UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number 811-1629
RIVERSOURCE DIMENSIONS SERIES, INC.
(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
(Address of principal executive offices) (Zip code)
Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474
(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 671-1947
Date of fiscal year end: 7/31
Date of reporting period: 1/31
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
DISCIPLINED SMALL AND MID CAP EQUITY FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2010
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND
SEEKS TO PROVIDE SHAREHOLDERS WITH LONG-TERM CAPITAL
GROWTH.
<Table>
(SINGLE STRATEGY FUNDS ICON)
</Table>
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 2
Fund Expenses Example.............. 7
Portfolio of Investments........... 10
Statement of Assets and
Liabilities...................... 22
Statement of Operations............ 23
Statements of Changes in Net
Assets........................... 24
Financial Highlights............... 26
Notes to Financial Statements...... 32
Proxy Voting....................... 47
</Table>
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RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> RiverSource Disciplined Small and Mid Cap Equity Fund (the Fund) Class A
shares gained 10.20% (excluding sales charge) for the six months ended Jan.
31, 2010.
> The Fund underperformed its benchmark, the Russell 2500(TM) Index, which rose
11.84% during the six-month period.
> The Fund also underperformed the Lipper Mid-Cap Core Funds Index, representing
the Fund's peer group, which increased 13.34%, for the same period.
ANNUALIZED TOTAL RETURNS (for period ended Jan. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 3 YEARS 5/18/06
- ----------------------------------------------------------------------
RiverSource Disciplined Small
and Mid Cap Equity Fund
Class A (excluding sales
charge) +10.20% +33.79% -12.27% -8.14%
- ----------------------------------------------------------------------
Russell 2500 Index(1)
(unmanaged) +11.84% +42.74% -6.76% -2.39%
- ----------------------------------------------------------------------
Lipper Mid-Cap Core Funds
Index(2) +13.34% +44.07% -4.92% -1.05%
- ----------------------------------------------------------------------
</Table>
* Not annualized.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting riversource.com/funds or calling 1(800) 221-2450.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
fees and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
other share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
2 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
(1) The Russell 2500 Index, an unmanaged index, measures the performance of the
2,500 smallest companies in the Russell 3000 Index, which represents
approximately 16% of the total market capitalization of the Russell 3000
Index. The index reflects reinvestment of all distributions and changes in
market prices.
(2) The Lipper Mid-Cap Core Funds Index includes the 30 largest mid-cap core
funds tracked by Lipper Inc. The index's returns include net reinvested
dividends. The Fund's performance is currently measured against this index
for purposes of determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT JAN. 31, 2010
SINCE
Without sales charge 6 MONTHS* 1 YEAR 3 YEARS INCEPTION
Class A (inception 5/18/06) +10.20% +33.79% -12.27% -8.14%
- -----------------------------------------------------------------------
Class B (inception 5/18/06) +9.66% +32.67% -12.96% -8.85%
- -----------------------------------------------------------------------
Class C (inception 5/18/06) +9.66% +32.67% -12.96% -8.86%
- -----------------------------------------------------------------------
Class I (inception 5/18/06) +10.30% +34.29% -11.93% -7.79%
- -----------------------------------------------------------------------
Class R4 (inception 5/18/06) +10.23% +34.03% -12.00% -7.89%
- -----------------------------------------------------------------------
Class W (inception 12/1/06) +10.13% +33.83% -12.30% -10.40%
- -----------------------------------------------------------------------
With sales charge
Class A (inception 5/18/06) +3.86% +26.08% -13.99% -9.60%
- -----------------------------------------------------------------------
Class B (inception 5/18/06) +4.66% +27.67% -13.84% -9.59%
- -----------------------------------------------------------------------
Class C (inception 5/18/06) +8.66% +31.67% -12.96% -8.86%
- -----------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 5.75%.
Class B share performance reflects a contingent deferred sales charge (CDSC)
applied as follows: first year 5%; second year 4%; third and fourth years 3%;
fifth year 2%; sixth year 1%; no sales charge thereafter. Class C shares may be
subject to a 1% CDSC if shares are sold within one year after purchase. Sales
charges do not apply to Class I, Class R4 and Class W shares. Class I and Class
R4 are available to qualifying institutional investors only. Class W shares are
offered through qualifying discretionary accounts.
* Not annualized.
- --------------------------------------------------------------------------------
4 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
STYLE MATRIX
- --------------------------------------------------------------------------------
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
LARGE
X MEDIUM SIZE
X SMALL
</Table>
Shading within the style matrix approximates areas in which the Fund is designed
to generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
Investments in small- and mid-capitalization companies often involve greater
risks and potential volatility than investments in larger, more established
companies.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 5
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
SECTOR BREAKDOWN(1) (at Jan. 31, 2010)
- ---------------------------------------------------------------------
<Table>
Consumer Discretionary 18.6%
- ------------------------------------------------
Consumer Staples 4.6%
- ------------------------------------------------
Energy 10.8%
- ------------------------------------------------
Financials 15.3%
- ------------------------------------------------
Health Care 9.0%
- ------------------------------------------------
Industrials 13.2%
- ------------------------------------------------
Information Technology 15.3%
- ------------------------------------------------
Materials 8.8%
- ------------------------------------------------
Telecommunication Services 2.1%
- ------------------------------------------------
Utilities 2.0%
- ------------------------------------------------
Other(2) 0.3%
- ------------------------------------------------
</Table>
(1) Sectors can be comprised of several industries. Please refer to the section
entitled "Portfolio of Investments" for a complete listing. No single
industry exceeds 25% of portfolio assets.
Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan). The Fund's
composition is subject to change.
(2) Cash & Cash Equivalents.
The sectors identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
TOP TEN HOLDINGS(1) (at Jan. 31, 2010)
- ---------------------------------------------------------------------
<Table>
Murphy Oil 0.9%
- ------------------------------------------------
Humana 0.9%
- ------------------------------------------------
CIGNA 0.9%
- ------------------------------------------------
3Com 0.9%
- ------------------------------------------------
Hartford Financial Services Group 0.9%
- ------------------------------------------------
Platinum Underwriters Holdings 0.9%
- ------------------------------------------------
CenturyTel 0.8%
- ------------------------------------------------
Western Digital 0.8%
- ------------------------------------------------
Seagate Technology 0.8%
- ------------------------------------------------
Computer Sciences 0.8%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan and Cash &
Cash Equivalents).
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
6 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the ongoing expenses of any funds in which the Fund
invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). The Fund's indirect expense from investing in the acquired funds
is based on the Fund's pro rata portion of the ongoing expenses charged by
acquired funds using the expense ratio of each of the acquired funds as of the
acquired fund's most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months Jan. 31, 2010.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Direct expenses paid during the period" to
estimate the expenses you paid on your account during this period. You can also
estimate the direct and indirect expenses you paid over the period by using the
number in the first line under the heading "Direct and indirect expenses paid
during the period."
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 7
FUND EXPENSES EXAMPLE (continued) ----------------------------------------------
<Table>
<Caption>
DIRECT AND
DIRECT INDIRECT
BEGINNING ENDING EXPENSES EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING PAID DURING
AUG. 1, 2009 JAN. 31, 2010 THE PERIOD(a) THE PERIOD(b)
- ------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,102.00 $ 6.55 $ 6.60
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.70 $ 6.29 $ 6.34
- ------------------------------------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,096.60 $10.51 $10.56
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.91 $10.10 $10.15
- ------------------------------------------------------------------------------------------
Class C
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,096.60 $10.45 $10.51
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.96 $10.05 $10.10
- ------------------------------------------------------------------------------------------
Class I
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,103.00 $ 3.78 $ 3.83
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,021.34 $ 3.63 $ 3.68
- ------------------------------------------------------------------------------------------
Class R4
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,102.30 $ 5.29 $ 5.35
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,019.90 $ 5.09 $ 5.14
- ------------------------------------------------------------------------------------------
Class W
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,101.30 $ 6.13 $ 6.18
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,019.10 $ 5.89 $ 5.94
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
8 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
ANNUALIZED EXPENSE RATIOS
<Table>
<Caption>
FUND'S ACQUIRED FUND
ANNUALIZED FEES AND NET FUND
EXPENSE RATIO EXPENSES EXPENSES
- ----------------------------------------------------------------------
Class A 1.25% .01% 1.26%
- ----------------------------------------------------------------------
Class B 2.01% .01% 2.02%
- ----------------------------------------------------------------------
Class C 2.00% .01% 2.01%
- ----------------------------------------------------------------------
Class I .72% .01% .73%
- ----------------------------------------------------------------------
Class R4 1.01% .01% 1.02%
- ----------------------------------------------------------------------
Class W 1.17% .01% 1.18%
- ----------------------------------------------------------------------
</Table>
(a) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period).
(b) Expenses are equal to the annualized expense ratio for each class plus the
acquired fund fees and expenses, multiplied by the average account value
over the period, multiplied by 182/365 (to reflect the one-half year
period).
(c) Based on the actual return for the six months ended Jan. 31, 2010: +10.20%
for Class A, +9.66% for Class B, +9.66% for Class C, +10.30% for Class I,
+10.23% for Class R4 and +10.13% for Class W.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 9
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
JAN. 31, 2010 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (98.5%)
ISSUER SHARES VALUE(a)
AEROSPACE & DEFENSE (0.6%)
BE Aerospace 5,341(b) $119,799
Ceradyne 12,801(b) 250,131
Spirit AeroSystems Holdings Cl A 10,979(b,d) 235,499
Triumph Group 1,990 101,351
---------------
Total 706,780
- -------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS (0.3%)
Air Transport Services Group 35,833(b) 82,774
Atlas Air Worldwide Holdings 6,988(b) 256,250
---------------
Total 339,024
- -------------------------------------------------------------------------------------
AIRLINES (1.2%)
Alaska Air Group 7,744(b) 242,697
Allegiant Travel 4,661(b,d) 238,643
Continental Airlines Cl B 14,261(b,d) 262,260
Hawaiian Holdings 36,341(b) 215,866
SkyWest 32,278 472,227
---------------
Total 1,431,693
- -------------------------------------------------------------------------------------
AUTO COMPONENTS (2.2%)
ArvinMeritor 18,188(b) 176,242
Autoliv 13,331(c) 570,699
Cooper Tire & Rubber 16,254 276,806
Dana Holding 39,919(b) 411,565
Exide Technologies 23,722(b) 183,371
Goodyear Tire & Rubber 22,962(b) 306,313
Spartan Motors 29,436 176,616
Tenneco 17,173(b) 303,619
TRW Automotive Holdings 8,193(b) 188,685
WABCO Holdings 4,416 114,154
---------------
Total 2,708,070
- -------------------------------------------------------------------------------------
AUTOMOBILES (0.2%)
Harley-Davidson 9,417 214,143
- -------------------------------------------------------------------------------------
BEVERAGES (0.2%)
Coca-Cola Enterprises 12,269 247,711
- -------------------------------------------------------------------------------------
BIOTECHNOLOGY (0.2%)
Cubist Pharmaceuticals 6,921(b) 141,811
PDL BioPharma 22,740(d) 145,536
---------------
Total 287,347
- -------------------------------------------------------------------------------------
BUILDING PRODUCTS (0.3%)
Apogee Enterprises 14,460(d) 198,969
Insteel Inds 9,167(d) 90,570
Quanex Building Products 7,470 120,118
---------------
Total 409,657
- -------------------------------------------------------------------------------------
CAPITAL MARKETS (1.4%)
Apollo Investment 24,445 251,783
BGC Partners Cl A 29,180(d) 118,763
Broadpoint Gleacher Securities 21,101(b) 85,459
GFI Group 22,904 111,542
Intl Assets Holding 8,562(b) 127,488
Knight Capital Group Cl A 14,467(b) 226,264
MF Global Holdings 23,932(b) 156,755
MVC Capital 7,749 90,663
Oppenheimer Holdings Cl A 4,537(d) 123,905
optionsXpress Holdings 7,299 104,741
Penson Worldwide 12,635(b,d) 106,387
SWS Group 13,292(d) 159,504
---------------
Total 1,663,254
- -------------------------------------------------------------------------------------
CHEMICALS (4.1%)
Ashland 8,671 350,395
Celanese Series A 4,900 142,590
CF Inds Holdings 6,307 585,668
Cytec Inds 3,515 131,145
Eastman Chemical 3,128(d) 176,826
Huntsman 26,456 322,499
Innophos Holdings 9,079 177,585
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
10 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
CHEMICALS (CONT.)
Lubrizol 2,390 $176,119
NewMarket 2,788 251,533
Olin 26,012(d) 429,198
OM Group 17,264(b) 563,152
Solutia 15,392(b) 211,640
Stepan 2,718 158,949
Terra Inds 13,370 422,492
WR Grace & Co 40,215(b) 960,333
---------------
Total 5,060,124
- -------------------------------------------------------------------------------------
COMMERCIAL BANKS (1.4%)
BancFirst 4,720 190,216
Fifth Third Bancorp 48,980 609,312
SVB Financial Group 8,016(b,d) 347,814
TowneBank 14,586(d) 155,924
Trico Bancshares 10,072 173,843
Wintrust Financial 2,784 96,716
Zions Bancorporation 9,533(d) 180,841
---------------
Total 1,754,666
- -------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (1.7%)
Brink's 12,603 294,658
Herman Miller 10,765(d) 181,821
HNI 9,412 235,488
Kimball Intl Cl B 24,290 191,405
RR Donnelley & Sons 26,040 516,114
Steelcase Cl A 29,467(d) 208,626
United Stationers 5,008(b,d) 273,236
Viad 8,534(d) 168,376
---------------
Total 2,069,724
- -------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (1.6%)
3Com 143,751(b) 1,070,945
Blue Coat Systems 5,661(b) 139,544
JDS Uniphase 13,742(b) 108,012
NETGEAR 9,591(b) 197,958
Plantronics 7,321 193,421
Tellabs 47,291(b) 304,081
---------------
Total 2,013,961
- -------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (2.4%)
Lexmark Intl Cl A 15,751(b) 406,218
NCR 26,010(b) 311,340
Novatel Wireless 17,158(b) 128,342
SanDisk 2,552(b) 64,872
Seagate Technology 59,200(c) 990,416
Western Digital 26,188(b) 994,882
---------------
Total 2,896,070
- -------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (2.6%)
Comfort Systems USA 12,316(d) 144,467
EMCOR Group 27,598(b) 664,008
Fluor 15,097 684,498
Granite Construction 10,147(d) 313,339
KBR 27,118 507,920
Layne Christensen 5,102(b) 129,234
Michael Baker 5,342(b,d) 208,391
Shaw Group 6,111(b) 197,324
Tutor Perini 15,945(b) 303,912
---------------
Total 3,153,093
- -------------------------------------------------------------------------------------
CONSUMER FINANCE (0.8%)
Advance America Cash Advance Centers 28,231 136,356
Cash America Intl 3,005 112,958
Discover Financial Services 44,722 611,797
EZCORP Cl A 5,371(b) 97,537
---------------
Total 958,648
- -------------------------------------------------------------------------------------
CONTAINERS & PACKAGING (0.1%)
Temple-Inland 7,446 129,337
- -------------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (0.3%)
Corinthian Colleges 14,138(b,d) 197,932
Regis 9,104 145,027
---------------
Total 342,959
- -------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.1%)
IntercontinentalExchange 819(b) 78,198
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 11
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
DIVERSIFIED TELECOMMUNICATION SERVICES (1.5%)
CenturyTel 29,423 $1,000,677
Neutral Tandem 10,164(b) 157,135
Qwest Communications Intl 175,188 737,541
---------------
Total 1,895,353
- -------------------------------------------------------------------------------------
ELECTRIC UTILITIES (0.5%)
Edison Intl 19,960 665,067
- -------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (0.7%)
EnerSys 12,131(b) 236,433
General Cable 8,078(b) 235,070
GrafTech Intl 32,855(b) 412,659
---------------
Total 884,162
- -------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (2.9%)
Agilent Technologies 7,908(b) 221,661
Anixter Intl 13,027(b,d) 542,966
Arrow Electronics 11,100(b) 291,597
Avnet 9,011(b) 238,251
Benchmark Electronics 14,414(b) 262,623
Ingram Micro Cl A 17,533(b) 296,308
Insight Enterprises 18,381(b) 211,565
Jabil Circuit 15,372 222,587
Littelfuse 4,368(b) 131,302
Methode Electronics 19,678 216,261
Plexus 7,141(b,d) 242,865
SYNNEX 9,983(b,d) 264,250
Tech Data 6,843(b) 278,852
Vishay Intertechnology 16,826(b) 126,868
---------------
Total 3,547,956
- -------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (5.6%)
Atwood Oceanics 7,276(b) 243,892
BJ Services 15,288 316,003
Bristow Group 3,455(b) 123,344
Cal Dive Intl 12,100(b) 85,184
CARBO Ceramics 2,894 190,772
Complete Production Services 17,022(b) 213,286
Diamond Offshore Drilling 5,617(d) 514,124
Dril-Quip 5,541(b) 290,847
GulfMark Offshore 7,779(b) 190,974
Helmerich & Payne 10,370 433,777
Key Energy Services 48,202(b,d) 466,354
Lufkin Inds 6,165 390,738
Nabors Inds 13,204(b,c) 294,449
Oil States Intl 5,908(b) 217,651
Parker Drilling 54,091(b,d) 260,178
Patterson-UTI Energy 17,797 273,362
Pride Intl 19,032(b,d) 563,347
Rowan Companies 20,868(b) 448,245
SEACOR Holdings 1,884(b) 132,351
Superior Energy Services 8,946(b) 205,490
TETRA Technologies 23,066(b,d) 241,270
Tidewater 7,954 372,406
Unit 4,876(b,d) 222,053
Willbros Group 13,829(b) 211,445
---------------
Total 6,901,542
- -------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (2.1%)
Andersons 3,961 106,868
BJ's Wholesale Club 3,864(b) 130,565
Ingles Markets Cl A 10,711 151,668
Pantry 8,606(b) 115,923
Ruddick 10,053(d) 285,003
Safeway 37,160 834,241
SUPERVALU 32,758 481,870
Whole Foods Market 10,191(b) 277,399
Winn-Dixie Stores 21,954(b,d) 222,394
---------------
Total 2,605,931
- -------------------------------------------------------------------------------------
FOOD PRODUCTS (1.6%)
American Italian Pasta Cl A 3,649(b) 125,015
Bunge 6,917 406,649
Cal-Maine Foods 8,223(d) 268,481
Chiquita Brands Intl 6,377(b) 93,551
Darling Intl 20,958(b) 163,263
Dean Foods 15,141(b) 266,936
Fresh Del Monte Produce 19,703(b,c) 400,562
Green Mountain Coffee Roasters 2,435(b) 206,537
---------------
Total 1,930,994
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
GAS UTILITIES (0.4%)
Laclede Group 5,366 $173,107
Questar 6,310 261,739
---------------
Total 434,846
- -------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (1.0%)
Abaxis 4,671(b) 112,478
ev3 18,536(b,d) 270,255
Intuitive Surgical 1,714(b) 562,295
Orthofix Intl 3,602(b,c,d) 108,528
Sirona Dental Systems 4,208(b) 135,371
---------------
Total 1,188,927
- -------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (6.0%)
AMERIGROUP 18,284(b,d) 465,328
Centene 12,454(b) 239,740
CIGNA 32,445 1,095,668
Coventry Health Care 27,609(b) 631,694
Health Management Associates Cl A 17,524(b) 116,359
Health Net 15,514(b) 376,370
HealthSpring 27,447(b) 477,303
HMS Holdings 5,391(b,d) 243,080
Humana 22,599(b) 1,098,764
Kindred Healthcare 27,824(b) 470,504
Magellan Health Services 22,468(b) 887,037
Molina Healthcare 11,081(b,d) 246,552
RehabCare Group 6,256(b) 181,799
Sun Healthcare Group 11,234(b) 98,185
Triple-S Management Cl B 14,760(b,c,d) 244,868
Universal American Financial 18,692(b) 249,725
WellCare Health Plans 13,446(b) 419,246
---------------
Total 7,542,222
- -------------------------------------------------------------------------------------
HEALTH CARE TECHNOLOGY (0.2%)
Eclipsys 7,843(b) 130,821
IMS Health 7,862 170,134
---------------
Total 300,955
- -------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (0.8%)
Bally Technologies 7,604(b,d) 301,651
California Pizza Kitchen 11,637(b,d) 160,591
Las Vegas Sands 20,107(b) 311,658
Wyndham Worldwide 12,590 264,264
---------------
Total 1,038,164
- -------------------------------------------------------------------------------------
HOUSEHOLD DURABLES (2.4%)
American Greetings Cl A 13,283 245,470
Garmin 18,692(c,d) 603,939
Harman Intl Inds 7,325 260,404
NVR 343(b) 234,660
Tupperware Brands 18,544 787,378
Whirlpool 10,230(e) 769,091
---------------
Total 2,900,942
- -------------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (1.1%)
AES 16,168(b) 204,202
Constellation Energy Group 18,161 586,237
Mirant 14,274(b) 200,835
NRG Energy 14,138(b) 340,867
---------------
Total 1,332,141
- -------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (0.6%)
McDermott Intl 21,156(b) 499,705
Seaboard 222 273,060
---------------
Total 772,765
- -------------------------------------------------------------------------------------
INSURANCE (9.2%)
Allied World Assurance Holdings 3,977(c) 178,011
American Financial Group 13,050 323,771
American Physicians Capital 5,376 149,238
Amerisafe 11,109(b,d) 192,186
AmTrust Financial Services 8,859 106,042
Arch Capital Group 3,096(b,c) 221,488
Argo Group Intl Holdings 5,930(b,c) 158,568
Assurant 14,458 454,415
CNA Surety 8,227(b) 115,178
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 13
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
INSURANCE (CONT.)
Conseco 57,967(b) $275,923
eHealth 6,815(b) 124,033
Employers Holdings 23,501 310,918
Endurance Specialty Holdings 5,432(c) 195,661
FBL Financial Group Cl A 3,582 64,261
Flagstone Reinsurance Holdings 6,794(c) 71,133
FPIC Insurance Group 2,276(b) 86,374
Genworth Financial Cl A 66,881(b) 925,633
Hartford Financial Services Group 43,540 1,044,524
HCC Insurance Holdings 8,070 218,697
Horace Mann Educators 23,121 277,221
Lincoln Natl 20,510 504,136
Max Capital Group 9,339(c) 210,314
Meadowbrook Insurance Group 17,729 119,671
Montpelier Re Holdings 15,112(c) 255,242
Natl Financial Partners 22,382(b) 189,128
PartnerRe 5,123(c) 382,125
Platinum Underwriters Holdings 28,618(c) 1,037,689
Principal Financial Group 36,826 848,839
ProAssurance 9,523(b,d) 483,387
Protective Life 10,872 183,193
RenaissanceRe Holdings 3,653(c) 197,920
Safety Insurance Group 7,026 245,910
SeaBright Insurance Holdings 15,885(b) 161,709
Validus Holdings 4,262(c) 112,943
XL Capital Cl A 41,032(c) 688,107
Zenith Natl Insurance 10,259(d) 286,226
---------------
Total 11,399,814
- -------------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL (0.6%)
Expedia 11,802(b) 252,681
Liberty Media -- Interactive Cl A 34,254(b,g) 355,556
NutriSystem 8,782(d) 178,802
---------------
Total 787,039
- -------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (0.9%)
EarthLink 65,986(d) 535,146
ModusLink Global Solutions 16,987(b) 172,418
ValueClick 12,142(b) 112,314
Vistaprint 5,143(b,c,d) 288,059
---------------
Total 1,107,937
- -------------------------------------------------------------------------------------
IT SERVICES (2.2%)
Ciber 33,810(b,d) 109,206
Computer Sciences 19,087(b) 979,164
CSG Systems Intl 11,159(b) 216,596
Euronet Worldwide 9,815(b) 200,422
Heartland Payment Systems 8,578 122,408
Ness Technologies 12,754(b,c) 70,657
SAIC 20,334(b) 372,722
TeleTech Holdings 9,087(b) 173,016
Unisys 3,692(b) 106,662
Wright Express 10,527(b,d) 309,073
---------------
Total 2,659,926
- -------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.4%)
Brunswick 9,676(d) 103,823
JAKKS Pacific 19,935(b,d) 219,286
Polaris Inds 4,548 201,067
---------------
Total 524,176
- -------------------------------------------------------------------------------------
MACHINERY (3.2%)
AGCO 11,567(b) 357,536
Bucyrus Intl 4,758 249,224
Chart Inds 13,584(b,d) 219,110
Cummins 8,777 396,369
EnPro Inds 5,393(b,d) 131,320
Force Protection 35,930(b) 182,884
FreightCar America 6,680 130,260
Joy Global 5,012 229,249
Manitowoc 10,735 117,012
Mueller Inds 11,774 289,523
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
MACHINERY (CONT.)
NACCO Inds Cl A 1,292 $69,535
Navistar Intl 3,143(b) 116,260
Nordson 8,338(d) 471,430
Oshkosh 14,100 508,586
Terex 13,561(b) 265,118
Timken 11,030 247,182
---------------
Total 3,980,598
- -------------------------------------------------------------------------------------
MEDIA (1.4%)
CBS Cl B 22,925 296,420
DISH Network Cl A 23,386 427,028
Gannett 10,602 171,222
Interpublic Group of Companies 38,533(b,d) 248,923
Liberty Media -- Capital Series A 5,612(b,g) 145,295
Natl CineMedia 11,601 173,783
Virgin Media 17,851 253,306
---------------
Total 1,715,977
- -------------------------------------------------------------------------------------
METALS & MINING (3.3%)
AK Steel Holding 9,681 196,912
Allegheny Technologies 9,454 386,196
AM Castle & Co 7,999(d) 77,590
Brush Engineered Materials 5,807(b) 104,352
Carpenter Technology 4,492 120,386
Century Aluminum 14,864(b) 168,260
Cliffs Natural Resources 10,985 438,851
Commercial Metals 17,661 242,662
Horsehead Holding 20,299(b,d) 198,930
Kaiser Aluminum 4,120 144,818
Olympic Steel 4,291(d) 119,032
Reliance Steel & Aluminum 9,132 372,038
RTI Intl Metals 9,210(b,d) 227,948
United States Steel 15,577(d) 692,086
Walter Energy 5,448 353,684
Worthington Inds 12,909 186,793
---------------
Total 4,030,538
- -------------------------------------------------------------------------------------
MULTILINE RETAIL (1.5%)
Big Lots 4,249(b) 120,714
Dillard's Cl A 15,544(d) 257,409
Family Dollar Stores 8,655 267,266
JC Penney 20,587(e) 511,176
Macy's 13,908 221,554
Nordstrom 11,517(d) 397,797
Sears Holdings 1,421(b,d) 132,551
---------------
Total 1,908,467
- -------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (5.1%)
ATP Oil & Gas 13,672(b) 197,834
Bill Barrett 8,171(b) 253,301
Cimarex Energy 3,889 191,378
CVR Energy 8,223(b) 65,948
Frontier Oil 20,108 250,546
Frontline 7,726(c,d) 232,244
Gran Tierra Energy 31,218(b,c) 152,656
Knightsbridge Tankers 10,267(c) 147,947
Massey Energy 3,978 153,233
McMoRan Exploration 21,618(b,d) 328,810
Murphy Oil 21,591 1,102,868
Newfield Exploration 4,443(b) 217,440
Patriot Coal 16,874(b,d) 261,378
Penn Virginia 6,496 157,658
Petroleum Development 6,350(b) 133,096
Rosetta Resources 9,754(b) 200,542
St. Mary Land & Exploration 9,404 301,304
Stone Energy 10,998(b) 175,308
Sunoco 12,303 308,682
Swift Energy 8,629(b,d) 216,243
Tesoro 18,449(d) 230,613
USEC 40,179(b) 160,716
Western Refining 24,057(b,d) 109,940
Whiting Petroleum 3,162(b) 210,463
World Fuel Services 21,962(d) 527,747
---------------
Total 6,287,895
- -------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (1.2%)
Clearwater Paper 3,565(b) 174,435
Intl Paper 28,346 649,407
MeadWestvaco 11,528 277,479
Schweitzer-Mauduit Intl 5,292 398,170
---------------
Total 1,499,491
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 15
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
PERSONAL PRODUCTS (0.2%)
Nu Skin Enterprises Cl A 12,353 $287,084
- -------------------------------------------------------------------------------------
PHARMACEUTICALS (1.4%)
Endo Pharmaceuticals Holdings 14,166(b) 284,878
Forest Laboratories 28,973(b) 858,760
Par Pharmaceutical Companies 11,210(b) 295,047
Questcor Pharmaceuticals 16,483(b) 74,668
ViroPharma 15,989(b) 157,971
---------------
Total 1,671,324
- -------------------------------------------------------------------------------------
PROFESSIONAL SERVICES (0.9%)
Administaff 12,253 279,858
Heidrick & Struggles Intl 5,020(d) 127,659
ICF Intl 4,621(b) 108,178
Kelly Services Cl A 7,693(b,d) 100,932
Korn/Ferry Intl 7,132(b) 105,554
Manpower 3,139 162,568
Spherion 23,273(b) 131,260
TrueBlue 8,205(b,d) 119,054
---------------
Total 1,135,063
- -------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (1.7%)
American Capital Agency 3,287 87,730
Anworth Mtge Asset 31,416 216,770
Capstead Mtge 41,049 545,131
Entertainment Properties Trust 6,304 220,073
Hospitality Properties Trust 12,368 273,580
Medical Properties Trust 12,025 120,370
MFA Financial 42,426 312,255
NorthStar Realty Finance 22,213 100,847
SL Green Realty 4,320 196,517
---------------
Total 2,073,273
- -------------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (0.4%)
CB Richard Ellis Group Cl A 16,611(b,d) 204,315
Jones Lang LaSalle 4,305(d) 245,428
---------------
Total 449,743
- -------------------------------------------------------------------------------------
ROAD & RAIL (0.4%)
Arkansas Best 10,699 241,155
Hertz Global Holdings 18,921(b,d) 196,022
Saia 7,629(b,d) 91,548
---------------
Total 528,725
- -------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (3.2%)
Amkor Technology 35,189(b,d) 200,225
Atheros Communications 15,865(b) 508,791
Cavium Networks 5,479(b) 118,401
Cree 3,463(b) 193,616
Marvell Technology Group 22,888(b,c) 398,938
Micron Technology 64,112(b) 559,056
Monolithic Power Systems 12,491(b) 257,564
NetLogic Microsystems 4,369(b) 178,954
NVIDIA 12,474(b) 191,975
OmniVision Technologies 21,473(b) 277,002
Power Integrations 5,911 184,482
Sigma Designs 13,255(b,d) 147,263
Silicon Image 33,604(b,d) 80,986
Skyworks Solutions 25,127(b) 318,862
Teradyne 12,884(b) 120,337
Volterra Semiconductor 5,620(b) 109,534
Zoran 5,974(b) 65,535
---------------
Total 3,911,521
- -------------------------------------------------------------------------------------
SOFTWARE (2.0%)
ArcSight 4,582(b) 108,823
Blackbaud 6,624 147,715
Informatica 12,808(b,d) 303,421
MicroStrategy Cl A 2,097(b) 196,531
Pegasystems 5,729(d) 190,489
Rovi 8,394(b) 242,335
Sourcefire 5,513(b) 114,946
SuccessFactors 6,934(b) 113,024
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
16 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
SOFTWARE (CONT.)
Take-Two Interactive Software 21,028(b,d) $195,140
Taleo Cl A 8,657(b) 175,824
TIBCO Software 35,261(b) 315,938
TiVo 21,205(b) 191,269
Ultimate Software Group 4,951(b) 148,035
---------------
Total 2,443,490
- -------------------------------------------------------------------------------------
SPECIALTY RETAIL (6.9%)
Abercrombie & Fitch Cl A 6,301(d) 198,734
American Eagle Outfitters 16,203 257,466
AnnTaylor Stores 17,022(b) 213,796
Asbury Automotive Group 10,450(b) 115,682
AutoNation 14,491(b,d) 260,838
Barnes & Noble 10,336(d) 180,673
Big 5 Sporting Goods 8,107 118,443
Brown Shoe 14,962(d) 183,285
Cabela's 7,407(b) 119,401
CarMax 10,222(b) 210,880
Cato Cl A 10,990(d) 224,746
Chico's FAS 20,610(b,d) 263,190
Children's Place Retail Stores 8,374(b,d) 266,293
Collective Brands 10,930(b) 215,102
Dress Barn 17,911(b) 421,625
Foot Locker 19,168 216,407
GameStop Cl A 10,481(b) 207,209
Genesco 11,899(b) 280,578
Group 1 Automotive 12,400(b,d) 359,600
GUESS? 4,486 178,139
Gymboree 3,680(b,d) 143,557
Hot Topic 29,515(b,d) 169,711
Jo-Ann Stores 10,690(b,d) 374,364
Jos A Bank Clothiers 2,918(b,d) 122,293
Men's Wearhouse 22,598(d) 455,350
Office Depot 41,980(b) 238,446
OfficeMax 22,563(b) 292,642
Pacific Sunwear of California 34,329(b,d) 120,838
PetSmart 10,279 264,684
RadioShack 25,829 504,182
Rent-A-Center 17,486(b) 349,720
Signet Jewelers 11,339(b,c) 310,235
Sonic Automotive Cl A 12,410(b) 118,516
Stage Stores 11,163(d) 144,226
Wet Seal Cl A 56,235(b,d) 188,387
Williams-Sonoma 14,891 282,631
---------------
Total 8,571,869
- -------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (1.6%)
Crocs 31,391(b) 230,724
Deckers Outdoor 2,031(b) 199,383
Fossil 12,501(b) 408,158
Iconix Brand Group 15,208(b) 191,925
Jones Apparel Group 15,451 223,112
Skechers USA Cl A 7,880(b) 221,113
Warnaco Group 11,402(b) 441,485
---------------
Total 1,915,900
- -------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.2%)
Ocwen Financial 21,552(b,d) 197,416
- -------------------------------------------------------------------------------------
TOBACCO (0.4%)
Alliance One Intl 30,949(b,d) 157,530
Universal 7,196(d) 326,627
---------------
Total 484,157
- -------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (0.5%)
H&E Equipment Services 20,609(b,d) 218,661
United Rentals 14,496(b) 116,113
WESCO Intl 10,524(b,d) 291,726
---------------
Total 626,500
- -------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.6%)
NII Holdings 7,474(b) 244,699
Syniverse Holdings 15,887(b) 267,061
Telephone & Data Systems 3,304 104,241
USA Mobility 10,152 105,479
---------------
Total 721,480
- -------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $101,388,570) $121,325,829
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 17
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
MONEY MARKET FUND (0.3%)
SHARES VALUE(a)
RiverSource Short-Term Cash Fund, 0.16% 336,878(f) $336,878
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $336,878) $336,878
- -------------------------------------------------------------------------------------
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (11.2%)
SHARES VALUE(a)
CASH COLLATERAL REINVESTMENT FUND
JPMorgan Prime Money Market Fund 13,845,107 $13,845,107
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $13,845,107) $13,845,107
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $115,570,555)(h) $135,507,814
=====================================================================================
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
INVESTMENTS IN DERIVATIVES
FUTURES CONTRACTS OUTSTANDING AT JAN. 31, 2010
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION
CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION)
- ------------------------------------------------------------------------------------
E-Mini S&P MidCap 400
Index 17 $1,192,210 March 2010 $(12,625)
Russell 2000 Mini Index 15 901,500 March 2010 (9,301)
- ------------------------------------------------------------------------------------
Total $(21,926)
- ------------------------------------------------------------------------------------
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At Jan. 31, 2010, the
value of foreign securities, excluding short-term securities, represented
6.92% of net assets.
(d) At Jan. 31, 2010, security was partially or fully on loan. See Note 7 to
the financial statements.
(e) At Jan. 31, 2010, investments in securities included securities valued at
$424,125 that were partially pledged as collateral to cover initial margin
deposits on open stock index futures contracts.
(f) Affiliated Money Market Fund -- See Note 8 to the financial statements. The
rate shown is the seven-day current annualized yield at Jan. 31, 2010.
- --------------------------------------------------------------------------------
18 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(g) Shareholders of tracking stocks have a financial interest only in a unit or
division of the company. Unlike the common stock of the company itself, a
tracking stock usually has limited or no voting rights. In the event of a
company's liquidation, tracking stock shareholders typically do not have a
legal claim on the company's assets.
(h) At Jan. 31, 2010, the cost of securities for federal income tax purposes
was approximately $115,571,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $24,425,000
Unrealized depreciation (4,488,000)
-----------------------------------------------------------
Net unrealized appreciation $19,937,000
-----------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 19
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date.
Valuation adjustments are not applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Non-U.S. equity securities actively traded in foreign markets may be reflected
in Level 2 despite the availability of closing prices, because the Fund
evaluates and determines whether those closing prices reflect fair value at the
close of the New York Stock Exchange (NYSE) or require adjustment, as described
in Note 2 to the financial statements -- Valuation of securities.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as
- --------------------------------------------------------------------------------
20 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
Level 3 investments due to lack of market transparency and corroboration to
support these quoted prices. Additionally, valuation models may be used as the
pricing source for any remaining investments classified as Level 3. These models
rely on one or more significant unobservable inputs and/or significant
assumptions by the Fund Administrator. Inputs used in a valuation model may
include, but are not limited to, financial statement analysis, discount rates
and estimated cash flows, and comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Jan. 31, 2010:
<Table>
<Caption>
FAIR VALUE AT JAN. 31, 2010
---------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- ---------------------------------------------------------------------------------------------
Equity Securities
Common Stocks(a) $121,325,829 $-- $-- $121,325,829
- ---------------------------------------------------------------------------------------------
Total Equity Securities 121,325,829 -- -- 121,325,829
- ---------------------------------------------------------------------------------------------
Other
Affiliated Money Market
Fund(b) 336,878 -- -- 336,878
Investments of Cash
Collateral Received
for Securities on
Loan(c) 13,845,107 -- -- 13,845,107
- ---------------------------------------------------------------------------------------------
Total Other 14,181,985 -- -- 14,181,985
- ---------------------------------------------------------------------------------------------
Investments in Securities 135,507,814 -- -- 135,507,814
Other Financial
Instruments(d) (21,926) -- -- (21,926)
- ---------------------------------------------------------------------------------------------
Total $135,485,888 $-- $-- $135,485,888
- ---------------------------------------------------------------------------------------------
</Table>
(a) Industry classifications are identified in the Portfolio of Investments.
(b) Money market fund that is a sweep investment for cash balances in the Fund
at Jan. 31, 2010.
(c) Asset categories for Investments of Cash Collateral are identified in the
Portfolio of Investments.
(d) Other Financial Instruments are derivative instruments, which are valued at
the unrealized appreciation (depreciation) on the instrument. Derivative
descriptions are located in the Investments in Derivatives section of the
Portfolio of Investments.
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1(800) SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling the RiverSource
Family of Funds at 1(800) 221-2450.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 21
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
JAN. 31, 2010 (UNAUDITED)
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $101,388,570) $121,325,829
Affiliated money market fund (identified cost $336,878) 336,878
Investments of cash collateral received for securities on loan
(identified cost $13,845,107) 13,845,107
- -------------------------------------------------------------------------------
Total investments in securities (identified cost $115,570,555) 135,507,814
Capital shares receivable 276,968
Dividends and accrued interest receivable 46,028
Receivable for investment securities sold 8,160,651
- -------------------------------------------------------------------------------
Total assets 143,991,461
- -------------------------------------------------------------------------------
LIABILITIES
Disbursements in excess of cash 11
Capital shares payable 723,284
Payable for investment securities purchased 6,163,406
Payable upon return of securities loaned 13,845,107
Variation margin payable on futures contracts 23,582
Accrued investment management services fees 2,401
Accrued distribution fees 742
Accrued transfer agency fees 596
Accrued administrative services fees 206
Other accrued expenses 39,822
- -------------------------------------------------------------------------------
Total liabilities 20,799,157
- -------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $123,192,304
- -------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 180,212
Additional paid-in capital 125,302,582
Excess of distributions over net investment income (32,707)
Accumulated net realized gain (loss) (22,173,116)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies 19,915,333
- -------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $123,192,304
- -------------------------------------------------------------------------------
*Value of securities on loan $ 13,359,452
- -------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $ 9,920,350 1,446,919 $6.86(1)
Class B $ 902,638 134,802 $6.70
Class C $ 254,358 37,966 $6.70
Class I $20,166,740 2,935,992 $6.87
Class R4 $ 8,273 1,206 $6.86
Class W $91,939,945 13,464,271 $6.83
- ----------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $7.28. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
22 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
STATEMENT OF OPERATIONS --------------------------------------------------------
SIX MONTHS ENDED JAN. 31, 2010 (UNAUDITED)
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $ 959,566
Income distributions from affiliated money market fund 2,216
Income from securities lending -- net 61,974
- ------------------------------------------------------------------------------
Total income 1,023,756
- ------------------------------------------------------------------------------
Expenses:
Investment management services fees 385,948
Distribution fees
Class A 12,984
Class B 4,834
Class C 1,473
Class W 129,818
Transfer agency fees
Class A 13,992
Class B 1,379
Class C 407
Class R4 2
Class W 103,854
Administrative services fees 40,549
Plan administration services fees -- Class R4 10
Compensation of board members 2,010
Custodian fees 5,227
Printing and postage 36,625
Registration fees 7,457
Professional fees 6,746
Other 4,553
- ------------------------------------------------------------------------------
Total expenses 757,868
- ------------------------------------------------------------------------------
Investment income (loss) -- net 265,888
- ------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions 16,633,582
Futures contracts 404,990
- ------------------------------------------------------------------------------
Net realized gain (loss) on investments 17,038,572
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies (3,026,836)
- ------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 14,011,736
- ------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $14,277,624
- ------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 23
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2010 JULY 31, 2009
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 265,888 $ 434,794
Net realized gain (loss) on investments 17,038,572 (21,892,627)
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities in
foreign currencies (3,026,836) 26,269,090
- --------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 14,277,624 4,811,257
- --------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (25,228) --
Class I (135,774) (76,661)
Class R4 (37) (28)
Class W (129,029) (331,470)
Tax return of capital
Class I -- (14,347)
Class R4 -- (4)
Class W -- (77,411)
- --------------------------------------------------------------------------------------------------
Total distributions (290,068) (499,921)
- --------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
24 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2010 JULY 31, 2009
(UNAUDITED)
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 1,060,879 $ 6,309,131
Class B shares 54,339 674,807
Class C shares 13,622 208,691
Class I shares 2,910,600 30,487,874
Class W shares 5,901,731 167,849,227
Reinvestment of distributions at net asset value
Class A shares 24,217 --
Class I shares 135,727 90,986
Class R4 shares 6 6
Class W shares 129,025 408,872
Conversions from Class B to Class A
Class A shares -- 246,654
Class B shares -- (246,654)
Payments for redemptions
Class A shares (2,255,654) (8,114,777)
Class B shares (171,750) (285,979)
Class C shares (74,850) (63,129)
Class I shares (5,406,201) (21,030,480)
Class W shares (53,163,113) (60,828,360)
- --------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions (50,841,422) 115,706,869
- --------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (36,853,866) 120,018,205
Net assets at beginning of period 160,046,170 40,027,965
- --------------------------------------------------------------------------------------------------
Net assets at end of period $123,192,304 $160,046,170
- --------------------------------------------------------------------------------------------------
Excess of distributions over net investment income $ (32,707) $ (8,527)
- --------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 25
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
The following tables are intended to help you understand the Fund's financial
performance. Certain information reflects financial results for a single share
of a class held for the periods shown. For periods ended 2007 and after, per
share net investment income (loss) amounts are calculated based on average
shares outstanding during the period. Total returns assume reinvestment of all
dividends and distributions. Total returns do not reflect payment of sales
charges, if any, and are not annualized for periods of less than one year.
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS A JAN. 31, 2010 --------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006(a)
Net asset value, beginning of period $6.24 $8.39 $9.55 $8.95 $9.48
- ---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01 .01 .00(b) .05 --
Net gains (losses) (both realized and
unrealized) .63 (2.16)(c) (1.14) .59 (.53)
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations .64 (2.15) (1.14) .64 (.53)
- ---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) -- (.02) (.04) --
Tax return of capital -- -- (.00)(b) -- --
- ---------------------------------------------------------------------------------------------------------------------
Total distributions (.02) -- (.02) (.04) --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.86 $6.24 $8.39 $9.55 $8.95
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 10.20% (25.63%) (11.94%) 7.12% (5.59%)
- ---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Gross expenses prior to expense
waiver/reimbursement 1.25%(e) 1.40% 1.32% 1.67% 5.83%(e)
- ---------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(f) 1.25%(e) 1.29%(g) 1.20%(g) 1.29% 1.26%(e)
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .27%(e) .18% .05% .52% .01%(e)
- ---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $10 $10 $17 $18 $9
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 41% 104% 56% 84% 14%
- ---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
26 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS B JAN. 31, 2010 --------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006(a)
Net asset value, beginning of period $6.11 $8.27 $9.47 $8.93 $9.48
- ---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.02) (.03) (.06) (.04) (.01)
Net gains (losses) (both realized and
unrealized) .61 (2.13)(c) (1.14) .62 (.54)
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations .59 (2.16) (1.20) .58 (.55)
- ---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- -- (.04) --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.70 $6.11 $8.27 $9.47 $8.93
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 9.66% (26.12%) (12.67%) 6.43% (5.80%)
- ---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Gross expenses prior to expense
waiver/reimbursement 2.01%(e) 2.17% 2.09% 2.12% 6.64%(e)
- ---------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(f) 2.01%(e) 2.08%(g) 1.97%(g) 2.06% 2.07%(e)
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.50%)(e) (.60%) (.71%) (.41%) (.37%)(e)
- ---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1 $1 $1 $1 $--
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 41% 104% 56% 84% 14%
- ---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 27
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS C JAN. 31, 2010 --------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006(a)
Net asset value, beginning of period $6.11 $8.27 $9.47 $8.93 $9.48
- ---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.02) (.03) (.06) (.04) (.01)
Net gains (losses) (both realized and
unrealized) .61 (2.13)(c) (1.14) .61 (.54)
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations .59 (2.16) (1.20) .57 (.55)
- ---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- -- (.03) --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.70 $6.11 $8.27 $9.47 $8.93
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 9.66% (26.12%) (12.67%) 6.37% (5.80%)
- ---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Gross expenses prior to expense
waiver/reimbursement 2.00%(e) 2.16% 2.08% 2.16% 6.61%(e)
- ---------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(f) 2.00%(e) 2.07%(g) 1.96%(g) 2.06% 2.04%(e)
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.48%)(e) (.56%) (.72%) (.40%) (.78%)(e)
- ---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $-- $--
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 41% 104% 56% 84% 14%
- ---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
28 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS I JAN. 31, 2010 --------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006(a)
Net asset value, beginning of period $6.27 $8.41 $9.57 $8.95 $9.48
- ---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03 .04 .05 .08 --
Net gains (losses) (both realized and
unrealized) .62 (2.16)(c) (1.16) .59 (.53)
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations .65 (2.12) (1.11) .67 (.53)
- ---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.02) (.04) (.05) --
Tax return of capital -- (.00)(b) (.01) -- --
- ---------------------------------------------------------------------------------------------------------------------
Total distributions (.05) (.02) (.05) (.05) --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.87 $6.27 $8.41 $9.57 $8.95
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 10.30% (25.15%) (11.63%) 7.48% (5.59%)
- ---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Gross expenses prior to expense
waiver/reimbursement .72%(e) .85% .91% .95% 5.58%(e)
- ---------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(f) .72%(e) .85%(g) .84%(g) .95% 1.01%(e)
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .79%(e) .68% .50% .80% .19%(e)
- ---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $20 $21 $15 $39 $--
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 41% 104% 56% 84% 14%
- ---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 29
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS R4 JAN. 31, 2010 --------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006(a)
Net asset value, beginning of period $6.25 $8.42 $9.56 $8.95 $9.48
- ---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02 .03 .04 .07 --
Net gains (losses) (both realized and
unrealized) .62 (2.17)(c) (1.14) .58 (.53)
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations .64 (2.14) (1.10) .65 (.53)
- ---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.03) (.03) (.03) (.04) --
Tax return of capital -- (.00)(b) (.01) -- --
- ---------------------------------------------------------------------------------------------------------------------
Total distributions (.03) (.03) (.04) (.04) --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.86 $6.25 $8.42 $9.56 $8.95
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 10.23% (25.41%) (11.48%) 7.30% (5.59%)
- ---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Gross expenses prior to expense
waiver/reimbursement 1.01%(e) 1.17% 1.23% 1.68% 5.69%(e)
- ---------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(f) 1.01%(e) 1.01%(g) .84%(g) 1.15% 1.12%(e)
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .51%(e) .47% .42% .71% .21%(e)
- ---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $-- $--
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 41% 104% 56% 84% 14%
- ---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
30 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS W JAN. 31, 2010 ---------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007(h)
Net asset value, beginning of period $6.21 $8.36 $9.54 $9.79
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01 .01 .01 --
Net gains (losses) (both realized and
unrealized) .62 (2.14)(c) (1.17) (.20)
- ----------------------------------------------------------------------------------------------------------
Total from investment operations .63 (2.13) (1.16) (.20)
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.01) (.02) (.01) (.05)
Tax return of capital -- (.00)(b) (.01) --
- ----------------------------------------------------------------------------------------------------------
Total distributions (.01) (.02) (.02) (.05)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.83 $6.21 $8.36 $9.54
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN 10.13% (25.47%) (12.13%) (2.06%)
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Gross expenses prior to expense
waiver/reimbursement 1.17%(e) 1.29% 1.34% 1.60%(e)
- ----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(f) 1.17%(e) 1.29%(g) 1.31%(g) 1.32%(e)
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) .34%(e) .28% .08% .03%(e)
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $92 $128 $7 $57
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 41% 104% 56% 84%
- ----------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) For the period from May 18, 2006 (when shares became publicly available) to
July 31, 2006.
(b) Rounds to zero.
(c) Calculation of the net loss per share (both realized and unrealized) does
not correlate to the aggregate realized and unrealized gains presented in
the Statement of Operations due to the timing of sales and repurchases of
Fund shares in relation to fluctuations in the market value of the
portfolio.
(d) Expense ratios include the impact of a performance incentive adjustment, if
any. In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
underlying funds in which it invests. Such indirect expenses are not
included in the reported expense ratios.
(e) Annualized.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the years ended July 31, 2009 and 2008.
(h) For the period from Dec. 1, 2006 (when shares became publicly available) to
July 31, 2007.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 31
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS OF JAN. 31, 2010)
1. ORGANIZATION
RiverSource Disciplined Small and Mid Cap Equity Fund (the Fund) is a series of
RiverSource Dimensions Series, Inc. (the Corporation) and is registered under
the Investment Company Act of 1940, as amended (the 1940 Act) as a diversified,
open-end management investment company. The Corporation has 10 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the Corporation's Board of Directors (the Board). The
Fund invests primarily in equity securities of companies with market
capitalizations of up to $5 billion or that fall within the range of companies
that comprise the Russell 2500(TM )Index at the time of investment.
The Fund offers Class A, Class B, Class C, Class I, Class R4 and Class W shares.
- - Class A shares are offered with a front-end sales charge, which may be waived
under certain circumstances.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares one month after the completion of
the eighth year of ownership if originally purchased in a RiverSource fund on
or after May 21, 2005 or originally purchased in a Seligman fund on or after
June 13, 2009. Class B shares originally purchased in a RiverSource fund
prior to May 21, 2005 will convert to Class A shares in the ninth calendar
year of ownership. Class B shares originally purchased in a Seligman fund
prior to June 13, 2009 will convert to Class A shares in the month prior to
the ninth year of ownership.
- - Class C shares may be subject to a CDSC.
- - Class I and Class R4 shares are offered without a front-end sales charge or
CDSC to qualifying institutional investors.
- - Class W shares are offered without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts.
At Jan. 31, 2010, RiverSource Investments, LLC (RiverSource Investments or the
Investment Manager) and affiliated funds-of-funds in the RiverSource Family of
Funds owned 100% of Class I shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ 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.
- --------------------------------------------------------------------------------
32 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ADOPTION OF NEW ACCOUNTING STANDARD
In June 2009, the Financial Accounting Standards Board (FASB) established the
FASB Accounting Standards Codification(TM )(Codification) as the single source
of authoritative accounting principles recognized by the FASB in the preparation
of financial statements in conformity with U.S. generally accepted accounting
principles (GAAP). The Codification supersedes existing non-grandfathered, non-
SEC accounting and reporting standards. The Codification did not change GAAP
but, rather, organized it into a hierarchy where all guidance within the
Codification carries an equal level of authority. The Codification became
effective for financial statements issued for interim and annual periods ending
after Sept. 15, 2009. The Codification did not have an effect on the Fund's
financial statements.
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of business of the New York Stock
Exchange (NYSE). Securities traded on national securities exchanges or included
in national market systems are valued at the last quoted sales price from the
primary exchange. Debt securities are generally traded in the over-the-counter
market and are valued by an independent pricing service using an evaluated bid.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities (such as foreign securities)
that is not reflected in price quotations or valuations from other sources. A
fair value price is a good faith estimate of the value of a security at a given
point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the NYSE and therefore the closing prices for securities in such markets or
on
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 33
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
such exchanges may not fully reflect events that occur after such close but
before the close of the NYSE, including significant movements in the U.S. market
after foreign exchanges have closed. Accordingly, in those situations,
Ameriprise Financial, Inc. (Ameriprise Financial), parent company of the
Investment Manager, as administrator to the Fund, will fair value foreign
securities pursuant to procedures adopted by the Board, including utilizing a
third party pricing service to determine these fair values. These procedures
take into account multiple factors, including movements in the U.S. securities
markets, to determine a good faith estimate that reasonably reflects the current
market conditions as of the close of the NYSE.
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. Typically, those maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at amortized cost
using the market value on the 61st day before maturity. Short-term securities
maturing in 60 days or less at acquisition date are valued at amortized cost.
Amortized cost is an approximation of market value. Investments in money market
funds are valued at net asset value.
FOREIGN CURRENCY TRANSLATIONS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
- --------------------------------------------------------------------------------
34 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income (which includes net short-term capital gains) to
shareholders. No provision for income or excise taxes is thus required.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. Generally,
the tax authorities can examine all tax returns filed for the last three years.
RECENT ACCOUNTING PRONOUNCEMENT
On Jan. 21, 2010, the FASB issued an Accounting Standards Update (the
amendment), Fair Value Measurements and Disclosures (Topic 820): Improving
Disclosures about Fair Value Measurements, which provides guidance on how
investment assets and liabilities are to be valued and disclosed. Specifically,
the amendment requires reporting entities to disclose the input and valuation
techniques used to measure fair value for both recurring and nonrecurring fair
value measurements for Level 2 or Level 3 positions. The amendment also requires
that transfers between all levels (including Level 1 and Level 2) be disclosed
on a gross basis (i.e., transfers out must be disclosed separately from
transfers in), and the reason(s) for the transfer. Additionally purchases,
sales, issuances and settlements must be disclosed on a gross basis in the Level
3 rollforward. The effective date of the amendment is for interim and annual
periods beginning after Dec. 15, 2009, however, the requirement to provide the
Level 3 activity for purchases, sales, issuances and settlements on a gross
basis will be effective for interim and annual periods beginning after Dec. 15,
2010. At this time the Fund is evaluating the implications of the amendment and
the impact to the financial statements.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
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 amortization of premium, market discount and original issue discount
using the effective interest method, is accrued daily.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 35
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
3. INVESTMENTS IN DERIVATIVES
The Fund may invest in certain derivative instruments, which are transactions
whose values depend on or are derived from (in whole or in part) the value of
one or more other assets, such as securities, currencies, commodities or
indices. Such derivative instruments may be used to maintain cash reserves while
maintaining exposure to certain other assets, to offset anticipated declines in
values of investments, to facilitate trading, to reduce transaction costs, and
to pursue higher investment returns. The Fund may also use derivative
instruments to mitigate certain investment risks, such as foreign currency
exchange rate risk, interest rate risk, and credit risk. Investments in
derivative instruments may expose the Fund to certain additional risks,
including those detailed below.
FUTURES TRANSACTIONS
The Fund may buy and sell financial futures contracts traded on any U.S. or
foreign exchange to produce incremental earnings, hedge existing positions or
protect against market changes in the value of equities, interest rates or
foreign currencies. The Fund may also buy and write put and call options on
these futures contracts. A futures contract represents a commitment for the
future purchase or sale of an asset at a specified price on a specified date.
Futures and options on futures are valued daily based upon the last sale price
at the close of the market on the principal exchange on which they are traded.
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.
Upon entering into futures contracts, the Fund bears the risk of interest rates,
exchange rates or securities prices moving unexpectedly, in which case, the Fund
may not achieve the anticipated benefits of the futures contracts and may
realize a loss. Additional risks include counterparty credit risk, the
possibility of an illiquid market, and that a change in the value of the
contract or option may not correlate with changes in the value of the underlying
securities.
EFFECTS OF DERIVATIVE TRANSACTIONS ON THE FINANCIAL STATEMENTS
The following tables are intended to provide additional information about the
effect of derivatives on the financial statements of the Fund including: the
fair value of derivatives by risk category and the location of those fair values
in the Statement of Assets and Liabilities; the impact of derivative
transactions on the Fund's operations over the period including realized gains
or losses and unrealized gains or losses. The derivative schedules following the
Portfolio of
- --------------------------------------------------------------------------------
36 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
Investments present additional information regarding derivative instruments
outstanding at the end of the period, if any.
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT JAN. 31, 2010
<Table>
<Caption>
ASSET DERIVATIVES LIABILITY DERIVATIVES
-------------------------------- --------------------------------
STATEMENT OF ASSETS STATEMENT OF ASSETS
RISK EXPOSURE AND LIABILITIES AND LIABILITIES
CATEGORY LOCATION FAIR VALUE LOCATION FAIR VALUE
- ----------------------------------------------------------------------------------------------
Equity contracts Net assets --
unrealized
depreciation on
N/A N/A investments $21,926*
- ----------------------------------------------------------------------------------------------
Total N/A $21,926
- ----------------------------------------------------------------------------------------------
</Table>
* Includes cumulative appreciation (depreciation) of futures contracts as
reported in the Futures Contracts Outstanding table following the Portfolio
of Investments. Only the current day's variation margin is reported in
receivables or payables in the Statement of Assets and Liabilities.
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS FOR THE SIX
MONTHS ENDED JAN. 31, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN
INCOME
- -----------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- -----------------------------------------------------------------
Equity contracts $404,990
- -----------------------------------------------------------------
Total $404,990
- -----------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES
RECOGNIZED IN INCOME
- -----------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- -----------------------------------------------------------------
Equity contracts $(33,017)
- -----------------------------------------------------------------
Total $(33,017)
- -----------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FUTURES
The gross national amount of long contracts outstanding was $2.1 million at Jan.
31, 2010. The monthly average gross national amount for long contracts was $1.6
million for the six months ended Jan. 31, 2010. The fair value of such contracts
on Jan. 31, 2010 is set forth in the above table.
4. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is an annual fee that is equal to a percentage of the Fund's average daily net
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 37
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
assets that declines from 0.70% to 0.475% as the Fund's net assets increase. The
fee may be adjusted upward or downward by a performance incentive adjustment
determined monthly by measuring the percentage difference over a rolling 12-
month period between the annualized performance of one Class A share of the Fund
and the annualized performance of the Lipper Mid-Cap Core Funds Index. In
certain circumstances, the Board may approve a change in the index. The maximum
adjustment is 0.12% per year. If the performance difference is less than 0.50%,
the adjustment will be zero. The adjustment decreased the management fee by
$87,128 for the six months ended Jan. 31, 2010. The management fee for the six
months ended Jan. 31, 2010 was 0.57% of the Fund's average daily net assets,
including the adjustment under the terms of the performance incentive
arrangement.
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial
an annual fee for administration and accounting services equal to a percentage
of the Fund's average daily net assets that declines from 0.06% to 0.03% as the
Fund's net assets increase. The fee for the six months ended Jan. 31, 2010 was
0.06% of the Fund's average daily net assets.
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended Jan.
31, 2010, other expenses paid to this company were $377.
COMPENSATION OF BOARD MEMBERS
Under a Deferred Compensation Plan (the Plan), the board members who are not
"interested persons" of the Fund under the 1940 Act may defer receipt of their
compensation. Deferred amounts are treated as though equivalent dollar amounts
had been invested in shares of the Fund or other funds in the RiverSource Family
of Funds. The Fund's liability for these amounts is adjusted for market value
changes and remains in the funds until distributed in accordance with the Plan.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains Fund shareholder accounts and records and provides Fund
shareholder services. The Fund pays the Transfer Agent an annual account-based
fee at a rate equal to $19.50 for Class A, $20.50 for Class B and $20.00 for
Class C for this service. The Transfer Agent also charges an annual fee of $3
per account serviced directly by the Fund or its designated agent for Class A,
- --------------------------------------------------------------------------------
38 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
Class B and Class C shares. The Fund also pays the Transfer Agent an annual
asset-based fee at a rate of 0.05% of the Fund's average daily net assets
attributable to Class R4 shares and an annual asset-based fee at a rate of 0.20%
of the Fund's average daily net assets attributable to Class W shares. The
Transfer Agent charges an annual fee of $5 per inactive account, charged on a
pro rata basis for the 12 month period from the date the account becomes
inactive. These fees are included in the transfer agency fees in the Statement
of Operations.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares for the provision of various administrative,
recordkeeping, communication and educational services.
DISTRIBUTION FEES
The Fund has an agreement with RiverSource Fund Distributors, Inc. (the
Distributor) for distribution and shareholder services. Under a Plan and
Agreement of Distribution pursuant to Rule 12b-1, the Fund pays a fee at an
annual rate of up to 0.25% of the Fund's average daily net assets attributable
to Class A and Class W shares and a fee at an annual rate of up to 1.00% of the
Fund's average daily net assets attributable to Class B and Class C shares. For
Class B and Class C shares, of the 1.00% fee, up to 0.75% is reimbursed for
distribution expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed (unreimbursed expense) was approximately $53,000 and $4,000 for Class
B and Class C shares, respectively. These amounts are based on the most recent
information available as of Oct. 31, 2009, and may be recovered from future
payments under the distribution plan or CDSC. To the extent the unreimbursed
expense has been fully recovered, the distribution fee is reduced.
SALES CHARGES
Sales charges, including front-end and CDSCs, received by the Distributor for
distributing Fund shares were $13,605 for Class A and $210 for Class B for the
six months ended Jan. 31, 2010.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
The Investment Manager and its affiliates have contractually agreed to waive
certain fees and expenses until Sept. 30, 2010, unless sooner terminated at the
sole discretion of the Board, such that net expenses (excluding fees and
expenses of acquired funds*), before giving effect to any performance incentive
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 39
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
adjustment, will not exceed the following percentage of the class' average daily
net assets:
<Table>
Class A.............................................. 1.40%
Class B.............................................. 2.17
Class C.............................................. 2.16
Class I.............................................. 0.95
Class R4............................................. 1.25
Class W.............................................. 1.40
</Table>
* In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in
which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and the Fund may own different proportions of
acquired funds at different times, the amount of fees and expenses incurred
indirectly by the Fund will vary.
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $55,526,387 and $107,369,286, respectively, for the six
months ended Jan. 31, 2010. Realized gains and losses are determined on an
identified cost basis.
6. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2010 JULY 31, 2009
- ----------------------------------------------------------------------
CLASS A
Sold 152,701 1,123,483
Converted from Class B* -- 39,528
Reinvested distributions 3,392 --
Redeemed (328,377) (1,539,579)
- ----------------------------------------------------------------------
Net increase (decrease) (172,284) (376,568)
- ----------------------------------------------------------------------
CLASS B
Sold 8,132 121,575
Converted to Class A* -- (40,369)
Redeemed (25,619) (50,038)
- ----------------------------------------------------------------------
Net increase (decrease) (17,487) 31,168
- ----------------------------------------------------------------------
CLASS C
Sold 2,030 38,661
Redeemed (10,905) (11,505)
- ----------------------------------------------------------------------
Net increase (decrease) (8,875) 27,156
- ----------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
40 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2010 JULY 31, 2009
- ----------------------------------------------------------------------
CLASS I
Sold 425,004 5,323,223
Reinvested distributions 18,983 16,573
Redeemed (823,670) (3,840,456)
- ----------------------------------------------------------------------
Net increase (decrease) (379,683) 1,499,340
- ----------------------------------------------------------------------
CLASS R4
Reinvested distributions 1 1
- ----------------------------------------------------------------------
Net increase (decrease) 1 1
- ----------------------------------------------------------------------
CLASS W
Sold 877,833 31,029,459
Reinvested distributions 18,147 74,885
Redeemed (8,031,109) (11,322,377)
- ----------------------------------------------------------------------
Net increase (decrease) (7,135,129) 19,781,967
- ----------------------------------------------------------------------
</Table>
* Automatic conversion of Class B shares to Class A shares based on the
original purchase date.
7. LENDING OF PORTFOLIO SECURITIES
The Fund has entered into a Master Securities Lending Agreement (the Agreement)
with JPMorgan Chase Bank, National Association (JPMorgan). The Agreement
authorizes JPMorgan as lending agent to lend securities to authorized borrowers
in order to generate additional income on behalf of the Fund. Pursuant to the
Agreement, the securities loaned are secured by cash or U.S. government
securities equal to at least 100% of the market value of the loaned securities.
Any additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Cash collateral received is invested by the lending agent on behalf of the Fund
into authorized investments pursuant to the Agreement. The investments made with
the cash collateral are listed in the Portfolio of Investments. The values of
such investments and any uninvested cash collateral balance are disclosed in the
Statement of Assets and Liabilities along with the related obligation to return
the collateral upon the return of the securities loaned. At Jan. 31, 2010,
securities valued at $13,359,452 were on loan, secured by cash collateral of
$13,845,107 invested in short-term securities or in cash equivalents.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
indemnification does not extend to losses associated with declines in the value
of cash collateral investments. Loans are subject to termination by the Fund or
the borrower at any time, and are, therefore, not considered to be illiquid
investments.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Net income of
$61,974 earned from securities lending for the six months ended Jan. 31, 2010 is
included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
8. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the funds in the
RiverSource Family of Funds and other institutional clients of RiverSource
Investments. The cost of the Fund's purchases and proceeds from sales of shares
of RiverSource Short-Term Cash Fund aggregated $25,329,391 and $24,992,513,
respectively, for the six months ended Jan. 31, 2010. The income distributions
received with respect to the Fund's investment in RiverSource Short-Term Cash
Fund can be found in the Statement of Operations and the Fund's invested balance
in RiverSource Short-Term Cash Fund at Jan. 31, 2010, can be found in the
Portfolio of Investments.
9. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
15, 2009, replacing a prior credit facility. The credit facility agreement,
which is a collective agreement between the Fund and certain other funds in the
RiverSource Family of Funds, severally and not jointly, permits collective
borrowings up to $300 million. The borrowers shall have the right, upon written
notice to the Administrative Agent to request an increase of up to $200 million
in the aggregate amount of the credit facility from new or existing lenders,
provided that the aggregate amount of the credit facility shall at no time
exceed $500 million. Participation in such increase by any existing lender shall
be at such lender's sole discretion. Interest is charged to each Fund based on
its borrowings at a rate equal to the sum of the federal funds rate plus (i)
1.25% per annum plus (ii) if one-month LIBOR exceeds the federal funds rate, the
amount
- --------------------------------------------------------------------------------
42 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
of such excess. Each borrowing under the credit facility matures no later than
60 days after the date of borrowing. The Fund also pays a commitment fee equal
to its pro rata share of the amount of the credit facility at a rate of 0.10%
per annum, in addition to an upfront fee equal to its pro rata share of 0.04% of
the amount of the credit facility. Prior to Oct. 15, 2009, the credit facility
agreement, which was a collective agreement between the Fund and certain other
funds in the RiverSource Family of Funds, severally and not jointly, permitted
collective borrowings up to $475 million. Interest was charged to each Fund
based on its borrowings at a rate equal to the federal funds rate plus 0.75%.
The Fund also paid a commitment fee equal to its pro rata share of the amount of
the credit facility at a rate of 0.06% per annum, in addition to an upfront fee
equal to its pro rata share of 0.02% of the amount of the credit facility. The
Fund had no borrowings during the six months ended Jan. 31, 2010.
10. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of futures contracts,
passive foreign investment company (PFIC) holdings, re-characterization of real
estate investment trust (REIT) distributions, post-October losses and losses
deferred due to wash sales. 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.
For federal income tax purposes, the Fund had a capital loss carry-over of
$21,435,234 at July 31, 2009, that if not offset by capital gains will expire as
follows:
<Table>
<Caption>
2014 2015 2016 2017
$93,125 $21,904 $2,186,828 $19,133,377
</Table>
Because the measurement periods for a regulated investment company's income are
different for excise tax purposes versus income tax purposes, special rules are
in place to protect the amount of earnings and profits needed to support excise
tax distributions. As a result, the Fund is permitted to treat net capital
losses realized between Nov. 1, 2008 and its fiscal year end (post-October loss)
as occurring on the first day of the following tax year. At July 31, 2009, the
Fund had a post-October loss of $15,728,006 that is treated for income tax
purposes as occurring on Aug. 1, 2009.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
It is unlikely the Board will authorize a distribution of any net realized
capital gains until the available capital loss carry-over has been offset or
expires. There is no assurance that the Fund will be able to utilize all of its
capital loss carry-over before it expires.
11. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statement of Assets and Liabilities
through the date of issuance of the Fund's financial statements. There were no
events or transactions that occurred during the period that materially impacted
the amounts or disclosures in the Fund's financial statements.
12. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court,
asking the U.S. Supreme Court to stay the District Court proceedings while the
U.S. Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise
- --------------------------------------------------------------------------------
44 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
Financial, Inc. (Ameriprise Financial)), entered into settlement agreements with
the Securities and Exchange Commission (SEC) and Minnesota Department of
Commerce (MDOC) related to market timing activities. As a result, AEFC was
censured and ordered to cease and desist from committing or causing any
violations of certain provisions of the Investment Advisers Act of 1940, the
Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to retain an independent distribution consultant to assist in developing
a plan for distribution of all disgorgement and civil penalties ordered by the
SEC in accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise
Financial, Inc., acquired J. & W. Seligman & Co. Incorporated (Seligman). In
late 2003, Seligman conducted an extensive internal review concerning mutual
fund trading practices. Seligman's review, which covered the period 2001-2003,
noted one arrangement that permitted frequent trading in certain open-end
registered investment companies managed by Seligman (the Seligman Funds); this
arrangement was in the process of being closed down by Seligman before September
2003. Seligman identified three other arrangements that permitted frequent
trading, all of which had been terminated by September 2002. In January 2004,
Seligman, on a voluntary basis, publicly disclosed these four arrangements to
its clients and to shareholders of the Seligman Funds. Seligman also provided
information concerning mutual fund trading practices to the SEC and the Office
of the Attorney General of the State of New York (NYAG).
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc. (now known as RiverSource Fund
Distributors, Inc.), Seligman Data Corp. and Brian T. Zino (collectively, the
Seligman Parties), alleging, in substance, that the Seligman Parties permitted
various persons to engage in frequent trading and, as a result, the prospectus
disclosure used by the registered investment companies then managed by Seligman
was and had been misleading. The NYAG included other related claims and also
claimed that the fees charged by Seligman to the Seligman Funds were excessive.
On March 13, 2009, without admitting or denying any violations of law or
wrongdoing, the Seligman Parties entered into a stipulation of settlement with
the NYAG and settled the claims made by the NYAG. Under the terms of the
settlement, Seligman paid $11.3 million to four
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 45
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
Seligman Funds. This settlement resolved all outstanding matters between the
Seligman Parties and the NYAG. In addition to the foregoing matter, the New York
staff of the SEC indicated in September 2005 that it was considering
recommending to the Commissioners of the SEC the instituting of a formal action
against Seligman and Seligman Advisors, Inc. relating to frequent trading in the
Seligman Funds. Seligman responded to the staff in October 2005 that it believed
that any action would be both inappropriate and unnecessary, especially in light
of the fact that Seligman had previously resolved the underlying issue with the
Independent Directors of the Seligman Funds and made recompense to the affected
Seligman Funds. There have been no further developments with the SEC on this
matter.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
46 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT
PROXY VOTING -------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling the RiverSource Family of Funds at 1(800) 221-2450; contacting your
financial intermediary; visiting riversource.com/funds; or searching the website
of the Securities and Exchange Commission (SEC) at http://www.sec.gov.
Information regarding how the Fund voted proxies relating to portfolio
securities is filed with the SEC by August 31 for the most recent 12-month
period ending June 30 of that year, and is available without charge by visiting
riversource.com/funds; or searching the website of the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2010 SEMIANNUAL
REPORT 47
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. RiverSource(R) mutual funds are
distributed by RiverSource Fund Distributors, Inc., Member
FINRA, and managed by RiverSource Investments, LLC.
RiverSource is part of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C)2010 RiverSource Investments, LLC. S-6516 E (4/10)
</Table>
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
DISCIPLINED SMALL CAP VALUE FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2010
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND SEEKS TO
PROVIDE SHAREHOLDERS WITH LONG-TERM CAPITAL GROWTH.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 2
Fund Expenses Example.............. 7
Portfolio of Investments........... 10
Statement of Assets and
Liabilities...................... 20
Statement of Operations............ 21
Statements of Changes in Net
Assets........................... 22
Financial Highlights............... 23
Notes to Financial Statements...... 31
Proxy Voting....................... 47
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> RiverSource Disciplined Small Cap Value Fund (the Fund) Class A shares gained
8.43% (excluding sales charge) for the six months ended Jan. 31, 2010.
> The Fund underperformed its benchmark, the unmanaged Russell 2000(R) Value
Index, which rose 10.63% for the six-month period.
> The Fund also underperformed the Lipper Small-Cap Value Funds Index,
representing the Fund's peer group, which increased 11.79%, for the same
period.
ANNUALIZED TOTAL RETURNS (for period ended Jan. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
INCEPTION
6 MONTHS* 1 YEAR 3 YEAR 2/16/06
- ----------------------------------------------------------------------
RiverSource Disciplined Small
Cap Value Fund
Class A (excluding sales
charge) +8.43% +34.24% -11.87% -7.01%
- ----------------------------------------------------------------------
Russell 2000 Value Index(1)
(unmanaged) +10.63% +36.55% -9.57% -3.89%
- ----------------------------------------------------------------------
Lipper Small-Cap Value Funds
Index(2) +11.79% +45.30% -6.65% -2.44%
- ----------------------------------------------------------------------
</Table>
* Not annualized.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting riversource.com/funds or calling 1(800) 221-2450.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
fees and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
other share classes of the Fund.
- --------------------------------------------------------------------------------
2 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
(1) The Russell 2000 Value Index, an unmanaged index, measures the performance
of those Russell 2000 companies with lower price-to-book ratios and lower
forecasted growth values. The index reflects reinvestment of all
distributions and changes in market prices.
(2) The Lipper Small-Cap Value Funds Index includes the 30 largest small-cap
value funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT JAN. 31, 2010
SINCE
Without sales charge 6 MONTHS* 1 YEAR 3 YEARS INCEPTION
Class A (inception 2/16/06) +8.43% +34.24% -11.87% -7.01%
- -----------------------------------------------------------------------
Class B (inception 2/16/06) +8.03% +33.27% -12.54% -7.74%
- -----------------------------------------------------------------------
Class C (inception 2/16/06) +8.09% +33.35% -12.51% -7.72%
- -----------------------------------------------------------------------
Class I (inception 2/16/06) +8.44% +34.65% -11.60% -6.73%
- -----------------------------------------------------------------------
Class R2 (inception 12/11/06) +8.07% +33.54% -12.11% -11.05%
- -----------------------------------------------------------------------
Class R3 (inception 12/11/06) +8.18% +33.92% -11.93% -10.85%
- -----------------------------------------------------------------------
Class R4 (inception 2/16/06) +8.34% +34.32% -11.66% -6.82%
- -----------------------------------------------------------------------
Class R5 (inception 12/11/06) +8.58% +34.62% -11.60% -10.53%
- -----------------------------------------------------------------------
With sales charge
Class A (inception 2/16/06) +2.20% +26.51% -13.59% -8.40%
- -----------------------------------------------------------------------
Class B (inception 2/16/06) +3.03% +28.27% -13.40% -8.41%
- -----------------------------------------------------------------------
Class C (inception 2/16/06) +7.09% +32.35% -12.51% -7.72%
- -----------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 5.75%.
Class B share performance reflects a contingent deferred sales charge (CDSC)
applied as follows: first year 5%; second year 4%; third and fourth years 3%;
fifth year 2%; sixth year 1%; no sales charge thereafter. Class C shares may be
subject to a 1% CDSC if shares are sold within one year after purchase. Sales
charges do not apply to Class I, Class R2, Class R3, Class R4 and Class R5
shares. Class I, Class R2, Class R3, Class R4 and Class R5 are available to
qualifying institutional investors only.
* Not annualized.
- --------------------------------------------------------------------------------
4 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
STYLE MATRIX
- --------------------------------------------------------------------------------
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
LARGE
MEDIUM SIZE
X SMALL
</Table>
Shading within the style matrix approximates areas in which the Fund is designed
to generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
Investments in small-capitalization companies often involve greater risks and
potential volatility than investments in larger, more established companies.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 5
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
SECTOR BREAKDOWN(1) (at Jan. 31, 2010))
- ---------------------------------------------------------------------
<Table>
<Caption>
Consumer Discretionary 12.1%
- ------------------------------------------------
Consumer Staples 5.0%
- ------------------------------------------------
Energy 8.8%
- ------------------------------------------------
Financials 28.7%
- ------------------------------------------------
Health Care 8.4%
- ------------------------------------------------
Industrials 14.6%
- ------------------------------------------------
Information Technology 9.5%
- ------------------------------------------------
Materials 8.9%
- ------------------------------------------------
Telecommunication Services 0.6%
- ------------------------------------------------
Utilities 1.0%
- ------------------------------------------------
Other(2) 2.4%
- ------------------------------------------------
</Table>
(1) Sectors can be comprised of several industries. Please refer to the section
entitled "Portfolio of Investments" for a complete listing. No single
industry exceeds 25% of portfolio assets.
Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan). The Fund's
composition is subject to change.
(2) Cash & Cash Equivalents.
The sectors identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
TOP TEN HOLDINGS(1) (at Jan. 31, 2010)
- ---------------------------------------------------------------------
<Table>
<Caption>
Platinum Underwriters Holdings 1.9%
- ---------------------------------------------------
Magellan Health Services 1.8%
- ---------------------------------------------------
WR Grace & Co 1.7%
- ---------------------------------------------------
Capstead Mtge 1.5%
- ---------------------------------------------------
MFA Financial 1.4%
- ---------------------------------------------------
3Com 1.2%
- ---------------------------------------------------
SkyWest 1.2%
- ---------------------------------------------------
ProAssurance 1.1%
- ---------------------------------------------------
OM Group 1.1%
- ---------------------------------------------------
HealthSpring 1.0%
- ---------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan and Cash &
Cash Equivalents).
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
6 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the ongoing expenses of any funds in which the Fund
invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). The Fund's indirect expense from investing in the acquired funds
is based on the Fund's pro rata portion of the ongoing expenses charged by
acquired funds using the expense ratio of each of the acquired funds as of the
acquired fund's most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months Jan. 31, 2010.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Direct expenses paid during the period" to
estimate the expenses you paid on your account during this period. You can also
estimate the direct and indirect expenses you paid over the period by using the
number in the first line under the heading "Direct and indirect expenses paid
during the period."
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 7
FUND EXPENSES EXAMPLE (continued) ----------------------------------------------
<Table>
<Caption>
DIRECT AND
DIRECT INDIRECT
BEGINNING ENDING EXPENSES EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING PAID DURING
AUG. 1, 2009 JAN. 31, 2010 THE PERIOD(a) THE PERIOD(b)
- ------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,084.30 $ 6.60 $ 6.91
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.60 $ 6.39 $ 6.69
- ------------------------------------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,080.30 $10.53 $10.84
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.81 $10.20 $10.50
- ------------------------------------------------------------------------------------------
Class C
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,080.90 $10.48 $10.79
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.86 $10.15 $10.45
- ------------------------------------------------------------------------------------------
Class I
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,084.40 $ 4.78 $ 5.09
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.34 $ 4.63 $ 4.94
- ------------------------------------------------------------------------------------------
Class R2
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,080.70 $ 8.77 $ 9.08
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.50 $ 8.50 $ 8.80
- ------------------------------------------------------------------------------------------
Class R3
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,081.80 $ 7.68 $ 7.99
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.55 $ 7.44 $ 7.75
- ------------------------------------------------------------------------------------------
Class R4
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,083.40 $ 6.39 $ 6.70
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.80 $ 6.19 $ 6.49
- ------------------------------------------------------------------------------------------
Class R5
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,085.80 $ 4.94 $ 5.25
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.19 $ 4.78 $ 5.09
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
8 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
ANNUALIZED EXPENSE RATIOS
<Table>
<Caption>
FUND'S ACQUIRED FUND
ANNUALIZED FEES AND NET FUND
EXPENSE RATIO EXPENSES EXPENSES
- ----------------------------------------------------------------------
Class A 1.27% .06% 1.33%
- ----------------------------------------------------------------------
Class B 2.03% .06% 2.09%
- ----------------------------------------------------------------------
Class C 2.02% .06% 2.08%
- ----------------------------------------------------------------------
Class I .92% .06% .98%
- ----------------------------------------------------------------------
Class R2 1.69% .06% 1.75%
- ----------------------------------------------------------------------
Class R3 1.48% .06% 1.54%
- ----------------------------------------------------------------------
Class R4 1.23% .06% 1.29%
- ----------------------------------------------------------------------
Class R5 .95% .06% 1.01%
- ----------------------------------------------------------------------
</Table>
(a) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period).
(b) Expenses are equal to the annualized expense ratio for each class plus the
acquired fund fees and expenses, multiplied by the average account value
over the period, multiplied by 182/365 (to reflect the one-half year
period).
(c) Based on the actual return for the six months ended Jan. 31, 2010: +8.43%
for Class A, +8.03% for Class B, +8.09% for Class C, +8.44% for Class I,
+8.07% for Class R2, +8.18% for Class R3, +8.34% for Class R4 and +8.58% for
Class R5.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 9
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
JAN. 31, 2010 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (97.6%)
ISSUER SHARES VALUE(a)
AEROSPACE & DEFENSE (1.2%)
Ceradyne 10,168(b) $198,683
Esterline Technologies 2,773(b) 104,708
GeoEye 1,183(b) 30,368
Triumph Group 3,595 183,093
---------------
Total 516,852
- -------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS (0.8%)
Atlas Air Worldwide Holdings 8,797(b) 322,586
Pacer Intl 15,103(b) 45,309
---------------
Total 367,895
- -------------------------------------------------------------------------------------
AIRLINES (1.5%)
Alaska Air Group 4,529(b) 141,939
SkyWest 34,505 504,808
---------------
Total 646,747
- -------------------------------------------------------------------------------------
AUTO COMPONENTS (2.3%)
ArvinMeritor 16,242(b) 157,385
Dana Holding 31,397(b) 323,703
Exide Technologies 21,735(b,d) 168,012
Spartan Motors 17,782 106,692
Superior Inds Intl 3,392 49,896
Tenneco 12,140(b) 214,635
---------------
Total 1,020,323
- -------------------------------------------------------------------------------------
BUILDING PRODUCTS (0.9%)
Apogee Enterprises 12,190 167,734
Insteel Inds 4,823(d) 47,651
Quanex Building Products 5,563 89,453
Universal Forest Products 2,907 98,664
---------------
Total 403,502
- -------------------------------------------------------------------------------------
CAPITAL MARKETS (4.6%)
Apollo Investment 16,548 170,444
Ares Capital 16,191 199,149
BGC Partners Cl A 28,776 117,118
Cohen & Steers 1,821(d) 37,039
Evercore Partners Cl A 2,504(d) 74,794
GAMCO Investors Cl A 842 34,581
Hercules Technology Growth Capital 3,785 38,077
Intl Assets Holding 4,813(b) 71,666
JMP Group 2,455 19,075
Knight Capital Group Cl A 23,281(b) 364,115
MF Global Holdings 15,758(b) 103,215
MVC Capital 7,424 86,861
Oppenheimer Holdings Cl A 3,153(d) 86,108
PennantPark Investment 7,088 64,146
Penson Worldwide 11,425(b,d) 96,199
Prospect Capital 10,736(d) 122,498
Stifel Financial 2,092(b) 109,412
SWS Group 10,848(d) 130,176
U.S. Global Investors Cl A 1,778 17,087
Westwood Holdings Group 2,887(d) 104,365
---------------
Total 2,046,125
- -------------------------------------------------------------------------------------
CHEMICALS (4.7%)
Innophos Holdings 8,100 158,436
Innospec 6,984(c,d) 68,094
Olin 26,995(d) 445,418
OM Group 14,011(b) 457,039
Solutia 14,312(b) 196,790
WR Grace & Co 31,239(b) 745,987
---------------
Total 2,071,764
- -------------------------------------------------------------------------------------
COMMERCIAL BANKS (5.7%)
Arrow Financial 3,240(d) 84,175
BancFirst 3,023 121,827
Bancorp 6,947(b) 50,783
Bank of Kentucky Financial 1,074 19,601
Bridge Bancorp 824 19,430
Camden Natl 3,298(d) 95,708
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
10 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
COMMERCIAL BANKS (CONT.)
Community Trust Bancorp 4,027 $102,004
First Financial 3,837 105,901
First Financial Bankshares 2,081(d) 110,397
First of Long Island 2,118(d) 51,319
German American Bancorp 3,296(d) 48,979
Great Southern Bancorp 1,185 26,627
Heritage Financial 2,188(d) 30,763
MainSource Financial Group 12,728(d) 70,131
Natl Bankshares 2,590(d) 65,268
NBT Bancorp 5,565(d) 116,086
Northrim BanCorp 5,577 89,399
Peoples Bancorp 1,278 16,588
Republic Bancorp Cl A 4,228(d) 70,227
S.Y. Bancorp 4,644 98,406
Southside Bancshares 1,555 30,945
SVB Financial Group 6,007(b) 260,644
Tompkins Financial 2,106(d) 82,555
TowneBank 8,264(d) 88,342
Trico Bancshares 3,366(d) 58,097
Trustmark 8,569(d) 195,373
UMB Financial 4,313 170,407
Wilshire Bancorp 16,066(d) 147,968
Wintrust Financial 3,020(d) 104,915
---------------
Total 2,532,865
- -------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (1.0%)
Consolidated Graphics 3,018(b,d) 101,858
Kimball Intl Cl B 15,437 121,644
United Stationers 2,067(b,d) 112,776
Viad 6,228(d) 122,877
---------------
Total 459,155
- -------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (2.1%)
3Com 70,226(b) 523,184
EMS Technologies 3,472(b) 44,511
Harmonic 9,730(b,d) 59,061
NETGEAR 3,442(b) 71,043
Plantronics 5,216 137,807
Polycom 4,447(b) 99,746
---------------
Total 935,352
- -------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (3.0%)
Comfort Systems USA 16,092(d) 188,759
EMCOR Group 18,601(b) 447,540
Granite Construction 7,591(d) 234,410
Layne Christensen 4,385(b) 111,072
Tutor Perini 18,612(b,d) 354,745
---------------
Total 1,336,526
- -------------------------------------------------------------------------------------
CONSUMER FINANCE (0.4%)
Advance America Cash Advance Centers 11,858(d) 57,274
Cash America Intl 1,501 56,423
World Acceptance 1,190(b) 48,064
---------------
Total 161,761
- -------------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (0.3%)
Regis 9,327 148,579
- -------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.5%)
Life Partners Holdings 5,379(d) 106,935
PHH 5,782(b,d) 100,838
---------------
Total 207,773
- -------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (1.3%)
EnerSys 11,134(b) 217,002
GrafTech Intl 27,190(b) 341,506
---------------
Total 558,508
- -------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (3.0%)
Anixter Intl 8,200(b,d) 341,776
Benchmark Electronics 8,619(b) 157,038
CTS 6,872 52,296
Insight Enterprises 14,538(b) 167,332
Littelfuse 3,209(b) 96,463
Methode Electronics 7,792 85,634
Plexus 2,456(b) 83,529
SMART Modular Technologies WWH 5,920(b) 35,994
SYNNEX 9,422(b,d) 249,400
TTM Technologies 5,846(b) 60,506
---------------
Total 1,329,968
- -------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (3.6%)
Bristow Group 3,600(b) 128,520
Bronco Drilling 6,146(b,d) 30,853
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 11
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
ENERGY EQUIPMENT & SERVICES (CONT.)
Cal Dive Intl 11,558(b) $81,368
CARBO Ceramics 1,919 126,500
Complete Production Services 7,909(b) 99,100
Dawson Geophysical 3,031(b,d) 65,742
GulfMark Offshore 4,134(b,d) 101,490
Key Energy Services 43,237(b,d) 418,319
Lufkin Inds 2,115 134,049
Matrix Service 5,662(b) 57,130
Parker Drilling 47,845(b) 230,134
Pioneer Drilling 3,912(b) 31,100
TETRA Technologies 8,787(b) 91,912
---------------
Total 1,596,217
- -------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (2.3%)
Andersons 5,545 149,604
Casey's General Stores 3,481 106,797
Ingles Markets Cl A 2,606 36,901
Nash Finch 3,471 119,750
Pantry 7,276(b) 98,008
Ruddick 7,833 222,066
Spartan Stores 4,762 64,477
Winn-Dixie Stores 22,601(b,d) 228,948
---------------
Total 1,026,551
- -------------------------------------------------------------------------------------
FOOD PRODUCTS (1.7%)
American Italian Pasta Cl A 3,126(b) 107,097
Chiquita Brands Intl 20,789(b,d) 304,975
Diamond Foods 835 29,993
Fresh Del Monte Produce 15,736(b,c) 319,912
---------------
Total 761,977
- -------------------------------------------------------------------------------------
GAS UTILITIES (0.6%)
Chesapeake Utilities 1,331(d) 39,451
Laclede Group 3,480 112,265
New Jersey Resources 1,820(d) 66,412
Northwest Natural Gas 1,333 57,812
---------------
Total 275,940
- -------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.6%)
ev3 18,690(b,d) 272,500
- -------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (7.1%)
Centene 11,438(b) 220,182
Gentiva Health Services 4,608(b) 117,688
HealthSpring 25,981(b) 451,810
Kindred Healthcare 23,596(b) 399,008
Magellan Health Services 20,056(b) 791,810
Molina Healthcare 10,769(b,d) 239,610
RehabCare Group 2,691(b) 78,200
Sun Healthcare Group 10,923(b) 95,467
Triple-S Management Cl B 12,776(b,c,d) 211,954
Universal American Financial 13,174(b) 176,005
WellCare Health Plans 11,991(b) 373,879
---------------
Total 3,155,613
- -------------------------------------------------------------------------------------
HOUSEHOLD DURABLES (0.3%)
American Greetings Cl A 6,521 120,508
Blyth 1,104(d) 31,011
---------------
Total 151,519
- -------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (--%)
Central Garden & Pet Cl A 922(b) 8,104
- -------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (0.5%)
Seaboard 163 200,490
- -------------------------------------------------------------------------------------
INSURANCE (10.2%)
American Equity Investment Life Holding 4,105 30,131
American Physicians Capital 3,042 84,446
American Physicians Service Group 4,299(d) 98,490
American Safety Insurance Holdings 2,130(b,c) 29,288
Amerisafe 9,829(b) 170,042
AmTrust Financial Services 8,774 105,025
Argo Group Intl Holdings 4,639(b,c) 124,047
CNA Surety 9,095(b) 127,330
Conseco 74,116(b) 352,791
Employers Holdings 27,323 361,482
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
INSURANCE (CONT.)
Flagstone Reinsurance Holdings 5,163(c) $54,057
FPIC Insurance Group 2,454(b,d) 93,129
Greenlight Capital Re Series A 1,932(b,c) 46,658
Horace Mann Educators 25,702 308,167
Maiden Holdings 8,665(c) 58,835
Max Capital Group 5,826(c) 131,202
Meadowbrook Insurance Group 18,820 127,035
Montpelier Re Holdings 8,775(c) 148,210
Natl Financial Partners 20,622(b) 174,256
Phoenix Companies 12,436(b) 29,225
Platinum Underwriters Holdings 22,784(c) 826,147
PMA Capital Cl A 5,839(b) 35,151
ProAssurance 9,760(b) 495,417
Safety Insurance Group 5,353 187,355
SeaBright Insurance Holdings 9,679(b) 98,532
Tower Group 6,145 135,805
Zenith Natl Insurance 4,606 128,507
---------------
Total 4,560,760
- -------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (1.2%)
EarthLink 48,305(d) 391,754
ModusLink Global Solutions 10,108(b) 102,596
United Online 4,873 30,797
---------------
Total 525,147
- -------------------------------------------------------------------------------------
IT SERVICES (1.4%)
Ciber 24,334(b,d) 78,599
CSG Systems Intl 6,619(b) 128,475
Euronet Worldwide 7,630(b) 155,804
Global Cash Access Holdings 11,308(b) 91,595
ManTech Intl Cl A 1,145(b) 54,857
Ness Technologies 17,209(b,c) 95,338
---------------
Total 604,668
- -------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.6%)
Brunswick 5,209 55,893
JAKKS Pacific 18,193(b,d) 200,123
---------------
Total 256,016
- -------------------------------------------------------------------------------------
MACHINERY (2.7%)
EnPro Inds 4,721(b,d) 114,956
FreightCar America 4,993 97,364
Hurco Companies 2,252(b,d) 37,744
John Bean Technologies 5,114 84,330
LB Foster Cl A 4,033(b,d) 108,810
Mueller Inds 10,011 246,170
NACCO Inds Cl A 936 50,376
Nordson 6,719 379,892
Robbins & Myers 3,168(d) 70,393
---------------
Total 1,190,035
- -------------------------------------------------------------------------------------
MARINE (0.2%)
Genco Shipping & Trading 4,188(b) 80,242
- -------------------------------------------------------------------------------------
MEDIA (0.2%)
Natl CineMedia 6,486 97,160
- -------------------------------------------------------------------------------------
METALS & MINING (2.6%)
AM Castle & Co 5,975(d) 57,958
Brush Engineered Materials 4,166(b) 74,863
Century Aluminum 12,558(b) 142,157
Coeur d'Alene Mines 24,318(b,d) 340,937
Haynes Intl 2,705 79,229
Horsehead Holding 11,651(b,d) 114,180
Kaiser Aluminum 3,086 108,473
Olympic Steel 3,611(d) 100,169
RTI Intl Metals 5,734(b,d) 141,917
---------------
Total 1,159,883
- -------------------------------------------------------------------------------------
MULTILINE RETAIL (0.5%)
Dillard's Cl A 7,268 120,358
Retail Ventures 11,349(b) 93,970
---------------
Total 214,328
- -------------------------------------------------------------------------------------
MULTI-UTILITIES (0.4%)
CH Energy Group 3,064 121,182
NorthWestern 2,141(d) 52,347
---------------
Total 173,529
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 13
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
OIL, GAS & CONSUMABLE FUELS (5.2%)
Atlas Energy 9,975 $301,743
ATP Oil & Gas 10,181(b) 147,319
Berry Petroleum Cl A 5,488 148,615
Bill Barrett 8,218(b) 254,758
CVR Energy 13,087(b) 104,958
Gran Tierra Energy 51,153(b,c) 250,138
Knightsbridge Tankers 8,155(c) 117,514
Nordic American Tanker Shipping 1,502(c,d) 44,564
Penn Virginia 7,346 178,287
Petroleum Development 8,411(b) 176,295
Rosetta Resources 9,092(b) 186,932
Stone Energy 7,555(b) 120,427
Swift Energy 6,769(b,d) 169,631
USEC 10,752(b,d) 43,008
Western Refining 13,394(b,d) 61,211
---------------
Total 2,305,400
- -------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (1.6%)
Clearwater Paper 3,389(b) 165,824
Glatfelter 5,946 82,055
Kapstone Paper and Packaging 8,774(b) 81,072
Schweitzer-Mauduit Intl 5,339 401,706
---------------
Total 730,657
- -------------------------------------------------------------------------------------
PERSONAL PRODUCTS (0.2%)
Chattem 1,035(b) 96,731
- -------------------------------------------------------------------------------------
PHARMACEUTICALS (0.7%)
Par Pharmaceutical Companies 8,333(b) 219,324
ViroPharma 8,377(b) 82,765
---------------
Total 302,089
- -------------------------------------------------------------------------------------
PROFESSIONAL SERVICES (0.8%)
CDI 3,259 42,009
Heidrick & Struggles Intl 2,727(d) 69,347
Kelly Services Cl A 3,566(b) 46,786
Korn/Ferry Intl 2,193(b) 32,456
Spherion 10,470(b) 59,051
TrueBlue 4,594(b,d) 66,659
Volt Information Sciences 2,352(b) 21,850
---------------
Total 338,158
- -------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (6.7%)
American Campus Communities 2,652 68,050
American Capital Agency 3,383 90,292
Anworth Mtge Asset 27,211 187,756
Capstead Mtge 47,610 632,261
Entertainment Properties Trust 4,182 145,994
Getty Realty 4,712 101,638
Medical Properties Trust 8,140 81,481
MFA Financial 83,691 615,966
Mid-America Apartment Communities 1,434 67,283
Natl Health Investors 3,764 128,051
Natl Retail Properties 5,397(d) 109,019
NorthStar Realty Finance 32,784(d) 148,839
Omega Healthcare Investors 12,553(d) 234,867
Realty Income 4,793(d) 133,868
Universal Health Realty Income Trust 3,998 132,734
Urstadt Biddle Properties Cl A 7,638(d) 114,494
---------------
Total 2,992,593
- -------------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (0.1%)
China Housing & Land Development 8,507(b,c,d) 31,051
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
ROAD & RAIL (0.6%)
Arkansas Best 7,326 $165,128
Old Dominion Freight Line 2,957(b) 81,318
Saia 2,779(b,d) 33,348
---------------
Total 279,794
- -------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (0.7%)
OmniVision Technologies 14,051(b) 181,257
Pericom Semiconductor 8,687(b) 76,446
Sigma Designs 4,864(b,d) 54,039
Trident Microsystems 7,718(b,d) 14,047
---------------
Total 325,789
- -------------------------------------------------------------------------------------
SOFTWARE (1.1%)
Take-Two Interactive Software 14,256(b,d) 132,296
TIBCO Software 37,561(b) 336,546
---------------
Total 468,842
- -------------------------------------------------------------------------------------
SPECIALTY RETAIL (6.7%)
AnnTaylor Stores 13,516(b) 169,761
Asbury Automotive Group 7,758(b) 85,881
Brown Shoe 5,981(d) 73,267
Buckle 4,075(d) 123,636
Build-A-Bear Workshop 9,576(b) 45,678
Conn's 8,722(b,d) 49,018
Dress Barn 12,911(b) 303,925
DSW Cl A 4,838(b) 116,596
Genesco 10,550(b) 248,769
Group 1 Automotive 10,635(b,d) 308,415
Gymboree 4,686(b,d) 182,801
Hot Topic 15,180(b) 87,285
Jo-Ann Stores 7,294(b,d) 255,436
Men's Wearhouse 7,776 156,686
OfficeMax 4,743(b) 61,517
Pacific Sunwear of California 21,247(b,d) 74,789
Rent-A-Center 16,699(b) 333,979
Shoe Carnival 5,418(b) 98,987
Sonic Automotive Cl A 7,176(b) 68,531
Stage Stores 9,037 116,758
---------------
Total 2,961,715
- -------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (1.2%)
Carter's 2,895(b) 74,865
Iconix Brand Group 7,252(b) 91,520
Jones Apparel Group 12,479 180,196
Skechers USA Cl A 6,327(b) 177,536
---------------
Total 524,117
- -------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.5%)
ESB Financial 4,204 49,271
ESSA Bancorp 3,487(d) 41,321
Ocwen Financial 13,769(b) 126,124
---------------
Total 216,716
- -------------------------------------------------------------------------------------
TOBACCO (0.7%)
Universal 6,763 306,973
- -------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (0.2%)
H&E Equipment Services 9,814(b,d) 104,127
- -------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.6%)
Syniverse Holdings 10,542(b) 177,211
USA Mobility 9,074 94,279
---------------
Total 271,490
- -------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $38,246,922) $43,310,616
- -------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (2.4%)
SHARES VALUE(a)
RiverSource Short-Term Cash Fund, 0.16% 1,047,997(e) $1,047,997
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $1,047,997) $1,047,997
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 15
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (11.5%)
SHARES VALUE(a)
CASH COLLATERAL REINVESTMENT FUND
JPMorgan Prime Money Market Fund 5,117,441 $5,117,441
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $5,117,441) $5,117,441
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $44,412,360)(f) $49,476,054
=====================================================================================
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
INVESTMENTS IN DERIVATIVES
At Jan. 31, 2010, $72,000 was held in a margin deposit account as collateral to
cover initial margin requirements on open stock index futures contracts.
FUTURES CONTRACTS OUTSTANDING AT JAN. 31, 2010
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION
CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION)
- ------------------------------------------------------------------------------------
Russell 2000 Mini Index 17 $1,021,700 March 2010 $(51,912)
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At Jan. 31, 2010, the
value of foreign securities, excluding short-term securities, represented
5.76% of net assets.
(d) At Jan. 31, 2010, security was partially or fully on loan. See Note 7 to
the financial statements.
(e) Affiliated Money Market Fund -- See Note 8 to the financial statements. The
rate shown is the seven-day current annualized yield at Jan. 31, 2010.
- --------------------------------------------------------------------------------
16 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(f) At Jan. 31, 2010, the cost of securities for federal income tax purposes
was approximately $44,412,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $7,815,000
Unrealized depreciation (2,751,000)
----------------------------------------------------------
Net unrealized appreciation $5,064,000
----------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 17
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date.
Valuation adjustments are not applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Non-U.S. equity securities actively traded in foreign markets may be reflected
in Level 2 despite the availability of closing prices, because the Fund
evaluates and determines whether those closing prices reflect fair value at the
close of the New York Stock Exchange (NYSE) or require adjustment, as described
in Note 2 to the financial statements -- Valuation of securities.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as
- --------------------------------------------------------------------------------
18 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
Level 3 investments due to lack of market transparency and corroboration to
support these quoted prices. Additionally, valuation models may be used as the
pricing source for any remaining investments classified as Level 3. These models
rely on one or more significant unobservable inputs and/or significant
assumptions by the Fund Administrator. Inputs used in a valuation model may
include, but are not limited to, financial statement analysis, discount rates
and estimated cash flows, and comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of
Jan. 31, 2010:
<Table>
<Caption>
FAIR VALUE AT JAN. 31, 2010
--------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- --------------------------------------------------------------------------------------------
Equity Securities
Common Stocks(a) $43,310,616 $-- $-- $43,310,616
- --------------------------------------------------------------------------------------------
Total Equity Securities 43,310,616 -- -- 43,310,616
- --------------------------------------------------------------------------------------------
Other
Affiliated Money Market
Fund(b) 1,047,997 -- -- 1,047,997
Investments of Cash
Collateral Received
for Securities on
Loan(c) 5,117,441 -- -- 5,117,441
- --------------------------------------------------------------------------------------------
Total Other 6,165,438 -- -- 6,165,438
- --------------------------------------------------------------------------------------------
Investments in Securities 49,476,054 -- -- 49,476,054
Other Financial
Instruments(d) (51,912) -- -- (51,912)
- --------------------------------------------------------------------------------------------
Total $49,424,142 $-- $-- $49,424,142
- --------------------------------------------------------------------------------------------
</Table>
(a) Industry classifications are identified in the Portfolio of Investments.
(b) Money market fund that is a sweep investment for cash balances in the Fund
at Jan. 31, 2010.
(c) Asset categories for Investments of Cash Collateral are identified in the
Portfolio of Investments.
(d) Other Financial Instruments are derivative instruments, which are valued at
the unrealized appreciation (depreciation) on the instrument. Derivative
descriptions are located in the Investments in Derivatives section of the
Portfolio of Investments.
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1(800) SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling the RiverSource
Family of Funds at 1(800) 221-2450.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 19
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
JAN. 31, 2010 (UNAUDITED)
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $38,246,922) $ 43,310,616
Affiliated money market fund (identified cost $1,047,997) 1,047,997
Investments of cash collateral received for securities on loan
(identified cost $5,117,441) 5,117,441
- --------------------------------------------------------------------------------------
Total investments in securities (identified cost $44,412,360) 49,476,054
Dividends and accrued interest receivable 24,639
Margin deposits on futures contracts 72,000
- --------------------------------------------------------------------------------------
Total assets 49,572,693
- --------------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 49,053
Payable upon return of securities loaned 5,117,441
Variation margin payable on futures contracts 7,122
Accrued investment management services fees 1,044
Accrued distribution fees 87
Accrued transfer agency fees 28
Accrued administrative services fees 98
Other accrued expenses 30,154
- --------------------------------------------------------------------------------------
Total liabilities 5,205,027
- --------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 44,367,666
- --------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 61,364
Additional paid-in capital 51,510,825
Undistributed net investment income 174,074
Accumulated net realized gain (loss) (12,390,379)
Unrealized appreciation (depreciation) on investments 5,011,782
- --------------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding capital stock $ 44,367,666
- --------------------------------------------------------------------------------------
*Value of securities on loan $ 4,954,449
- --------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $11,260,076 1,557,611 $7.23(1)
Class B $ 229,725 32,229 $7.13
Class C $ 87,761 12,316 $7.13
Class I $32,771,769 4,531,666 $7.23
Class R2 $ 3,290 455 $7.23
Class R3 $ 4,530 627 $7.22
Class R4 $ 7,227 1,000 $7.23
Class R5 $ 3,288 455 $7.23
- ----------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $7.67. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
20 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS --------------------------------------------------------
SIX MONTHS ENDED JAN. 31, 2010 (UNAUDITED)
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $ 399,801
Income distributions from affiliated money market fund 893
Income from securities lending -- net 49,483
- ------------------------------------------------------------------------
Total income 450,177
- ------------------------------------------------------------------------
Expenses:
Investment management services fees 175,722
Distribution fees
Class A 14,278
Class B 1,278
Class C 435
Class R2 8
Class R3 5
Transfer agency fees
Class A 5,079
Class B 138
Class C 42
Class R3 2
Class R4 2
Administrative services fees 19,138
Plan administration services fees
Class R2 4
Class R3 5
Class R4 9
Compensation of board members 708
Custodian fees 2,418
Printing and postage 11,020
Registration fees 26,082
Professional fees 4,209
Other 2,242
- ------------------------------------------------------------------------
Total expenses 262,824
Expenses waived/reimbursed by the Investment Manager and
its affiliates (20,366)
- ------------------------------------------------------------------------
Total net expenses 242,458
- ------------------------------------------------------------------------
Investment income (loss) -- net 207,719
- ------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions 2,332,830
Futures contracts 219,917
- ------------------------------------------------------------------------
Net realized gain (loss) on investments 2,552,747
Net change in unrealized appreciation (depreciation) on
investments 1,429,719
- ------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 3,982,466
- ------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $4,190,185
- ------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 21
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2010 JULY 31, 2009
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 207,719 $ 377,135
Net realized gain (loss) on investments 2,552,747 (11,082,938)
Net change in unrealized appreciation (depreciation) on
investments 1,429,719 7,316,289
- ---------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 4,190,185 (3,389,514)
- ---------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (74,218) (28,406)
Class C (52) --
Class I (324,851) (220,730)
Class R2 (10) (1)
Class R3 (25) (10)
Class R4 (52) (42)
Class R5 (31) (17)
- ---------------------------------------------------------------------------------------------
Total distributions (399,239) (249,206)
- ---------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares 240,130 2,450,687
Class B shares 949 205,267
Class C shares 7,524 56,304
Class I shares 178,256 35,465,513
Class R3 shares 324 724
Reinvestment of distributions at net asset value
Class A shares 26,528 11,018
Class C shares 47 --
Class I shares 324,780 220,690
Class R3 shares 7 --
Conversions from Class B to Class A
Class A shares -- 79,994
Class B shares -- (79,994)
Payments for redemptions
Class A shares (592,928) (1,511,682)
Class B shares (53,250) (115,767)
Class C shares (3,122) (18,418)
Class I shares (12,942,096) (15,688,017)
- ---------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (12,812,851) 21,076,319
- ---------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (9,021,905) 17,437,599
Net assets at beginning of period 53,389,571 35,951,972
- ---------------------------------------------------------------------------------------------
Net assets at end of period $ 44,367,666 $ 53,389,571
- ---------------------------------------------------------------------------------------------
Undistributed net investment income $ 174,074 $ 365,594
- ---------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
22 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
The following tables are intended to help you understand the Fund's financial
performance. Certain information reflects financial results for a single share
of a class held for the periods shown. For periods ended 2007 and after, per
share net investment income (loss) amounts are calculated based on average
shares outstanding during the period. Total returns assume reinvestment of all
dividends and distributions. Total returns do not reflect payment of sales
charges, if any, and are not annualized for periods of less than one year.
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS A JAN. 31, 2010 --------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006(a)
Net asset value, beginning of period $6.71 $8.76 $10.00 $9.77 $10.22
- ---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02 .04 .04 .14 .02
Net gains (losses) (both realized and
unrealized) .55 (2.07) (1.01) .29 (.47)
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations .57 (2.03) (.97) .43 (.45)
- ---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.02) (.05) (.01) --
Distributions from realized gains -- -- (.22) (.19) --
- ---------------------------------------------------------------------------------------------------------------------
Total distributions (.05) (.02) (.27) (.20) --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.23 $6.71 $8.76 $10.00 $9.77
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 8.43% (23.18%) (9.67%) 4.29% (4.40%)
- ---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense
waiver/reimbursement 1.36%(c) 1.60% 1.54% 1.73% 3.27%(c)
- ---------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d) 1.27%(c) 1.42% 1.24% 1.35% 1.40%(c)
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .63%(c) .61% .44% 1.30% .55%(c)
- ---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $11 $11 $13 $14 $11
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 98% 87% 127% 40%
- ---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 23
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS B JAN. 31, 2010 --------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006(a)
Net asset value, beginning of period $6.60 $8.65 $9.90 $9.73 $10.22
- ---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01) (.01) (.02) .05 --
Net gains (losses) (both realized and
unrealized) .54 (2.04) (1.01) .31 (.49)
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations .53 (2.05) (1.03) .36 (.49)
- ---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- -- (.22) (.19) --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.13 $6.60 $8.65 $9.90 $9.73
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 8.03% (23.70%) (10.47%) 3.51% (4.79%)
- ---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense
waiver/reimbursement 2.11%(c) 2.37% 2.29% 2.38% 4.05%(c)
- ---------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d) 2.03%(c) 2.18% 2.00% 2.11% 2.18%(c)
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.15%)(c) (.14%) (.27%) .49% (.17%)(c)
- ---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $1 $--
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 98% 87% 127% 40%
- ---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
24 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS C JAN. 31, 2010 --------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006(a)
Net asset value, beginning of period $6.60 $8.65 $9.90 $9.73 $10.22
- ---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .00(e) (.01) (.03) .05 --
Net gains (losses) (both realized and
unrealized) .53 (2.04) (1.00) .31 (.49)
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations .53 (2.05) (1.03) .36 (.49)
- ---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.00)(e) -- (.00)(e) -- --
Distributions from realized gains -- -- (.22) (.19) --
- ---------------------------------------------------------------------------------------------------------------------
Total distributions (.00)(e) -- (.22) (.19) --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.13 $6.60 $8.65 $9.90 $9.73
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 8.09% (23.70%) (10.43%) 3.51% (4.79%)
- ---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense
waiver/reimbursement 2.11%(c) 2.36% 2.29% 2.47% 4.05%(c)
- ---------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d) 2.02%(c) 2.17% 2.00% 2.11% 2.18%(c)
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.12%)(c) (.13%) (.29%) .43% (.22%)(c)
- ---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $-- $--
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 98% 87% 127% 40%
- ---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 25
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS I JAN. 31, 2010 --------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006(a)
Net asset value, beginning of period $6.73 $8.78 $10.03 $9.78 $10.22
- ---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03 .06 .07 .15 .03
Net gains (losses) (both realized and
unrealized) .54 (2.07) (1.02) .32 (.47)
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations .57 (2.01) (.95) .47 (.44)
- ---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.07) (.04) (.08) (.03) --
Distributions from realized gains -- -- (.22) (.19) --
- ---------------------------------------------------------------------------------------------------------------------
Total distributions (.07) (.04) (.30) (.22) --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.23 $6.73 $8.78 $10.03 $9.78
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 8.44% (22.83%) (9.46%) 4.69% (4.31%)
- ---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense
waiver/reimbursement 1.01%(c) 1.22% 1.22% 1.19% 3.00%(c)
- ---------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d) .92%(c) 1.04% .92% 1.05% 1.13%(c)
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .95%(c) .98% .79% 1.43% .91%(c)
- ---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $33 $42 $23 $25 $3
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 98% 87% 127% 40%
- ---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
26 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS R2 JAN. 31, 2010 --------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007(f)
Net asset value, beginning of period $6.71 $8.75 $9.97 $10.99
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01 .02 .02 .06
Net gains (losses) (both realized and
unrealized) .53 (2.06) (1.00) (.86)
- ---------------------------------------------------------------------------------------------------------
Total from investment operations .54 (2.04) (.98) (.80)
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) (.00)(e) (.02) (.03)
Distributions from realized gains -- -- (.22) (.19)
- ---------------------------------------------------------------------------------------------------------
Total distributions (.02) (.00)(e) (.24) (.22)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.23 $6.71 $8.75 $9.97
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN 8.07% (23.28%) (9.82%) (7.40%)
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense
waiver/reimbursement 1.75%(c) 2.04% 2.03% 1.85%(c)
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d) 1.69%(c) 1.71% 1.46% 1.80%(c)
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) .21%(c) .31% .23% .77%(c)
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $--
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 98% 87% 127%
- ---------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 27
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS R3 JAN. 31, 2010 --------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007(f)
Net asset value, beginning of period $6.71 $8.76 $9.99 $10.99
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02 .04 .04 .07
Net gains (losses) (both realized and
unrealized) .53 (2.07) (1.00) (.85)
- ---------------------------------------------------------------------------------------------------------
Total from investment operations .55 (2.03) (.96) (.78)
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.02) (.05) (.03)
Distributions from realized gains -- -- (.22) (.19)
- ---------------------------------------------------------------------------------------------------------
Total distributions (.04) (.02) (.27) (.22)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.22 $6.71 $8.76 $9.99
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN 8.18% (23.11%) (9.65%) (7.21%)
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense
waiver/reimbursement 1.59%(c) 1.80% 1.79% 1.58%(c)
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d) 1.48%(c) 1.46% 1.21% 1.55%(c)
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) .43%(c) .58% .48% 1.02%(c)
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $--
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 98% 87% 127%
- ---------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
28 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS R4 JAN. 31, 2010 --------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006(a)
Net asset value, beginning of period $6.72 $8.78 $10.00 $9.77 $10.22
- ---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02 .05 .07 .17 .02
Net gains (losses) (both realized and
unrealized) .54 (2.07) (1.00) .28 (.47)
- ---------------------------------------------------------------------------------------------------------------------
Total from investment operations .56 (2.02) (.93) .45 (.45)
- ---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.04) (.07) (.03) --
Distributions from realized gains -- -- (.22) (.19) --
- ---------------------------------------------------------------------------------------------------------------------
Total distributions (.05) (.04) (.29) (.22) --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.23 $6.72 $8.78 $10.00 $9.77
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 8.34% (22.92%) (9.27%) 4.42% (4.40%)
- ---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense
waiver/reimbursement 1.31%(c) 1.56% 1.52% 1.83% 3.12%(c)
- ---------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d) 1.23%(c) 1.22% .97% 1.26% 1.25%(c)
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .67%(c) .80% .73% 1.60% .69%(c)
- ---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $-- $--
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 98% 87% 127% 40%
- ---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 29
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED JULY 31,
CLASS R5 JAN. 31, 2010 --------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007(f)
Net asset value, beginning of period $6.72 $8.77 $10.02 $10.99
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03 .06 .07 .11
Net gains (losses) (both realized and
unrealized) .55 (2.07) (1.02) (.86)
- ---------------------------------------------------------------------------------------------------------
Total from investment operations .58 (2.01) (.95) (.75)
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.07) (.04) (.08) (.03)
Distributions from realized gains -- -- (.22) (.19)
- ---------------------------------------------------------------------------------------------------------
Total distributions (.07) (.04) (.30) (.22)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.23 $6.72 $8.77 $10.02
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN 8.58% (22.90%) (9.50%) (6.93%)
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense
waiver/reimbursement 1.03%(c) 1.27% 1.28% 1.09%(c)
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d) .95%(c) 1.10% .97% 1.05%(c)
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) .95%(c) .92% .72% 1.53%(c)
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $--
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 27% 98% 87% 127%
- ---------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) For the period from Feb. 16, 2006 (when shares became publicly available) to
July 31, 2006.
(b) Expense ratios include the impact of a performance incentive adjustment, if
any. In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the reported expense ratios.
(c) Annualized.
(d) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(e) Rounds to zero.
(f) For the period from Dec. 11, 2006 (when shares became publicly available) to
July 31, 2007.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
30 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS OF JAN. 31, 2010)
1. ORGANIZATION
RiverSource Disciplined Small Cap Value Fund (the Fund) is a series of
RiverSource Dimensions Series, Inc. (the Corporation) and is registered under
the Investment Company Act of 1940, as amended (the 1940 Act) as a diversified,
open-end management investment company. The Corporation has 10 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the Corporation's Board of Directors (the Board). The
Fund invests primarily in small capitalization equity securities of companies
with market capitalizations that fall within the range of companies that
comprise the Russell 2000 Value Index at the time of investment.
The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4
and Class R5 shares.
- - Class A shares are offered with a front-end sales charge, which may be waived
under certain circumstances.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares one month after the completion of
the eighth year of ownership if originally purchased in a RiverSource fund on
or after May 21, 2005 or originally purchased in a Seligman fund on or after
June 13, 2009. Class B shares originally purchased in a RiverSource fund
prior to May 21, 2005 will convert to Class A shares in the ninth calendar
year of ownership. Class B shares originally purchased in a Seligman fund
prior to June 13, 2009 will convert to Class A shares in the month prior to
the ninth year of ownership.
- - Class C shares may be subject to a CDSC.
- - Class I, Class R2, Class R3, Class R4 and Class R5 shares are offered without
a front-end sales charge or CDSC to qualifying institutional investors.
At Jan 31, 2010, RiverSource Investments, LLC (RiverSource Investments or the
Investment Manager) and affiliated funds-of-funds in the RiverSource Family of
Funds owned 100% of Class I shares, and the Investment Manager owned 100% of
Class R2, Class R4 and Class R5 shares. At Jan. 31, 2010, the Investment Manager
and affiliated funds-of-funds in the RiverSource Family of Funds owned
approximately 90% of the total outstanding Fund shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 31
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
investments are allocated to each class of shares based upon its relative net
assets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ADOPTION OF NEW ACCOUNTING STANDARD
In June 2009, the Financial Accounting Standards Board (FASB) established the
FASB Accounting Standards Codification(TM) (Codification) as the single source
of authoritative accounting principles recognized by the FASB in the preparation
of financial statements in conformity with U.S. generally accepted accounting
principles (GAAP). The Codification supersedes existing non-grandfathered, non-
SEC accounting and reporting standards. The Codification did not change GAAP
but, rather, organized it into a hierarchy where all guidance within the
Codification carries an equal level of authority. The Codification became
effective for financial statements issued for interim and annual periods ending
after Sept. 15, 2009. The Codification did not have an effect on the Fund's
financial statements.
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of business of the New York Stock
Exchange (NYSE). Securities traded on national securities exchanges or included
in national market systems are valued at the last quoted sales price from the
primary exchange. Debt securities are generally traded in the over-the-counter
market and are valued by an independent pricing service using an evaluated bid.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities (such as foreign securities)
that is not reflected in price quotations or valuations
- --------------------------------------------------------------------------------
32 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
from other sources. A fair value price is a good faith estimate of the value of
a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the NYSE and therefore the closing prices for securities in such markets or
on such exchanges may not fully reflect events that occur after such close but
before the close of the NYSE, including significant movements in the U.S. market
after foreign exchanges have closed. Accordingly, in those situations,
Ameriprise Financial, Inc. (Ameriprise Financial), parent company of the
Investment Manager, as administrator to the Fund, will fair value foreign
securities pursuant to procedures adopted by the Board, including utilizing a
third party pricing service to determine these fair values. These procedures
take into account multiple factors, including movements in the U.S. securities
markets, to determine a good faith estimate that reasonably reflects the current
market conditions as of the close of the NYSE. The fair value of a security is
likely to be different from the quoted or published price, if available.
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. Typically, those maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at amortized cost
using the market value on the 61st day before maturity. Short-term securities
maturing in 60 days or less at acquisition date are valued at amortized cost.
Amortized cost is an approximation of market value. Investments in money market
funds are valued at net asset value.
FOREIGN CURRENCY TRANSLATIONS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 33
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
providers contain general indemnification clauses. The Fund's maximum exposure
under these arrangements is unknown since the amount of any future claims that
may be made against the Fund cannot be determined and the Fund has no historical
basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income (which includes net short-term capital gains) to
shareholders. No provision for income or excise taxes is thus required.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. Generally,
the tax authorities can examine all tax returns filed for the last three years.
RECENT ACCOUNTING PRONOUNCEMENTS
On Jan. 21, 2010, the FASB issued an Accounting Standards Update (the
amendment), Fair Value Measurements and Disclosures (Topic 820): Improving
Disclosures about Fair Value Measurements, which provides guidance on how
investment assets and liabilities are to be valued and disclosed. Specifically,
the amendment requires reporting entities to disclose the input and valuation
techniques used to measure fair value for both recurring and nonrecurring fair
value measurements for Level 2 or Level 3 positions. The amendment also requires
that transfers between all levels (including Level 1 and Level 2) be disclosed
on a gross basis (i.e., transfers out must be disclosed separately from
transfers in), and the reason(s) for the transfer. Additionally purchases,
sales, issuances and settlements must be disclosed on a gross basis in the Level
3 rollforward. The effective date of the amendment is for interim and annual
periods beginning after Dec. 15, 2009, however, the requirement to provide the
Level 3 activity for purchases, sales, issuances and settlements on a gross
basis will be effective for interim and annual periods beginning after Dec. 15,
2010. At this time the Fund is evaluating the implications of the amendment and
the impact to the financial statements.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
- --------------------------------------------------------------------------------
34 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
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 amortization of premium, market discount and original issue discount
using the effective interest method, is accrued daily.
3. INVESTMENTS IN DERIVATIVES
The Fund may invest in certain derivative instruments, which are transactions
whose values depend on or are derived from (in whole or in part) the value of
one or more other assets, such as securities, currencies, commodities or
indices. Such derivative instruments may be used to maintain cash reserves while
maintaining exposure to certain other assets, to offset anticipated declines in
values of investments, to facilitate trading, to reduce transaction costs, and
to pursue higher investment returns. The Fund may also use derivative
instruments to mitigate certain investment risks, such as foreign currency
exchange rate risk, interest rate risk, and credit risk. Investments in
derivative instruments may expose the Fund to certain additional risks,
including those detailed below.
FUTURES TRANSACTIONS
The Fund may buy and sell financial futures contracts traded on any U.S. or
foreign exchange to produce incremental earnings, hedge existing positions or
protect against market changes in the value of equities, interest rates or
foreign currencies. The Fund may also buy and write put and call options on
these futures contracts. A futures contract represents a commitment for the
future purchase or sale of an asset at a specified price on a specified date.
Futures and options on futures are valued daily based upon the last sale price
at the close of the market on the principal exchange on which they are traded.
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.
Upon entering into futures contracts, the Fund bears the risk of interest rates,
exchange rates or securities prices moving unexpectedly, in which case, the Fund
may not achieve the anticipated benefits of the futures contracts and may
realize a loss. Additional risks include counterparty credit risk, the
possibility of an illiquid market, and that a change in the value of the
contract or option may not correlate with changes in the value of the underlying
securities.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 35
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
EFFECTS OF DERIVATIVE TRANSACTIONS ON THE FINANCIAL STATEMENTS
The following tables are intended to provide additional information about the
effect of derivatives on the financial statements of the Fund including: the
fair value of derivatives by risk category and the location of those fair values
in the Statement of Assets and Liabilities; the impact of derivative
transactions on the Fund's operations over the period including realized gains
or losses and unrealized gains or losses. The derivative schedules following the
Portfolio of Investments present additional information regarding derivative
instruments outstanding at the end of the period, if any.
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT JAN. 31, 2010
<Table>
<Caption>
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------- -------------------------------
STATEMENT OF ASSETS STATEMENT OF ASSETS
RISK EXPOSURE AND LIABILITIES AND LIABILITIES
CATEGORY LOCATION FAIR VALUE LOCATION FAIR VALUE
- -------------------------------------------------------------------------------------------
Equity contracts Net assets -
unrealized
depreciation on
N/A N/A investments $51,912*
- -------------------------------------------------------------------------------------------
Total N/A $51,912
- -------------------------------------------------------------------------------------------
</Table>
* Includes cumulative appreciation (depreciation) of futures contracts as
reported in the Futures Contracts Outstanding table following the Portfolio
of Investments. Only the current day's variation margin is reported in
receivables or payables in the Statement of Assets and Liabilities.
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JAN. 31, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN
INCOME
- -----------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- -----------------------------------------------------------------
Equity contracts $219,917
- -----------------------------------------------------------------
Total $219,917
- -----------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES
RECOGNIZED IN INCOME
- -----------------------------------------------------------------
RISK EXPOSURE CATEGORY FUTURES
- -----------------------------------------------------------------
Equity contracts $(55,829)
- -----------------------------------------------------------------
Total $(55,829)
- -----------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FUTURES
The gross notional amount of long contracts outstanding was $1 million at Jan.
31, 2010. The monthly average gross notional amount for these contracts
- --------------------------------------------------------------------------------
36 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
was $700,000 for the six months ended Jan. 31, 2010. The fair value of such
contracts on Jan. 31, 2010 is set forth in the table above.
4. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is an annual fee that is equal to a percentage of the Fund's average daily net
assets that declines from 0.85% to 0.725% as the Fund's net assets increase. The
fee may be adjusted upward or downward by a performance incentive adjustment
determined monthly by measuring the percentage difference over a rolling 12-
month period between the annualized performance of one Class A share of the Fund
and the annualized performance of the Lipper Small-Cap Value Funds Index. In
certain circumstances, the Board may approve a change in the index. The maximum
adjustment is 0.12% per year. If the performance difference is less than 0.50%,
the adjustment will be zero. The adjustment decreased the management fee by
$27,616 for the six months ended Jan. 31, 2010. The management fee for the six
months ended Jan. 31, 2010 was 0.74% of the Fund's average daily net assets,
including the adjustment under the terms of the performance incentive
arrangement.
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial
an annual fee for administration and accounting services equal to a percentage
of the Fund's average daily net assets that declines from 0.08% to 0.05% as the
Fund's net assets increase. The fee for the six months ended Jan. 31, 2010 was
0.08% of the Fund's average daily net assets.
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended Jan.
31, 2010, other expenses paid to this company were $123.
COMPENSATION OF BOARD MEMBERS
Under a Deferred Compensation Plan (the Plan), the board members who are not
"interested persons" of the Fund under the 1940 Act may defer receipt of their
compensation. Deferred amounts are treated as though equivalent dollar amounts
had been invested in shares of the Fund or other funds in the RiverSource Family
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 37
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
of Funds. The Fund's liability for these amounts is adjusted for market value
changes and remains in the funds until distributed in accordance with the Plan.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains Fund shareholder accounts and records and provides Fund
shareholder services. The Fund pays the Transfer Agent an annual account-based
fee at a rate equal to $19.50 for Class A, $20.50 for Class B and $20.00 for
Class C for this service. The Transfer Agent also charges an annual fee of $3
per account serviced directly by the Fund or its designated agent for Class A,
Class B and Class C shares. The Fund also pays the Transfer Agent an annual
asset-based fee at a rate of 0.05% of the Fund's average daily net assets
attributable to Class R2, Class R3, Class R4 and Class R5 shares. The Transfer
Agent charges an annual fee of $5 per inactive account, charged on a pro rata
basis for the 12 month period from the date the account becomes inactive. These
fees are included in the transfer agency fees in the Statement of Operations.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
DISTRIBUTION FEES
The Fund has an agreement with RiverSource Fund Distributors, Inc. (the
Distributor) for distribution and shareholder services. Under a Plan and
Agreement of Distribution pursuant to Rule 12b-1, the Fund pays a fee at an
annual rate of up to 0.25% of the Fund's average daily net assets attributable
to Class A and Class R3 shares, a fee at an annual rate of up to 0.50% of the
Fund's average daily net assets attributable to Class R2 shares and a fee at an
annual rate of up to 1.00% of the Fund's average daily net assets attributable
to Class B and Class C shares. For Class B and Class C shares, of the 1.00% fee,
up to 0.75% is reimbursed for distribution expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed (unreimbursed expense) was approximately $16,000 and $2,000 for Class
B and Class C shares, respectively. These amounts are based on the most recent
information available as of Oct. 31, 2009, and may be recovered from future
payments under the distribution plan or CDSC. To the extent the unreimbursed
expense has been fully recovered, the distribution fee is reduced.
- --------------------------------------------------------------------------------
38 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
SALES CHARGES
Sales charges, including front-end and CDSCs, received by the Distributor for
distributing Fund shares were $3,485 for Class A and $13 for Class B for the six
months ended Jan. 31, 2010.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the six months ended Jan. 31, 2010, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds*), including the adjustment under
the terms of a performance incentive arrangement, were as follows:
<Table>
Class A.............................................. 1.27%
Class B.............................................. 2.03
Class C.............................................. 2.02
Class I.............................................. 0.92
Class R2............................................. 1.69
Class R3............................................. 1.48
Class R4............................................. 1.23
Class R5............................................. 0.95
</Table>
The waived/reimbursed fees and expenses for the transfer agency fees at the
class level were as follows:
<Table>
Class R3.............................................. $1
</Table>
The management fees waived/reimbursed at the Fund level were $20,365.
The Investment Manager and its affiliates have contractually agreed to waive
certain fees and expenses until Sept. 30, 2010, unless sooner terminated at the
sole discretion of the Board, such that net expenses (excluding fees and
expenses of acquired funds*), before giving effect to any performance incentive
adjustment, will not exceed the following percentage of the class' average daily
net assets:
<Table>
Class A.............................................. 1.49%
Class B.............................................. 2.26
Class C.............................................. 2.25
Class I.............................................. 1.04
Class R2............................................. 1.84
Class R3............................................. 1.59
Class R4............................................. 1.34
Class R5............................................. 1.09
</Table>
* In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in
which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and the Fund may own
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 39
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
different proportions of acquired funds at different times, the amount of
fees and expenses incurred indirectly by the Fund will vary.
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $12,468,854 and $26,084,977, respectively, for the six
months ended Jan. 31, 2010. Realized gains and losses are determined on an
identified cost basis.
6. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2010 JULY 31, 2009
- ----------------------------------------------------------------------
CLASS A
Sold 33,105 390,536
Converted from Class B* -- 11,922
Reinvested distributions 3,537 1,852
Redeemed (81,962) (252,101)
- ----------------------------------------------------------------------
Net increase (decrease) (45,320) 152,209
- ----------------------------------------------------------------------
CLASS B
Sold 133 30,986
Converted to Class A* -- (12,120)
Redeemed (7,412) (19,523)
- ----------------------------------------------------------------------
Net increase (decrease) (7,279) (657)
- ----------------------------------------------------------------------
CLASS C
Sold 1,087 7,429
Reinvested distributions 6 --
Redeemed (447) (2,110)
- ----------------------------------------------------------------------
Net increase (decrease) 646 5,319
- ----------------------------------------------------------------------
CLASS I
Sold 24,478 6,190,809
Reinvested distributions 43,304 37,091
Redeemed (1,821,339) (2,542,749)
- ----------------------------------------------------------------------
Net increase (decrease) (1,753,557) 3,685,151
- ----------------------------------------------------------------------
CLASS R3
Sold 44 127
Reinvested distributions 1 --
- ----------------------------------------------------------------------
Net increase (decrease) 45 127
- ----------------------------------------------------------------------
</Table>
* Automatic conversion of Class B shares to Class A shares based on the
original purchase date.
- --------------------------------------------------------------------------------
40 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
7. LENDING OF PORTFOLIO SECURITIES
The Fund has entered into a Master Securities Lending Agreement (the Agreement)
with JPMorgan Chase Bank, National Association (JPMorgan). The Agreement
authorizes JPMorgan as lending agent to lend securities to authorized borrowers
in order to generate additional income on behalf of the Fund. Pursuant to the
Agreement, the securities loaned are secured by cash or U.S. government
securities equal to at least 100% of the market value of the loaned securities.
Any additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Cash collateral received is invested by the lending agent on behalf of the Fund
into authorized investments pursuant to the Agreement. The investments made with
the cash collateral are listed in the Portfolio of Investments. The values of
such investments and any uninvested cash collateral balance are disclosed in the
Statement of Assets and Liabilities along with the related obligation to return
the collateral upon the return of the securities loaned. At Jan. 31, 2010,
securities valued at $4,954,449 were on loan, secured by cash collateral of
$5,117,441 invested in short-term securities or in cash equivalents.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Fund or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Net income of
$49,483 earned from securities lending for the six months ended Jan. 31, 2010 is
included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
8. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the funds in the
RiverSource Family of Funds and other institutional clients of RiverSource
Investments. The cost of the Fund's purchases and proceeds from sales of shares
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
of RiverSource Short-Term Cash Fund aggregated $9,423,903 and $8,637,995,
respectively, for the six months ended Jan. 31, 2010. The income distributions
received with respect to the Fund's investment in RiverSource Short-Term Cash
Fund can be found in the Statement of Operations and the Fund's invested balance
in RiverSource Short-Term Cash Fund at Jan. 31, 2010, can be found in the
Portfolio of Investments.
9. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
15, 2009, replacing a prior credit facility. The credit facility agreement,
which is a collective agreement between the Fund and certain other funds in the
RiverSource Family of Funds, severally and not jointly, permits collective
borrowings up to $300 million. The borrowers shall have the right, upon written
notice to the Administrative Agent to request an increase of up to $200 million
in the aggregate amount of the credit facility from new or existing lenders,
provided that the aggregate amount of the credit facility shall at no time
exceed $500 million. Participation in such increase by any existing lender shall
be at such lender's sole discretion. Interest is charged to each Fund based on
its borrowings at a rate equal to the sum of the federal funds rate plus (i)
1.25% per annum plus (ii) if one-month LIBOR exceeds the federal funds rate, the
amount of such excess. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.10% per annum, in addition to an upfront fee equal to its pro rata share of
0.04% of the amount of the credit facility. Prior to Oct. 15, 2009, the credit
facility agreement, which was a collective agreement between the Fund and
certain other funds in the RiverSource Family of Funds, severally and not
jointly, permitted collective borrowings up to $475 million. Interest was
charged to each Fund based on its borrowings at a rate equal to the federal
funds rate plus 0.75%. The Fund also paid a commitment fee equal to its pro rata
share of the amount of the credit facility at a rate of 0.06% per annum, in
addition to an upfront fee equal to its pro rata share of 0.02% of the amount of
the credit facility. The Fund had no borrowings during the six months ended Jan.
31, 2010.
10. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of futures contracts,
- --------------------------------------------------------------------------------
42 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
passive foreign investment company (PFIC) holdings, re-characterization of real
estate investment trust (REIT) distributions, post-October losses and losses
deferred due to wash sales. 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.
For federal income tax purposes, the Fund had a capital loss carry-over of
$6,787,750 at July 31, 2009, that if not offset by capital gains will expire as
follows:
<Table>
<Caption>
2016 2017
$554,680 $6,233,070
</Table>
Because the measurement periods for a regulated investment company's income are
different for excise tax purposes versus income tax purposes, special rules are
in place to protect the amount of earnings and profits needed to support excise
tax distributions. As a result, the Fund is permitted to treat net capital
losses realized between Nov. 1, 2008 and its fiscal year end (post-October loss)
as occurring on the first day of the following tax year. At July 31, 2009, the
Fund had a post-October loss of $7,832,894 that is treated for income tax
purposes as occurring on Aug. 1, 2009.
It is unlikely the Board will authorize a distribution of any net realized
capital gains until the available capital loss carry-over has been offset or
expires. There is no assurance that the Fund will be able to utilize all of its
capital loss carry-over before it expires.
11. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statement of Assets and Liabilities
through the date of issuance of the Fund's financial statements. There were no
events or transactions that occurred during the period that materially impacted
the amounts or disclosures in the Fund's financial statements.
12. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
they are investors in several American Express Company (now known as
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court,
asking the U.S. Supreme Court to stay the District Court proceedings while the
U.S. Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise
Financial, Inc., acquired J. & W. Seligman & Co. Incorporated (Seligman). In
late 2003, Seligman conducted an extensive internal review concerning mutual
fund trading practices. Seligman's review, which covered the
- --------------------------------------------------------------------------------
44 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
period 2001-2003, noted one arrangement that permitted frequent trading in
certain open-end registered investment companies managed by Seligman (the
Seligman Funds); this arrangement was in the process of being closed down by
Seligman before September 2003. Seligman identified three other arrangements
that permitted frequent trading, all of which had been terminated by September
2002. In January 2004, Seligman, on a voluntary basis, publicly disclosed these
four arrangements to its clients and to shareholders of the Seligman Funds.
Seligman also provided information concerning mutual fund trading practices to
the SEC and the Office of the Attorney General of the State of New York (NYAG).
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc. (now known as RiverSource Fund
Distributors, Inc.), Seligman Data Corp. and Brian T. Zino (collectively, the
Seligman Parties), alleging, in substance, that the Seligman Parties permitted
various persons to engage in frequent trading and, as a result, the prospectus
disclosure used by the registered investment companies then managed by Seligman
was and had been misleading. The NYAG included other related claims and also
claimed that the fees charged by Seligman to the Seligman Funds were excessive.
On March 13, 2009, without admitting or denying any violations of law or
wrongdoing, the Seligman Parties entered into a stipulation of settlement with
the NYAG and settled the claims made by the NYAG. Under the terms of the
settlement, Seligman paid $11.3 million to four Seligman Funds. This settlement
resolved all outstanding matters between the Seligman Parties and the NYAG. In
addition to the foregoing matter, the New York staff of the SEC indicated in
September 2005 that it was considering recommending to the Commissioners of the
SEC the instituting of a formal action against Seligman and Seligman Advisors,
Inc. relating to frequent trading in the Seligman Funds. Seligman responded to
the staff in October 2005 that it believed that any action would be both
inappropriate and unnecessary, especially in light of the fact that Seligman had
previously resolved the underlying issue with the Independent Directors of the
Seligman Funds and made recompense to the affected Seligman Funds. There have
been no further developments with the SEC on this matter.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 45
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
adverse effect on the Funds or the ability of Ameriprise Financial or its
affiliates to perform under their contracts with the Funds. Ameriprise Financial
is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
46 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT
PROXY VOTING ------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling the RiverSource Family of Funds at 1(800) 221-2450; contacting your
financial intermediary; visiting riversource.com/funds; or searching the website
of the Securities and Exchange Commission (SEC) at http://www.sec.gov.
Information regarding how the Fund voted proxies relating to portfolio
securities is filed with the SEC by August 31 for the most recent 12-month
period ending June 30 of that year, and is available without charge by visiting
riversource.com/funds; or searching the website of the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2010 SEMIANNUAL REPORT 47
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. RiverSource(R) mutual funds are
distributed by RiverSource Fund Distributors, Inc., Member
FINRA, and managed by RiverSource Investments, LLC.
RiverSource is part of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C)2010 RiverSource Investments, LLC. S-6509 E (4/10)
</Table>
Item 2. Code of Ethics. Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert. Not applicable for semi-annual
reports.
Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual
reports.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. Investments.
(a) The complete schedule of investments is included in Item 1 of this Form
N-CSR.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not
applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. Not applicable.
Item 10. Submission of matters to a vote of security holders. Not applicable.
Item 11. Controls and Procedures.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form N-CSR,
the registrant's Principal Financial Officer and Principal Executive Officer
have concluded that those disclosure controls and procedures provide reasonable
assurance that the material information required to be disclosed by the
registrant on this report is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's last fiscal half-year (the
registrant's second fiscal half-year in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable for semi-annual reports.
(a)(2) Separate certification for the Registrant's principal executive officer
and principal financial officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of
1940, are attached as EX.99.CERT.
(a)(3) Not applicable.
(b) A certification by the Registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940, is attached
as EX.99.906 CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) RiverSource Dimensions Series, Inc.
By /s/ Patrick T. Bannigan
----------------------------------
Patrick T. Bannigan
President and Principal Executive
Officer
Date April 6, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By /s/ Patrick T. Bannigan
----------------------------------
Patrick T. Bannigan
President and Principal Executive
Officer
Date April 6, 2010
By /s/ Jeffrey P. Fox
----------------------------------
Jeffrey P. Fox
Treasurer and Principal Financial
Officer
Date April 6, 2010