<PAGE>
PAGE 1
IDS Blue Chip Advantage Fund
1995 annual report
(prospectus enclosed)
(Icon of) Prize 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.
(This annual report includes a prospectus that describes in detail
the fund's objective, investment policies, risks, sales charges,
fees and other matters of interest. Please read the prospectus
carefully before you invest or send money.)
Distributed by American Express Financial Advisors Inc.<PAGE>
PAGE 2
(Icon of) Prize ribbon
Making the most of the market
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 priminant 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 Fund tries to
identify and build its portfolio around. Result: a fund that's
like the S&P . . . only better.<PAGE>
PAGE 3
Contents
(Icon of) One open book inside of another.
The purpose of this annual report is to tell investors how the fund
performed.
The prospectus, which is bound into the middle of this annual
report, describes the fund in detail.
1995 annual report
From the president 4
From the portfolio manager 4
Ten largest holdings 6
Making the most of your fund 7
Long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 17
IDS mutual funds 20
Federal income tax information 23
1995 prospectus
The fund in brief
Goal 3p
Types of fund investments 3p
Manager and distributor 3p
Portfolio manager 3p
Alternative sales arrangements 4p
Sales charge and fund expenses 5p
Performance
Financial highlights 7p
Total returns 8p
Key terms 9p
Investment policies
Facts about investments and their risks 11p
Alternative investment option 13p
Valuing assets 13p
How to buy, exchange or sell shares
Alternative sales arrangements 14p
How to buy shares 17p
How to exchange shares 20p
How to sell shares 20p
Reductions and waivers of the sales charge 25p
Special shareholder services
Services 29p
Quick telephone reference 29p
<PAGE>
PAGE 4
Distributions and taxes
Dividend and capital gain distributions 30p
Reinvestments 31p
Taxes 32p
How the fund is organized
Shares 35p
Voting rights 35p
Shareholder meetings 35p
Directors and officers 35p
Investment manager and transfer agent 37p
Distributor 38p
About American Express Financial Corporation
General information 39p<PAGE>
PAGE 5
To our shareholders
(Photo of) William R. Pearce
President of the fund
(Photo of) Guru Baliga
Portfolio manager
From the president
All of the funds in the IDS MUTUAL FUND GROUP held shareholder
meetings on Nov. 9, 1994. The meetings, which were well-attended,
approved all of the proposals advanced by management. Among the
proposals were:
o The election of directors and the selection of KPMG
Peat Marwick LLP as independent auditors for each of the funds in
the group.
o A new investment management agreement for each fund.
Now, when you invest in IDS mutual funds, you have a choice of the
following:
Class A shares - These have our traditional, "front-end" load,
which means you pay a sales charge when you buy shares. Or,
Class B shares - These have a "back-end" load, which means you may
pay a sales charge when you sell shares.
o A change in investment policy that will permit the fund
to adopt a master/ feeder structure if and when the board of each
fund determines that it is in the best interest of shareholders.
o A change with respect to the number of "fundamental
investment policies" that allows the board to modify them should it
deem appropriate.
Lastly, I want to introduce the fund's new portfolio manager, Guru
Baliga, who assumed that responsibility in September 1994. Please
see his letter for a review of the past period, as well as his
investment plans.
William R. Pearce
From the portfolio manager
The past fiscal year provided a clear-cut example of the benefit of
maintaining a patient investment approach. At the outset of the
period, the stock market stumbled, eventually resulting in a
negative return for the fund through the summer of last year. The
following months, however, included periodic market rallies, which
enabled the fund to recover from the early decline and conclude the
entire fiscal year (February 1994 through January 1995) on an
almost even basis.
Although the stock market has always moved up and down in value,
the past fiscal year was more volatile than usual. The pattern was
set in February 1994, when the Federal Reserve Board began raising
short-term interest rates to slow down economic growth and thereby
head off a potential run-up in the rate of inflation. Rising
interest rates usually have a detrimental effect on stocks, so the
market's ensuing retreat was not a surprise.
<PAGE>
PAGE 6
More ups than downs
The market remained unsettled through the rest of the fiscal year,
as it was caught in a tug-of-war between the negative influence of
rising interest rates and the positive forces of low inflation and
expanding corporate profits. In such an environment, stock groups
(auto, technology, health care, financial services, consumer goods,
etc.) would periodically go in and out of favor, sometimes within a
matter of days. In fact, during calendar year 1994, about two-
thirds of the stocks in the Standard and Poor's 500 Stock Index
lost ground, with many of them suffering 30-50% drops from their
highs for the year.
Although that made for a difficult investment environment, the
stock- picking ability of our research analysts (upon whose
expertise we rely for determining which stocks will be owned in the
portfolio) enabled us to take advantage of market upturns and
weather the downturns relatively well. Over the long run, that is
essentially what this fund aims to do. The fund owns stocks that
are in the Standard & Poor's 500 Stock Index, but narrows that
group down to between 100 and 125 stocks to which our analysts have
given their highest ratings.
A calmer year?
While there surely will be trends and individual events to cause
the stock market to fluctuate in 1995, it's reasonable to expect
the market's biggest recent hurdle - higher interest rates - will
be less of a concern as the year progresses. In fact, we saw some
indication of that in the opening weeks of 1995 as more stable
rates sparked a stock rally. The outlook for a calmer interest rate
environment is based on our belief that the economy will continue
to grow, but at a more modest rate, and that inflation will not
rise markedly. In such a scenario, it's likely that investors would
be increasingly attracted to stocks, which would be good for the
market and, ultimately, the fund.
Guru Baliga
12-month performance
(All figures per share)
Net asset value (NAV)
Jan. 31, 1995 $ 5.97
Jan. 31, 1994 $ 6.58
Decrease $ (0.61)
Distributions
Feb. 1, 1994 - Jan. 31, 1995
From income $ 0.24
From capital gains$ 0.35
Total distributions$0.59
Total return* (0.2%)
*If you purchased shares in the fund during this period, your
return also would have been affected by the sales charge, as
described in the prospectus.<PAGE>
PAGE
<TABLE>
<CAPTION>
IDS Blue Chip Advantage Fund
Your's fund's ten largest holdings
(Pie chart) The ten holdings listed here make up 29.83% of the
fund's net assets
Percent Value
(of fund's net assets)(as of Jan. 31, 1995)
_____________________________________________________________________________________________________________
<S> <C> <C>
Exxon 4.64% $7,018,750
Exxon is a major factor in the world crude oil, natural
gas and chemical industry and also has substantial coal
and mineral holdings.
Royal Dutch Petroleum 3.95 5,974,125
Royal Dutch Petroleum Co., which includes Royal Dutch
(the Dutch version) and Shell Transport (the English
version), is a major oil company.
General Electric 3.86 5,850,400
General Electric is a diversified company with interests
in manufacturing, broadcasting (NBC), financial
services and technology.
Bristol-Myers Squibb 2.71 4,108,200
Bristol-Myers Squibb is one of the world's largest
pharmaceutical companies.
Philip Morris 2.67 4,036,613
Philip Morris is the largest cigarette company and has
become the second largest packaged-food company in the
world as a result of its Kraft acquistion.
Procter & Gamble 2.66 4,025,925
Procter & Gamble is a major manufacturer of personal-care
products, detergents, diapers and food.
PepsiCo 2.52 3,820,250
A major consumer products company with interests in snack foods,
soft drinks and restaurants.
Merck 2.44 3,694,950
Merck & Co. is one of the world's largest drug manufacturers.
E.I. duPont 2.21 3,344,100
E.I. duPont is a large industrial company with businesses in
diversified industrial chemicals and pihments; imaging systems,
pharmaceutical, and agricultural chemicals; and through its
wholly-owned Conoco subsidiary, oil and gas exporation,
development, and refining.
AirTouch Communications 2.17 3,289,000
A subsidiary of Pacific Telesis, AirTouch Communications
is engaged in non-regulated wireless communication
operations, with cellular interest in the United States,
Germany, Japan, Italy, South Korea and Belgium.
</TABLE>
Average annual total return
(as of Jan. 31, 1995)
1 year Since inception*
-5.14% +9.41%
*Period from March 5, 1990 to Jan. 31, 1995.<PAGE>
PAGE 8
Making the most of your fund
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures reflect the deduction of the maximum 5% sales charge. This
was a period of widely fluctiating security prices. Past
performance is no guarantee of future results.
Build your assets systematically
To keep your assets growing steadily, one of the best ways to use
the fund is by dollar-cost averaging -- a time-tested strategy that
can make market fluctuations work for you. To dollar-cost average,
simply invest a fixed amount of money regularly. You'll
automatically buy more shares when the fund's share price is low,
fewer shares when it is high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00
Feb 100 18 5.56
Mar 100 17 5.88
Apr 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 29 5.26
Sept 100 21 4.76
Oct 100 20 5.00
(footnotes to table) By investing an equal number of dollars each
month...
(arrow in table pointing to April) you automatically buy more
shares when the per share market price is low
(arrow in table pointing to September) and fewer shares when the
per share market price is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
Three ways to benefit from a mutual fund:
o your shares increase in value when the fund's investments do
well
o you receive capital gains when the gains on investments sold
by the fund exceed losses
o you receive income when the fund's stock dividends, interest
and short-term gains exceed its expenses.<PAGE>
PAGE 9
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gain distributions to buy additional shares
of the fund or another fund.
How your $10,000 has grown in IDS Blue Chip Advantage Fund
Average annual total return
(as of Jan. 31, 1995)
Since
1 year 3/5/90
-5.14% +9.41%
$15,552
Blue Chip
S&P 500 Advantage Fund
Stock Index
$9,500
$5,000
4/1/90 '91 '92 '93 '94 '95
On the chart above you can see how the fund's total return compared
to a widely cited performance index, the S&P 500 Stock Index. In
comparing Blue Chip Advantage Fund to this index, you should take
into account the fact that the fund's performance reflects the
maximum sales charge of 5%, while such charges are not reflected in
the performance of the index. If you were actually to buy either
individual stocks or growth mutual funds, any sales charges that
you pay would reduce your total return as well.
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Average annual total return figures reflect the deduction of the
maximum 5% sales charge. This was a period of widely fluctuating
security prices. Past performance is no guarantee of future
results.<PAGE>
PAGE 10
Independent auditors' report
___________________________________________________________________
The board of directors and shareholders
IDS Market Advantage Series, Inc.:
We have audited the accompanying statement of
assets and liabilities, including the schedule
of investments in securities, of IDS Blue Chip
Advantage Fund (a series of IDS Market
Advantage Series, Inc.) as of January 31, 1995,
and the related statement of operations for the
year then ended and the statements of changes
in net assets for each of the years in the
two-year period ended January 31, 1995, and the
financial highlights for each of the years in
the four-year period ended January 31, 1995,
and for the period from March 5, 1990
(commencement of operations) to January 31,
1991. These financial statements and the
financial highlights are the responsibility of
fund management. Our responsibility is to
express an opinion on these financial
statements and the financial highlights based
on our audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about
whether the financial statements and the
financial highlights are free of material
misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and
disclosures in the financial statements.
Investment securities held in custody are
confirmed to us by the custodian. An audit also
includes assessing the accounting principles
used and significant estimates made by
management, as well as evaluating the overall
financial statement presentation. We believe
that our audits provide a reasonable basis for
our opinion.<PAGE>
PAGE 11
Independent auditors' report
___________________________________________________________________
In our opinion, the financial statements
referred to above present fairly, in all
material respects, the financial position of
IDS Blue Chip Advantage Fund at January 31,
1995, and the results of its operations for the
year then ended and the changes in its net
assets for each of the years in the two-year
period ended January 31, 1995, and the
financial highlights for the periods stated in
the first paragraph above, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
March 3, 1995<PAGE>
PAGE 12
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Blue Chip Advantage Fund
Jan. 31, 1995
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $146,989,133) $151,002,251
Cash in bank on demand deposit 332,738
Dividends receivable 197,476
_____________________________________________________________________________________________________________
Total assets 151,532,465
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Accrued investment management and services fee 64,360
Accrued distribution fee 11,032
Accrued transfer agency fee 27,525
Other accrued expenses 47,803
_____________________________________________________________________________________________________________
Total liabilities 150,720
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $151,381,745
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value;
outstanding 25,350,756 shares $ 253,508
Additional paid-in capital 145,577,561
Undistributed net investment income (Note 1) 151,766
Accumulated net realized gain 1,288,092
Unrealized appreciation (Note 4) 4,110,818
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $151,381,745
_____________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 5.97
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 13
Statement of operations
IDS Blue Chip Advantage Fund
Year ended Jan. 31, 1995
Investment income
_____________________________________________________________________________________________________________
Income:
Dividends (net of foreign taxes withheld of $57,704) $ 3,521,120
Interest 272,048
_____________________________________________________________________________________________________________
Total income 3,793,168
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 706,350
Distribution fee 125,288
Transfer agency fee 312,591
Compensation of directors 1,748
Compensation of officers 1,589
Custodian fees 4,374
Postage 31,837
Registration fees 44,773
Reports to shareholders 6,843
Audit fees 16,500
Administrative 4,143
Other 13,934
_____________________________________________________________________________________________________________
Total expenses 1,269,970
_____________________________________________________________________________________________________________
Investment income -- net 2,523,198
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized gain on security transactions (Note 3) 6,362,476
Net realized loss on closed stock index futures contracts (105,559)
_____________________________________________________________________________________________________________
Net realized gain on investments 6,256,917
Net change in unrealized appreciation or depreciation (9,051,151)
_____________________________________________________________________________________________________________
Net loss on investments (2,794,234)
_____________________________________________________________________________________________________________
Net decrease in net assets resulting from operations $ (271,036)
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 14
<TABLE>
<CAPTION>
Financial statements
Statement of changes in net assets
IDS Blue Chip Advantage Fund
Year ended Jan. 31,
Operations and distributions
_____________________________________________________________________________________________________________
<S> <C> <C>
1995 1994
Investment income -- net $ 2,523,198 $ 2,134,143
Net realized gain on investments 6,256,917 12,775,441
Net change in unrealized appreciation or depreciation (9,051,151) 3,908,042
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations (271,036) 18,817,626
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (2,588,135) (2,043,210)
Net realized gain (10,968,570) (8,629,922)
_____________________________________________________________________________________________________________
Total distributions (13,556,705) (10,673,132)
_____________________________________________________________________________________________________________
Capital share transactions
_____________________________________________________________________________________________________________
Proceeds from sales of
6,515,919 and 6,335,699 shares (Note 2) 40,945,271 40,812,605
Net asset value of 2,259,469 and 1,637,538 shares
issued in reinvestment of distributions 13,406,634 10,543,443
Payments for redemptions of
5,876,306 and 5,507,338 shares (36,914,829) (35,563,796)
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions
representing net addition of
2,899,082 and 2,465,899 shares, respectively 17,437,076 15,792,252
_____________________________________________________________________________________________________________
Total increase in net assets 3,609,335 23,936,746
_____________________________________________________________________________________________________________
Net assets at beginning of year 147,772,410 123,835,664
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$151,766 and $205,735) $151,381,745 $147,772,410
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 15
Notes to financial statements
IDS Blue Chip Advantage Fund
Jan. 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.
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<PAGE>
PAGE 16
purposes. Also, due to the timing of dividend distributions, the
fiscal year in which amounts are distributed may differ from the
year that the income or realized gains (losses) were recorded by
the fund.
On the statement of assets and liabilities, as a result of
permanent book-to-tax differences, undistributed net investment
income has been increased by $10,968, resulting in a
reclassification adjustment to decrease paid-in-capital by $10,968.
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 an agreement dated Nov. 14, 1991, the fund pays
American Express Financial Corporation 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 American Express Financial Corporation 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.
American Express Financial Corporation 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 $531,537 for the year ended Jan. 31,
1995. The fund also pays custodian fees to American Express Trust
Company, an affiliate of American Express Financial Advisors Inc.
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 $72 for the year ended Jan. 31, 1995.<PAGE>
PAGE 17
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $170,176,817 and $168,439,387,
respectively, for the year ended Jan. 31, 1995. Realized gains and
losses are determined on an identified cost basis.
___________________________________________________________________
4. Stock index futures contracts
Investments in securities at Jan. 31, 1995, included securities
valued at $1,081,500 that were pledged as collateral to cover
initial margin deposits on 24 purchase contracts. The market value
of the open contracts at Jan. 31, 1995, was $5,666,400 with $97,700
unrealized gain.
___________________________________________________________________
5. Financial Highlights
"Financial highlights" showing per share data and selected
information is presented on page 5 of the prospectus.<PAGE>
PAGE 18
<TABLE>
<CAPTION>
Investments in securities
IDS Blue Chip Advantage Fund (Percentages represent value of
Jan. 31, 1995 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (95.7%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Aerospace & defense (6.1%)
General Dyanmics 24,800 $ 1,069,500
Martin Marietta 34,800 1,552,950
Raytheon 36,900 2,463,075
Rockwell Intl 54,600 2,054,325
United Technologies 33,700 2,165,225
____________
Total 9,305,075
_____________________________________________________________________________________________________________________________
Airlines (0.8%)
AMR 20,700 (b) 1,161,788
_____________________________________________________________________________________________________________________________
Automotive & related (2.1%)
Chrysler 23,500 1,057,500
Ford Motor 83,900 2,118,475
____________
Total 3,175,975
_____________________________________________________________________________________________________________________________
Banks and savings & loans (6.0%)
Ahmanson (HF) 37,800 618,975
Bank of Boston 44,300 1,240,400
BankAmerica 62,200 2,682,375
Citicorp 1,300 52,813
First Chicago 39,600 1,861,200
NationsBank 55,200 2,566,800
____________
Total 9,022,563
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 19
Beverages & tobacco (7.4%)
Coca-Cola 29,800 1,564,500
PepsiCo 103,600 3,820,250
Philip Morris 67,700 4,036,613
UST 61,200 1,805,400
____________
Total 11,226,763
_____________________________________________________________________________________________________________________________
Chemicals (3.6%)
Dow Chemical 33,900 2,114,512
DuPont (EI) 62,800 3,344,100
____________
Total 5,458,612
_____________________________________________________________________________________________________________________________
Communications equipment (4.6%)
AirTouch Communications 119,600 (b) 3,289,000
Motorola 38,800 2,294,050
Northern Telecom 40,600 (c) 1,385,475
____________
Total 6,968,525
_____________________________________________________________________________________________________________________________
Computers & office equipment (3.7%)
Cisco Systems 26,800 (b) 894,450
Compaq Computer 20,900 (b) 747,175
Computer Associates 16,300 812,962
Hewlett-Packard 2,800 281,400
Microsoft 11,000 (b) 653,125
Oracle Systems 5,100 (b) 217,388
Pitney Bowes 60,400 1,864,850
Xerox 1,700 185,937
____________
Total 5,657,287
_____________________________________________________________________________________________________________________________
Electronics (0.2%)
Intel 4,200 291,375
_____________________________________________________________________________________________________________________________
Energy (10.0%)
Amoco 9,000 522,000
Atlantic Richfield 4,400 468,600
Chevron 6,700 298,987
Exxon 112,300 7,018,750
Louisiana Land/Exp 12,600 411,075
Royal Dutch Petroleum ADR 53,400 (c) 5,974,125
Unocal 15,400 402,325
USX Marathon Group 5,800 92,800
____________
Total 15,188,662
_____________________________________________________________________________________________________________________________
Energy equipment & services (0.2%)
Fluor 4,700 217,375
Rowan 19,800 (b) 113,850
____________
Total 331,225
_____________________________________________________________________________________________________________________________
Financial services (2.3%)
Federal Natl Mtge 31,200 2,230,800
Household Intl 28,900 1,174,062
Travelers 1,200 44,250
____________
Total 3,449,112
_____________________________________________________________________________________________________________________________
Food (0.6%)
Archer-Daniels-Midland 11,700 235,462
ConAgra 7,400 228,475
Pioneer Hi-Bred 6,200 227,850
Super Valu Stores 7,600 180,500
____________
Total 872,287
_____________________________________________________________________________________________________________________________
Furniture & appliances (1.8%)
Maytag 83,200 1,237,600
Stanley Works 39,100 1,480,912
____________
Total 2,718,512
_____________________________________________________________________________________________________________________________
Health care (10.2%)
Amgen 12,400 (b) 788,950
Bristol Myers-Squibb 66,800 4,108,200
Johnson & Johnson 50,700 2,946,938<PAGE>
PAGE 20
Medtronic 24,000 1,425,000
Merck 91,800 3,694,950
Pfizer 30,200 2,468,850
____________
Total 15,432,888
_____________________________________________________________________________________________________________________________
Health care services (2.3%)
Service Intl 80,900 2,315,763
U.S. HealthCare 24,200 1,107,150
_____________
Total 3,422,913
_____________________________________________________________________________________________________________________________
Household products (2.7%)
Procter & Gamble 61,700 4,025,925
Unilever NV ADR 900 (c) 106,200
____________
Total 4,132,125
_____________________________________________________________________________________________________________________________
Industrial equipment & services (3.5%)
Caterpillar 21,200 1,091,800
Deere 17,200 1,225,500
General Signal 37,500 1,303,125
WMX Technologies 60,800 1,725,200
____________
Total 5,345,625
_____________________________________________________________________________________________________________________________
Industrial transportation (2.5%)
Conrail 17,300 925,550
CSX 18,000 1,289,250
Norfolk Southern 24,300 1,506,600
____________
Total 3,721,400
_____________________________________________________________________________________________________________________________
Insurance (1.5%)
American Intl Group 2,400 249,900
General Re 1,500 193,687
Jefferson Pilot 2,900 156,238
Torchmark 100 3,900
Unum 39,700 1,741,838
____________
Total 2,345,563
_____________________________________________________________________________________________________________________________
Leisure time & entertainment (0.8%)
Hasbro 39,400 1,186,925
_____________________________________________________________________________________________________________________________
Media (1.1%)
Comcast Cl A 13,500 202,500
Harcourt General 2,600 86,775
Tele-Communications Cl A 21,900 (b) 465,375
Time Warner 7,000 252,000
Viacom Cl B 15,900 (b) 733,388
____________
Total 1,740,038
_____________________________________________________________________________________________________________________________
Metals (1.5%)
Barrick Gold 65,900 (c) 1,309,763
Nucor 15,300 780,300
Reynolds Metals 2,800 140,000
____________
Total 2,230,063
_____________________________________________________________________________________________________________________________
Multi-industry conglomerates (3.9%)
General Electric 113,600 (d) 5,850,400
_____________________________________________________________________________________________________________________________
Paper & packaging (1.1%)
Intl Paper 23,400 1,664,325
_____________________________________________________________________________________________________________________________
Restaurants & lodging (3.3%)
McDonalds 96,200 3,138,525
Shoneys 52,300 (b) 614,525
Wendy's Intl 78,100 1,259,362
____________
Total 5,012,412
_____________________________________________________________________________________________________________________________
Retail (4.1%)
Dayton Hudson 25,300 1,736,212
Home Depot 61,300 2,865,775
Lowes 400 14,700
Penney (JC) 700 29,050
<PAGE>
PAGE 21
Pep Boys 37,100 1,210,387
Sears Roebuck 6,800 300,050
____________
Total 6,156,174
_____________________________________________________________________________________________________________________________
Utilities-electric (1.8%)
Cinergy 40,100 987,463
Northern States Power 19,100 883,375
SCE 52,300 856,412
____________
Total 2,727,250
_____________________________________________________________________________________________________________________________
Utilities-gas (0.3%)
Enron 8,700 253,388
Pacific Enterprises 10,400 236,600
____________
Total 489,988
_____________________________________________________________________________________________________________________________
Utilities-telephone (5.7%)
AT&T 60,600 3,022,425
BellSouth 23,100 1,368,675
MCI Communications 99,200 1,822,800
Pacific Telesis 38,600 1,182,125
U S WEST 31,400 1,228,525
____________
Total 8,624,550
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $140,897,282) $144,910,400
_____________________________________________________________________________________________________________________________
/TABLE
<PAGE>
PAGE 22
<TABLE>
<CAPTION>
Short-term securities (4.0%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (3.0%)
Federal Home Loan Bank Disc Note
02-14-95 5.57% $1,300,000 $ 1,297,394
Federal Home Loan Mtge Disc Notes
02-10-95 5.61 600,000 599,163
02-17-95 5.84 600,000 598,448
Federal Natl Mtge Assn Disc Note
02-07-95 5.68 2,000,000 1,998,117
_____________________________________________________________________________________________________________________________
Commercial paper (1.0%)
Nestle Capital
02-06-95 5.75 1,600,000 1,598,729
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $6,091,851) $ 6,091,851
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $146,989,133)(e) $151,002,251
_____________________________________________________________________________________________________________________________
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 4 to the financial statements):
Type of security Contracts
___________________________________________________________________________________________
Standard & Poor's 500 Stock Index, Mar. 1995 24
___________________________________________________________________________________________
(e) At Jan. 31, 1995, the cost of securities for federal income tax purposes was
$147,610,679 and the aggregate gross unrealized appreciation and depreciation
based on that cost was:
Unrealized appreciation $ 8,251,975
Unrealized depreciation (4,860,403)
___________________________________________________________________________________________
Net unrealized appreciation $ 3,391,572
___________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 23
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 deposits (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
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
<PAGE>
PAGE 24
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
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<PAGE>
PAGE 25
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
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 stock 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 growing flowers
<PAGE>
PAGE 26
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
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
<PAGE>
PAGE 27
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) prism
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
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 advisor 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 28
Federal income tax information
IDS Blue Chip Advantage Fund
_______________________________________________________
The fund is required by the Internal Revenue Code of
1986 to tell its shareholders about the tax treatment
of the dividends it pays during its fiscal year.
The dividends listed below were reported to
you on a Form 1099-DIV, Dividends and Distributions,
last January. Shareholders should consult a tax
advisor on how to report distributions for state and
local purposes.
IDS Blue Chip Advantage Fund
Fiscal year ended Jan. 31, 1995
Income distributions
taxable as dividend income,
87.25% qualifying for deduction by corporations.
Payable datePer share
March 30, 1994 $0.0200
June 29, 1994 0.0300
Sept. 29, 1994 0.0300
Dec. 29, 1994 0.1625
Total $0.2425
Capital gain distribution
taxable as long-term capital gain.
Payable datePer share
Dec. 29, 1994 $0.3471
Total distributions $0.5896
The distribution of $0.5096 per share, payable
Dec. 29, 1994, consisted of $0.0345 derived from
net investment income, $0.1280 from net short-term
capital gains (a total of $0.1625 taxable as dividend
income) and $0.3471 from net long-term capital gains.<PAGE>
PAGE 29
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 (TouchToneR phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
American Express Financial Advisors
IDS Blue Chip Advantage Fund
IDS Tower 10
Minneapolis, MN 55440-0010<PAGE>
PAGE 30
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report and
prospectus are placed
in blue strip at the top
of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report and prospectus. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
