<PAGE>
PAGE 1
1996 ANNUAL REPORT
IDS Blue Chip Advantage Fund
(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.)
AMERICAN
EXPRESS
Financial
Advisors
Distributed by American Express Financial Advisors Inc.
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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 priminent 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.
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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.
1996 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 19
IDS mutual funds 23
Federal income tax information 26
1996 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 7p
Financial highlights 7p
Total returns 9p
Investment policies and risks 11p
Facts about investments and their risks 12p
Alternative investment option 14p
Valuing Fund shares 14p
How to purchase, exchange or redeem shares 15p
Alternative purchase arrangements 15p
How to purchase shares 18p
How to exchange shares 20p
Reductions and waivers of the sales charge 25p
Special shareholder services 29p
Services 29p
Quick telephone reference 29p
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Distributions and taxes 30p
Dividend and capital gain distributions 30p
Reinvestments 31p
Taxes 32p
How to determine the correct TIN 34p
How the Fund is organized 35p
Shares 35p
Voting rights 35p
Shareholder meetings 35p
Board members and officers 35p
Investment manager and transfer agent 37p
Distributor 38p
About American Express Financial Corporation 39p
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
If you're an experienced investor, you know that 1995 was an
unusually strong year for the U.S. financial markets. Perhaps just
as important, you also know that history shows that bull marks
don't last forever. Though they're often unpredictable, declines -
- - whether they're brief or longlasting, moderate or substantial --
are always a possibility.
That fact reinforces the need for investors to review periodically
their long-term goals and assess whether their investment program
remains on track to achieving them. Your quarterly investment
statements are one part of that monitoring process. The other is a
meeting with your American Express financial advisor. That becomes
even more important if there's a major change in your financial
situation or in the financial markets.
William R. Pearce
From the portfolio manager
Supported by the most powerful bull market of the past 20 years,
IDS Blue Chip Advantage Fund recorded its best 12-month performance
since the Fund's inception in 1990. For investors in Class A
shares, that resulted in a total return (including net asset value
change, capital gains and dividends) of nearly 40% for the February
1995 through January 1996 fiscal year.
At the beginning of 1995, our investment outlook called for modest
economic growth, restrained inflation and stable-to-declining long-
term interest rates. In such an environment, we expected that
stocks would generate a moderately good return. As it turned out,
we were right about the investment environment, but we greatly
underestimated the strength of the stock market.
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 the end of January, the
market was on a remarkable roll that saw it gain ground in all but
two of the ensuing 12 months.
Despite a sharp downturn last fall, stocks of technology-related
companies, which boasted generally outstanding corporate profit
reports, led the market's march. Overall strong performances were
also registered by stocks in the health care, financial services
and telecommunications sectors.
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PAGE 6
While we owned a number of technology stocks, our explosion on a
percentage basis, particularly among spectacular performers such as
IBM, Intel, Microsoft and Hewlett-Packard, was less than that of
the Standard & Poor's 500, the market index we use for performance
comparisons. (The portfolio structure resembles the S&P 500 in
that the Fund invests only in stocks included in that index. Those
that carry the highest investment rating, as determined by our
research analysts, ultimately comprise the portfolio.) Our
"underweighting" in these technology stocks tempered our overall
performance during the spring and summer.
Several strong sectors
On the other hand, we often maintained an above-market exposure to
financial services stocks, especially banks and savings and loans.
They comprised an average of about 10% of the portfolio and proved
to be extremely beneficial to the Fund. As for other stock
sectors, "consumer noncyclicals," which made up about a quarter of
portfolio assets and include health care, food, beverage, tobacco
and leisure/entertainment stocks, also made a strong contribution,
as did aerospace/defense, industrial machinery and
telecommunications stocks. Among our weakest holdings were those
of retailing companies.
At this writing (mid-February), although the investment environment
remains mostly favorable, it clearly lacks the punch provided by
the substantial interest-rate decline and impressive corporate
profit reports that began to emerge a year ago. The result is that
the market is likely to experience greater volatility than it did
last year. Still, barrin any unpredictable calamities, we think
sharp stock selection may allow for positive results by the time
the year is out.
Guru Baliga
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
Jan. 31, 1996 $ 7.62
Jan. 31, 1995 $ 5.97
Increase $ 1.65
Distributions
Feb. 1, 1995 - Jan. 31, 1996
From income $ 0.39
From capital gains$ 0.25
Total distributions$ 0.64
Total return** 39.0%***
Class B
March 20, 1995 - Jan. 31, 1996
(All figures per share)
Net asset value (NAV)
Jan. 31, 1996 $ 7.59
March 20, 1995* $ 6.30
Increase $ 1.29
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Distributions
March 20, 1995 - Jan. 31, 1996
From income $ 0.37
From capital gains$ 0.25
Total distributions$ 0.62
Total return** 30.3%***
Class Y
March 20, 1995 - Jan. 31, 1996
(All figures per share)
Net asset value (NAV)
Jan. 31, 1996 $ 7.62
March 20, 1995* $ 6.30
Increase $ 1.32
Distributions
March 20, 1995* - Jan. 31, 1996
From income $ 0.40
From capital gains$ 0.25
Total distributions$ 0.65
Total return** 31.3%***
*Inception date.
** The prospectus discusses the effect of sales charges, if any, on
the various classes.
***The total return is a hypthetical investment in the Fund with
all distributions reinvested.
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PAGE 8
<TABLE>
<CAPTION>
IDS Blue Chip Advantage Fund
The Fund's ten largest holdings
__________________________________________________________________________________________
Percent Value
(of Fund's net assets)(as of Jan. 31, 1996)
__________________________________________________________________________________________
<S> <C> <C>
Royal Dutch Petroleum 5.05% $15,998,900
A major oil company that includes Royal Dutch
(the Dutch version) and Shell Transport (the English
version).
AT&T 5.01 15,862,750
Provides long-distance services throughout the United States
and to other countries. The company also manufactures, for
itself and others, many of the products used in long-distance
communications.
Philip Morris 2.88 9,132,600
The largest cigarette company that has become the second
largest packaged-food company in the world as a result of
the Kraft acquisition.
Merck 2.73 8,647,775
One of the world's largest drug manufacturers.
First Union 2.29 7,245,950
A bank holding company engaged in general banking business.
General Electric 2.13 6,738,650
A diversified company with interest in manufacturing,
broadcasting (NBC), financial services and technology.
Norwest 2.10 6,637,812
As a diversified financial services organization, this company
operates through subsidiaries engaged in banking and in related
businesses.
American Home Products 2.06 6,538,200
This company is engaged in the discovery, development,
manufacture, distribution and sale of a diversified line of
products in three business segments: health care products,
agricultural products and food products.
Schlumberger 1.93 6,107,887
A holding company, which, through its subsidiaries, is
engaged in the production and sale of wine, champagne and
other alcoholic and non-alcoholic beverages, as well as food
and non-food products.
Emerson Electric 1.87 5,912,750
A diversified manufacturer of electrical and electronic
products for use in commercial and industrial products,
appliances and construction-related components.
</TABLE>
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PAGE 9
Making the most of your fund
Average annual total return
(as of Jan. 31, 1996)
Class A
1 year 5 years Since inception*
+32.06% +15.10% +13.93%
*March 5, 1990
Total returns for Class A, Class B and Class Y for the period from
March 20, 1995 to Jan. 31, 1996 were +24.58%, +25.34% and +31.31%,
respectively. March 20, 1995 was the inception date for Class B
and Class Y. Total return for Class A is shown for comparative
purposes. The performance of Class B and Class Y will vary from
the performance of Class A based on differences in sales charges
and fees.
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures for Class A and Class B reflect the effect 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
One of the best ways to invest in the Fund is by dollar-cost
averaging -- a time-tested strategy that can make market
fluctuations work for you. To dollar-cost average, simply invest a
fixed amount of money regularly. You'll automatically buy more
shares when the fund's share price is low, fewer shares when it is
high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00
Feb 100 18 5.56
Mar 100 17 5.88
Apr 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
(footnotes to table) By investing an equal number of dollars each
month...
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PAGE 10
(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.
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PAGE 11
Three ways to benefit from a mutual fund:
o your shares increase in value when the Fund's investments do
well
o you receive capital gains when the gains on investments sold
by the Fund exceed losses
o you receive income when the fund's stock dividends, interest
and short-term gains exceed its expenses.
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gain distributions to buy additional shares
month 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, 1996)
Since
1 year 5 years 3/5/90
+32.06% +15.10% +13.93%
$21,620
Blue Chip
S&P 500 Advantage Fund
Stock Index
$9,500
4/1/90 '91 '92 '93 '94 '95 '96
*The graph above is for Class A only. Class B and Class Y are not
shown. Total returns for Class A, Class B and Class Y for the
period from March 20, 1995 to Jan. 31, 1996 were +24.58%, +25.34%
and +31.31%, respectively. March 20, 1995 was the inception date
for Class B and Class Y. Total return for Class A is shown for
comparative purposes. The performance of Class B and Class Y will
vary from the performance of Class A based on differences in sales
charges and fees.
Assumes: oHolding period from 4/1/90 to 1/31/96. o Returns do not
reflect taxes payable on distributions. Reinvestment of all income
and capital gain distributions for the Fund, with a value of
$6,988. Also see "Performance" in the Fund's current prospectus.
Standard & Poor's 500 Stock Index (S&P 500), an unmanaged list of
common stocks, is frequently used as a general measure of market
performance.
On the graph 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.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.<PAGE>
PAGE 12
Independent auditors' report
The board 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, 1996, 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, 1996, and the financial highlights for each of the
years in the five-year period ended January 31, 1996, 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. As to securities purchased and
sold but not received or delivered, we request confirmations from
brokers, and where replies are not received, we carry out other
appropriate auditing procedures. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS
Blue Chip Advantage Fund at January 31, 1996, 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, 1996, 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 1, 1996
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<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Blue Chip Advantage Fund
Jan. 31, 1996
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $289,351,738) $331,181,836
Cash in bank on demand deposit 754,229
Dividends receivable 448,698
Receivable for investment securities sold 2,316,644
_____________________________________________________________________________________________________________
Total assets 334,701,407
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Payable for investment securities purchased 17,918,835
Accrued investment management services fee 7,307
Accrued distribution fee 1,640
Accrued service fee 2,682
Accrued transfer agency fee 2,926
Accrued administrative services fee 656
Other accrued expenses 114,056
_____________________________________________________________________________________________________________
Total liabilities 18,048,102
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $316,653,305
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- authorized 10,000,000,000 shares of $.01 par value $ 415,953
Additional paid-in capital 261,338,972
Undistributed net investment income 283,934
Accumulated net realized gain (Note 1) 12,599,198
Unrealized appreciation of investments and on translation
of assets and liabilities in foreign currencies (Note 4) 42,015,248
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $316,653,305
_____________________________________________________________________________________________________________
Net assets applicable to outstanding shares: Class A $247,478,942
Class B $ 41,563,672
Class Y $ 27,610,691
Net asset value per share of outstanding capital stock: Class A 32,495,615 $ 7.62
Class B 5,475,124 $ 7.59
Class Y 3,624,527 $ 7.62
See accompanying notes to financial statements. <PAGE>
PAGE 14
Statement of operations
IDS Blue Chip Advantage Fund
Year ended Jan. 31, 1996
Investment income
_____________________________________________________________________________________________________________
Income:
Dividends (net of foreign taxes withheld of $60,884) $ 4,724,394
Interest 874,430
_____________________________________________________________________________________________________________
Total income 5,598,824
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 951,438
Distribution fee
Class A 16,556
Class B 103,147
Transfer agency fee 402,312
Incremental transfer agency fee - Class B 2,252
Service fee
Class A 281,152
Class B 24,141
Administrative services fee 77,284
Compensation of board members 5,999
Compensation of officers 2,718
Custodian fees 28,284
Postage 36,753
Registration fees 117,626
Reports to shareholders 47,294
Audit fees 19,000
Administrative 3,134
Other 9,820
_____________________________________________________________________________________________________________
Total expenses 2,128,910
Earnings credits on cash balances (Note 2) (6,413)
_____________________________________________________________________________________________________________
Total net expenses 2,122,497
_____________________________________________________________________________________________________________
Investment income -- net 3,476,327
_____________________________________________________________________________________________________________
Realized and unrealized gain -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions
(including gain of $759 from foreign currency transactions) (Note 3) 28,245,691
Net realized gain on closed stock index futures contracts 2,242,662
_____________________________________________________________________________________________________________
Net realized gain on investments and foreign currency 30,488,353
Net change in unrealized appreciation or depreciation of investments and on
translation of assets and liabilities in foreign currencies 37,904,430
_____________________________________________________________________________________________________________
Net gain on investments and foreign currency 68,392,783
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $71,869,110
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
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PAGE 15
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Blue Chip Advantage Fund
Year ended Jan. 31,
_____________________________________________________________________________________________________________
Operations and distributions 1996 1995
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 3,476,327 $ 2,523,198
Net realized gain on investments and foreign currency 30,488,353 6,256,917
Net change in unrealized appreciation or depreciation of investments
and on translation of assets and liabilities in foreign currencies 37,904,430 (9,051,151)
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations 71,869,110 (271,036)
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (2,821,594) (2,588,135)
Class B (161,630) --
Class Y (367,124) --
Net realized gain
Class A (15,200,366) (10,968,570)
Class B (2,259,559) --
Class Y (1,716,563) --
_____________________________________________________________________________________________________________
Total distributions (22,526,836) (13,556,705)
_____________________________________________________________________________________________________________
Capital share transactions (Note 5)
_____________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 89,141,849 40,945,271
Class B shares 39,708,806 --
Class Y shares 28,323,434 --
Reinvestment of distributions at net asset value
Class A shares 17,839,828 13,406,634
Class B shares 2,399,949 --
Class Y shares 2,083,688 --
Payments for redemptions
Class A shares (53,709,365) (36,914,829)
Class B shares (Note 2) (2,952,873) --
Class Y shares (6,906,030) --
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions 115,929,286 17,437,076
_____________________________________________________________________________________________________________
Total increase in net assets 165,271,560 3,609,335
Net assets at beginning of year 151,381,745 147,772,410
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$283,934 and $151,766) $316,653,305 $151,381,745
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
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PAGE 16
Notes to financial statements
IDS Blue Chip Advantage Fund
___________________________________________________________________
1. Summary of significant accounting policies
The Fund is a series of IDS Market Advantage Series, Inc. and
registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company. The Fund
invests in common stocks that are included in a broad market index.
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:
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of increase and decrease in net assets from
operations during the period. Actual results could differ from
those estimates.
Valuation of securities
All securities are valued at the close of each business day.
Securities 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. 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.
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PAGE 17
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.
On the statement of assets and liabilities, as a result of
permanent book-to-tax differences, undistributed net investment
income has been increased by $6,189 and accumulated net realized
gain has been decreased by $759, resulting in a reclassification
adjustment to decrease paid-in-capital by $5,430.
Dividends to shareholders
Dividends from net investment income, declared and paid each
calendar quarter, are reinvested in additional shares of the Fund
at net asset value or payable in cash. Capital gains, when
available, are distributed along with the last income dividend of
the calendar year.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Dividend income is recognized on the ex-dividend
date and interest income, including level-yield amortization of
premium and discount, is accrued daily.
<PAGE>
PAGE 18
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.
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 services 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.
<PAGE>
PAGE 19
Sales charges received by American Express Financial Advisors Inc.
for distributing Fund shares were $1,257,028 for Class A and $8,642
for Class B for the year ended Jan. 31, 1996. The Fund also pays
custodian fees to American Express Trust Company, an affiliate of
AEFC.
During the year ended Jan. 31, 1996, the Fund's custodian and
transfer agency fees were reduced by $6,413 as a result of earnings
credits from overnight cash balances.
The Fund has a retirement plan for its independent board members.
Upon retirement, board members receive monthly payments equal to
one-half of the retainer fee for as many months as they served as
board members 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 board members serve on the board. The retirement
plan expense amounted to $651 for the year ended Jan. 31, 1996.
___________________________________________________________________
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $353,519,430 and $256,233,026,
respectively, for the year ended Jan. 31, 1996. Realized gains and
losses are determined on an identified cost basis.
___________________________________________________________________
4. Stock index futures contracts
Investments in securities at Jan. 31, 1996, included securities
valued at $2,839,750 that were pledged as collateral to cover
initial margin deposits on 22 purchase contracts. The market value
of the open contracts at Jan. 31, 1996 was $7,017,450 with a net
unrealized gain of $185,150.
___________________________________________________________________
5. Capital share transactions
Transactions in shares of capital stock for the years indicated are
as follows:
<TABLE>
<CAPTION>
Year ended Jan. 31, 1996 Year ended
01/31/95
Class A Class B* Class Y* Class A
_______________________________________________________________________________________
<S> <C> <C> <C> <C>
Sold 12,676,537 5,554,078 4,313,563 6,515,919
Issued for reinvested 2,461,505 329,917 287,679 2,259,469
distributions
Redeemed (7,993,183) (408,871) (976,715)
(5,876,306)
_______________________________________________________________________________________
Net increase 7,144,859 5,475,124 3,624,527 2,899,082
_______________________________________________________________________________________
*Inception date was March 20, 1995.
_______________________________________________________________________________________
<PAGE>
PAGE 20
</TABLE>
6. Financial highlights
"Financial highlights" showing per share data and selected
information is presented on pages 7 and 8 of the prospectus.
<PAGE>
PAGE 21
<TABLE>
<CAPTION>
Investments in securities
IDS Blue Chip Advantage Fund (Percentages represent value of
Jan. 31, 1996 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Common stocks (97.4%)
_____________________________________________________________________________________________________________________________
Issuer Shares Value(a)
_____________________________________________________________________________________________________________________________
<S> <C> <C>
Aerospace & defense (3.0%)
Allied Signal 2,000 $ 99,750
Boeing 46,200 3,586,275
Lockheed Martin 7,800 587,925
Loral 4,800 222,000
Raytheon 22,800 1,120,050
Rockwell Intl 68,300 4,004,088
____________
Total 9,620,088
_____________________________________________________________________________________________________________________________
Automotive & related (3.9%)
Chrysler 61,000 3,522,750
Dana 3,000 98,625
Ford Motor 143,000 4,236,375
General Motors 88,000 4,631,000
____________
Total 12,488,750
_____________________________________________________________________________________________________________________________
Banks and savings & loans (8.8%)
Banc One 18,600 704,475
Bank of New York 19,500 999,375
BankAmerica 25,200 1,697,850
Barnett Banks 17,100 1,000,350
Citicorp 64,200 4,742,775
First Chicago 31,031 1,206,330
First Union 125,200 7,245,950
Great Western Financial 20,900 501,600
Mellon Bank 22,700 1,203,100
NationsBank 16,400 1,145,950
Norwest 193,100 6,637,812
Wells Fargo 3,500 821,188
____________
Total 27,906,755
_____________________________________________________________________________________________________________________________
Beverages & tobacco (6.1%)
Anheuser-Busch 21,100 1,466,450
Coca-Cola 74,900 5,645,588
PepsiCo 49,700 2,963,362
Philip Morris 98,200 9,132,600
____________
Total 19,208,000
_____________________________________________________________________________________________________________________________
See accompanying notes to investments in securities.
<PAGE>
PAGE 22
Building materials (1.6%)
Louisiana Pacific 9,300 237,150
Masco 32,200 941,850
Sherwin-Williams 7,500 315,938
Temple-Inland 11,200 491,400
Tyco Intl 75,700 2,677,888
Weyerhaeuser 9,900 456,637
____________
Total 5,120,863
_____________________________________________________________________________________________________________________________
Chemicals (0.6%)
Morton Intl 1,900 70,300
Praxair 53,500 1,819,000
____________
Total 1,889,300
_____________________________________________________________________________________________________________________________
Communications equipment (2.7%)
AirTouch Communications 201,700 (b) 5,698,025
Northern Telecom 64,900 (c) 2,920,500
____________
Total 8,618,525
_____________________________________________________________________________________________________________________________
Computers & office equipment (5.9%)
Cisco Systems 26,300 (b) 2,189,475
Compaq Computer 37,400 (b) 1,762,475
Computer Associates 32,150 2,198,256
First Data 10,300 728,725
Hewlett-Packard 55,800 4,729,050
Microsoft 29,300 (b) 2,710,250
Novell 2,300 (b) 31,050
Oracle Systems 16,400 (b) 783,100
Pitney Bowes 25,400 1,149,350
Silicon Graphics 50,000 (b) 1,406,250
3Com 21,300 (b) 977,138
____________
Total 18,665,119
_____________________________________________________________________________________________________________________________
Electronics (2.6%)
AMP 96,800 3,775,200
Applied Materials 9,900 (b) 366,300
Intel 66,500 3,673,086
LSI Logic 10,200 (b) 286,875
____________
Total 8,101,461
_____________________________________________________________________________________________________________________________
Energy (5.6%)
Amerada Hess 29,300 1,615,162
Royal Dutch Petroleum ADR 115,100 (c) 15,998,900
____________
Total 17,614,062
_____________________________________________________________________________________________________________________________
Energy equipment & services (1.9%)
Fluor 200 13,400
Schlumberger LTD 87,100 (c) 6,107,887
____________
Total 6,121,287
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 23
Financial services (1.7%)
Block (H&R) 11,400 420,375
Dean Witter, Discover 9,900 535,837
Federal Home Loan Mtge 28,300 2,423,188
Household Intl 7,800 506,025
Morgan Stanley Group 10,100 481,012
Travelers 17,300 1,137,475
____________
Total 5,503,912
_____________________________________________________________________________________________________________________________
Food (1.3%)
ConAgra 59,400 2,724,975
Ralston-Purina Group 19,500 1,255,312
____________
Total 3,980,287
____________________________________________________________________________________________________________________________
Health care (12.2%)
Amer Home Products 64,100 6,538,200
Amgen 29,300 (b) 1,761,663
Biomet 82,600 (b) 1,548,750
Boston Scientific 31,200 (b) 1,599,000
Bristol-Myers Squibb 18,800 1,663,800
Johnson & Johnson 38,300 3,676,800
Lilly (Eli) 500 28,750
Medtronic 47,600 2,719,150
Merck 123,100 8,647,775
Pharmacia & Upjohn 6,700 280,563
Pfizer 85,000 5,843,750
Schering-Plough 78,700 4,259,638
____________
Total 38,567,839
_____________________________________________________________________________________________________________________________
Health care services (2.1%)
Service Intl 104,000 4,511,000
U.S. HealthCare 32,200 2,024,575
_____________
Total 6,535,575
_____________________________________________________________________________________________________________________________
Household products (1.6%)
Clorox 34,000 2,809,250
Gillette 40,100 2,150,363
_____________
Total 4,959,613
_____________________________________________________________________________________________________________________________
Industrial equipment & services (4.1%)
Caterpillar 44,500 2,864,688
Cincinnati Milacron 51,400 1,227,175
Deere 88,700 3,326,250
General Signal 73,200 2,470,500
Illinois Tool Works 47,900 2,939,863
____________
Total 12,828,476
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 24
Industrial transportation (0.5%)
Burlington Northern Santa Fe 400 32,750
Union Pacific 23,600 1,572,350
____________
Total 1,605,100
_____________________________________________________________________________________________________________________________
Insurance (1.9%)
UNUM 95,900 5,897,850
_____________________________________________________________________________________________________________________________
Leisure time & entertainment (0.7%)
Disney (Walt) 28,300 1,818,275
Harrah's Entertainment 700 (b) 19,250
Marriott Intl 6,500 278,688
Mattel 4,000 129,000
____________
Total 2,245,213
_____________________________________________________________________________________________________________________________
Media (2.0%)
Comcast Cl A 1,000 20,125
Deluxe 14,900 437,687
McGraw-Hill 17,000 1,513,000
Tele-Communications Cl A 12,400 (b) 261,950
Time Warner 100,700 4,179,050
____________
Total 6,411,812
_____________________________________________________________________________________________________________________________
Metals (2.7%)
Aluminum Co of Amer 34,700 1,925,850
Barrick Gold 104,500 (c) 3,069,687
Nucor 34,800 2,022,750
Reynolds Metals 29,100 1,556,850
____________
Total 8,575,137
_____________________________________________________________________________________________________________________________
Multi-industry conglomerates (5.4%)
Emerson Electric 70,600 5,912,750
General Electric 87,800 (d) 6,738,650
Seagram 126,200 (c) 4,590,525
____________
Total 17,241,925
_____________________________________________________________________________________________________________________________
Paper & packaging (1.0%)
Bemis 28,200 796,650
Crown Cork & Seal 5,200 (b) 213,850
James River 30,200 792,750
Kimberly-Clark 15,000 1,209,375
____________
Total 3,012,625
_____________________________________________________________________________________________________________________________
Restaurants & lodging (2.3%)
Hilton Hotels 56,800 4,416,200
Luby's Cafeterias 30,400 638,400
McDonald's 46,300 2,326,575
Wendy's Intl 2,100 43,312
____________
Total 7,424,487
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 25
Retail (2.6%)
Federated Dept Stores 5,700 (b) 153,900
Gap 51,600 2,431,650
Home Depot 38,700 1,780,200
Kroger 6,600 (b) 229,350
May Dept Stores 40,800 1,815,600
Nordstrom 15,200 596,600
Rite Aid 41,400 1,329,975
____________
Total 8,337,275
_____________________________________________________________________________________________________________________________
Textiles (0.6%)
NIKE Cl B 8,000 558,000
VF 24,200 1,222,100
____________
Total 1,780,100
_____________________________________________________________________________________________________________________________
Utilities-electric (3.0%)
SCE 304,900 5,640,650
Unicom 116,300 3,910,587
____________
Total 9,551,237
_____________________________________________________________________________________________________________________________
Utilities-gas (0.3%)
Tenneco 18,500 955,062
_____________________________________________________________________________________________________________________________
Utilities-telephone (8.7%)
AT&T 237,200 15,862,750
GTE 76,500 3,519,000
MCI Communications 167,800 4,803,275
SBC Communications 58,400 3,306,900
____________
Total 27,491,925
_____________________________________________________________________________________________________________________________
Total common stocks
(Cost: $266,427,790) $308,259,660
_____________________________________________________________________________________________________________________________
</TABLE>
<TABLE><CAPTION>
Short-term securities (7.2%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (1.3%)
Federal Natl Mtge Assn Disc Nts
02-12-96 5.39% $2,600,000 $ 2,595,726
02-13-96 5.41 1,500,000 1,497,300
____________
Total 4,093,026
<PAGE>
PAGE 26
Commercial paper (5.9%)
AT&T
02-20-96 5.54 1,400,000 1,395,936
Bayshore Fuel
02-23-96 5.48 2,100,000 2,093,006
Colgate Palmolive
03-12-96 5.47 3,900,000 (e) 3,874,742
Dean Witter, Discover
02-09-96 5.53 1,600,000 1,598,044
02-28-96 5.42 3,400,000 3,386,230
Pitney Bowes Credit
02-22-96 5.44 3,500,000 3,488,934
Reed Elsevier
02-07-96 5.53 900,000 (e) 899,175
02-15-96 5.51 900,000 (e) 898,086
Sandoz
02-29-96 5.38 1,200,000 1,194,997
____________
Total 18,829,150
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $22,923,948) $ 22,922,176
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $289,351,738)(f) $331,181,836
_____________________________________________________________________________________________________________________________
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 10.3% of
the Fund's net assets as of Jan. 31, 1996.
(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
___________________________________________________________________________________________
Standard & Poor's 500 Stock Index, March 1996 22
___________________________________________________________________________________________
(e) Commercial paper sold within terms of a private placement memorandum, exempt from registration
under section 4(2) of the Securities Act of 1933, as amended, and may be sold only to dealers
in that program or other "accredited investors." This security has been determined to be liquid
under guidelines established by the board.
(f) At Jan. 31, 1996, the cost of securities for federal income tax purposes was $289,572,975 and
the aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $42,650,028
Unrealized depreciation (1,041,167)
___________________________________________________________________________________________
Net unrealized appreciation $41,608,861
___________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 27
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 28
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 29
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 30
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 31
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 32
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 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, 1996
Class A
Income distributions
taxable as dividend income,
25.20% qualifying for deduction by corporations.
Payable date Per share
March 30, 1995 $0.02246
June 28, 1995 0.02492
Sept. 28, 1995 0.03292
Dec. 28, 1995 0.31741
Total $0.39771
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 28, 1995 $0.24600
Total distributions $0.64371
The distribution of $0.56341 per share,
payable Dec. 28, 1995, consisted of
$0.02861 derived from net investment
income, $0.28880 from net short-term
capital gains (a total of $0.31741
taxable as dividend income) and $0.24600
from net long-term capital gains.
<PAGE>
PAGE 33
Class B
Income distributions
taxable as dividend income,
25.20% qualifying for deduction by corporations.
March 30, 1995 $0.02255
June 28, 1995 0.01976
Sept. 28, 1995 0.02370
Dec. 28, 1995 0.30687
Total $0.37288
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 28, 1995 $0.24600
Total distributions $0.61888
The distribution of $0.55287 per share,
payable Dec. 28, 1995, consisted of
$0.01807 derived from net investment
income, $0.28880 from net short-term
capital gains (a total of $0.30687
taxable as dividend income) and $0.24600
from net long-term capital gains.
Class Y
Income distributions
taxable as dividend income,
25.20% qualifying for deduction by corporations.
March 30, 1995 $0.02280
June 28, 1995 0.02767
Sept. 28, 1995 0.03595
Dec. 28, 1995 0.32055
Total $0.40697
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 28, 1995 $0.24600
Total distributions $0.65297
The distribution of $0.56655 per share,
payable Dec. 28, 1995, consisted of
$0.03175 derived from net investment
income, $0.28880 from net short-term
capital gains (a total of $0.32055
taxable as dividend income) and $0.24600
from net long-term capital gains.
<PAGE>
PAGE 34
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 35
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report and
prospectus are placed
in blue strip at the top
of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report and prospectus. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
