Annual Report
and Prospectus
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE(R)
GROWTH FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
JULY 31, 2007
(Prospectus also enclosed)
RIVERSOURCE GROWTH FUND SEEKS TO
PROVIDE SHAREHOLDERS WITH
LONG-TERM CAPITAL GROWTH.
This annual report includes a prospectus that
describes in detail the Fund's objective,
investment strategy, risks, sales charges, fees
and other matters of interest. Please read the
prospectus carefully before you invest or send
money.
LETTER TO SHAREHOLDERS
Dear Fellow RiverSource Funds Shareholder:
At RiverSource Funds, we are focused on delivering consistent and competitive
investment results. Yet our commitment to shareholders extends beyond investment
performance to include providing Insightful Solutions for Today's Investor(R).
What this means is that we remain dedicated to offering innovative products such
as our Advice-Built Solutions(SM) that are designed to help you achieve your
financial goals.
Our Advice-Built Solutions embed investment advice such as asset allocation and
rebalancing into the investment management process. Advice-embedded solutions
are among the fastest growing investment products in the financial industry in
part because investors find them easy to understand and use in a portfolio. At
RiverSource Funds, we have been at the forefront of this movement with
innovative products such as our Income Builder, Portfolio Builder and Retirement
Plus(SM) Series of funds in addition to RiverSource(R) Strategic Allocation
Fund.
Your financial professional provides a wide range of investment and planning
services in addition to helping you select mutual funds for your portfolio. We
encourage you to talk with your financial professional about our Advice-Built
Solutions and how they may help you reach your specific goals whether you are
saving for retirement or paying for future college expenses or health care
expenses.
Thank you for investing with RiverSource Funds and for your continued support.
Sincerely,
<Table>
/s/ STEPHEN R. LEWIS, JR. /s/ PATRICK T. BANNIGAN
Stephen R. Lewis, Jr. Patrick T. Bannigan
Chairman of the Boards President, RiverSource Funds
</Table>
YOU SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF A
MUTUAL FUND CAREFULLY BEFORE INVESTING. FOR A FREE PROSPECTUS, WHICH CONTAINS
THIS AND OTHER IMPORTANT INFORMATION ABOUT THE FUNDS, CALL (888) 791-3380. READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
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.
- --------------------------------------------------------------------------------
THIS PAGE IS NOT PART OF THE ANNUAL REPORT
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 3
Performance Summary................. 5
Questions & Answers
with Portfolio Management........ 8
The Fund's Long-term Performance ... 12
Fund Expenses Example............... 14
Investments in Securities........... 16
Financial Statements................ 20
Notes to Financial Statements....... 26
Report of Independent Registered
Public Accounting Firm........... 49
Federal Income Tax Information...... 50
Board Members and Officers.......... 52
Approval of Investment Management
Services Agreement............... 56
Proxy Voting........................ 58
Change in Independent Registered
Public Accounting Firm........... 58
</Table>
(DALBAR LOGO)
The RiverSource mutual fund
shareholder reports have been
awarded the Communications Seal
from Dalbar Inc., an independent
financial services research firm.
The Seal recognizes communications
demonstrating a level of
excellence in the industry.
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2 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
FUND SNAPSHOT AT JULY 31, 2007
FUND OBJECTIVE
RiverSource Growth Fund seeks to provide shareholders with long-term capital
growth.
SECTOR BREAKDOWN*
Percentage of portfolio assets
(PIE CHART)
<Table>
Information Technology 21.0%
Health Care 20.0%
Consumer Discretionary 15.8%
Telecommunication Services 14.5%
Consumer Staples 8.6%
Industrials 5.6%
Other(1) 14.5%
</Table>
* Sectors can be comprised of several industries. Please refer to the section
entitled "Investments in Securities" for a complete listing. No single
industry exceeds 25% of portfolio assets.
(1) Includes Financials 5.4%, Materials 3.4%, Energy 3.0%, Options Purchased
0.4% and Cash & Cash Equivalents(2) 2.3%.
(2) Of the 2.3%, 1.2% is due to security lending activity, 0.2% is due to open
options contracts and 0.9% is the Fund's cash equivalent position.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Virgin Media 8.3%
Harman Intl Inds 4.2%
Vodafone Group 4.0%
QUALCOMM 4.0%
Cisco Systems 2.9%
Merck & Co 2.4%
Boston Scientific 2.3%
Genentech 2.3%
Microsoft 1.9%
Altria Group 1.9%
</Table>
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
The Global Industry Classification Standard (GICS) 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.
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.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 3
FUND SNAPSHOT AT JULY 31, 2007
STYLE MATRIX
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund generally
invests.
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 serves 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.
PORTFOLIO MANAGER
<Table>
<Caption>
YEARS IN INDUSTRY
Nick Thakore 14
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A INIDX 03/01/72
Class B IGRBX 03/20/95
Class C AXGCX 06/26/00
Class I AGWIX 03/04/04
Class R2 -- 12/11/06
Class R3 RSCGX 12/11/06
Class R4(1) IGRYX 03/20/95
Class R5 RSWHX 12/11/06
Class W -- 12/01/06
(1) Effective Dec. 11, 2006, Class Y was renamed Class
R4.
Total net assets $3.227 billion
Number of holdings 114
</Table>
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4 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the year ended July 31, 2007
(BAR CHART)
<Table>
RiverSource Growth Fund Class A (excluding sales
charge) +15.20
Russell 1000(R) Growth Index (unmanaged) +19.47
Lipper Large-Cap Growth Funds Index +17.67
</Table>
(see "The Fund's Long-term Performance" for Index descriptions)
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 institution or
visiting riversource.com/funds.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
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.
ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
<Table>
<Caption>
TOTAL
Class A 1.19%
Class B 1.96%
Class C 1.95%
Class I 0.74%
Class R2(a) 1.50%
Class R3(a) 1.27%
Class R4(b) 1.04%(c)
Class R5(a) 0.76%
Class W(d) 1.17%
</Table>
(a) Inception date for Class R2, Class R3 and Class R5 was Dec. 11, 2006.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) The investment manager and its affiliates have contractually agreed to
waive certain fees and to absorb certain expenses until July 31, 2008,
unless sooner terminated at the discretion of the Fund's Board. Any amounts
waived will not be reimbursed by the Fund. Under this agreement, net fund
expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment (that increased the
management fee by 0.09), will not exceed 0.97% for Class R4.
(d) Inception date for Class W was Dec. 1, 2006.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 5
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT JULY 31, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 3/1/72) +15.20% +11.58% +9.55% +0.77% +11.81%
Class B (inception 3/20/95) +14.31% +10.72% +8.70% -0.01% +6.19%
Class C (inception 6/26/00) +14.31% +10.73% +8.71% N/A -6.90%
Class I (inception 3/4/04) +15.70% +12.11% N/A N/A +8.63%
Class R2 (inception 12/11/06) N/A N/A N/A N/A +3.93%*
Class R3 (inception 12/11/06) N/A N/A N/A N/A +4.09%*
Class R4** (inception 3/20/95) +15.39% +11.79% +9.74% +0.92% +7.17%
Class R5 (inception 12/11/06) N/A N/A N/A N/A +4.41%*
Class W (inception 12/1/06) N/A N/A N/A N/A +5.29%*
WITH SALES CHARGE
Class A (inception 3/1/72) +8.58% +9.40% +8.26% +0.17% +11.63%
Class B (inception 3/20/95) +9.31% +9.62% +8.41% -0.01% +6.19%
Class C (inception 6/26/00) +13.31% +10.73% +8.71% N/A -6.90%
</Table>
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6 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
<Table>
<Caption>
AT JUNE 30, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 3/1/72) +18.55% +10.76% +8.49% +2.20% +11.92%
Class B (inception 3/20/95) +17.63% +9.90% +7.65% +1.42% +6.45%
Class C (inception 6/26/00) +17.64% +9.91% +7.65% N/A -6.65%
Class I (inception 3/4/04) +19.06% +11.26% N/A N/A +9.65%
Class R2 (inception 12/11/06) N/A N/A N/A N/A +6.56%*
Class R3 (inception 12/11/06) N/A N/A N/A N/A +6.69%*
Class R4** (inception 3/20/95) +18.72% +10.94% +8.68% +2.36% +7.43%
Class R5 (inception 12/11/06) N/A N/A N/A N/A +6.99%*
Class W (inception 12/1/06) N/A N/A N/A N/A +7.92%*
WITH SALES CHARGE
Class A (inception 3/1/72) +11.73% +8.60% +7.21% +1.60% +11.73%
Class B (inception 3/20/95) +12.63% +8.79% +7.35% +1.42% +6.45%
Class C (inception 6/26/00) +16.64% +9.91% +7.65% N/A -6.65%
</Table>
Class A share performance reflects the maximum sales charge of 5.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 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, Class R5 and Class W shares.
Class I, Class R2, Class R3, Class R4 and Class R5 are available to
institutional investors only. Class W shares are offered through qualifying
discretionary accounts.
* Not annualized.
** Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 7
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Portfolio Manager Nick Thakore discusses the Fund's positioning and
results for the fiscal year ended July 31, 2007.
Q: How did RiverSource Growth Fund perform for the 12 months ended July 31,
2007?
A: RiverSource Growth Fund's Class A shares rose 15.20%, excluding sales
charge, for the 12 months ended July 31, 2007. The Fund underperformed its
benchmark, the Russell 1000(R) Growth Index (Russell Index), which advanced
19.47%, and its peer group as represented by the Lipper Large-Cap Growth
Funds Index, which advanced 17.67% for the same period.
Q: What factors influenced performance during the period?
A: The stock market advanced strongly during the fiscal year, with a notable
shift in market leadership. After lagging for a prolonged period, large-cap
growth stocks outperformed large-cap value stocks, small-cap stocks and
mid-cap stocks.
Though the Fund benefited from the favorable environment, it did not fully
keep pace with the sharp advance of the Russell Index. Positioning in the
health care and materials sectors were key factors in the Fund's
underperformance.
AFTER LAGGING FOR A PROLONGED PERIOD, LARGE-CAP GROWTH STOCKS OUTPERFORMED
LARGE-CAP VALUE STOCKS, SMALL-CAP STOCKS AND MID-CAP STOCKS.
The Fund's health care holdings underperformed, largely due to company-
specific issues. Medical device maker Boston Scientific saw some improvement
in sales of implantable cardioverter defibrillators, but faced continued
pressure in other areas, including sales of drug-coated coronary stents.
Pharmaceutical company Pfizer struggled in the first half of the period due
to disappointing study results for an add-on compound to its widely used
cholesterol drug Lipitor. We reduced holdings of Boston Scientific and Pfizer
during the period. Another pharmaceutical company, AstraZeneca, released
disappointing clinical trial results for some new drugs and bought Medimmune,
an acquisition that was poorly received due to its dilutive effect on
earnings.
The materials sector was incredibly strong during the period, and a number of
small industries and individual stocks performed well. Within the sector, we
- --------------------------------------------------------------------------------
8 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
emphasized precious metals stocks, including gold and silver, which were not
as strong as other groups. We remain optimistic about the prospects for
precious metals, based on limited near-term supply growth and some demand
growth. Given the recent underperformance of gold stocks and the use of gold
as a hedge against inflation and the dollar's decline, we consider the
outlook for these stocks to be quite promising.
On the positive side, positioning in information technology and
telecommunication services were the leading contributors to performance.
Stock selection in the information technology sector was advantageous, driven
by strong results from QUALCOMM, Nokia and Cisco Systems. QUALCOMM, a
semiconductor company that makes chips for handheld wireless devices, is
entering a major product cycle in which we believe they have a virtual
monopoly. Going forward, as many as 90% of all cell phones may have
QUALCOMM's third generation (3G) technology. Cell phone manufacturer Nokia
benefited from a favorable market for wireless handsets. Cisco Systems
benefited from strong results and increasing dominance in the enterprise and
telecommunications networking areas.
In the telecommunication services sector, the Fund emphasized the wireless
segment, which has continued to experience growth. Vodafone Group, a European
wireless telecommunications company, was the Fund's leading contributor to
performance. Vodafone Group began the period at a relatively inexpensive
valuation, and a combination of improving fundamentals and expectations that
were initially quite low led to strong performance. Conversely, the Fund's
holdings of Sprint Nextel detracted, largely due to results early in the
period when the company struggled to execute its growth plans and experienced
deteriorating fundamentals. During the first half of the fiscal year, we used
a rally in the stock to significantly reduce the position due to our concerns
about near-term fundamentals.
Q: What changes did you make to the Fund's portfolio during the fiscal year?
A: We decreased the energy weighting following the sector's strong performance
due to our concern over near-term fundamentals. In our view, commodity prices
seemed too high given the supply/demand scenario.
We still have confidence in the growth potential of telecommunication
services and maintain an emphasis on the sector. However, we adjusted
individual
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 9
QUESTIONS & ANSWERS
telecommunications positions, adding to several European telecommunications
stocks, such as Deutsche Telekom due to attractive valuations, while reducing
exposure to U.S. telecommunications stocks, including Sprint Nextel. Exposure
to wireless companies in emerging markets declined, primarily because Fund
holdings were acquired or performed well, leading us to take profits.
The Fund's health care position increased slightly. Within the sector, we
increased the Fund's holdings of pharmaceutical stock Merck & Co. Though the
market was skeptical that Merck & Co could meet its own earnings growth
forecast, we had confidence in its product development and cost management
efforts.
We reduced the industrials position despite the sector's continued strength,
because we are concerned about the sustainability of growth and the fact that
many industrial companies are already operating at record profit margins.
Q: How are you positioning the Fund going forward?
A: A major theme within the portfolio is our interest in "mega-cap" companies,
that is, the very largest companies within our universe. We believe that
these stocks are more attractively valued than ever before compared to the
rest of the stock market. In addition, they may have faster growth rates and
better earnings revision trends than the overall market.
A MAJOR THEME WITHIN THE PORTFOLIO IS OUR INTEREST IN "MEGA-CAP"
COMPANIES, THAT IS, THE VERY LARGEST COMPANIES WITHIN OUR UNIVERSE.
We have been focusing more on stocks generating high free cash flow. In a
decelerating economy, aggregate free cash flow is likely to decline, making
companies that can maintain it even more attractive. This characteristic can
also make companies more appealing for acquisitions and private equity
buyouts, which have been drivers behind recent market performance.
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource Fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource Fund.
- --------------------------------------------------------------------------------
10 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
THE FUND'S LONG-TERM PERFORMANCE
The chart on the facing page illustrates the total value of an assumed $10,000
investment in RiverSource Growth Fund Class A shares (from 8/1/97 to 7/31/07) as
compared to the performance of two widely cited performance indices, Russell
1000 Growth Index and the Lipper Large-Cap Growth Funds Index. In comparing the
Fund's Class A shares to these indices, you should take into account the fact
that the Fund's performance reflects the maximum sales charge of 5.75%, while
such charges are not reflected in the performance of the indices. Returns for
the Fund include the reinvestment of any distribution paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. 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 institution or visiting riversource.com/funds. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
<Table>
<Caption>
SINCE
Results at July 31, 2007 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION(3)
RIVERSOURCE GROWTH FUND (INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,858 $13,093 $14,871 $9,220 $492,300
Average annual total return +8.58% +9.40% +8.26% +0.17% +11.63%
RUSSELL 1000 GROWTH INDEX(1)
Cumulative value of $10,000 $11,947 $13,405 $16,237 $12,526 N/A
Average annual total return +19.47% +10.26% +10.18% +3.35% N/A
LIPPER LARGE-CAP GROWTH FUNDS INDEX(2)
Cumulative value of $10,000 $11,767 $13,383 $15,478 $12,563 N/A
Average annual total return +17.67% +10.20% +9.13% +2.80% N/A
</Table>
Results for other share classes can be found on page 6.
- --------------------------------------------------------------------------------
12 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN RIVERSOURCE GROWTH FUND LINE
GRAPH)
<Table>
<Caption>
RIVERSOURCE GROWTH FUND
CLASS A (INCLUDES SALES RUSSELL 1000(R) GROWTH LIPPER LARGE-CAP GROWTH
CHARGE) ($9,220) INDEX(1) ($12,526) FUNDS INDEX(2) ($12,563)
----------------------- ---------------------- ------------------------
'97 9,425 10,000 10,000
'98 10,021 11,992 12,016
'99 12,074 14,875 14,771
'00 15,818 18,502 18,029
'01 9,152 12,015 11,827
'02 6,450 8,561 8,518
'03 7,033 9,558 9,282
'04 7,323 10,371 9,852
'05 8,746 11,723 11,417
'06 8,832 11,634 11,205
'07 9,220 12,526 12,563
</Table>
(1) The Russell 1000 Growth Index, an unmanaged index, measures the performance
of those stocks in the Russell 1000 Index with higher price-to-book ratios
and higher forecasted growth values. The index reflects reinvestment of all
distributions and changes in market prices.
(2) The Lipper Large-Cap Growth Funds Index includes the 30 largest large-cap
growth 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.
(3) Fund data is from March 1, 1972. The Fund began operating before the
inception of the Russell 1000 Growth Index and Lipper peer group.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 13
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 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). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the acquired funds expense ratio as of the 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 ended July 31, 2007.
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 "Expenses paid during the period" to estimate the
expenses you paid on your account during this 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.
- --------------------------------------------------------------------------------
14 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
FEB. 1, 2007 JULY 31, 2007 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $1,004.00 $5.76 1.16%
Hypothetical
(5% return before
expenses) $1,000 $1,019.04 $5.81 1.16%
Class B
Actual(b) $1,000 $1,000.00 $9.52 1.92%
Hypothetical
(5% return before
expenses) $1,000 $1,015.27 $9.59 1.92%
Class C
Actual(b) $1,000 $1,000.00 $9.52 1.92%
Hypothetical
(5% return before
expenses) $1,000 $1,015.27 $9.59 1.92%
Class I
Actual(b) $1,000 $1,006.00 $3.58 .72%
Hypothetical
(5% return before
expenses) $1,000 $1,021.22 $3.61 .72%
Class R2
Actual(b) $1,000 $1,002.10 $7.45 1.50%
Hypothetical
(5% return before
expenses) $1,000 $1,017.36 $7.50 1.50%
Class R3
Actual(b) $1,000 $1,003.30 $6.31 1.27%
Hypothetical
(5% return before
expenses) $1,000 $1,018.50 $6.36 1.27%
Class R4*
Actual(b) $1,000 $1,004.80 $5.07 1.02%
Hypothetical
(5% return before
expenses) $1,000 $1,019.74 $5.11 1.02%
Class R5
Actual(b) $1,000 $1,005.80 $3.78 .76%
Hypothetical
(5% return before
expenses) $1,000 $1,021.03 $3.81 .76%
Class W
Actual(b) $1,000 $1,003.90 $5.76 1.16%
Hypothetical
(5% return before
expenses) $1,000 $1,019.04 $5.81 1.16%
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(a) Expenses are equal to the Fund's annualized expense ratio as indicated
above, multiplied by the average account value over the period, multiplied
by 181/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended July 31, 2007: +0.40%
for Class A, +0.00% for Class B, +0.00% for Class C, +0.60% for Class I,
+0.21% for Class R2, +0.33% for Class R3, +0.48% for Class R4, +0.58%. for
Class R5 and +0.39% for Class W.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 15
INVESTMENTS IN SECURITIES
JULY 31, 2007
(Percentages represent value of investments compared to net assets)
<Table>
<Caption>
COMMON STOCKS (97.4%)
ISSUER SHARES VALUE(A)
AEROSPACE & DEFENSE (2.4%)
Boeing 517,321 $53,506,511
Honeywell Intl 269,205 15,481,980
Lockheed Martin 89,507 8,814,649
---------------
Total 77,803,140
- -----------------------------------------------------------------------------------
BEVERAGES (2.4%)
Coca-Cola 347,444 18,105,307
PepsiCo 927,982 60,894,179
---------------
Total 78,999,486
- -----------------------------------------------------------------------------------
BIOTECHNOLOGY (4.6%)
Amgen 718,446(b) 38,609,288
Biogen Idec 495,140(b) 27,995,216
Celgene 155,011(b) 9,387,466
Genentech 985,691(b) 73,315,696
---------------
Total 149,307,666
- -----------------------------------------------------------------------------------
CAPITAL MARKETS (2.3%)
Blackstone Group LP 23,715(b) 569,397
Fortress Investment Group LLC Cl A 236,765(e) 4,491,432
Goldman Sachs Group 66,393 12,504,458
KKR Private Equity Investors LP Unit 2,440,935(g) 49,306,887
Oaktree Capital Group LLC Cl A Unit 230,000(b,d,g) 7,590,000
---------------
Total 74,462,174
- -----------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (10.3%)
Alcatel-Lucent ADR 387,268(c) 4,492,309
Avaya 1,284,610(b) 21,247,449
Cisco Systems 3,296,939(b) 95,314,506
JDS Uniphase 1,359,682(b,e) 19,484,243
Nokia ADR 837,408(c) 23,983,365
QUALCOMM 3,139,483 130,759,468
Telefonaktiebolaget LM Ericsson ADR 745,871(c) 27,903,034
Tellabs 553,512(b) 6,282,361
---------------
Total 329,466,735
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
COMPUTERS & PERIPHERALS (2.5%)
Apple 362,850(b) $47,809,116
Brocade Communications Systems 127,906(b) 900,458
Dell 294,049(b) 8,224,551
Hewlett-Packard 535,073 24,629,410
---------------
Total 81,563,535
- -----------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.2%)
KBR 187,152(b) 6,005,708
- -----------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (5.5%)
AT&T 789,842 30,930,213
Chunghwa Telecom ADR 80,014(c) 1,326,632
COLT Telecom Group 816,308(b,c) 2,540,890
Deutsche Telekom 2,698,810(c) 46,379,814
Deutsche Telekom ADR 1,298,073(c) 22,300,894
Indosat 8,701,500(c) 6,842,286
Qwest Communications Intl 2,056,667(b) 17,543,370
Telefonica 931,652(c) 21,805,040
Telefonica ADR 147,367(c) 10,349,584
Telenor ADR 295,000(c) 16,301,346
---------------
Total 176,320,069
- -----------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (0.2%)
Transocean 70,925(b) 7,620,891
- -----------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (0.1%)
CVS Caremark 92,812 3,266,054
- -----------------------------------------------------------------------------------
FOOD PRODUCTS (1.3%)
Dean Foods 219,304 6,309,376
Kraft Foods Cl A 1,135,834 37,198,564
---------------
Total 43,507,940
- -----------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (2.9%)
Boston Scientific 5,750,917(b) 75,624,559
Medtronic 330,666 16,754,846
---------------
Total 92,379,405
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
16 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HEALTH CARE PROVIDERS & SERVICES (3.5%)
Cardinal Health 747,493 $49,132,715
McKesson 554,004 31,999,271
UnitedHealth Group 650,718 31,514,273
---------------
Total 112,646,259
- -----------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (--%)
Pinnacle Entertainment 11,527(b) 305,581
- -----------------------------------------------------------------------------------
HOUSEHOLD DURABLES (4.2%)
Harman Intl Inds 1,163,171 134,927,836
Tele Atlas 75,879(b,c) 2,180,219
---------------
Total 137,108,055
- -----------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (2.7%)
Colgate-Palmolive 601,212 39,679,992
Procter & Gamble 783,578 48,472,135
---------------
Total 88,152,127
- -----------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (1.8%)
General Electric 1,526,011 59,148,186
- -----------------------------------------------------------------------------------
INSURANCE (2.9%)
ACE 245,058(c) 14,144,748
AFLAC 206,615 10,768,774
American Intl Group 696,550 44,704,578
Hartford Financial Services Group 40,168 3,690,234
Prudential Financial 212,839 18,863,921
---------------
Total 92,172,255
- -----------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (3.2%)
eBay 948,762(b) 30,739,889
Google Cl A 98,197(b) 50,080,469
VeriSign 407,075(b) 12,086,057
Yahoo! 480,135(b) 11,163,139
---------------
Total 104,069,554
- -----------------------------------------------------------------------------------
IT SERVICES (0.1%)
HCL Technologies 240,310(c) 1,862,640
- -----------------------------------------------------------------------------------
MACHINERY (0.3%)
Flowserve 113,498 8,202,500
- -----------------------------------------------------------------------------------
MEDIA (11.3%)
Charter Communications Cl A 2,717,734(b) 11,034,000
Comcast Cl A 726,932(b) 19,096,504
Idearc 18,849 654,249
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MEDIA (CONT.)
News Corp Cl A 754,236 $15,929,464
Time Warner Cable Cl A 93,358(b) 3,568,143
Virgin Media 10,774,573(h) 267,640,393
Vivendi 93,060(c) 3,953,080
WorldSpace Cl A 419,274(b,e) 2,046,057
XM Satellite Radio Holdings Cl A 3,376,167(b,h) 38,657,112
---------------
Total 362,579,002
- -----------------------------------------------------------------------------------
METALS & MINING (3.4%)
Barrick Gold 109,574(c) 3,604,985
Coeur d'Alene Mines 5,707,601(b,e) 22,316,720
Lihir Gold 21,587,339(b,c) 56,268,218
Newmont Mining 606,738 25,331,312
Stillwater Mining 256,952(b) 2,338,263
---------------
Total 109,859,498
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (2.8%)
Chevron 108,490 9,249,857
Exxon Mobil 689,505 58,697,562
Kinder Morgan Management LLC --(b) 19
Total 281,264(c) 22,151,245
---------------
Total 90,098,683
- -----------------------------------------------------------------------------------
PHARMACEUTICALS (9.0%)
AstraZeneca 1,158,953(c) 59,897,687
Bristol-Myers Squibb 621,282 17,650,622
Eli Lilly & Co 355,995 19,255,770
Johnson & Johnson 347,470 21,021,935
Merck & Co 1,550,309 76,972,841
Pfizer 2,152,041 50,594,484
Schering-Plough 799,724 22,824,123
Wyeth 449,988 21,833,418
---------------
Total 290,050,880
- -----------------------------------------------------------------------------------
ROAD & RAIL (0.9%)
Hertz Global Holdings 1,344,437(b) 30,101,944
- -----------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (3.1%)
Atmel 3,750,256(b) 20,213,880
Intel 1,881,906 44,450,619
LSI 1,301,808(b) 9,373,018
Spansion Cl A 2,441,983(b) 25,909,440
United Microelectronics ADR 232,402(c) 750,658
---------------
Total 100,697,615
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 17
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SOFTWARE (1.9%)
Microsoft 2,155,236 $62,480,292
- -----------------------------------------------------------------------------------
SPECIALTY RETAIL (0.3%)
Office Depot 46,627(b) 1,163,810
TJX Companies 327,663 9,092,648
---------------
Total 10,256,458
- -----------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.2%)
Countrywide Financial 229,462 6,463,945
- -----------------------------------------------------------------------------------
TOBACCO (1.9%)
Altria Group 939,104 62,422,243
- -----------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (9.1%)
ALLTEL 358,358 23,633,710
America Movil ADR Series L 126,236(c) 7,559,012
Hutchison Telecommunications Intl 18,581,402(c) 23,268,898
Millicom Intl Cellular 170,734(b,c) 13,709,940
Orascom Telecom Holding GDR 125,593(c,e) 8,439,850
Sprint Nextel 2,670,852 54,832,592
Vivo Participacoes ADR 1,389,500(c) 6,238,855
Vodafone Group 43,513,834(c) 130,809,030
Vodafone Group ADR 823,585(c) 24,995,805
---------------
Total 293,487,692
- -----------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $2,963,166,182) $3,142,868,212
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
OPTIONS PURCHASED (0.4%)
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
CALLS
QUALCOMM 1,163 $50.00 Jan. 2008 $174,450
Virgin Media 11,090 30.00 Jan. 2008 831,750
Virgin Media 11,090 27.50 Jan. 2008 1,608,050
- --------------------------------------------------------------------------------------------------------------------------
PUTS
XM Satellite Radio Holdings Cl A 25,224 15.00 Jan. 2008 10,089,600
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OPTIONS PURCHASED
(Cost: $11,652,813) $12,703,850
- --------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (2.4%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 75,870,781(i) $75,870,781
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $75,870,781) $75,870,781
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $3,050,689,776)(j) $3,231,442,843
===================================================================================
</Table>
NOTES TO INVESTMENTS IN SECURITIES
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At July 31, 2007, the
value of foreign securities represented 17.5% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the Fund's
Board of Directors. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At July 31,
2007, the value of these securities amounted to $7,590,000 or 0.2% of net
assets.
(e) At July 31, 2007, security was partially or fully on loan. See Note 6 to
the financial statements.
(f) Cash collateral received from security lending activity is invested in an
affiliated money market fund and represents 1.2% of net assets. See Note 6
to the financial statements. Cash collateral received for open options
contracts is invested in an affiliated money market fund and represents
0.2% of net assets. See Note 1 to the financial statements. 1.0% of net
assets is the Fund's cash equivalent position.
- --------------------------------------------------------------------------------
18 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
NOTES TO INVESTMENTS IN SECURITIES (CONTINUED)
(g) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). These securities may be valued at fair
value according to procedures approved, in good faith, by the Fund's Board
of Directors. Information concerning such security holdings at July 31,
2007, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ----------------------------------------------------------------------------------
KKR Private Equity Investors LP Unit 05-01-06 thru 07-24-07 $53,952,761
Oaktree Capital Group LLC Cl A Unit* 05-21-07 thru 07-20-07 9,765,100
</Table>
* Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended.
(h) At July 31, 2007, securities valued at $85,310,520 were held to cover open
call options written as follows (see Note 7 to the financial statements):
<Table>
<Caption>
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
- ----------------------------------------------------------------------------------------
Virgin Media 11,090 $30.00 Jan. 2008 $831,750
XM Satellite Radio
Holdings Cl A 25,224 20.00 Jan. 2008 504,480
- ----------------------------------------------------------------------------------------
Total value $1,336,230
- ----------------------------------------------------------------------------------------
</Table>
At July 31, 2007, cash or short-term securities were designated to cover
open put options written as follows (see Note 7 to the financial
statements):
<Table>
<Caption>
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
- ----------------------------------------------------------------------------------------
XM Satellite Radio
Holdings Cl A 25,224 $12.50 Jan. 2008 $5,549,280
</Table>
(i) Affiliated Money Market Fund -- See Note 8 to the financial statements.
(j) At July 31, 2007, the cost of securities for federal income tax purposes
was $3,081,131,055 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $251,190,208
Unrealized depreciation (100,878,420)
- ------------------------------------------------------------------------------
Net unrealized appreciation $150,311,788
- ------------------------------------------------------------------------------
</Table>
The Global Industry Classification Standard (GICS) 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.
HOW TO FIND INFORMATION ABOUT THE FUND'S 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 disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 19
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2007
<Table>
ASSETS
Investments in securities, at value (Note 1)
Unaffiliated issuers* (identified cost $2,974,818,995) $3,155,572,062
Affiliated money market fund (identified cost
$75,870,781) (Note 8) 75,870,781
- ------------------------------------------------------------------------------
Total investments in securities (identified cost
$3,050,689,776) 3,231,442,843
Cash in bank on demand deposit 100,297
Foreign currency holdings (identified cost $279,190) (Note
1) 276,065
Capital shares receivable 1,451,776
Dividends and accrued interest receivable 5,952,417
Receivable for investment securities sold 65,440,809
Unrealized appreciation on forward foreign currency
contracts held, at value (Note 5) 1,626,082
- ------------------------------------------------------------------------------
Total assets 3,306,290,289
- ------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 2,444,581
Payable for investment securities purchased 26,710,978
Payable upon return of securities loaned (Note 6) 37,808,900
Payable for cash collateral held on open options contracts
(Note 1) 5,317,020
Accrued investment management services fee 51,157
Accrued distribution fee 27,444
Accrued transfer agency fee 1,509
Accrued administrative services fee 4,612
Accrued plan administration services fee 1,011
Other accrued expenses 286,378
Options contracts written, at value (premiums received
$8,319,762) (Note 7) 6,885,510
- ------------------------------------------------------------------------------
Total liabilities 79,539,100
- ------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $3,226,751,189
==============================================================================
</Table>
- --------------------------------------------------------------------------------
20 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
JULY 31, 2007
<Table>
REPRESENTED BY
Capital stock -- $.01 par value (Note 1) $ 994,514
Additional paid-in capital 3,334,999,400
Undistributed net investment income 21,380,472
Accumulated net realized gain (loss) (Note 10) (314,505,270)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (Note 5) 183,882,073
- ------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $3,226,751,189
==============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $2,392,774,288
Class B $ 369,487,313
Class C $ 20,332,352
Class I $ 298,304,650
Class R2 $ 5,135
Class R3 $ 5,143
Class R4 $ 145,831,935
Class R5 $ 5,159
Class W $ 5,214
Net asset value per share of outstanding
capital stock: Class A shares(1) 73,100,079 $ 32.73
Class B shares 12,401,019 $ 29.79
Class C shares 682,923 $ 29.77
Class I shares 8,893,003 $ 33.54
Class R2 shares 155 $ 33.13
Class R3 shares 155 $ 33.18
Class R4 shares 4,373,779 $ 33.34
Class R5 shares 155 $ 33.28
Class W shares 157 $ 33.21
- -------------------------------------------------------------------------------------------
* Including securities on loan, at value
(Note 6) $ 33,616,930
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $34.73. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 21
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 2007
<Table>
INVESTMENT INCOME
Income:
Dividends $ 59,682,896
Interest 1,270,908
Income distributions from affiliated money market fund (Note
8) 5,549,293
Fee income from securities lending (Note 6) 524,804
Less foreign taxes withheld (1,474,003)
- --------------------------------------------------------------------------
Total income 65,553,898
- --------------------------------------------------------------------------
Expenses (Note 2):
Investment management services fee 22,705,786
Distribution fee
Class A 6,060,271
Class B 4,642,489
Class C 201,604
Class R2 16
Class R3 8
Class W 9
Transfer agency fee
Class A 4,761,442
Class B 999,373
Class C 41,758
Class R2 2
Class R3 2
Class R4 221,474
Class R5 2
Class W 7
Service fee -- Class R4 93,050
Administrative services fees and expenses 1,763,087
Plan administration services fee
Class R2 8
Class R3 8
Class R4 311,647
Compensation of board members 62,840
Custodian fees 303,550
Printing and postage 482,500
Registration fees 133,300
Professional fees 95,538
Other 147,342
- --------------------------------------------------------------------------
Total expenses 43,027,113
Earnings and bank fee credits on cash balances (Note 2) (270,712)
- --------------------------------------------------------------------------
Total net expenses 42,756,401
- --------------------------------------------------------------------------
Investment income (loss) -- net 22,797,497
- --------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
22 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
STATEMENT OF OPERATIONS (CONTINUED)
YEAR ENDED JULY 31, 2007
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (Note 3) $247,504,400
Foreign currency transactions 31,204
Options contracts written (Note 7) (2,403,085)
- --------------------------------------------------------------------------
Net realized gain (loss) on investments 245,132,519
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies 227,422,901
- --------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 472,555,420
- --------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $495,352,917
==========================================================================
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 23
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 22,797,497 $ 21,536,361
Net realized gain (loss) on investments 245,132,519 378,492,867
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies 227,422,901 (369,575,760)
- ---------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 495,352,917 30,453,468
- ---------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (17,087,134) (766,414)
Class C (21,069) --
Class I (3,983,286) (240,149)
Class R2 (55) N/A
Class R3 (55) N/A
Class R4 (1,999,289) (164,443)
Class R5 (56) N/A
Class W (55) N/A
- ---------------------------------------------------------------------------------------
Total distributions (23,090,999) (1,171,006)
- ---------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Proceeds from sales
Class A shares (Note 2) 279,305,597 723,627,727
Class B shares 40,223,465 155,729,842
Class C shares 3,730,834 8,410,448
Class I shares 102,896,983 109,795,697
Class R2 shares 5,000 N/A
Class R3 shares 5,000 N/A
Class R4 shares 28,815,906 54,128,249
Class R5 shares 5,000 N/A
Class W shares 5,000 N/A
Reinvestment of distributions at net asset value
Class A shares 16,669,054 748,320
Class C shares 20,543 --
Class I shares 3,983,218 240,142
Class R4 shares 1,999,289 164,443
</Table>
- --------------------------------------------------------------------------------
24 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
Payments for redemptions
Class A shares (574,909,608) (500,308,297)
Class B shares (Note 2) (201,026,288) (269,341,808)
Class C shares (Note 2) (4,753,464) (4,706,122)
Class I shares (110,663,694) (3,449,675)
Class R2 shares -- N/A
Class R3 shares -- N/A
Class R4 shares (184,854,678) (96,349,570)
Class R5 shares -- N/A
Class W shares -- N/A
- ---------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (598,542,843) 178,689,396
- ---------------------------------------------------------------------------------------
Total increase (decrease) in net assets (126,280,925) 207,971,858
Net assets at beginning of year 3,353,032,114 3,145,060,256
- ---------------------------------------------------------------------------------------
Net assets at end of year $3,226,751,189 $3,353,032,114
=======================================================================================
Undistributed net investment income $ 21,380,472 $ 21,642,770
- ---------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 25
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a series of RiverSource Large Cap Series, Inc. and is registered
under the Investment Company Act of 1940 (as amended) as a diversified, open-end
management investment company. RiverSource Large Cap Series, Inc. has 10 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the Board. The Fund invests primarily in common stocks
of U.S. and foreign companies that appear to offer growth opportunities.
The Fund offers Class A, Class B, Class C, Class I and Class R4 shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I and Class R4 shares have no sales charge and are offered only to
qualifying institutional investors.
Effective Dec. 11, 2006, the Board approved renaming Class Y as Class R4,
terminating the shareholder servicing agreement, revising the fee structure
under the transfer agent agreement from account-based to asset-based, and
adopting a plan administration services agreement.
At July 31, 2007, Ameriprise Financial, Inc. (Ameriprise Financial), the parent
company of RiverSource Investments, LLC (the Investment Manager) and the
affiliated funds-of-funds owned 100% of Class I shares.
Effective Dec. 11, 2006, the Fund offers additional classes of shares, Class R2,
Class R3 and Class R5, to certain institutional investors. These shares are sold
without a front-end sales charge or CDSC. At July 31, 2007, Ameriprise Financial
owned 100% of Class R2, Class R3 and Class R5 shares.
Effective Dec. 1, 2006, the Fund offers an additional class of shares, Class W,
through qualifying discretionary accounts. Class W shares are sold without a
front-end sales charge or CDSC. At July 31, 2007, Ameriprise Financial owned
100% of Class W 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 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.
- --------------------------------------------------------------------------------
26 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
The Fund's significant accounting policies are summarized below:
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 each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Foreign securities are valued based on quotations from the principal market in
which such securities are normally traded. The procedures adopted by the Board
of Directors of the funds 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 equities) 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 New York Stock Exchange 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 New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial will fair value foreign
equity securities pursuant to procedures adopted by the Board of Directors of
the funds, 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
New York Stock Exchange. Swap transactions are valued through an authorized
pricing service, broker, or an internal model. Short-term securities maturing in
more than 60 days from the valuation date are valued at the market price or
approximate market value based on current interest rates; those maturing in 60
days or less are valued at amortized cost.
ILLIQUID SECURITIES
At July 31, 2007, investments in securities included issues that are illiquid
which, the Fund currently limits to 15% of net assets, at market value, at the
time of purchase. Prior to July 12, 2007, the Fund limited the percent held in
securities and other instruments that were illiquid to 10% of the Fund's net
assets. The aggregate value of such securities as of July 31, 2007 was
$56,896,887 representing 1.8% of net assets. These securities may be valued at
fair value
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 27
according to procedures approved, in good faith, by the Board. According to
board guidelines, certain unregistered securities are determined to be liquid
and are not included within the 15% limitation specified above. Assets are
liquid if they can be sold or disposed of in the ordinary course of business
within seven days at approximately the value which the asset is valued by the
Fund.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the Fund may buy and write options traded on any
U.S. or foreign exchange or in the over-the-counter market where completing the
obligation depends upon the credit standing of the other party. Cash collateral
may be collected by the Fund to secure certain over-the-counter options trades.
Cash collateral held by the Fund for such option trades must be returned to the
counterparty upon closure, exercise or expiration of the contract. The Fund also
may buy and sell put and call options and write covered call options on
portfolio securities as well as write cash-secured put options. The risk in
writing a call option is that the Fund gives up the opportunity for profit if
the market price of the security increases. The risk in writing a put option is
that the Fund may incur a loss if the market price of the security decreases and
the option is exercised. The risk in buying an option is that the Fund pays a
premium whether or not the option is exercised. The Fund also has the additional
risk of being unable to enter into a closing transaction if a liquid secondary
market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Fund will
realize a gain or loss when the option transaction expires or closes. When an
option is exercised, the proceeds on sales for a written call option, the
purchase cost for a written put option or the cost of a security for a purchased
put or call option is adjusted by the amount of premium received or paid.
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund also may buy and write put and call options on these futures contracts.
Risks of entering into futures contracts and related options include 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.
Futures are valued daily based upon the last sale price at the close of 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
- --------------------------------------------------------------------------------
28 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
loss when the contract is closed or expires. At July 31, 2007, the Fund had no
outstanding futures contracts.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
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. At July 31, 2007, foreign currency holdings consisted of
multiple denominations, primarily Malaysian Ringgits and Indonesian Rupiahs.
The Fund may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate fluctuation.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates from an
independent pricing service. The Fund is subject to the credit risk that the
other party will not complete its contract obligations.
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.
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 to the shareholders. No provision for income or excise
taxes is thus required.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred losses on
certain futures contracts and losses deferred due to "wash sale" transactions.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for
federal income tax purposes. Also, due to the timing of dividend distributions,
the fiscal year in
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 29
which amounts are distributed may differ from the year that the income or
realized gains (losses) were recorded by the Fund.
On the statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by $31,204
and accumulated net realized loss has been increased by $31,204.
The tax character of distributions paid for the years indicated is as follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
- ----------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income............................ $17,087,134 $766,414
Long-term capital gain..................... -- --
CLASS B
Distributions paid from:
Ordinary income............................ -- --
Long-term capital gain..................... -- --
CLASS C
Distributions paid from:
Ordinary income............................ 21,069 --
Long-term capital gain..................... -- --
CLASS I
Distributions paid from:
Ordinary income............................ 3,983,286 240,149
Long-term capital gain..................... -- --
CLASS R2(A)
Distributions paid from:
Ordinary income............................ 55 N/A
Long-term capital gain..................... -- N/A
CLASS R3(A)
Distributions paid from:
Ordinary income............................ 55 N/A
Long-term capital gain..................... -- N/A
CLASS R4(B)
Distributions paid from:
Ordinary income............................ 1,999,289 164,443
Long-term capital gain..................... -- --
CLASS R5(A)
Distributions paid from:
Ordinary income............................ 56 N/A
Long-term capital gain..................... -- N/A
</Table>
- --------------------------------------------------------------------------------
30 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
YEAR ENDED JULY 31, 2007 2006
- ----------------------------------------------------------------------------
CLASS W(C)
Distributions paid from:
Ordinary income............................ $ 55 N/A
Long-term capital gain..................... -- N/A
</Table>
(a) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) For the period from Dec. 1, 2006 (inception date) to July 31, 2007.
At July 31, 2007, the components of distributable earnings on a tax basis are as
follows:
<Table>
Undistributed ordinary income............................ $ 23,220,406
Undistributed accumulated long-term gain................. $ --
Accumulated realized loss................................ $(284,278,656)
Unrealized appreciation (depreciation)................... $ 151,815,525
</Table>
RECENT ACCOUNTING PRONOUNCEMENTS
On Sept. 20, 2006, the Financial Accounting Standards Board (FASB) released
Statement of Financial Accounting Standards No. 157 "Fair Value Measurements"
(SFAS 157). SFAS 157 establishes an authoritative definition of fair value, sets
out a framework for measuring fair value, and requires additional disclosures
about fair-value measurements. The application of SFAS 157 is required for
fiscal years beginning after Nov. 15, 2007 and interim periods within those
fiscal years. The impact of SFAS 157 on the Fund's financial statements is being
evaluated.
In June 2006, the FASB issued FASB Interpretation 48 (FIN 48), "Accounting for
Uncertainty in Income Taxes." FIN 48 clarifies the accounting for uncertainty in
income taxes recognized in accordance with FASB Statement 109, "Accounting for
Income Taxes." FIN 48 prescribes a two-step process to recognize and measure a
tax position taken or expected to be taken in a tax return. The first step is to
determine whether a tax position has met the more-likely-than-not recognition
threshold and the second step is to measure a tax position that meets the
threshold to determine the amount of benefit to recognize. FIN 48 also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. FIN 48 is effective for fiscal
years beginning after Dec. 15, 2006. Tax positions of the Fund are being
evaluated to determine the impact, if any, to the Fund. The adoption of FIN 48
is not anticipated to have a material impact on the Fund.
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.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 31
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Interest income, including amortization of premium, market discount and
original issue discount using the effective interest method, is accrued daily.
2. EXPENSES AND SALES CHARGES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.60%
to 0.375% annually as the Fund's assets increase. The fee may be adjusted upward
or downward by a performance incentive adjustment based on a comparison of the
performance of Class A shares of the Fund to the Lipper Large-Cap Growth 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 increased the fee by
$2,987,141 for the year ended July 31, 2007. The management fee for the year
ended July 31, 2007, was 0.66% of the Fund's average daily net assets, including
an adjustment under the terms of the performance incentive agreement.
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.06% to 0.03% annually as the
Fund's assets increase.
Other expenses in the amount of $32,815 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.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
Under a Deferred Compensation Plan (the Plan), non-interested board members 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
RiverSource funds. The Fund's liability for these amounts is adjusted for market
value changes and remains in the Fund until distributed in accordance with the
Plan.
Professional fees include fees paid by the Fund for legal services and
independent registered public accounting firm services.
- --------------------------------------------------------------------------------
32 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual fee per shareholder account for this service as follows:
- - Class A $19.50
- - Class B $20.50
- - Class C $20.00
Effective Dec. 11, 2006, as part of the Board's approval to rename Class Y as
Class R4, the fee structure under the Transfer Agency Agreement was revised from
an account-based fee for Class Y to an asset-based fee for Class R4. The Fund
pays the Transfer Agent an annual asset-based fee at a rate of 0.05% of the
Fund's average daily net asset attributable to Class R4 shares. Prior to Dec.
11, 2006, the Fund paid the Transfer Agent an annual account-based fee of $17.50
per shareholder account.
In addition, the Fund 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 and Class R5 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.
Prior to Dec. 11, 2006, Class I paid a transfer agency fee at an annual rate per
shareholder account of $1. Effective Dec. 11, 2006, this fee was eliminated.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the statement of operations.
The Fund has agreements with Ameriprise Financial Services, Inc. and RiverSource
Distributors, Inc. (collectively, 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, Class R3 and Class W 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.
Effective Dec. 11, 2006, a Plan Administration Services Agreement was adopted
for the restructured Class R4 and the introduction of Class R2 and Class R3. The
fee is calculated at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares.
Prior to Dec. 11, 2006, under a Shareholder Service Agreement, the Fund paid the
Distributor a fee for service provided to shareholders by the Distributor and
other servicing agents with respect to Class Y shares. The fee was calculated at
a rate of 0.10% of the Fund's average daily net assets attributable to Class Y
shares. Effective Dec. 11, 2006, this agreement was terminated.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 33
Sales charges received by the Distributor for distributing Fund shares were
$2,629,101 for Class A, $396,657 for Class B and $2,421 for Class C for the year
ended July 31, 2007.
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.
Effective Dec. 11, 2006, with the renaming of Class Y as Class R4, the
Investment Manager and its affiliates have contractually agreed to waive certain
fees and expenses until July 31, 2008, unless sooner terminated at the
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 0.97% for Class R4.
During the year ended July 31, 2007, the Fund's custodian and transfer agency
fees were reduced by $270,712 as a result of earnings and bank fee credits from
overnight cash balances. The Fund also pays custodian fees to Ameriprise Trust
Company, an affiliate of Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $3,263,138,796 and $3,915,171,059, respectively, for the
year ended July 31, 2007. Realized gains and losses are determined on an
identified cost basis.
- --------------------------------------------------------------------------------
34 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- --------------------------------------------------------------------------------------------
Class A 8,592,129 525,999 (18,184,913) (9,066,785)
Class B 1,395,545 -- (6,731,640) (5,336,095)
Class C 129,341 709 (165,607) (35,557)
Class I 3,255,973 123,015 (3,216,500) 162,488
Class R2(a) 155 -- -- 155
Class R3(a) 155 -- -- 155
Class R4(b) 887,179 62,013 (5,678,782) (4,729,590)
Class R5(a) 155 -- -- 155
Class W(c) 157 -- -- 157
- --------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED JULY 31, 2006
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- --------------------------------------------------------------------------------------------
Class A 25,321,178 25,727 (17,311,509) 8,035,396
Class B 5,918,299 -- (10,403,829) (4,485,530)
Class C 320,095 -- (178,061) 142,034
Class I 3,763,917 8,083 (113,992) 3,658,008
Class R4(b) 1,827,502 5,559 (3,287,393) (1,454,332)
- --------------------------------------------------------------------------------------------
</Table>
(a) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) For the period from Dec. 1, 2006 (inception date) to July 31, 2007.
5. FORWARD FOREIGN CURRENCY CONTRACTS
At July 31, 2007, the Fund had forward foreign currency exchange contracts that
obligate it to deliver currencies at specified future dates. The unrealized
appreciation on these contracts is included in the accompanying financial
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 35
statements. See "Summary of significant accounting policies." The terms of the
open contracts are as follows:
<Table>
<Caption>
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED
EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION
- -------------------------------------------------------------------------------------------------
Aug. 2, 2007 6,981,334 9,552,887 $ 813 $--
European Monetary Unit U.S. Dollar
Aug. 17, 2007 50,696,127 103,626,432 677,588 --
British Pound U.S. Dollar
Aug. 17, 2007 57,500,000 117,557,025 791,526 --
British Pound U.S. Dollar
Aug. 30, 2007 35,500,000 48,698,084 72,556 --
European Monetary Unit U.S. Dollar
Aug. 30, 2007 36,083,023 49,507,712 83,599 --
European Monetary Unit U.S. Dollar
- -------------------------------------------------------------------------------------------------
Total $1,626,082 $--
- -------------------------------------------------------------------------------------------------
</Table>
6. LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, the Fund may lend securities
representing up to one-third of the value of its total assets (which includes
collateral for securities on loan) to broker-dealers, banks, or other
institutional borrowers of securities. The Fund receives collateral in the form
of cash and U.S. government securities, equal to at least 100% of the value of
securities loaned, which is marked to the market value of the loaned securities
daily until the securities are returned, e.g., if the value of the securities on
loan increases, additional cash collateral is provided by the borrower. The
Investment Manager serves as securities lending agent for the Fund under the
investment management services agreement pursuant to which the Fund has agreed
to reimburse the Investment Manager for expenses incurred by it in connection
with the lending program, and pursuant to guidelines adopted by and under the
oversight of the Board. At July 31, 2007, securities valued at $33,616,930 were
on loan to brokers. For collateral, the Fund received $37,808,900 in cash. Cash
collateral received is invested in an affiliated money market fund and
short-term securities, including U.S. government securities or other high-grade
debt obligations, which are included in the "Investments in securities." Income
from securities lending amounted to $524,804 for the year ended July 31, 2007.
Expenses paid to the Investment Manager were $7,621 for the year ended July 31,
2007, which are included in other expenses on the statement of operations. The
risks to the Fund of securities lending are that the borrower may not provide
additional collateral when required or return the securities when due.
- --------------------------------------------------------------------------------
36 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
7. OPTIONS CONTRACTS WRITTEN
Contracts and premiums associated with options contracts written are as follows:
<Table>
<Caption>
CALLS PUTS
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- ----------------------------------------------------------------------------------
Balance July 31, 2006 2,515 $ 5,531,700 -- $ --
Opened 91,990 10,349,937 42,040 5,339,080
Closed (24,901) (8,220,882) (16,816) (2,135,632)
Expired (33,290) (2,544,441) -- --
- ----------------------------------------------------------------------------------
Balance July 31, 2007 36,314 $ 5,116,314 25,224 $ 3,203,448
- ----------------------------------------------------------------------------------
</Table>
See "Summary of significant accounting policies."
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 RiverSource funds
and other institutional clients of RiverSource Investments. Cost of purchases
and proceeds from sales aggregated $1,512,404,501 and $1,436,533,720,
respectively, for the year ended July 31, 2007.
9. BANK BORROWINGS
The Fund has a revolving credit agreement with a syndicate of banks headed by
JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the temporary
funding of shareholder redemptions or for other temporary or emergency purposes.
The agreement went into effect Sept. 19, 2006. The Fund must maintain asset
coverage for borrowings of at least 300%. The agreement, which enables the Fund
to participate with other RiverSource funds, permits borrowings up to $500
million, collectively. Interest is charged to each Fund based on its borrowings
at a rate equal to either the higher of the Federal Funds Effective Rate plus
0.40% or the JPMCB Prime Commercial Lending Rate. Borrowings are payable within
60 days after such loan is executed. The Fund also pays a commitment fee equal
to its pro rata share of the amount of the credit facility at a rate of 0.06%
per annum. Prior to this agreement, the Fund paid a commitment fee equal to its
pro rata share of the amount of the credit facility at a rate of 0.07% per
annum. The Fund had no borrowings under the facility outstanding during the year
ended July 31, 2007.
10. CAPITAL LOSS CARRY-OVER
For federal income tax purposes, the Fund had a capital loss carry-over of
$284,278,656 at July 31, 2007, that if not offset by capital gains will expire
in 2011. 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.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 37
11. 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 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. In response to defendants' motion to dismiss the
complaint, the 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 may file a notice of appeal with the Eight Circuit Court of Appeals
within 30 days from the date of judgment.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), the parent company of RiverSource Investments, LLC
(RiverSource Investments), entered into settlement agreements with the
Securities and Exchange Commission (SEC) and Minnesota Department of Commerce
(MDOC) related to market timing activities. In connection with these matters,
the SEC and MDOC issued orders (the Orders) alleging that AEFC violated certain
provisions of the federal and Minnesota securities laws by failing to adequately
disclose market timing activities by allowing certain identified market timers
to continue to market time contrary to disclosures in mutual fund and variable
annuity product prospectuses. The Orders also alleged that AEFC failed to
implement procedures to detect and prevent market timing in 401(k) plans for
employees of AEFC and related companies and failed to adequately disclose that
there were no such procedures. Pursuant to the MDOC Order, the MDOC also alleged
that AEFC allowed inappropriate market timing to occur by failing to have
written policies and procedures and failing to properly supervise its employees.
As a result of the Orders, 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. Pursuant to the terms of the Orders, AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to make presentations at least annually to its board of directors and the
relevant mutual funds' board that include an overview of policies and procedures
to prevent market timing, material changes to these policies and procedures and
- --------------------------------------------------------------------------------
38 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
whether disclosures related to market timing are consistent with the SEC order
and federal securities laws. 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. In
addition, AEFC agreed to complete and submit to the MDOC a compliance review of
its procedures regarding market timing within one year of the MDOC Order,
including a summary of actions taken to ensure compliance with applicable laws
and regulations and certification by a senior officer regarding compliance and
supervisory procedures.
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.
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.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 39
12. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $28.61 $28.34 $23.73 $22.80 $20.88
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .23(b) .18 .04 .02 --
Net gains (losses) (both realized and
unrealized) 4.11 .10 4.57 .91 1.92
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 4.34 .28 4.61 .93 1.92
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.22) (.01) -- -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $32.73 $28.61 $28.34 $23.73 $22.80
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $2,393 $2,351 $2,101 $2,117 $2,263
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.19% 1.14% 1.19% 1.03% 1.21%
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .71% .72% .16% .07% --%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98% 134% 136% 171% 205%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 15.20% .98% 19.43% 4.08% 9.20%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) 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 above reported expense ratios.
(e) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
40 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $26.06 $26.01 $21.95 $21.25 $19.61
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.02)(b) (.05) (.16) (.16) (.17)
Net gains (losses) (both realized and
unrealized) 3.75 .10 4.22 .86 1.81
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 3.73 .05 4.06 .70 1.64
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $29.79 $26.06 $26.01 $21.95 $21.25
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $369 $462 $578 $598 $775
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.96% 1.91% 1.97% 1.81% 1.99%
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets (.06%) (.06%) (.62%) (.71%) (.77%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98% 134% 136% 171% 205%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 14.31% .19% 18.50% 3.29% 8.36%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) 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 above reported expense ratios.
(e) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 41
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $26.07 $26.01 $21.95 $21.25 $19.62
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)(b) (.04) (.16) (.16) (.17)
Net gains (losses) (both realized and
unrealized) 3.74 .10 4.22 .86 1.80
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 3.73 .06 4.06 .70 1.63
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.03) -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $29.77 $26.07 $26.01 $21.95 $21.25
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $20 $19 $15 $13 $12
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.95% 1.91% 1.97% 1.81% 2.01%
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets (.03%) (.03%) (.62%) (.71%) (.81%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98% 134% 136% 171% 205%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 14.31% .23% 18.50% 3.29% 8.31%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) 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 above reported expense ratios.
(e) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
42 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004(B)
Net asset value, beginning of period $29.31 $28.93 $24.10 $25.61
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .40(c) .32 .12 .09
Net gains (losses) (both realized and
unrealized) 4.19 .10 4.71 (1.60)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 4.59 .42 4.83 (1.51)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.36) (.04) -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.54 $29.31 $28.93 $24.10
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $298 $256 $147 $18
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) .74% .68% .75% .57%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.21% 1.22% .55% .43%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98% 134% 136% 171%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 15.70% 1.44% 20.04% (5.90%)(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from March 4, 2004 (inception date) to July 31, 2004.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) 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 above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 43
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $32.23
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .13(c)
Net gains (losses) (both realized and
unrealized) 1.12
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.25
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.35)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.13
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) 1.50%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .63%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 3.93%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) 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 above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
44 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $32.23
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .18(c)
Net gains (losses) (both realized and
unrealized) 1.13
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.31
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.36)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.18
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) 1.27%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .87%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 4.09%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) 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 above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 45
CLASS R4*
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $29.13 $28.81 $24.07 $23.09 $21.11
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .25(b) .24 .09 .07 .04
Net gains (losses) (both realized and
unrealized) 4.22 .10 4.65 .91 1.94
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 4.47 .34 4.74 .98 1.98
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.26) (.02) -- -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.34 $29.13 $28.81 $24.07 $23.09
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $146 $265 $304 $350 $398
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(c),(d) 1.03% .95% 1.02% .86% 1.03%
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets .79% .89% .34% .25% .18%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98% 134% 136% 171% 205%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 15.39% 1.17% 19.69% 4.24% 9.38%
- -----------------------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using average shares outstanding
method.
(c) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(d) 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 above reported expense ratios.
(e) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
46 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $32.23
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .29(c)
Net gains (losses) (both realized and
unrealized) 1.12
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.41
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.36)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.28
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) .76%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.38%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 4.41%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) 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 above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 47
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2007(B)
Net asset value, beginning of period $31.89
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .24(c)
Net gains (losses) (both realized and
unrealized) 1.43
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.67
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.35)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $33.21
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Ratio of expenses to average daily
net assets(d),(e) 1.17%(f)
- -----------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss)
to average daily net assets 1.09%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate
(excluding short-term securities) 98%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 5.29%(h)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 1, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using average shares outstanding
method.
(d) Expense ratio is based on total expenses of the Fund before reduction of
earnings and bank fee credits on cash balances. Includes the impact of a
performance incentive adjustment fee, if any.
(e) 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 above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
48 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF RIVERSOURCE GROWTH FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of RiverSource Growth Fund (the
Fund), one of the portfolios constituting the RiverSource Large Cap Series, Inc.
as of July 31, 2007, and the related statement of operations, statement of
changes in net assets and financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The financial
statements and financial highlights of the Fund for the periods presented
through July 31, 2006, were audited by other auditors whose report dated
September 20, 2006, expressed an unqualified opinion on those financial
statements and financial highlights.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of July 31, 2007, by correspondence with the custodian and
brokers, or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
RiverSource Growth Fund of the RiverSource Large Cap Series, Inc. at July 31,
2007, the results of its operations, changes in its net assets and the financial
highlights for the year then ended, in conformity with U.S. generally accepted
accounting principles.
Ernst & Young LLP
Minneapolis, Minnesota
September 20, 2007
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 49
FEDERAL INCOME TAX INFORMATION
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended July 31, 2007
CLASS A
<Table>
<Caption>
INCOME DISTRIBUTION - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.22210
</Table>
CLASS C
<Table>
<Caption>
INCOME DISTRIBUTION - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.03029
</Table>
CLASS I
<Table>
<Caption>
INCOME DISTRIBUTION - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.35985
</Table>
CLASS R2
<Table>
<Caption>
INCOME DISTRIBUTION - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.35429
</Table>
CLASS R3
<Table>
<Caption>
INCOME DISTRIBUTION -- taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.35625
</Table>
- --------------------------------------------------------------------------------
50 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
CLASS R4*
<Table>
<Caption>
INCOME DISTRIBUTION -- taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.26381
</Table>
CLASS R5
<Table>
<Caption>
INCOME DISTRIBUTION -- taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.35941
</Table>
CLASS W
<Table>
<Caption>
INCOME DISTRIBUTION -- taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 100%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.35385
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 51
BOARD MEMBERS AND OFFICERS
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board.
The following is a list of the Fund's Board members. Each member oversees 102
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme
901 S. Marquette Ave. since 2006 Court, 1998-2005
Minneapolis, MN 55402
Age 53
- -----------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, RiverSource Funds,
901 S. Marquette Ave. since 1999 1999-2006; former Governor of
Minneapolis, MN 55402 Minnesota
Age 73
- -----------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member President, Springboard -- Partners
901 S. Marquette Ave. since 2007 in Cross Cultural Leadership
Minneapolis, MN 55402 (consulting company)
Age 52
- -----------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and
901 S. Marquette Ave. since 2004 Management, Bentley College; former
Minneapolis, MN 55402 Dean, McCallum Graduate School of
Age 56 Business, Bentley College
- -----------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member Former Managing Director, Shikiar American Progressive
901 S. Marquette Ave. since 2005 Asset Management Insurance
Minneapolis, MN 55402
Age 71
- -----------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Professor of Valmont Industries,
901 S. Marquette Ave. since 2002 and Economics, Carleton College Inc. (manufactures
Minneapolis, MN 55402 Chair of the irrigation systems)
Age 68 Board since 2007
- -----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
52 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset Strategic
901 S. Marquette Ave. since 2004 Management, Inc. (private real Distribution, Inc.
Minneapolis, MN 55402 estate and asset management (transportation,
Age 55 company) distribution and
logistics
consultants)
- -----------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer, RiboNovix, Hybridon, Inc.
901 S. Marquette Ave. since 2002 Inc. since 2003 (biotechnology); (biotechnology);
Minneapolis, MN 55402 former President, Forester Biotech American Healthways,
Age 63 Inc. (health
management programs)
- -----------------------------------------------------------------------------------------------------
</Table>
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
William F. Truscott Board member President -- U.S. Asset Management
53600 Ameriprise since 2001, and Chief Investment Officer,
Financial Center Vice President Ameriprise Financial, Inc. and
Minneapolis, MN 55474 since 2002 President, Chairman of the Board
Age 47 and Chief Investment Officer,
RiverSource Investments, LLC since
2005; President, Ameriprise
Certificate Company since 2006;
Senior Vice President -- Chief
Investment Officer, Ameriprise
Financial, Inc. and Chairman of the
Board and Chief Investment Officer,
RiverSource Investments, LLC,
2001-2005
- -----------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 53
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Patrick T. Bannigan President since Senior Vice President -- Asset Management,
172 Ameriprise 2006 RiverSource Investments, LLC since 2006;
Financial Center Managing Director and Global Head of Product,
Minneapolis, MN 55474 Morgan Stanley Investment Management,
Age 41 2004-2006; President, Touchstone Investments,
2002-2004; Director of Strategic Planning,
Evergreen Investments, 1995-2002
- ------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President -- Equity and Fixed
172 Ameriprise since 2004 Income, Ameriprise Financial, Inc. and
Financial Center RiverSource Investments, LLC since 2006; Vice
Minneapolis, MN 55474 President -- Investments, Ameriprise
Age 43 Certificate Company since 2003; Senior Vice
President -- Fixed Income, Ameriprise
Financial, Inc., 2002-2006 and RiverSource
Investments, LLC, 2004-2006; Managing
Director, Zurich Global Assets, 2001-2002
- ------------------------------------------------------------------------------------------
Amy K. Johnson Vice President Vice President -- Asset Management and Trust
5228 Ameriprise since 2006 Company Services, RiverSource Investments, LLC
Financial Center since 2006; Vice President -- Operations and
Minneapolis, MN 55474 Compliance, RiverSource Investments, LLC,
Age 41 2004-2006; Director of Product
Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- ------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Vice President -- Investment Accounting,
105 Ameriprise 2002 Ameriprise Financial, Inc. since 2002; Vice
Financial Center President -- Finance, American Express
Minneapolis, MN 55474 Company, 2000-2002
Age 52
- ------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset
5228 Ameriprise General Counsel Management, Ameriprise Financial, Inc. since
Financial Center and Secretary 2005; Vice President, General Counsel and
Minneapolis, MN 55474 since 2006 Secretary, Ameriprise Certificate Company
Age 47 since 2005; Vice President -- Asset Management
Compliance, Ameriprise Financial, Inc.,
2004-2005; Senior Vice President and Chief
Compliance Officer, U.S. Bancorp Asset
Management, 2002-2004; Second Vice President
and Assistant General Counsel, Hartford Life,
2001-2002
- ------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance
172 Ameriprise Officer since Officer, RiverSource Investments, LLC since
Financial Center 2006 2006; Director -- Mutual Funds, Voyageur Asset
Minneapolis, MN 55474 Management, 2003-2006; Director of Finance,
Age 46 Voyageur Asset Management, 2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
54 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Compliance Director and Anti-Money Laundering
2934 Ameriprise Prevention Officer, Ameriprise Financial, Inc. since
Financial Center Officer since 2004; Manager Anti-Money Laundering,
Minneapolis, MN 55474 2004 Ameriprise Financial, Inc., 2003-2004;
Age 43 Compliance Director and Bank Secrecy Act
Officer, American Express Centurion Bank,
2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 55
APPROVAL OF INVESTMENT MANAGEMENT SERVICES AGREEMENT
RiverSource Investments, LLC ("RiverSource"), a wholly-owned subsidiary of
Ameriprise Financial, Inc. ("Ameriprise Financial"), serves as the investment
manager to the Fund. Under an investment management services agreement (the "IMS
Agreement") RiverSource provides investment advice and other services to the
Fund and all RiverSource funds (collectively, the "Funds"). The Fund's Board of
Directors (the "Board") and the Board's Investment Review and Contracts
Committees monitor these services throughout the year.
On an annual basis, the Board, including the independent Board members (the
"Independent Directors"), considers renewal of the IMS Agreement. RiverSource
prepares detailed reports for the Board and its Contracts Committee in March and
April, including reports based on data provided by independent organizations to
assist the Board in making this determination. In addition, throughout the year,
the Board (or its committees) reviews information prepared by RiverSource
addressing the services RiverSource provides and Fund performance. The Board
accords particular weight to the work, deliberations and conclusions of the
Contracts and Investment Review Committees in determining whether to continue
the IMS Agreement. At the April 11-12, 2007 in-person Board meeting, independent
legal counsel to the Independent Directors reviewed with the Independent
Directors various factors relevant to the Board's consideration of advisory
agreements and the Board's legal responsibilities related to such consideration.
Following an analysis and discussion of the factors identified below, the Board,
including all of the Independent Directors, approved renewal of the IMS
Agreement.
Nature, Extent and Quality of Services Provided by RiverSource: The Board
analyzed various reports and presentations it had received detailing the
services performed by RiverSource, as well as its expertise, resources and
capabilities. The Board specifically considered many developments during the
past year concerning the services provided by RiverSource, including, in
particular, the growing strength and capabilities of many RiverSource offices
and the increased investment and resources dedicated to the Fund's operations,
particularly in the areas of trading systems, legal and compliance. Further, in
connection with the Board's evaluation of the overall package of services
provided by RiverSource, the Board considered the quality of the administrative,
custody and transfer agency services provided by RiverSource affiliates to the
Fund. The Board also reviewed the financial condition of RiverSource and the
entity's ability to carry out its responsibilities under the IMS Agreement. The
Board also discussed the acceptability of the terms of the IMS Agreement
(including the relatively broad scope of services required to be performed by
RiverSource). The Board concluded that the services being performed under the
IMS Agreement were of a reasonably high quality.
- --------------------------------------------------------------------------------
56 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
Based on the foregoing, and based on other information received (both oral and
written, including the information on investment performance referenced below)
and other considerations, the Board determined that RiverSource was in a
position to continue to provide a high quality and level of services to the
Fund.
Investment Performance: For purposes of evaluating the nature, extent and
quality of services provided under the IMS Agreement, the Board carefully
reviewed the investment performance of the Fund. In this regard, the Board
considered: (i) detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index, the percentage ranking of the Fund among its
comparison group and the net assets of the Fund; and (ii) a report detailing the
Fund's performance over various periods (including since inception), recent Fund
inflows (and outflows) and a comparison of the Fund's net assets from December
2006 to December 2005. The Board observed that the Fund's investment performance
met expectations.
Comparative Fees, Costs of Services Provided and the Profits Realized By
RiverSource and its Affiliates from their Relationships with the Fund: The
Board reviewed comparative fees and the costs of services to be provided under
the IMS Agreement. The Board members considered detailed comparative information
set forth in an annual report on fees and expenses, including, among other
things, data (prepared by an independent organization) showing a comparison of
the Fund's expenses with median expenses paid by funds in its peer group, as
well as data showing the Fund's contribution to RiverSource's profitability. The
Board accorded particular weight to the notion that the level of fees should
reflect a rational pricing model applied consistently across the various product
lines in the Funds' family, while assuring that the overall fees for each fund
are generally in line with the "pricing philosophy" (i.e., that the total
expense ratio of each fund, with few exceptions, is at or below the median
expense ratio of funds in the same comparison group). The Board took into
account that the Fund's total expense ratio (after considering proposed expense
caps/waivers) approximated the peer group's median expense ratio. Based on its
review, the Board concluded that the Fund's management fee was fair and
reasonable in light of the extent and quality of services that the Fund
receives.
The Board also considered the expected profitability of RiverSource and its
affiliates in connection with RiverSource providing investment management
services to the Fund. In this regard, the Board referred to a detailed
profitability report, discussing the profitability to RiverSource and Ameriprise
Financial from managing and operating the Fund, including data showing
comparative profitability. The Board also considered the services acquired by
the investment manager through the use of commission dollars paid by the Funds
on portfolio transactions. The Board noted that the fees paid by the Fund should
permit the investment manager to offer competitive compensation to its
personnel, make
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 57
necessary investments in its business and earn an appropriate profit. The Board
concluded that profitability levels were reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by RiverSource as the Fund grows and took note of
the extent to which Fund shareholders might also benefit from such growth. The
Board considered that the IMS Agreement provides for lower fees as assets
increase at pre-established breakpoints and concluded that the IMS Agreement
satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees were fair and reasonable
in light of the extent and quality of services provided. In reaching this
conclusion, no single factor was determinative. On April 12, 2007, the Board,
including all of the Independent Directors, approved the renewal of the IMS
Agreement.
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 RiverSource Funds at (888) 791-3380; contacting your financial
institution; 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.
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On April 12, 2007, Ernst & Young LLP was selected as the Fund's independent
registered public accounting firm for the 2007 fiscal year. A majority of the
Fund's Board of Directors, including a majority of the Independent Directors,
approved the appointment of Ernst & Young LLP. The predecessor independent
registered public accounting firm's reports on the Fund's financial statements
for the year ended July 31, 2006 and the year ended July 31, 2005 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During such fiscal periods
and through April 12, 2007 there were no disagreements between the Fund and the
predecessor independent registered public accounting firm on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope
- --------------------------------------------------------------------------------
58 RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT
or procedures, which such disagreements, if not resolved to the satisfaction of
the predecessor independent registered public accounting firm, would have caused
them to make reference to the subject matter of the disagreement in connection
with their reports on the financial statements for such fiscal periods.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2007 ANNUAL REPORT 59
THROUGH THE RIVERSOURCE INVESTMENTS FAMILY OF FUNDS, YOU CAN BUILD A DIVERSIFIED
PORTFOLIO THAT IS DESIGNED TO HELP YOU REACH YOUR GOALS.
<Table>
GROWTH FUNDS
RiverSource Growth Fund
RiverSource Fundamental Growth Fund
RiverSource Disciplined Large Cap
Growth Fund
RiverSource Mid Cap Growth Fund
RiverSource Aggressive Growth Fund
RiverSource Small Cap Growth Fund
Sector: RiverSource Global
Technology Fund
BLEND FUNDS
RiverSource Disciplined Equity Fund
RiverSource Large Cap Equity Fund
RiverSource S&P 500 Index Fund*
RiverSource Disciplined Small and
Mid Cap Equity Fund
RiverSource Small Cap Advantage
Fund
RiverSource Small Company Index
Fund
RiverSource Small Cap Equity Fund
Sector: RiverSource Precious Metals
and Mining Fund
VALUE FUNDS
RiverSource Dividend Opportunity
Fund
RiverSource Value Fund
RiverSource Fundamental Value Fund
RiverSource Equity Value Fund
RiverSource Large Cap Value Fund
RiverSource Diversified Equity
Income Fund
RiverSource Select Value Fund
RiverSource Mid Cap Value Fund
RiverSource Disciplined Small Cap
Value Fund
RiverSource Small Cap Value Fund
Sector: RiverSource Real Estate
Fund
ASSET ALLOCATION FUNDS
RiverSource Portfolio Builder
Conservative Fund
RiverSource Income Builder Basic
Income Fund
RiverSource Income Builder Moderate
Income Fund
RiverSource Income Builder Enhanced
Income Fund
RiverSource Portfolio Builder
Moderate Conservative Fund
RiverSource Portfolio Builder
Moderate Fund
RiverSource Retirement Plus(SM)
2010 Fund
RiverSource Balanced Fund
RiverSource Portfolio Builder
Moderate Aggressive Fund
RiverSource Retirement Plus(SM)
2015 Fund
RiverSource Strategic Allocation
Fund
RiverSource Retirement Plus(SM)
2020 Fund
RiverSource Portfolio Builder
Aggressive Fund
RiverSource Retirement Plus(SM)
2025 Fund
RiverSource Retirement Plus(SM)
2030 Fund
RiverSource Retirement Plus(SM)
2035 Fund
RiverSource Retirement Plus(SM)
2040 Fund
RiverSource Retirement Plus(SM)
2045 Fund
RiverSource Portfolio Builder Total
Equity Fund
</Table>
- --------------------------------------------------------------------------------
THIS PAGE IS NOT PART OF THE ANNUAL REPORT
<Table>
TAXABLE INCOME FUNDS
RiverSource Cash Management Fund**
RiverSource Short Duration U.S.
Government Fund
RiverSource U.S. Government
Mortgage Fund
RiverSource Inflation Protected
Securities Fund
RiverSource Floating Rate Fund
RiverSource Limited Duration Bond
Fund
RiverSource Core Bond Fund
RiverSource Diversified Bond Fund
RiverSource Strategic Income
Allocation Fund
RiverSource Income Opportunities
Fund
RiverSource High Yield Bond Fund
RiverSource Global Bond Fund
RiverSource Emerging Markets Bond
Fund
TAX-EXEMPT FUNDS
RiverSource Tax-Exempt Money Market
Fund**
RiverSource Intermediate Tax-Exempt
Fund
RiverSource Tax-Exempt Bond Fund
RiverSource State Tax-Exempt Funds
RiverSource Tax-Exempt High Income
Fund
GLOBAL/INTERNATIONAL FUNDS
RiverSource Global Equity Fund
RiverSource International Select
Value Fund
RiverSource International Equity
Fund
RiverSource Disciplined
International Equity Fund
RiverSource International
Opportunity Fund
RiverSource International Small Cap
Fund
RiverSource International
Aggressive Growth Fund
RiverSource European Equity Fund
RiverSource Emerging Markets Fund
</Table>
You should consider the investment objectives, risks, charges and expenses of a
mutual fund carefully before investing. For a free prospectus of any of the
funds listed above, which contains this and other important information about
the funds, contact your financial institution or visit riversource.com/funds.
Read the prospectus carefully before investing.
Investment products, including shares of mutual funds, involve risks including
possible loss of principal and fluctuation in value. Investing in certain funds
involves special risks, such as those related to investments in foreign
securities, small- and mid-capitalization stocks, fixed income securities
(especially high-yield securities), and funds which focus their investments in a
particular sector, such as real estate, technology and precious metals. See each
fund's prospectus for specific risks associated with the fund.
* "Standard & Poor's(R)," "S&P," "S&P 500(R)," and "Standard & Poor's 500(R)"
are trademarks of the McGraw-Hill Companies, Inc. These trademarks have been
licensed for use by Ameriprise Financial, Inc. The fund is not sponsored,
endorsed, sold or promoted by Standard & Poor's or any of their subsidiaries
or affiliates (the "Licensors") and the Licensors make no representation
regarding the advisability of investing in the fund.
** AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
ALTHOUGH A MONEY MARKET FUND SEEKS TO MAINTAIN THE VALUE OF YOUR INVESTMENT
AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN A MONEY
MARKET FUND.
- --------------------------------------------------------------------------------
THIS PAGE IS NOT PART OF THE ANNUAL REPORT
RIVERSOURCE(R) GROWTH 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
Distributors, Inc. and Ameriprise Financial
Services, Inc., Members FINRA, and managed by
RiverSource Investments, LLC. These companies
(RIVERSOURCE INVESTMENTS LOGO) are part of Ameriprise Financial, Inc. S-6455 AC (9/07)
</Table>