
/TABLE
<PAGE>
<TABLE>
<CAPTION>
_____________________________________________________________________________________________________________________________
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. Foreign securities represent 4.7% of
the fund's net assets as of July 31, 1995.
(d) Partially pledged as initial margin deposit on the following open stock index futures purchase
contracts (see Note 4 to the financial statements):
Type of security Contracts
<S> <C>
___________________________________________________________________________________________
Standard & Poor's 500 Stock Index, Sep. 1995 36
___________________________________________________________________________________________
(e) At July 31, 1995, the cost of securities for federal income tax purposes was approximately
$184,477,000 and the approximate aggregate gross unrealized appreciation and depreciation
based on that cost was:
Unrealized appreciation $ 26,892,000
Unrealized depreciation (625,000)
___________________________________________________________________________________________
Net unrealized appreciation $ 26,267,000
___________________________________________________________________________________________
/TABLE
<PAGE>
PAGE
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.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
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.
C. Angus Wurtele
Chairman of the board and chief executive officer,
The Valspar Corporation
_____________________________________________________________________
Interested directors who are officers and/or employees of AEFC
William H. Dudley
Executive vice president, AEFC.
David R. Hubers
President and chief executive officer, AEFC.
John R. Thomas
Senior vice president, AEFC.
_____________________________________________________________________
Officers who also are officers and/or employees of AEFC
Peter J. Anderson
Vice president of all funds in the IDS MUTUAL FUND GROUP.
Melinda S. Urion
Treasurer of all funds in the IDS MUTUAL FUND GROUP.
_____________________________________________________________________
Other officer
Leslie L. Ogg
Vice president, general counsel and secretary of all funds
in the IDS MUTUAL FUND GROUP.<PAGE>
PAGE
IDS mutual funds
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 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
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>
PAGE
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 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 Select Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of
capital and income.
(icon of) three apple trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by our research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS 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 Equity Value Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) three flowers
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek
high current income and growth of income and capital with reduced
volatility.
(icon of) 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.
(icon of) scale of justice<PAGE>
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 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 American Express Shareholder Service, P.O. Box 534,
Minneapolis, MN 55440-0534. Read it carefully before you invest or send money.
<PAGE>
PAGE
Quick telephone reference
American Express Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota:
800-437-3133
Mpls./St. Paul area:
671-3800
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express Infoline
Automated account information (TouchTone phones only), including current
fund prices and performance, account values and recent account
transactions
National/Minnesota:
800-272-4445
Mpls./St. Paul area:
671-1630
American Express Financial Advisors
IDS Blue Chip Advantage Fund
IDS Tower 10
Minneapolis, MN 55440-0010
