UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number 811-2111
RIVERSOURCE LARGE CAP SERIES, INC.
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(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
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(Address of principal executive offices) (Zip code)
Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474
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(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 671-1947
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Date of fiscal year end: 7/31
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Date of reporting period: 1/31
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Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
DISCIPLINED EQUITY FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2008
RIVERSOURCE DISCIPLINED EQUITY
FUND SEEKS TO PROVIDE SHAREHOLDERS
WITH LONG-TERM CAPITAL GROWTH.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 2
Performance Summary................. 4
Questions & Answers
with Portfolio Management........ 7
Fund Expenses Example............... 10
Portfolio of Investments............ 12
Financial Statements................ 18
Notes to Financial Statements....... 24
Proxy Voting........................ 44
</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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RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 1
FUND SNAPSHOT AT JAN. 31, 2008 (UNAUDITED)
FUND OBJECTIVE
RiverSource Disciplined Equity Fund seeks to provide shareholders with long-term
capital growth.
SECTOR BREAKDOWN*
Percentage of portfolio assets
(PIE CHART)
<Table>
Financials 19.6%
Energy 17.5%
Information Technology 13.0%
Health Care 12.8%
Consumer Discretionary 10.8%
Industrials 9.8%
Other(1) 16.5%
</Table>
* Sectors can be comprised of several industries. Please refer to the section
entitled "Portfolio of Investments" for a complete listing. No single
industry exceeds 25% of portfolio assets.
(1) Includes Consumer Staples 6.2%, Materials 4.7%, Utilities 1.0%,
Telecommunications Services 0.8% and Cash & Cash Equivalents(2) 3.8%.
(2) Of the 3.8%, 0.9% is due to security lending activity and 2.9% is the
Fund's cash equivalent position.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Pfizer 4.8%
Chevron 4.4%
Exxon Mobil 4.3%
Apple 3.4%
Johnson & Johnson 2.7%
Citigroup 2.6%
Microsoft 2.4%
Home Depot 2.0%
ConocoPhillips 1.6%
Intel 1.5%
</Table>
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
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.
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2 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
FUND SNAPSHOT AT JAN. 31, 2008 (UNAUDITED)
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 MANAGERS
<Table>
<Caption>
YEARS IN INDUSTRY
Dimitris Bertsimas, 15
Ph.D.
Gina Mourtzinou, Ph.D. 12
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A AQEAX 04/24/03
Class B AQEBX 04/24/03
Class C RDCEX 04/24/03
Class I ALEIX 07/15/04
Class R2 -- 12/11/06
Class R3 RSDEX 12/11/06
Class R4 RQEYX 04/24/03
Class R5 RSIPX 12/11/06
Class W RDEWX 12/01/06
Total net assets $ 3.450 billion
Number of holdings 241
</Table>
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RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 3
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the six-month period ended Jan. 31, 2008
(BAR CHART)
<Table>
RiverSource Disciplined Equity Fund Class A
(excluding sales charge) -4.72%
S&P 500 Index(1)(unmanaged) -4.32%
Lipper Large-Cap Core Funds Index(2) -3.76%
</Table>
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.
(1) The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of
common stocks, is frequently used as a general measure of market
performance. The index reflects reinvestment of all distributions and
changes in market prices.
(2) The Lipper Large-Cap Core Funds Index includes the 30 largest large-cap
core funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive
adjustment.
ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
<Table>
<Caption>
TOTAL NET EXPENSES(A)
Class A 1.05% 1.05%
Class B 1.82% 1.82%
Class C 1.81% 1.81%
Class I 0.70% 0.70%
Class R2 1.49% 1.49%
Class R3 1.25% 1.25%
Class R4 1.00% 0.91%
Class R5 0.75% 0.75%
Class W 1.18% 1.18%
</Table>
(a) 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 0.03%), will not exceed 1.09% for Class A, 1.85% for
Class B, 1.85% for Class C, 0.78% for Class I, 1.58% for Class R2, 1.33%
for Class R3, 0.88% for Class R4, 0.83% for Class R5 and 1.23% for Class W.
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4 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT JAN. 31, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS INCEPTION
Class A (inception 4/24/03) -4.72% -3.39% +7.61% +11.14%
Class B (inception 4/24/03) -5.18% -3.96% +6.78% +10.29%
Class C (inception 4/24/03) -5.20% -3.98% +6.79% +10.30%
Class I (inception 7/15/04) -4.61% -3.01% +8.03% +9.28%
Class R2 (inception 12/11/06) -4.83% -3.49% N/A -1.47%
Class R3 (inception 12/11/06) -4.72% -3.24% N/A -1.24%
Class R4 (inception 4/24/03) -4.74% -3.14% +7.80% +11.34%
Class R5 (inception 12/11/06) -4.70% -3.09% N/A -0.98%
Class W (inception 12/1/06) -4.82% -3.35% N/A -0.04%
WITH SALES CHARGE
Class A (inception 4/24/03) -10.19% -8.90% +5.53% +9.75%
Class B (inception 4/24/03) -9.67% -8.51% +5.60% +10.00%
Class C (inception 4/24/03) -6.09% -4.89% +6.79% +10.30%
</Table>
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RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 5
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT DEC. 31, 2007
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS INCEPTION
Class A (inception 4/24/03) -2.03% +5.26% +9.20% +12.96%
Class B (inception 4/24/03) -2.35% +4.42% +8.37% +12.10%
Class C (inception 4/24/03) -2.36% +4.58% +8.39% +12.11%
Class I (inception 7/15/04) -1.79% +5.62% +9.61% +11.65%
Class R2 (inception 12/11/06) -2.02% +4.99% N/A +4.89%
Class R3 (inception 12/11/06) -1.89% +5.27% N/A +5.15%
Class R4 (inception 4/24/03) -1.93% +5.35% +9.38% +13.17%
Class R5 (inception 12/11/06) -1.86% +5.58% N/A +5.46%
Class W (inception 12/1/06) -1.98% +5.17% N/A +6.38%
WITH SALES CHARGE
Class A (inception 4/24/03) -7.69% -0.84% +7.08% +11.52%
Class B (inception 4/24/03) -6.98% -0.53% +7.22% +11.81%
Class C (inception 4/24/03) -3.28% +3.59% +8.39% +12.11%
</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.
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6 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Portfolio Managers Dimitris Bertsimas and Gina Mourtzinou discuss
RiverSource Disciplined Equity Fund's positioning and results for the six months
ended Jan. 31, 2008.
Q: How did RiverSource Disciplined Equity Fund perform for the semiannual
period?
A: RiverSource Disciplined Equity Fund's Class A shares (excluding sales charge)
declined 4.72% for the six months ended Jan. 31, 2008. The Fund
underperformed the unmanaged Standard & Poor's 500 Index (S&P 500 Index),
which fell 4.32%, as well as the Lipper Large-Cap Core Funds Index,
representing the Fund's peer group, which declined 3.76%, for the same
period.
DURING THE SIX-MONTH PERIOD, THE QUALITY AND MOMENTUM MODELS OUTPERFORMED
THE S&P 500 INDEX, BUT NOT ENOUGH TO OFFSET THE UNDERPERFORMANCE OF THE
VALUE MODEL.
Q: What factors most significantly affected the Fund's performance?
A: The Fund's performance resulted from the three quantitative investment
models - momentum, value and quality - we employ in selecting stocks for the
Fund's portfolio. During the six-month period, the quality and momentum
models outperformed the S&P 500 Index, but not enough to offset the
underperformance of the value model. The quality model was intended to serve,
in part, as a defensive measure during equity market corrections when
investor risk aversion increases, and it indeed took the lead throughout
these challenging months. The value and quality models performed strongly
when beaten-up financials and homebuilders rallied somewhat in January 2008,
while the momentum model lagged. All of this supports our research indicating
that the style diversification provided by the three quantitative models is a
significant investment advantage over the long term, even though the Fund may
experience underperformance in the short term.
We do not make sector or industry bets based on our outlook for the economy
or the equity markets. During the period, the Fund's quantitative models led
to a bias toward large-cap and quality stocks, both of which boosted results,
as these equity sectors performed comparatively well. At the same time,
however, the Fund's models positioned the portfolio toward the cheapest
price/earnings stocks, which detracted.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 7
QUESTIONS & ANSWERS
Overall, sector allocation contributed modestly to the Fund's performance,
with a sizable weighting in energy and smaller positions in financials and
information technology particularly helpful. Partially offsetting these
positives were a moderate allocation to the strongly performing consumer
staples sector and a significant exposure to the weaker consumer
discretionary sector.
Stock selection as a whole detracted slightly from Fund results, even though
it was effective in nearly all of the sectors in which the Fund invests, and
was especially strong in the information technology and consumer
discretionary sectors. Such positives were not enough to offset the effect of
weak stock selection in energy and financials.
Among individual holdings, information technology company Apple, selected by
the momentum model, contributed most to the Fund's return. Other strong,
positive contributors included chemicals firm Monsanto, selected by the
momentum model; fast-food restaurant giant McDonald's, favored by the
momentum model; machinery leader Deere & Co, chosen by the momentum model;
health care services company Express Scripts, another momentum model pick;
and pharmaceutical company Johnson & Johnson, selected by the quality model.
Stocks that detracted from the Fund's return included four financials
companies, each selected by the value model, namely Fannie Mae, Citigroup,
Freddie Mac and Washington Mutual. Other poor performers during the period
were energy equipment firm Schlumberger, a momentum model pick, and metals
and mining company Freeport-McMoRan Copper & Gold, selected by both the value
and momentum models.
At the end of January, the Fund's largest individual stock holdings were
pharmaceutical giant Pfizer, a value and quality model choice; energy
companies Chevron and Exxon Mobil, the former selected by all three models
and the latter a quality model pick; information technology company Apple,
selected by the momentum model; pharmaceutical company Johnson & Johnson, a
quality model pick; and financial company Citigroup, selected by the value
model.
Q: What changes did you make to the Fund's portfolio during the period?
A: As a result of quantitative models-driven stock selection during the period,
the Fund's sector allocations changed somewhat. For example, the Fund's
- --------------------------------------------------------------------------------
8 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
QUESTIONS & ANSWERS
exposure to telecommunication services and utilities decreased relative to
the S&P 500 Index. The Fund's positions in health care, materials and
financials increased. Our risk models limit the size of individual holdings,
as well as sector and industry allocations relative to the S&P 500 Index. As
an example, the Fund's weightings by sector and industry can never be more
than 6% overweighted or underweighted relative to the S&P 500 Index. We also
apply additional risk measures that impose constraints on market
capitalization, price, quality, turnover, transaction costs and other
variables.
WE INTEND TO CONTINUE SEEKING OPTIMAL RETURNS FOR THE FUND THROUGH THE
STYLE DIVERSIFICATION OFFERED BY OUR THREE QUANTITATIVE INVESTMENT MODELS.
Q: How do you intend to manage the Fund in the coming months?
A: We intend to continue seeking optimal returns for the Fund through the style
diversification offered by our three quantitative investment models. We are
convinced of the merit of our multifaceted, disciplined approach to managing
risk in the Fund and believe this combination of style diversification and
rigorous risk management will allow us to maintain the high quality of the
Fund's portfolio in whatever market conditions lie ahead.
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.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 9
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 Jan. 31, 2008.
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.
- --------------------------------------------------------------------------------
10 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
AUG. 1, 2007 JAN. 31, 2008 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $ 952.80 $ 4.82 .98%
Hypothetical
(5% return before
expenses) $1,000 $1,020.27 $ 4.99 .98%
Class B
Actual(b) $1,000 $ 948.20 $ 8.54 1.74%
Hypothetical
(5% return before
expenses) $1,000 $1,016.43 $ 8.84 1.74%
Class C
Actual(b) $1,000 $ 948.00 $ 8.49 1.73%
Hypothetical
(5% return before
expenses) $1,000 $1,016.48 $ 8.79 1.73%
Class I
Actual(b) $1,000 $ 953.90 $ 3.10 .63%
Hypothetical
(5% return before
expenses) $1,000 $1,022.03 $ 3.21 .63%
Class R2
Actual(b) $1,000 $ 951.70 $ 6.99 1.42%
Hypothetical
(5% return before
expenses) $1,000 $1,018.05 $ 7.22 1.42%
Class R3
Actual(b) $1,000 $ 952.80 $ 5.66 1.15%
Hypothetical
(5% return before
expenses) $1,000 $1,019.41 $ 5.85 1.15%
Class R4
Actual(b) $1,000 $ 952.60 $ 4.23 .86%
Hypothetical
(5% return before
expenses) $1,000 $1,020.87 $ 4.38 .86%
Class R5
Actual(b) $1,000 $ 953.00 $ 3.30 .67%
Hypothetical
(5% return before
expenses) $1,000 $1,021.83 $ 3.41 .67%
Class W
Actual(b) $1,000 $ 951.80 $ 5.31 1.08%
Hypothetical
(5% return before
expenses) $1,000 $1,019.76 $ 5.50 1.08%
</Table>
(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 184/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Jan. 31, 2008: -4.72%
for Class A, -5.18% for Class B, -5.20% for Class C, -4.61% for Class I,
-4.83% for Class R2, -4.72% for Class R3, -4.74% for Class R4, -4.70% for
Class R5 and -4.82% for Class W.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 11
PORTFOLIO OF INVESTMENTS
JAN. 31, 2008 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (97.1%)
ISSUER SHARES VALUE(A)
AEROSPACE & DEFENSE (1.7%)
General Dynamics 150,467 $12,708,443
Goodrich 114,024 7,132,201
Honeywell Intl 294,567 17,400,073
Precision Castparts 83,393 9,490,123
United Technologies 170,133 12,489,464
---------------
Total 59,220,304
- ------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS (0.2%)
United Parcel Service Cl B 90,748 6,639,124
- ------------------------------------------------------------------------------------
AUTO COMPONENTS (0.7%)
Goodyear Tire
& Rubber 46,828(b) 1,178,661
Johnson Controls 666,450 23,572,336
---------------
Total 24,750,997
- ------------------------------------------------------------------------------------
AUTOMOBILES (0.8%)
Ford Motor 1,207,269(b) 8,016,266
General Motors 493,143 13,960,878
Harley-Davidson 144,208 5,851,961
---------------
Total 27,829,105
- ------------------------------------------------------------------------------------
BEVERAGES (2.1%)
Coca-Cola 490,947 29,049,334
Coca-Cola Enterprises 139,108 3,209,222
Pepsi Bottling Group 88,325 3,078,126
PepsiCo 536,808(h) 36,604,937
---------------
Total 71,941,619
- ------------------------------------------------------------------------------------
BIOTECHNOLOGY (0.3%)
Biogen Idec 186,838(b) 11,387,776
- ------------------------------------------------------------------------------------
BUILDING PRODUCTS (0.3%)
Masco 260,746 5,978,906
Trane 96,782 4,333,898
---------------
Total 10,312,804
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CAPITAL MARKETS (3.3%)
Bear Stearns Companies 66,590 $6,013,077
E*TRADE Financial 121,906(b) 605,873
Goldman Sachs Group 29,836 5,990,174
Janus Capital Group 88,512 2,390,709
Lehman Brothers Holdings 421,561 27,051,569
Merrill Lynch & Co 545,667 30,775,619
Morgan Stanley 787,984 38,950,049
T Rowe Price Group 54,720 2,768,285
---------------
Total 114,545,355
- ------------------------------------------------------------------------------------
CHEMICALS (2.6%)
Air Products & Chemicals 48,305 4,348,416
Ashland 8,000 364,240
Dow Chemical 350,979 13,568,848
Ecolab 67,323(h) 3,248,335
Monsanto 455,011 51,161,436
PPG Inds 66,308 4,382,296
Praxair 135,365 10,952,382
Sigma-Aldrich 59,672 2,963,312
---------------
Total 90,989,265
- ------------------------------------------------------------------------------------
COMMERCIAL BANKS (1.8%)
BB&T 390,651 14,172,817
Comerica 171,854 7,496,271
Fifth Third Bancorp 123,560 3,348,476
First Horizon Natl 264,891(d) 5,740,188
Huntington Bancshares 144,750(d) 1,946,888
KeyCorp 191,005 4,994,781
Marshall & Ilsley 55,025 1,535,198
Natl City 688,288 12,244,644
SunTrust Banks 18,947 1,306,396
Synovus Financial 135,983 1,796,335
US Bancorp 128,076(h) 4,348,180
Wachovia 107,170 4,172,128
---------------
Total 63,102,302
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
COMMERCIAL SERVICES & SUPPLIES (0.1%)
Avery Dennison 26,161 $1,355,663
RR Donnelley & Sons 79,664 2,779,477
---------------
Total 4,135,140
- ------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (1.6%)
Ciena 87,852(b) 2,383,425
Corning 307,678 7,405,809
Juniper Networks 647,103(b) 17,568,846
QUALCOMM 624,430 26,488,321
---------------
Total 53,846,401
- ------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (5.6%)
Apple 870,456(b) 117,824,924
EMC 2,603,090(b) 41,311,038
IBM 256,381 27,519,937
Lexmark Intl Cl A 152,812(b) 5,533,323
NCR 35,125(b) 754,485
QLogic 47,190(b) 674,817
---------------
Total 193,618,524
- ------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.7%)
Fluor 109,702 13,347,442
Jacobs Engineering Group 149,899(b) 11,458,280
---------------
Total 24,805,722
- ------------------------------------------------------------------------------------
CONSUMER FINANCE (--%)
SLM 71,306 1,550,906
- ------------------------------------------------------------------------------------
CONTAINERS & PACKAGING (--%)
Ball 31,661 1,452,923
- ------------------------------------------------------------------------------------
DISTRIBUTORS (0.2%)
Genuine Parts 157,293 6,909,881
- ------------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (0.1%)
Apollo Group Cl A 25,353(b) 2,021,648
H&R Block 128,936 2,484,597
---------------
Total 4,506,245
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
DIVERSIFIED FINANCIAL SERVICES (5.5%)
Bank of America 688,806 $30,548,546
CIT Group 196,139 5,484,046
Citigroup 3,270,125 92,282,928
IntercontinentalExchange 13,582(b) 1,900,937
JPMorgan Chase & Co 1,025,419 48,758,673
Leucadia Natl 209,784(d) 9,266,159
---------------
Total 188,241,289
- ------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.8%)
Embarq 30,891 1,399,362
Verizon Communications 706,965 27,458,521
---------------
Total 28,857,883
- ------------------------------------------------------------------------------------
ELECTRIC UTILITIES (0.7%)
Duke Energy 77,239 1,441,280
Edison Intl 60,970 3,180,195
PPL 385,743 18,870,548
---------------
Total 23,492,023
- ------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (0.2%)
Cooper Inds Cl A 65,899 2,935,141
Emerson Electric 98,708 5,018,315
---------------
Total 7,953,456
- ------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.1%)
Agilent Technologies 85,275(b,h) 2,891,675
- ------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (3.5%)
BJ Services 67,770 1,473,998
Cameron Intl 271,352(b) 10,924,632
ENSCO Intl 49,198 2,515,002
Nabors Inds 75,642(b,c) 2,058,975
Natl Oilwell Varco 121,258(b) 7,303,369
Noble 149,661 6,550,662
Schlumberger 678,337 51,187,309
Smith Intl 191,619 10,387,666
Transocean 69,075(b) 8,468,595
Weatherford Intl 303,252(b) 18,744,006
---------------
Total 119,614,214
- ------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (1.8%)
Safeway 318,606 9,873,600
SUPERVALU 79,252 2,382,315
Walgreen 37,391 1,312,798
Wal-Mart Stores 950,312 48,351,875
---------------
Total 61,920,588
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 13
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
FOOD PRODUCTS (0.3%)
Dean Foods 27,032 $756,896
Sara Lee 476,830(h) 6,704,229
Tyson Foods Cl A 287,490 4,096,733
---------------
Total 11,557,858
- ------------------------------------------------------------------------------------
GAS UTILITIES (0.2%)
Questar 112,296 5,716,989
- ------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.8%)
Baxter Intl 112,025 6,804,399
Becton Dickinson & Co 44,419 3,843,576
Stryker 239,689 16,051,972
Varian Medical Systems 12,728(b) 661,729
---------------
Total 27,361,676
- ------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (2.6%)
Cardinal Health 132,800 7,698,416
CIGNA 511,572 25,148,879
Express Scripts 312,689(b) 21,103,381
Health Management Associates Cl A 67,300 362,747
Humana 35,112(b) 2,819,494
Laboratory Corp of America Holdings 9,029(b) 667,063
Medco Health Solutions 554,391(b) 27,763,900
Quest Diagnostics 38,786(d) 1,912,926
Tenet Healthcare 456,110(b) 2,020,567
---------------
Total 89,497,373
- ------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (0.4%)
Intl Game Technology 15,007 640,349
McDonald's 207,075 11,088,866
Wendy's Intl 23,534 574,700
---------------
Total 12,303,915
- ------------------------------------------------------------------------------------
HOUSEHOLD DURABLES (0.9%)
Black & Decker 9,980 723,949
Centex 168,771 4,688,458
DR Horton 693,693 11,966,204
KB Home 141,005 3,877,638
Lennar Cl A 328,636 6,769,902
Pulte Homes 202,526 3,309,275
---------------
Total 31,335,426
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HOUSEHOLD PRODUCTS (0.5%)
Kimberly-Clark 257,974 $16,935,993
- ------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (2.0%)
3M 664,986 52,966,134
Textron 156,453(h) 8,769,191
Tyco Intl 216,455(c) 8,519,669
---------------
Total 70,254,994
- ------------------------------------------------------------------------------------
INSURANCE (6.8%)
ACE 301,685(c) 17,600,303
AFLAC 222,730 13,660,031
Allstate 752,055 37,053,750
Ambac Financial Group 235,033(d) 2,754,587
American Intl Group 435,870 24,042,589
Aon 52,239 2,273,441
Assurant 27,878 1,809,003
Chubb 366,329 18,972,179
Cincinnati Financial 28,900 1,113,806
Genworth Financial Cl A 656,721 15,984,589
Lincoln Natl 72,212 3,925,444
Marsh & McLennan Companies 262,123 7,234,595
MBIA 121,783(d) 1,887,637
MetLife 123,320 7,272,180
Progressive 1,079,899 20,042,925
Prudential Financial 152,757 12,888,108
Safeco 83,586(h) 4,460,985
Torchmark 89,376 5,457,299
Travelers Companies 482,839 23,224,556
Unum Group 358,253 8,103,683
XL Capital Cl A 48,190(c) 2,168,550
---------------
Total 231,930,240
- ------------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL (0.4%)
Amazon.com 181,591(b,h) 14,109,621
- ------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (0.9%)
Google Cl A 47,277(b) 26,678,411
VeriSign 170,201(b,d) 5,773,218
---------------
Total 32,451,629
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
IT SERVICES (0.3%)
Automatic Data Processing 19,839 $804,868
Fidelity Natl Information Services 67,329 2,858,116
Paychex 98,702 3,229,530
Total System Services 65,805 1,520,096
Unisys 124,409(b) 517,541
---------------
Total 8,930,151
- ------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.5%)
Brunswick 61,151 1,161,257
Eastman Kodak 232,404 4,631,812
Mattel 530,174 11,138,956
---------------
Total 16,932,025
- ------------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES (0.1%)
Applera-Applied Biosystems Group 34,347(f) 1,082,961
PerkinElmer 44,019 1,095,633
Waters 20,509(b) 1,178,242
---------------
Total 3,356,836
- ------------------------------------------------------------------------------------
MACHINERY (3.8%)
Caterpillar 516,479 36,742,317
Cummins 273,041 13,182,419
Deere & Co 325,760 28,588,698
Eaton 66,218 5,480,202
Illinois Tool Works 31,849 1,605,190
Ingersoll-Rand Cl A 296,130(c) 11,703,058
ITT 71,519 4,250,374
Manitowoc 155,654 5,933,530
PACCAR 166,484(d) 7,811,429
Pall 48,360 1,784,000
Parker Hannifin 161,275 10,903,803
Terex 61,944(b) 3,639,829
---------------
Total 131,624,849
- ------------------------------------------------------------------------------------
MEDIA (1.1%)
CBS Cl B 740,544 18,654,303
Gannett 498,635 18,449,495
McGraw-Hill Companies 16,525 706,609
New York Times Cl A 109,515(d) 1,833,281
---------------
Total 39,643,688
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
METALS & MINING (2.0%)
Alcoa 334,557 $11,073,837
Freeport-McMoRan Copper & Gold 588,540 52,397,716
United States Steel 46,592 4,757,509
---------------
Total 68,229,062
- ------------------------------------------------------------------------------------
MULTILINE RETAIL (0.2%)
Family Dollar Stores 102,849 2,162,914
Kohl's 70,735(b) 3,228,346
Target 31,333 1,741,488
---------------
Total 7,132,748
- ------------------------------------------------------------------------------------
MULTI-UTILITIES (0.1%)
NiSource 121,389 2,305,177
TECO Energy 83,991 1,400,130
---------------
Total 3,705,307
- ------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (14.3%)
Anadarko Petroleum 273,837 16,044,110
Apache 122,547 11,695,886
Chevron 1,831,571 154,767,749
ConocoPhillips 696,985 55,981,835
CONSOL Energy 62,063 4,530,599
Devon Energy 57,973 4,926,546
Exxon Mobil 1,729,512 149,429,836
Hess 62,794 5,703,579
Marathon Oil 375,756 17,604,169
Murphy Oil 160,618 11,811,848
Occidental Petroleum 701,124 47,585,286
Valero Energy 184,830 10,940,088
---------------
Total 491,021,531
- ------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.1%)
MeadWestvaco 72,874 2,040,472
- ------------------------------------------------------------------------------------
PERSONAL PRODUCTS (0.1%)
Avon Products 83,774 2,933,765
- ------------------------------------------------------------------------------------
PHARMACEUTICALS (9.2%)
Barr Pharmaceuticals 27,130(b) 1,415,915
Eli Lilly & Co 116,790 6,017,021
Forest Laboratories 130,224(b) 5,179,008
Johnson & Johnson 1,472,760 93,166,798
King Pharmaceuticals 400,546(b) 4,201,728
Merck & Co 772,283 35,741,257
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 15
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
PHARMACEUTICALS (CONT.)
Mylan 88,334 $1,317,060
Pfizer 7,149,910 167,236,395
---------------
Total 314,275,182
- ------------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (--%)
CB Richard Ellis Group Cl A 70,910(b) 1,376,363
- ------------------------------------------------------------------------------------
ROAD & RAIL (0.7%)
CSX 218,212 10,578,918
Union Pacific 103,594 12,952,358
---------------
Total 23,531,276
- ------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (1.8%)
Intel 2,505,392 53,114,310
MEMC Electronic Materials 120,382(b) 8,602,498
Teradyne 33,903(b) 371,916
---------------
Total 62,088,724
- ------------------------------------------------------------------------------------
SOFTWARE (2.9%)
Compuware 107,033(b) 909,781
Microsoft 2,529,902(h) 82,474,805
Oracle 805,327(b) 16,549,470
---------------
Total 99,934,056
- ------------------------------------------------------------------------------------
SPECIALTY RETAIL (4.3%)
Abercrombie & Fitch Cl A 47,279 3,767,664
AutoNation 173,695(b) 2,827,755
AutoZone 41,363(b,h) 4,999,959
Bed Bath & Beyond 172,209(b,d) 5,552,018
Best Buy 144,404 7,048,359
GameStop Cl A 134,574(b) 6,961,513
Gap 330,498(h) 6,319,122
Home Depot 2,249,714 68,998,727
Lowe's Companies 1,222,095 32,312,192
Office Depot 37,206(b) 551,765
RadioShack 168,700 2,926,945
Sherwin-Williams 53,160(h) 3,041,284
Staples 28,256 676,449
Tiffany & Co 53,505 2,134,850
---------------
Total 148,118,602
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
TEXTILES, APPAREL & LUXURY GOODS (1.2%)
Coach 425,592(b,h) $13,640,224
Jones Apparel Group 116,009 1,948,951
Liz Claiborne 193,713 4,240,378
Nike Cl B 250,207 15,452,784
VF 80,201 6,205,151
---------------
Total 41,487,488
- ------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (2.4%)
Countrywide Financial 631,768(d) 4,397,105
Fannie Mae 996,123 33,728,724
Freddie Mac 715,153 21,733,500
MGIC Investment 175,861(d) 3,253,429
Sovereign Bancorp 110,838 1,382,150
Washington Mutual 939,106 18,706,992
---------------
Total 83,201,900
- ------------------------------------------------------------------------------------
TOBACCO (1.4%)
Altria Group 641,159 48,612,675
- ------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (0.1%)
WW Grainger 42,704 3,397,957
- ------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $3,415,656,815) $3,349,545,892
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (3.9%)(e)
SHARES VALUE(A)
RiverSource Short-Term
Cash Fund 133,456,981(g) $133,456,981
- ----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $133,456,981) $133,456,981
- ----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $3,549,113,796)(i) $3,483,002,873
==================================================================================
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
16 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
INVESTMENTS IN DERIVATIVES
FUTURES CONTRACTS OUTSTANDING AT JAN. 31, 2008
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION/
CONTRACT DESCRIPTION LONG/(SHORT) MARKET VALUE DATE (DEPRECIATION)
- --------------------------------------------------------------------------------------------------
S&P 500 Index 228 $78,637,200 March 2008 $691,413
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At Jan. 31, 2008, the
value of foreign securities represented 1.2% of net assets.
(d) At Jan. 31, 2008, security was partially or fully on loan. See Note 5 to
the financial statements.
(e) Cash collateral received from security lending activity is invested in an
affiliated money market fund and represents 0.9% of net assets. See Note 5
to the financial statements. The Fund's cash equivalent position is 3.0% of
net assets.
(f) Shareholders of tracking stocks have a financial interest only in a unit or
division of the company. Unlike the common stock of the company itself, a
tracking stock usually has limited or no voting rights. In the event of a
company's liquidation, tracking stock shareholders typically do not have a
legal claim on the company's assets.
(g) Affiliated Money Market Fund - See Note 6 to the financial statements.
(h) At Jan. 31, 2008, investments in securities included securities valued at
$9,045,330 that were partially pledged as collateral to cover initial
margin deposits on open stock index futures contracts.
(i) At Jan. 31, 2008, the cost of securities for federal income tax purposes
was approximately $3,549,114,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $255,337,000
Unrealized depreciation (321,448,000)
- ------------------------------------------------------------------------------
Net unrealized depreciation $(66,111,000)
- ------------------------------------------------------------------------------
</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 DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 17
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JAN. 31, 2008 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $3,415,656,815) $3,349,545,892
Affiliated money market fund (identified cost
$133,456,981) 133,456,981
- ------------------------------------------------------------------------------
Total investments in securities (identified cost
$3,549,113,796) 3,483,002,873
Cash 189,468
Capital shares receivable 47,682,244
Dividends receivable 3,398,189
Receivable for investment securities sold 140,243,823
Variation margin receivable 1,152,750
- ------------------------------------------------------------------------------
Total assets 3,675,669,347
- ------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 11,384,762
Payable for investment securities purchased 182,702,992
Payable upon return of securities loaned 31,719,500
Accrued investment management services fee 52,322
Accrued distribution fee 20,181
Accrued transfer agency fee 2,873
Accrued administrative services fee 4,699
Accrued plan administration services fee 919
Other accrued expenses 201,566
- ------------------------------------------------------------------------------
Total liabilities 226,089,814
- ------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $3,449,579,533
==============================================================================
</Table>
- --------------------------------------------------------------------------------
18 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
JAN. 31, 2008 (UNAUDITED)
<Table>
REPRESENTED BY
Capital stock - $.01 par value $ 5,337,314
Additional paid-in capital 3,531,852,233
Undistributed net investment income 3,196,394
Accumulated net realized gain (loss) (25,424,761)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (65,381,647)
- ----------------------------------------------------------------------------------
Total - representing net assets applicable to outstanding capital
stock $3,449,579,533
==================================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $1,252,334,040
Class B $ 54,495,262
Class C $ 3,023,989
Class I $ 450,092,419
Class R2 $ 4,274
Class R3 $ 4,276
Class R4 $ 136,937,647
Class R5 $ 4,277
Class W $1,552,683,349
Net asset value per share of outstanding
capital stock: Class A shares (1) 193,702,203 $ 6.47
Class B shares 8,515,833 $ 6.40
Class C shares 473,899 $ 6.38
Class I shares 69,210,925 $ 6.50
Class R2 shares 661 $ 6.47
Class R3 shares 661 $ 6.47
Class R4 shares 21,098,328 $ 6.49
Class R5 shares 661 $ 6.47
Class W shares 240,728,210 $ 6.45
- ----------------------------------------------------------------------------------------------------------------
*Including securities on loan, at value $ 31,717,843
- ----------------------------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $6.86. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 19
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JAN. 31, 2008 (UNAUDITED)
<Table>
INVESTMENT INCOME
Income:
Dividends $ 35,145,432
Interest 6,699
Income distributions from affiliated money market fund 1,834,273
Fee income from securities lending 90,432
- -----------------------------------------------------------------------------
Total income 37,076,836
- -----------------------------------------------------------------------------
Expenses:
Investment management services fee 9,133,877
Distribution fee
Class A 1,738,814
Class B 305,347
Class C 16,445
Class R2 12
Class R3 6
Class W 1,513,782
Transfer agency fee
Class A 654,224
Class B 32,341
Class C 1,641
Class R2 2
Class R3 2
Class R4 38,575
Class R5 2
Class W 1,211,026
Administrative services fee 845,880
Plan administration services fee
Class R2 6
Class R3 6
Class R4 192,875
Compensation of board members 32,049
Custodian fees 89,770
Printing and postage 117,230
Registration fees 112,930
Professional fees 29,597
Other 45,641
- -----------------------------------------------------------------------------
Total expenses 16,112,080
Expenses waived/reimbursed by the Investment Manager
and its affiliates (53,996)
- -----------------------------------------------------------------------------
16,058,084
Earnings and bank fee credits on cash balances (59,689)
- -----------------------------------------------------------------------------
Total net expenses 15,998,395
- -----------------------------------------------------------------------------
Investment income (loss) - net 21,078,441
- -----------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
20 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS (CONTINUED)
SIX MONTHS ENDED JAN. 31, 2008 (UNAUDITED)
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) - NET
Net realized gain (loss) on:
Security transactions $ 21,538,727
Futures contracts (7,491,027)
- ----------------------------------------------------------------------------------
Net realized gain (loss) on investments 14,047,700
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (216,710,783)
- ----------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (202,663,083)
- ----------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $(181,584,642)
==================================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 21
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2008 JULY 31, 2007
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) - net $ 21,078,441 $ 26,328,359
Net realized gain (loss) on investments 14,047,700 175,329,400
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies (216,710,783) 99,972,248
- ----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (181,584,642) 301,630,007
- ----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (11,230,439) (11,770,748)
Class B (174) (119,376)
Class C (4,379) (7,167)
Class I (5,698,153) (4,503,510)
Class R2 (28) (53)
Class R3 (40) (53)
Class R4 (1,390,578) (2,093,617)
Class R5 (54) (54)
Class W (14,867,518) (4,357)
Net realized gain
Class A (68,772,061) (98,698,411)
Class B (3,058,960) (5,457,193)
Class C (169,022) (199,900)
Class I (24,176,366) (28,282,528)
Class R2 (244) (338)
Class R3 (244) (338)
Class R4 (7,584,972) (15,612,336)
Class R5 (244) (338)
Class W (74,056,615) (27,397)
- ----------------------------------------------------------------------------------------
Total distributions (211,010,091) (166,777,714)
- ----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
22 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2008 JULY 31, 2007
(UNAUDITED)
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 22,188,299 $ 88,546,740
Class B shares 3,070,795 11,644,836
Class C shares 325,399 962,793
Class I shares 62,364,314 268,920,269
Class R2 shares -- 5,000
Class R3 shares -- 5,000
Class R4 shares 9,158,366 96,913,115
Class R5 shares -- 5,000
Class W shares 1,018,495,542 847,280,579
Reinvestment of distributions at net asset value
Class A shares 74,058,702 101,787,281
Class B shares 3,022,151 5,504,829
Class C shares 167,943 204,516
Class I shares 29,873,023 32,784,089
Class R4 shares 8,975,550 17,705,953
Class W shares 88,923,836 31,356
Payments for redemptions
Class A shares (111,281,290) (248,119,981)
Class B shares (7,636,124) (34,806,536)
Class C shares (454,059) (749,148)
Class I shares (30,734,883) (138,117,054)
Class R4 shares (23,174,206) (203,796,200)
Class W shares (124,548,503) (82,651,517)
- ----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 1,022,794,855 764,060,920
- ----------------------------------------------------------------------------------------
Total increase (decrease) in net assets 630,200,122 898,913,213
Net assets at beginning of period 2,819,379,411 1,920,466,198
- ----------------------------------------------------------------------------------------
Net assets at end of period $3,449,579,533 $2,819,379,411
========================================================================================
Undistributed net investment income $ 3,196,394 $ 15,309,316
- ----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 23
NOTES TO FINANCIAL STATEMENTS
(Unaudited as to Jan. 31, 2008)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Disciplined Equity fund (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 of
Directors (the Board). The Fund invests primarily in equity securities of
companies listed on U.S. exchanges with market capitalizations greater than $5
billion at the time of purchase.
The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class
R4, Class R5 and Class W 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, Class R2, Class R3, Class R4 and Class R5 shares are sold without a
front-end sales charge or CDSC and are offered to qualifying institutional
investors.
- - Class W shares are sold without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts.
At Jan. 31, 2008, RiverSource Investments, LLC (the Investment Manager) and the
affiliated funds-of-funds owned 100% of Class I shares and the Investment
Manager owned 100% of Class R2, Class R3 and Class R5 shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
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.
- --------------------------------------------------------------------------------
24 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
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
generally contemplate the use of fair valuation in the event that price
quotations or valuations are not readily available, price quotations or
valuations from other sources are not reflective of market value and thus deemed
unreliable, or a significant event has occurred in relation to a security or
class of securities (such as foreign securities) that is not reflected in price
quotations or valuations from other sources. A fair value price is a good faith
estimate of the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the 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, Inc. (Ameriprise
Financial), parent company of the Investment Manager, as administrator to the
Fund, will fair value foreign securities pursuant to procedures adopted by the
Board, including utilizing a third party pricing service to determine these fair
values. These procedures take into account multiple factors, including movements
in the U.S. securities markets, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the New
York Stock Exchange.
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.
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
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 25
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. During
the six months ended Jan. 31, 2008, the Fund had no outstanding option
contracts.
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 loss when the contract is closed or expires.
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.
The Fund may enter into forward foreign currency 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
- --------------------------------------------------------------------------------
26 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
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. At Jan. 31, 2008, the Fund had no outstanding forward
foreign currency contracts.
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 shareholders. No provision for income or excise
taxes is thus required.
The Fund has adopted Financial Accounting Standards Board (FASB) Interpretation
48 (FIN 48), "Accounting for Uncertainty in Income Taxes," which is effective
for fiscal periods beginning after Dec. 15, 2006. 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. Management of the Fund has concluded that there are no significant
uncertain tax positions that would require recognition in the financial
statements. Generally the tax authorities can examine all the tax returns filed
for the last three years.
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, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes, and losses deferred due to
"wash sale" transactions. The character of distributions made during the year
from net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 27
RECENT ACCOUNTING PRONOUNCEMENT
On Sept. 20, 2006, the 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 hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported in
the Statement of operations for a fiscal period. The application of SFAS 157
will be effective for the Fund's fiscal year beginning Aug. 1, 2008. The
adoption of SFAS 157 is not anticipated to have a material impact on the Fund's
financial statements.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including amortization of premium, market discount and original issue discount
using the effective interest method, is accrued daily.
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 determined monthly by
measuring the percentage difference over a rolling 12-month period between the
performance of one Class A share of the Fund and the change in the Lipper Large-
Cap Core Funds Index. In certain circumstances, the Board may approve a change
in the index. The maximum adjustment is 0.12% per year. If the performance
difference is less than 0.50%, the adjustment will be zero. The adjustment
decreased the fee by $254,064 for the six months ended Jan. 31, 2008. The
management fee for the six months ended Jan. 31, 2008 was 0.56% of the Fund's
average daily net assets, including an adjustment under the terms of the
performance incentive adjustment.
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. The fee for the six months ended Jan. 31, 2008 was 0.05%
of the Fund's average daily net assets.
- --------------------------------------------------------------------------------
28 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended Jan.
31, 2008, other expenses paid to this company were $6,879.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former 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.
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
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, Class R4
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.
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.
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Prior to Oct. 1, 2007, Ameriprise
Financial Services, Inc. also served as a principal underwriter and distributor
to the Fund. 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 annual
rate of
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 29
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.
Sales charges received by the Distributor for distributing Fund shares were
$204,511 for Class A, $15,452 for Class B and $175 for Class C for the six
months ended Jan. 31, 2008.
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.
For the six months ended Jan. 31, 2008, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds) were 1.18% for Class R2, 0.91%
for Class R3 and 0.86% for Class R4. Of these waived/reimbursed fees and
expenses, the transfer agency fee at the class level was $53,031 for Class R4
and the plan administration services fees at the class level were $6, $6 and
$953 for Class R2, Class R3 and Class R4, respectively. In addition, the
Investment Manager and its affiliates have contractually agreed to waive certain
fees and expenses until July 31, 2008, such that net expenses (excluding fees
and expenses of acquired funds), before giving effect to any performance
incentive adjustment, will not exceed 1.09% for Class A, 1.85% for Class B,
1.85% for Class C, 0.78% for Class I, 1.58% for Class R2, 1.33% for Class R3,
0.88% for Class R4, 0.83% for Class R5 and 1.23% for Class W of the Fund's
average daily net assets, unless sooner terminated at the discretion of the
Board.
During the six months ended Jan. 31, 2008, the Fund's custodian and transfer
agency fees were reduced by $59,689 as a result of earnings and bank fee credits
from overnight cash balances. The Fund pays custodian fees to Ameriprise Trust
Company, a subsidiary of Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $1,565,251,143 and $801,902,036, respectively, for the
six months ended Jan. 31, 2008. Realized gains and losses are determined on an
identified cost basis.
- --------------------------------------------------------------------------------
30 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED JAN. 31, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- -----------------------------------------------------------------------------------------
Class A 3,085,117 10,923,112 (15,623,537) (1,615,308)
Class B 434,778 449,725 (1,093,453) (208,950)
Class C 45,924 25,066 (64,676) 6,314
Class I 8,542,474 4,380,209 (4,400,819) 8,521,864
Class R2 -- -- -- --
Class R3 -- -- -- --
Class R4 1,279,032 1,317,996 (3,237,873) (640,845)
Class R5 -- -- -- --
Class W 141,990,888 13,134,983 (17,561,691) 137,564,180
- -----------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- -----------------------------------------------------------------------------------------------
Class A 12,174,430 14,582,705 (34,507,399) (7,750,264)
Class B 1,639,136 796,647 (4,750,576) (2,314,793)
Class C 135,752 29,640 (105,911) 59,481
Class I 37,783,228 4,670,098 (18,989,372) 23,463,954
Class R2* 661 -- -- 661
Class R3* 661 -- -- 661
Class R4 13,970,887 2,529,422 (27,927,795) (11,427,486)
Class R5* 661 -- -- 661
Class W** 114,252,036 4,492 (11,092,498) 103,164,030
- -----------------------------------------------------------------------------------------------
</Table>
* For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
** For the period from Dec. 1, 2006 (inception date) to July 31, 2007.
5. 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
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 31
guidelines adopted by and under the oversight of the Board. At Jan. 31, 2008,
securities valued at $31,717,843 were on loan to brokers. For collateral, the
Fund received $31,719,500 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 "Portfolio of Investments." Income from securities lending amounted to
$90,432 for the six months ended Jan. 31, 2008. Expenses paid to the Investment
Manager were $3,010 for the six months ended Jan. 31, 2008, 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.
6. 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. The cost of the
Fund's purchases and proceeds from sales of shares of the RiverSource Short-Term
Cash Fund aggregated $832,368,029 and $707,236,435, respectively, for the six
months ended Jan. 31, 2008.
7. BANK BORROWINGS
The Fund has entered into a revolving credit facility 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 credit facility became effective on Oct. 18, 2007, replacing a
prior credit facility. The credit facility agreement, which is a collective
agreement between the Fund and certain other RiverSource funds, severally and
not jointly, permits collective borrowings up to $500 million. Interest is
charged to each Fund based on its borrowings at a rate equal to the federal
funds rate plus 0.30%. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.06% per annum. Under the prior credit facility, a Fund paid interest on its
outstanding 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. The Fund
had no borrowings during the six months ended Jan. 31, 2008.
8. 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
- --------------------------------------------------------------------------------
32 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
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 filed a notice of appeal with the Eighth Circuit Court of Appeals on
August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of Directors/
Trustees.
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.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 33
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.
- --------------------------------------------------------------------------------
34 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
9. 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, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of period $7.22 $6.74 $6.70 $5.95 $5.44
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .05(b) .08(b) .06 .04 .02
Net gains (losses) (both realized
and unrealized) (.37) .97 .35 .90 .63
- ----------------------------------------------------------------------------------------------------------
Total from investment operations (.32) 1.05 .41 .94 .65
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.06) (.06) (.06) (.03) (.02)
Distributions from realized gains (.37) (.51) (.31) (.16) (.12)
- ----------------------------------------------------------------------------------------------------------
Total distributions (.43) (.57) (.37) (.19) (.14)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.47 $7.22 $6.74 $6.70 $5.95
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $1,252 $1,410 $1,368 $28 $13
- ----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) .98%(e) 1.05% 1.05% 1.35% 1.91%
- ----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) .98%(e) 1.03% 1.02% 1.25% 1.13%
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.31%(e) 1.13% .95% .84% .65%
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 25% 62% 137% 64% 64%
- ----------------------------------------------------------------------------------------------------------
Total return(h) (4.72%)(i) 15.92% 6.25% 15.95% 11.99%
- ----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 35
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of
period $7.12 $6.65 $6.62 $5.90 $5.43
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02(b) .03(b) .01 .02 (.02)
Net gains (losses) (both realized
and unrealized) (.37) .96 .34 .86 .61
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (.35) .99 .35 .88 .59
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income -- (.01) (.01) -- --
Distributions from realized gains (.37) (.51) (.31) (.16) (.12)
- ---------------------------------------------------------------------------------------------------------
Total distributions (.37) (.52) (.32) (.16) (.12)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.40 $7.12 $6.65 $6.62 $5.90
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $54 $62 $73 $9 $3
- ---------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.74%(e) 1.82% 1.85% 2.13% 2.73%
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 1.74%(e) 1.79% 1.82% 2.04% 1.95%
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) .55%(e) .37% .20% .06% (.16%)
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 25% 62% 137% 64% 64%
- ---------------------------------------------------------------------------------------------------------
Total return(h) (5.18%)(i) 15.18% 5.42% 15.03% 10.95%
- ---------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earning and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
36 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of
period $7.11 $6.65 $6.62 $5.90 $5.43
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02(b) .03(b) .01 .01 (.02)
Net gains (losses) (both realized
and unrealized) (.37) .96 .35 .87 .61
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (.35) .99 .36 .88 .59
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.01) (.02) (.02) -- --
Distributions from realized gains (.37) (.51) (.31) (.16) (.12)
- ---------------------------------------------------------------------------------------------------------
Total distributions (.38) (.53) (.33) (.16) (.12)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.38 $7.11 $6.65 $6.62 $5.90
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $3 $3 $3 $-- $--
- ---------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.73%(e) 1.81% 1.84% 2.13% 2.73%
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 1.73%(e) 1.79% 1.81% 2.06% 1.95%
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) .55%(e) .36% .20% .02% (.17%)
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 25% 62% 137% 64% 64%
- ---------------------------------------------------------------------------------------------------------
Total return(h) (5.20%)(i) 15.14% 5.51% 15.03% 10.96%
- ---------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 37
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007 2006 2005 2004(B)
Net asset value, beginning of period $7.27 $6.78 $6.73 $5.96 $5.99
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .06(c) .11(c) .08 .04 .02
Net gains (losses) (both realized
and unrealized) (.37) .97 .36 .92 (.05)
- ----------------------------------------------------------------------------------------------------------
Total from investment operations (.31) 1.08 .44 .96 (.03)
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.09) (.08) (.08) (.03) --
Distributions from realized gains (.37) (.51) (.31) (.16) --
- ----------------------------------------------------------------------------------------------------------
Total distributions (.46) (.59) (.39) (.19) --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.50 $7.27 $6.78 $6.73 $5.96
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $450 $441 $252 $82 $9
- ----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) .63%(f) .70% .72% .91% 1.27%(f)
- ----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .63%(f) .67% .70% .91% .93%(f)
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.64%(f) 1.47% 1.41% 1.19% 5.35%(f)
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 25% 62% 137% 64% 64%
- ----------------------------------------------------------------------------------------------------------
Total return(i) (4.61%)(j) 16.29% 6.73% 16.29% (.50%)(j)
- ----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from July 15, 2004 (inception date) to July 31, 2004.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
38 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007(B)
Net asset value, beginning of period $7.21 $7.57
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .04 .03
Net gains (losses) (both realized and
unrealized) (.37) .20
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.33) .23
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.08)
Distributions from realized gains (.37) (.51)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.41) (.59)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.47 $7.21
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e),(f) 1.42% 1.49%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(f),(g),(h) 1.18% 1.48%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss)(f) 1.11% .55%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 25% 62%
- -----------------------------------------------------------------------------------------------------------
Total return(i),(j) (4.83%) 3.31%
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 39
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007(B)
Net asset value, beginning of period $7.22 $7.57
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .05 .04
Net gains (losses) (both realized and
unrealized) (.37) .20
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.32) .24
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.06) (.08)
Distributions from realized gains (.37) (.51)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.43) (.59)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.47 $7.22
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e),(f) 1.15% 1.24%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(f),(g),(h) .91% 1.22%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss)(f) 1.38% .81%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 25% 62%
- -----------------------------------------------------------------------------------------------------------
Total return(i),(j) (4.72%) 3.46%
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
40 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of
period $7.25 $6.76 $6.71 $5.95 $5.45
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .05(b) .09(b) .07 .05 .03
Net gains (losses) (both realized
and unrealized) (.37) .98 .36 .91 .61
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (.32) 1.07 .43 .96 .64
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.07) (.07) (.07) (.04) (.02)
Distributions from realized gains (.37) (.51) (.31) (.16) (.12)
- ---------------------------------------------------------------------------------------------------------
Total distributions (.44) (.58) (.38) (.20) (.14)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.49 $7.25 $6.76 $6.71 $5.95
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $137 $158 $224 $-- $--
- ---------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) .93%(e) .95% .87% 1.18% 1.76%
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) .86%(e) .87% .84% 1.06% .98%
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.42%(e) 1.29% 1.10% 1.03% .78%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 25% 62% 137% 64% 64%
- ---------------------------------------------------------------------------------------------------------
Total return(h) (4.74%)(i) 16.15% 6.48% 16.25% 11.87%
- ---------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 41
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007(B)
Net asset value, beginning of period $7.24 $7.57
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .06 .06
Net gains (losses) (both realized and
unrealized) (.38) .20
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.32) .26
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08) (.08)
Distributions from realized gains (.37) (.51)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.45) (.59)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.47 $7.24
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e),(f) .67% .75%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(f),(g),(h) .67% .74%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss)(f) 1.62% 1.28%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 25% 62%
- -----------------------------------------------------------------------------------------------------------
Total return(i),(j) (4.70%) 3.76%
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
42 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007(B)
Net asset value, beginning of period $7.22 $7.46
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .04 .03
Net gains (losses) (both realized and
unrealized) (.37) .32
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.33) .35
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.07) (.08)
Distributions from realized gains (.37) (.51)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.44) (.59)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.45 $7.22
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $1,553 $745
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e),(f) 1.08% 1.18%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(f),(g),(h) 1.08% 1.13%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss)(f) 1.13% .59%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 25% 62%
- -----------------------------------------------------------------------------------------------------------
Total return(i),(j) (4.82%) 5.01%
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT 43
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.
- --------------------------------------------------------------------------------
44 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2008 SEMIANNUAL REPORT
RIVERSOURCE DISCIPLINED EQUITY FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by
the Fund's current prospectus. RiverSource mutual
funds are distributed by RiverSource
Distributors, Inc., Member FINRA, and managed by
RiverSource Investments, LLC. These companies are
part of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2008 RiverSource Distributors, Inc. S-6274 F (3/08)
</Table>
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
GROWTH FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2008
RIVERSOURCE GROWTH FUND SEEKS TO
PROVIDE SHAREHOLDERS WITH
LONG-TERM CAPITAL GROWTH.
SINGLE STRATEGY FUNDS LOGO
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 2
Performance Summary................. 4
Questions & Answers
with Portfolio Management........ 8
Fund Expenses Example............... 12
Portfolio of Investments............ 14
Financial Statements................ 19
Notes to Financial Statements....... 25
Proxy Voting........................ 46
</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.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 1
FUND SNAPSHOT AT JAN. 31, 2008 (UNAUDITED)
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 23.2%
Health Care 19.0%
Consumer Discretionary 15.3%
Telecommunication Services 13.0%
Consumer Staples 9.6%
Industrials 6.0%
Other(1) 13.9%
</Table>
* Sectors can be comprised of several industries. Please refer to the section
entitled "Portfolio of Investments" for a complete listing. No single
industry exceeds 25% of portfolio assets.
(1) Includes Financials 4.8%, Materials 3.1%, Energy 1.8%, Options Purchased
0.2% and Cash & Cash Equivalents(2) 4.0%.
(2) Of the 4.0%, 1.9% is due to security lending activity and 2.1% is the
Fund's cash equivalent position.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Virgin Media 8.3%
QUALCOMM 6.2%
Vodafone Group 4.4%
AT&T 3.8%
Microsoft 3.4%
Boston Scientific 3.2%
Genentech 2.8%
Avon Products 2.7%
Boeing 2.3%
KKR Private Equity Investors LP
Unit 2.2%
</Table>
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
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.
- --------------------------------------------------------------------------------
2 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
FUND SNAPSHOT AT JAN. 31, 2008 (UNAUDITED)
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 15
</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 IGRYX 03/20/95
Class R5 RSWHX 12/11/06
Class W -- 12/01/06
Total net assets $2.724 billion
Number of holdings 107
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 3
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the six-month period ended Jan. 31, 2008
(BAR CHART)
<Table>
RiverSource Growth Fund Class A (excluding sales
charge) -6.43%
Russell 1000(R) Growth Index(1) (unmanaged) -3.15%
Lipper Large-Cap Growth Funds Index(2) -1.09%
</Table>
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.
(1) The Russell 1000(R) 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.
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 1.50%
Class R3 1.27%
Class R4 1.04%(a)
Class R5 0.76%
Class W 1.17%
</Table>
(a) 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.
- --------------------------------------------------------------------------------
4 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
THIS PAGE LEFT BLANK INTENTIONALLY
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT JAN. 31, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 3/1/72) -6.43% -6.03% +5.77% +9.21% +0.94% +11.43%
Class B (inception 3/20/95) -6.78% -6.75% +4.97% +8.37% +0.16% +5.36%
Class C (inception 6/26/00) -6.78% -6.75% +4.98% +8.37% N/A -7.31%
Class I (inception 3/4/04) -6.20% -5.64% +6.26% N/A N/A +5.73%
Class R2 (inception 12/11/06) -6.39% -6.19% N/A N/A N/A -2.39%
Class R3 (inception 12/11/06) -6.30% -5.99% N/A N/A N/A -2.17%
Class R4 (inception 3/20/95) -6.28% -5.79% +5.99% +9.42% +1.11% +6.35%
Class R5 (inception 12/11/06) -6.22% -5.68% N/A N/A N/A -1.83%
Class W (inception 12/1/06) -6.40% -6.03% N/A N/A N/A -1.25%
WITH SALES CHARGE
Class A (inception 3/1/72) -11.82% -11.44% +3.70% +7.93 +0.42 +11.27%
Class B (inception 3/20/95) -11.44% -11.41% +3.74% +8.07 +0.16 +5.36%
Class C (inception 6/26/00) -7.71% -7.68% +4.98% +8.37 N/A -7.31%
</Table>
- --------------------------------------------------------------------------------
6 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
PERFORMANCE SUMMARY
<Table>
<Caption>
AT DEC. 31, 2007
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 3/1/72) -2.71% +2.87% +7.35% +10.14% +1.58% +11.66%
Class B (inception 3/20/95) -3.11% +2.03% +6.50% +9.28% +0.80% +5.93%
Class C (inception 6/26/00) -3.07% +2.08% +6.52% +9.29% N/A -6.60%
Class I (inception 3/4/04) -2.49% +3.29% +7.82% N/A N/A +7.62%
Class R2 (inception 12/11/06) -2.72% +2.66% N/A N/A N/A +3.47%
Class R3 (inception 12/11/06) -2.57% +2.94% N/A N/A N/A +3.75%
Class R4 (inception 3/20/95) -2.53% +3.12% +7.56% +10.35% +1.75% +6.92%
Class R5 (inception 12/11/06) -2.50% +3.25% N/A N/A N/A +4.08%
Class W (inception 12/1/06) -2.70% +2.86% N/A N/A N/A +4.62%
WITH SALES CHARGE
Class A (inception 3/1/72) -8.31% -3.06% +5.25% +8.84 +1.06 +11.50%
Class B (inception 3/20/95) -7.95% -2.97% +5.32% +9.00 +0.80 +5.93%
Class C (inception 6/26/00) -4.04% +1.08% +6.52% +9.29 N/A -6.60%
</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.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 7
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Portfolio Manager Nick Thakore discusses the Fund's positioning and
results for the semiannual period ended Jan. 31, 2008.
Q: How did RiverSource Growth Fund perform for the six months ended Jan. 31,
2008?
A: RiverSource Growth Fund's Class A shares declined 6.43%, excluding sales
charge, for the six months ended Jan. 31, 2008. The Fund underperformed its
benchmark, the Russell 1000(R) Growth Index (Russell Index), which declined
3.15%, and its peer group as represented by the Lipper Large-Cap Growth Funds
Index, which declined 1.09% for the same period.
Q: What factors influenced performance during the period?
A: The market's preference for a narrow group of stocks that included both
cyclical companies and very fast growing companies with strong fundamentals
had a negative impact on the Fund's results. We generally avoided such stocks
because we questioned the companies' ability to sustain high growth rates or
because we considered them overvalued. Our concerns were validated in January
2008 as many of these stocks fell sharply.
Stock selection in telecommunication services, information technology,
materials and consumer staples had a positive impact on the Fund's
performance relative to the Russell Index. Although the Fund's
telecommunications holdings outperformed, the sector was weak overall and
having a larger telecommunications weighting than the Russell Index was
detrimental. Stock selection in consumer discretionary, health care,
industrials and financials also detracted from performance.
STOCK SELECTION IN CONSUMER DISCRETIONARY, HEALTH CARE, INDUSTRIALS AND
FINANCIALS ALSO DETRACTED FROM PERFORMANCE.
Stocks that did well during the period included Vodafone Group and Deutsche
Telekom, Lihir Gold, QUALCOMM and Nokia. Vodafone Group and Deutsche Telekom
are two European telecommunications firms that have experienced a turnaround
in fundamentals. Lihir Gold benefited as gold stocks performed strongly. The
company is one of the few gold stocks where production is rising and costs
are declining. QUALCOMM has had strong fundamentals, but was hampered by
outstanding legal issues, which may be resolved in 2008. We think the stock
price assumes a negative outcome and if the resolution is
- --------------------------------------------------------------------------------
8 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
QUESTIONS & ANSWERS
neutral or favorable, the stock could benefit. Nokia has continued to
dominate the cell phone handset business, improving margins and capitalizing
on competitor Motorola's weakness.
Virgin Media, Harman International Inds and Hertz Global Holdings, three
consumer discretionary companies, detracted from performance as did
semiconductor firm Spansion. After receiving an attractive acquisition bid,
Virgin Media was conducting an auction at the start of the semiannual period.
Multiple suitors showed interest, but difficulties in the high yield bond
market halted the auction and the stock price fell below even the initial bid
amount. We continue to see hidden value in Virgin Media, which management may
be able to realize on its own. Audio equipment maker Harman International
Inds was in the midst of a leveraged buyout when the two private equity firms
involved pulled out of the deal. We owned rental car company Hertz Global
Holdings as a restructuring opportunity where significant cost cutting was
likely to produce solid growth. The stock declined on fears that earnings
estimates would fall due to economic slowing. We believe Hertz Global
Holdings has a better business model than it is given credit for and that
cost cutting efforts might offset economy-related slowing. If not, we think
the stock's price already reflects the possibility of slower earnings.
Spansion suffered as prices in the memory chip market declined faster than
expected.
Q: What changes did you make to the Fund's portfolio during the semiannual
period?
A: During the period, we increased the Fund's technology weighting primarily
due to bottom-up stock purchases in the sector. For example, we increased
holdings of QUALCOMM and Nokia.
We also added to the Fund's consumer discretionary weighting. The Fund hasn't
generally emphasized retail, but as these stocks sold off aggressively,
valuations became more appealing and we began to identify selective
opportunities. We added to personal care retailer Avon Products because we
believe its management team is restructuring properly, investing in the
business to drive top line growth while also cutting costs.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 9
QUESTIONS & ANSWERS
WE LOWERED THE FUND'S ENERGY WEIGHTING BECAUSE WE BELIEVE THIS SECTOR'S
NEAR-TERM FUNDAMENTALS ARE NOT AS FAVORABLE AS ITS LONG-TERM FUNDAMENTALS.
We reduced exposure to energy, health care and telecommunication services. We
lowered the Fund's energy weighting because we believe this sector's near-
term fundamentals are not as favorable as its long-term fundamentals. In the
health care sector, we reduced holdings of AstraZeneca and Merck & Co, while
adding to Bristol-Myers Squibb. We considered AstraZeneca an inexpensive
stock with reasonable growth prospects, but eliminated the position amid
concerns that near-term fundamentals were weakening. After Merck & Co
performed well, we trimmed the position on valuation grounds and concern that
the company's joint venture with Schering-Plough would negatively affect
fundamentals. We believe that for the next few years Bristol-Myers Squibb is
likely to have a good earnings growth rate that is not yet reflected in the
stock's valuation.
We still see growth opportunities in the telecommunication services sector
and maintained an overweight relative to the Russell Index. However, as
individual holdings within the sector performed well, we trimmed some
positions such as Vodafone Group. Within the sector, we added to AT&T, a
stock that had languished for six months while the company's growth
continued. We also reduced holdings of General Electric because we think its
financial services business makes it vulnerable to consumer finance weakness.
Q: How are you positioning the Fund going forward?
A: Looking ahead, we anticipate a continuation of trends from 2007, including
continued deceleration in earnings growth. Our emphasis remains on the very
largest stocks, which began to deliver results in 2007. We think this trend
will endure over an extended period. These companies are growing earnings
faster than the rest of the market now and their liquidity is helpful given
increased volatility.
- --------------------------------------------------------------------------------
10 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
QUESTIONS & ANSWERS
WE BELIEVE OUR CAREFUL BALANCING OF GROWTH POTENTIAL WITH SOUND VALUATION
LEAVES THE FUND WELL-POSITIONED FOR THE CURRENT ENVIRONMENT.
We continue to seek exposure to the faster growing stocks in our universe,
but remain disciplined in our approach. Some great growth stories are just
too expensive, in our view. We believe this approach helps shield the Fund
should these faster growers encounter problems, and will be beneficial in the
more balanced equity environment we anticipate for 2008.
Though the Fund's strategy was hampered over the past six months by the
market's embrace of cyclical stocks and its indifference to high stock
valuations, our strategy has worked over time. We believe our careful
balancing of growth potential with sound valuation leaves the Fund
well-positioned for the current environment.
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.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 11
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 Jan. 31, 2008.
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.
- --------------------------------------------------------------------------------
12 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
AUG. 1, 2007 JAN. 31, 2008 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $ 935.70 $4.83 .99%
Hypothetical
(5% return before
expenses) $1,000 $1,020.21 $5.04 .99%
Class B
Actual(b) $1,000 $ 932.20 $8.57 1.76%
Hypothetical
(5% return before
expenses) $1,000 $1,016.38 $8.94 1.76%
Class C
Actual(b) $1,000 $ 932.20 $8.52 1.75%
Hypothetical
(5% return before
expenses) $1,000 $1,016.38 $8.89 1.75%
Class I
Actual(b) $1,000 $ 938.00 $2.64 .54%
Hypothetical
(5% return before
expenses) $1,000 $1,022.48 $2.75 .54%
Class R2
Actual(b) $1,000 $ 936.10 $6.59 1.35%
Hypothetical
(5% return before
expenses) $1,000 $1,018.40 $6.87 1.35%
Class R3
Actual(b) $1,000 $ 937.00 $5.47 1.12%
Hypothetical
(5% return before
expenses) $1,000 $1,019.56 $5.70 1.12%
Class R4
Actual(b) $1,000 $ 937.20 $4.10 .84%
Hypothetical
(5% return before
expenses) $1,000 $1,020.97 $4.28 .84%
Class R5
Actual(b) $1,000 $ 937.80 $2.93 .60%
Hypothetical
(5% return before
expenses) $1,000 $1,022.18 $3.06 .60%
Class W
Actual(b) $1,000 $ 936.00 $4.88 1.00%
Hypothetical
(5% return before
expenses) $1,000 $1,020.16 $5.09 1.00%
</Table>
(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 184/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Jan. 31, 2008: -6.43%
for Class A, -6.78% for Class B, -6.78% for Class C, -6.20% for Class I,
-6.39% for Class R2, -6.30% for Class R3, -6.28% for Class R4, -6.22% for
Class R5 and -6.40% for Class W.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 13
PORTFOLIO OF INVESTMENTS
JAN. 31, 2008 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (95.4%)
ISSUER SHARES VALUE(A)
AEROSPACE & DEFENSE (2.6%)
Boeing 760,377 $63,248,159
Lockheed Martin 59,239 6,393,073
---------------
Total 69,641,232
- ------------------------------------------------------------------------------------
AIRLINES (0.3%)
Northwest Airlines 230,844(b) 4,319,092
UAL 112,212 4,258,445
---------------
Total 8,577,537
- ------------------------------------------------------------------------------------
BEVERAGES (3.0%)
Coca-Cola 313,679 18,560,386
Molson Coors Brewing Cl B 565,712 25,270,355
PepsiCo 542,424 36,987,893
---------------
Total 80,818,634
- ------------------------------------------------------------------------------------
BIOTECHNOLOGY (4.7%)
Amgen 666,730(b) 31,062,951
Biogen Idec 183,105(b) 11,160,250
Celgene 63,293(b) 3,551,370
Genentech 1,092,663(b) 76,694,016
Gilead Sciences 150,267(b) 6,865,699
---------------
Total 129,334,286
- ------------------------------------------------------------------------------------
CAPITAL MARKETS (3.6%)
Apollo Mgmt LP 1,494,100(b,d,g) 25,212,938
Goldman Sachs Group 16,290 3,270,543
KKR Private Equity Investors LP Unit 3,539,668 59,610,508
Oaktree Capital Group LLC Cl A Unit 230,000(d,g) 6,325,000
Och-Ziff Capital Management Group LLC Cl A 224,533 4,953,198
---------------
Total 99,372,187
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
COMMUNICATIONS EQUIPMENT (10.2%)
Ciena 107,204(b) $2,908,445
Cisco Systems 1,854,323(b) 45,430,914
Comverse Technology 452,723(b) 7,390,703
JDS Uniphase 762,026(b) 7,932,691
Motorola 339,108 3,909,915
Nokia ADR 828,911(c) 30,628,261
QUALCOMM 3,984,743 169,032,797
Starent Networks 646,145(b) 7,986,352
---------------
Total 275,220,078
- ------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (2.3%)
Apple 321,044(b) 43,456,516
EMC 242,184(b) 3,843,460
Hewlett-Packard 334,183 14,620,506
---------------
Total 61,920,482
- ------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (7.0%)
AT&T 2,678,178 103,083,071
Deutsche Telekom 2,264,668(c) 46,453,277
Deutsche Telekom ADR 404,723(c) 8,292,774
Telefonica 489,000(c) 14,294,256
Telefonica ADR 147,367(c) 12,938,823
Verizon Communications 138,750 5,389,050
---------------
Total 190,451,251
- ------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (0.8%)
First Solar 58,458(b) 10,625,911
SunPower Cl A 49,972(b) 3,452,565
Suntech Power Holdings ADR 147,526(b,c) 8,074,098
---------------
Total 22,152,574
- ------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (0.1%)
CVS Caremark 92,812 3,626,165
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HEALTH CARE EQUIPMENT & SUPPLIES (3.4%)
Boston Scientific 7,052,734(b) $85,549,663
Medtronic 153,219 7,135,409
---------------
Total 92,685,072
- ------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (2.8%)
Cardinal Health 165,914 9,618,035
McKesson 480,289 30,157,346
UnitedHealth Group 581,360 29,556,342
WellPoint 103,738(b) 8,112,312
---------------
Total 77,444,035
- ------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (0.3%)
Intl Game Technology 186,212 7,945,666
- ------------------------------------------------------------------------------------
HOUSEHOLD DURABLES (2.1%)
Harman Intl Inds 1,202,458 55,998,469
- ------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (1.5%)
Colgate-Palmolive 229,924 17,704,148
Procter & Gamble 353,213 23,294,397
---------------
Total 40,998,545
- ------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (0.9%)
Siemens 184,931(c,e) 23,938,531
- ------------------------------------------------------------------------------------
INSURANCE (1.1%)
AFLAC 144,060 8,835,200
American Intl Group 164,801 9,090,423
Prudential Financial 150,261 12,677,521
---------------
Total 30,603,144
- ------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (2.0%)
eBay 476,617(b) 12,816,231
Google Cl A 73,496(b) 41,473,793
Yahoo! 48,993(b) 939,686
---------------
Total 55,229,710
- ------------------------------------------------------------------------------------
IT SERVICES (0.3%)
HCL Technologies 65,150(c) 405,459
MasterCard Cl A 40,738 8,432,766
---------------
Total 8,838,225
- ------------------------------------------------------------------------------------
MACHINERY (--%)
Flowserve 10,132 832,040
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MEDIA (13.0%)
Cablevision Systems Cl A 239,673(b) $5,627,522
Comcast Cl A 734,063(b) 13,330,584
DIRECTV Group 80,348(b) 1,814,258
DISH Network Cl A 176,163(b) 4,974,843
News Corp Cl A 916,144 17,315,122
Time Warner 1,411,467 22,216,491
Virgin Media 13,534,806(h) 226,301,955
WorldSpace Cl A 419,274(b,e) 582,791
XM Satellite Radio Holdings Cl A 4,768,866(b) 59,133,938
---------------
Total 351,297,504
- ------------------------------------------------------------------------------------
METALS & MINING (3.1%)
Coeur d'Alene Mines 6,493,899(b,e) 29,677,118
Lihir Gold 12,646,989(b,c) 41,168,844
Newmont Mining 265,197 14,410,800
---------------
Total 85,256,762
- ------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (1.8%)
Exxon Mobil 538,355 46,513,873
Kinder Morgan Management LLC --(b) 21
Valero Energy 44,192 2,615,724
---------------
Total 49,129,618
- ------------------------------------------------------------------------------------
PERSONAL PRODUCTS (3.3%)
Avon Products 2,101,414 73,591,518
Herbalife 377,497(c) 14,979,081
---------------
Total 88,570,599
- ------------------------------------------------------------------------------------
PHARMACEUTICALS (7.9%)
Bristol-Myers Squibb 2,209,728 51,243,592
Eli Lilly & Co 358,020 18,445,190
Johnson & Johnson 119,308 7,547,424
Merck & Co 928,840 42,986,715
Pfizer 2,206,548 51,611,159
Roche Holding 65,333(c) 11,862,594
Schering-Plough 1,013,624 19,836,622
Wyeth 295,694 11,768,621
---------------
Total 215,301,917
- ------------------------------------------------------------------------------------
ROAD & RAIL (1.4%)
Hertz Global Holdings 2,537,981(b) 37,866,677
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 15
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (3.7%)
Atmel 2,721,445(b) $8,599,766
Himax Technologies ADR 1,277,429(c) 6,297,725
Infineon Technologies 546,047(b,c) 5,570,720
Intel 1,936,275 41,049,030
LDK Solar ADR 64,693(b,c,e) 2,280,428
PMC-Sierra 2,729,608(b) 12,801,862
Spansion Cl A 4,518,145(b) 17,259,314
Texas Instruments 261,399 8,085,071
---------------
Total 101,943,916
- ------------------------------------------------------------------------------------
SOFTWARE (4.7%)
Microsoft 2,858,884 93,199,618
Nintendo ADR 318,630(c) 19,853,517
Nuance Communications 857,272(b) 13,622,052
---------------
Total 126,675,187
- ------------------------------------------------------------------------------------
SPECIALTY RETAIL (--%)
Office Depot 46,627(b) 691,478
- ------------------------------------------------------------------------------------
TOBACCO (1.7%)
Altria Group 595,157 45,124,804
- ------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (5.9%)
America Movil ADR Series L 52,780(c) 3,162,050
Millicom Intl Cellular 58,260(b,c) 6,172,064
Orascom Telecom Holding GDR 75,632(c,e) 5,604,331
Sprint Nextel 738,303 7,774,331
Vodafone Group 33,873,597(c) 118,495,755
Vodafone Group ADR 595,976(c) 20,739,965
---------------
Total 161,948,496
- ------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $2,749,909,393) $2,599,434,821
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
OPTIONS PURCHASED (0.1%)
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
CALLS
Virgin Media 16,687 $17.50 June 2008 $3,128,813
XM Satellite Radio Holdings ClA 4,468 15.00 Feb. 2008 212,230
- --------------------------------------------------------------------------------------------------------------------------
PUTS
Oil Service Holders Trust 664 165.00 Feb. 2008 645,740
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OPTIONS PURCHASED
(Cost: $5,551,843) $3,986,783
- --------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (3.9%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 107,513,320(i) $107,513,320
- ------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $107,513,320) $107,513,320
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $2,862,974,556)(j) $2,710,934,924
====================================================================================
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
16 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
INVESTMENTS IN DERIVATIVES
OPEN OPTIONS CONTRACTS WRITTEN AT JAN. 31, 2008
<Table>
<Caption>
NUMBER OF EXERCISE EXPIRATION
ISSUER PUTS/CALLS CONTRACTS PRICE DATE VALUE(A)
- --------------------------------------------------------------------------------------------------
Virgin Media Call 12,136 $22.50 June 2008 $819,180
</Table>
TOTAL RETURN SWAP CONTRACTS OUTSTANDING AT JAN. 31, 2008
<Table>
<Caption>
NOTIONAL
EXPIRATION PRINCIPAL UNREALIZED
COUNTERPARTY FUND RECEIVES FUND PAYS DATE AMOUNT APPRECIATION
- ---------------------------------------------------------------------------------------------------
Goldman Sachs Total return on Floating rate Jan. 23, 2009 $53,907 $1,142,336
International a custom basket based on
of securities 1-month LIBOR
in the consumer less 0.40%
goods sector
Goldman Sachs Total return on Floating rate Jan. 23, 2009 39,782 696,021
International a custom basket based on
of securities 1-month LIBOR
in the less 0.75%
financial
sector
Goldman Sachs Total return on Floating rate Jan. 23, 2009 38,748 141,223
International a custom basket based on
of securities 1-month LIBOR
in the plus 0.25%
technology
sector
- ---------------------------------------------------------------------------------------------------
Total $1,979,580
- ---------------------------------------------------------------------------------------------------
</Table>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JAN. 31, 2008
<Table>
<Caption>
CURRENCY TO BE CURRENCY TO BE UNREALIZED
EXCHANGE DATE DELIVERED RECEIVED DEPRECIATION
- ---------------------------------------------------------------------------------------------------
Feb. 4, 2008 2,797,050 5,556,406 $(5,523)
British Pound U.S. Dollar
Feb. 11, 2008 39,973,000 34,904,003 (586,718)
Australian Dollar U.S. Dollar
Feb. 25, 2008 46,657,000 69,108,348 (210,255)
European Monetary Unit U.S. Dollar
Feb. 27, 2008 35,108,000 51,963,702 (193,491)
European Monetary Unit U.S. Dollar
March 10, 2008 28,957,000 57,467,483 (16,080)
British Pound U.S. Dollar
March 13, 2008 23,520,000 46,678,380 (12,003)
British Pound U.S. Dollar
- ---------------------------------------------------------------------------------------------------
Total $(1,024,070)
- ---------------------------------------------------------------------------------------------------
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At Jan. 31, 2008, the
value of foreign securities represented 14.7% of net assets.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 17
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(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 Jan. 31,
2008, the value of these securities amounted to $31,537,938 or 1.2% of net
assets.
(e) At Jan. 31, 2008, security was partially or fully on loan. See Note 5 to
the financial statements.
(f) Cash collateral received from security lending activity is invested in an
affiliated money market fund and represents 1.9% of net assets. See Note 5
to the financial statements. The Fund's cash equivalent position is 2.0% of
net assets.
(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 Jan. 31,
2008, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ----------------------------------------------------------------------------------
Apollo Mgmt LP* 08-02-07 thru 01-16-08 $34,761,034
Oaktree Capital Group LLC Cl A Unit* 05-21-07 thru 07-20-07 9,544,300
</Table>
* Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended.
(h) At Jan. 31, 2008, securities valued at $20,291,392 were held to cover open
call options written. See Note 6 to the financial statements.
(i) Affiliated Money Market Fund - See Note 7 to the financial statements.
(j) At Jan. 31, 2008, the cost of securities for federal income tax purposes
was approximately $2,862,975,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $169,196,000
Unrealized depreciation (321,236,000)
- ------------------------------------------------------------------------------
Net unrealized depreciation $(152,040,000)
- ------------------------------------------------------------------------------
</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.
- --------------------------------------------------------------------------------
18 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JAN. 31, 2008 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $2,755,461,236) $2,603,421,604
Affiliated money market fund (identified cost
$107,513,320) 107,513,320
- ------------------------------------------------------------------------------
Total investments in securities (identified cost
$2,862,974,556) 2,710,934,924
Cash 1,025,573
Capital shares receivable 522,403
Dividends and accrued interest receivable 4,127,859
Receivable for investment securities sold 133,763,912
Unrealized appreciation on swap contracts 1,979,580
- ------------------------------------------------------------------------------
Total assets 2,852,354,251
- ------------------------------------------------------------------------------
LIABILITIES
Options contracts written, at value (premiums received
$1,086,966) 819,180
Capital shares payable 4,578,085
Payable for investment securities purchased 63,126,604
Payable upon return of securities loaned 50,420,900
Unrealized depreciation on forward foreign currency
contracts 1,024,070
Accrued investment management services fee 42,439
Accrued distribution fee 22,730
Accrued transfer agency fee 1,743
Accrued administrative services fee 3,877
Accrued plan administration services fee 737
Other accrued expenses 246,515
Collateral and deposits payable 8,260,358
- ------------------------------------------------------------------------------
Total liabilities 128,547,238
- ------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $2,723,807,013
==============================================================================
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 19
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
JAN. 31, 2008 (UNAUDITED)
<Table>
REPRESENTED BY
Capital stock -- $.01 par value $ 904,607
Additional paid-in capital 3,041,931,829
Undistributed net investment income 4,723,370
Accumulated net realized gain (loss) (172,854,897)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (150,897,896)
- ------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $2,723,807,013
==============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $2,042,243,098
Class B $ 314,274,923
Class C $ 17,576,774
Class I $ 238,668,792
Class R2 $ 4,776
Class R3 $ 4,776
Class R4 $ 111,024,256
Class R5 $ 4,778
Class W $ 4,840
Net asset value per share of outstanding Class A
capital stock: shares(1) 67,236,573 $ 30.37
Class B shares 11,316,343 $ 27.77
Class C shares 634,492 $ 27.70
Class I shares 7,684,441 $ 31.06
Class R2 shares 155 $ 30.81
Class R3 shares 155 $ 30.81
Class R4 shares 3,588,218 $ 30.94
Class R5 shares 155 $ 30.83
Class W shares 157 $ 30.83
- -------------------------------------------------------------------------------------------
* Including securities on loan, at value $ 46,150,808
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $32.22. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
20 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JAN. 31, 2008 (UNAUDITED)
<Table>
INVESTMENT INCOME
Income:
Dividends $ 19,340,991
Interest 56,107
Income distributions from affiliated money market fund 2,807,965
Fee income from securities lending 462,224
- -----------------------------------------------------------------------------
Total income 22,667,287
- -----------------------------------------------------------------------------
Expenses:
Investment management services fee 7,163,316
Distribution fee
Class A 2,932,106
Class B 1,808,803
Class C 101,122
Class R2 13
Class R3 7
Class W 7
Transfer agency fee
Class A 2,290,619
Class B 379,506
Class C 20,397
Class R2 2
Class R3 2
Class R4 35,138
Class R5 2
Class W 5
Administrative services fee 815,771
Plan administration services fee
Class R2 7
Class R3 7
Class R4 175,689
Compensation of board members 29,235
Custodian fees 184,500
Printing and postage 273,800
Registration fees 47,200
Professional fees 17,137
Other 40,427
- -----------------------------------------------------------------------------
Total expenses 16,314,818
Expenses waived/reimbursed by the Investment Manager and
its affiliates (121,783)
- -----------------------------------------------------------------------------
16,193,035
Earnings and bank fee credits on cash balances (87,510)
- -----------------------------------------------------------------------------
Total net expenses 16,105,525
- -----------------------------------------------------------------------------
Investment income (loss) -- net 6,561,762
- -----------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 21
STATEMENT OF OPERATIONS (CONTINUED)
SIX MONTHS ENDED JAN. 31, 2008 (UNAUDITED)
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $ 146,164,800
Foreign currency transactions (7,954,801)
Options contracts written 1,545,032
Swap transactions 1,895,342
- -----------------------------------------------------------------------------
Net realized gain (loss) on investments 141,650,373
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies (334,779,969)
- -----------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (193,129,596)
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $(186,567,834)
=============================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
22 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2008 JULY 31, 2007
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 6,561,762 $ 22,797,497
Net realized gain (loss) on investments 141,650,373 245,132,519
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies (334,779,969) 227,422,901
- ----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (186,567,834) 495,352,917
- ----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (18,612,148) (17,087,134)
Class C (35,078) (21,069)
Class I (3,250,658) (3,983,286)
Class R2 (34) (55)
Class R3 (46) (55)
Class R4 (1,320,795) (1,999,289)
Class R5 (63) (56)
Class W (42) (55)
- ----------------------------------------------------------------------------------------
Total distributions (23,218,864) (23,090,999)
- ----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 23
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2008 JULY 31, 2007
(UNAUDITED)
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 73,722,188 $ 279,305,597
Class B shares 13,928,199 40,223,465
Class C shares 1,149,711 3,730,834
Class I shares 13,247,985 102,896,983
Class R2 shares -- 5,000
Class R3 shares -- 5,000
Class R4 shares 15,511,308 28,815,906
Class R5 shares -- 5,000
Class W shares -- 5,000
Reinvestment of distributions at net asset value
Class A shares 18,132,649 16,669,054
Class C shares 34,035 20,543
Class I shares 3,250,578 3,983,218
Class R4 shares 1,320,795 1,999,289
Payments for redemptions
Class A shares (282,634,179) (574,909,608)
Class B shares (45,955,472) (201,026,288)
Class C shares (2,587,870) (4,753,464)
Class I shares (59,517,440) (110,663,694)
Class R4 shares (42,759,965) (184,854,678)
- ----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (293,157,478) (598,542,843)
- ----------------------------------------------------------------------------------------
Total increase (decrease) in net assets (502,944,176) (126,280,925)
Net assets at beginning of period 3,226,751,189 3,353,032,114
- ----------------------------------------------------------------------------------------
Net assets at end of period $2,723,807,013 $3,226,751,189
========================================================================================
Undistributed net investment income $ 4,723,370 $ 21,380,472
- ----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
24 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
(Unaudited as to Jan. 31, 2008)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Growth Fund (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 of Directors (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, Class R2, Class R3, Class
R4, Class R5 and Class W 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, Class R2, Class R3, Class R4 and Class R5 shares are sold without a
front-end sales charge or CDSC and are only offered to qualifying
institutional investors.
- - Class W shares are sold without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts.
At Jan. 31, 2008, RiverSource Investments, LLC (the Investment Manager) and the
affiliated funds-of-funds owned 100% of Class I shares and the Investment
Manager owned 100% of Class R2, Class R3, Class R5 and 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 services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
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.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 25
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
generally contemplate the use of fair valuation in the event that price
quotations or valuations are not readily available, price quotations or
valuations from other sources are not reflective of market value and thus deemed
unreliable, or a significant event has occurred in relation to a security or
class of securities (such as foreign securities) that is not reflected in price
quotations or valuations from other sources. A fair value price is a good faith
estimate of the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the 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, Inc. (Ameriprise
Financial), parent company of the Investment Manager, as administrator to the
Fund, will fair value foreign securities pursuant to procedures adopted by the
Board, including utilizing a third party pricing service to determine these fair
values. These procedures take into account multiple factors, including movements
in the U.S. securities markets, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the 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 Jan. 31, 2008, 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. The aggregate value of such securities at Jan. 31, 2008 was
$31,537,938 representing 1.2% of net assets. These securities may be valued at
fair value 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 at which the asset is valued by the
Fund.
- --------------------------------------------------------------------------------
26 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
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 loss when the contract is closed or expires. At Jan. 31, 2008, 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
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 27
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 Jan. 31, 2008, foreign currency holdings consisted of
British pounds.
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.
TOTAL RETURN EQUITY SWAP TRANSACTIONS
The Fund may enter into swap agreements to earn the total return on a specified
security, basket of securities or security indexes during the specified period,
in return for periodic payments based on a fixed or variable interest rate of
the total return from other underlying assets. Total return swap agreements may
be used to obtain exposure to a security or market without owning or taking
physical custody of such security or market. Under the terms of a total return
equity swap agreement, payments made by the Fund or the counterparty are based
on the total return of a particular reference asset or assets (such as an equity
security, a combination of such securities, or an index). That is, one party
agrees to pay another party the return on a stock, basket of stocks, or stock
index in return for a specified interest rate.
The notional amounts of swap contracts are not recorded in the financial
statements. Swap contracts are valued daily, and the change in value is recorded
as unrealized appreciation (depreciation) until the termination of the swap, at
which time realized gain (loss) is recorded. Payments received or made are
recorded as realized gains (losses).
Swap agreements may be subject to liquidity risk, which exists when a particular
swap is difficult to purchase or sell. It may not be possible for the Fund to
initiate a transaction or liquidate a position at an advantageous time or price,
which may result in significant losses. Total return swaps are subject to the
risk associated with the investment in the underlying securities and also the
risk of the counterparty not fulfilling its obligations under the agreement.
- --------------------------------------------------------------------------------
28 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
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 shareholders. No provision for income or excise
taxes is thus required.
The Fund has adopted Financial Accounting Standards Board (FASB) Interpretation
48 (FIN 48), "Accounting for Uncertainty in Income Taxes," which is effective
for fiscal periods beginning after Dec. 15, 2006. 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. Management of the Fund has concluded that there are no significant
uncertain tax positions that would require recognition in the financial
statements. Generally, the tax authorities can examine all the tax returns filed
for the last three years.
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, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes and losses deferred due to
"wash sale" transactions. The character of distributions made during the year
from net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
RECENT ACCOUNTING PRONOUNCEMENT
On Sept. 20, 2006, the 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 hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 29
measurements of fair value and the effect of certain measurements reported in
the Statement of operations for a fiscal period. The application of SFAS 157
will be effective for the Fund's fiscal year beginning Aug. 1, 2008. The
adoption of SFAS 157 is not anticipated to have a material impact on the Fund's
financial statements.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. 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 determined monthly by
measuring the percentage difference over a rolling 12-month period between the
performance of one Class A share of the Fund and the change in 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
decreased the fee by $1,840,359 for the six months ended Jan. 31, 2008. The
management fee for the six months ended Jan. 31, 2008 was 0.46% 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. The fee for the six months ended Jan. 31, 2008 was 0.05%
of the Fund's average daily net assets.
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended,
Jan. 31, 2008, other expenses paid to this company were $9,664.
- --------------------------------------------------------------------------------
30 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former 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.
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
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 R2, Class R3, Class R4
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.
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.
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Prior to Oct. 1, 2007, Ameriprise
Financial Services, Inc. also served as a principal underwriter and distributor
to the Fund. 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.
Sales charges received by the Distributor for distributing Fund shares were
$959,246 for Class A, $133,794 for Class B and $766 for Class C for the six
months ended Jan. 31, 2008.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 31
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.
For the six months ended Jan. 31, 2008, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds) were 1.10% for Class R2, 0.86%
for Class R3 and 0.67% for Class R4. Of these waived/reimbursed fees and
expenses, the plan administration services fees at the class level were $7, $7
and $121,769 for Class R2, Class R3 and Class R4, respectively. In addition, the
Investment Manager and its affiliates have contractually agreed to waive certain
fees and expenses until July 31, 2008, such that net expenses (excluding fees
and expenses of acquired funds), before giving effect to any performance
incentive adjustment, will not exceed 0.97% of the Fund's average daily net
assets for Class R4, unless sooner terminated at the discretion of the Board.
During the six months ended Jan. 31, 2008, the Fund's transfer agency fees were
reduced by $87,510 as a result of bank fee credits from overnight cash balances.
The Fund pays custodian fees to Ameriprise Trust Company, a subsidiary of
Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $1,650,320,449 and $2,004,469,643, respectively, for the
six months ended Jan. 31, 2008. Realized gains and losses are determined on an
identified cost basis.
- --------------------------------------------------------------------------------
32 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED JAN. 31, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 2,235,532 561,730 (8,660,768) (5,863,506)
Class B 464,973 -- (1,549,649) (1,084,676)
Class C 38,268 1,155 (87,854) (48,431)
Class I 397,523 98,532 (1,704,617) (1,208,562)
Class R2 -- -- -- --
Class R3 -- -- -- --
Class R4 466,271 40,170 (1,292,002) (785,561)
Class R5 -- -- -- --
Class W -- -- -- --
- ----------------------------------------------------------------------------------------------
</Table>
<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* 155 -- -- 155
Class R3* 155 -- -- 155
Class R4 887,179 62,013 (5,678,782) (4,729,590)
Class R5* 155 -- -- 155
Class W** 157 -- -- 157
- ----------------------------------------------------------------------------------------------
</Table>
* For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
** For the period from Dec. 1, 2006 (inception date) to July 31, 2007.
5. 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
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 33
guidelines adopted by and under the oversight of the Board. At Jan. 31, 2008,
securities valued at $46,150,808 were on loan to brokers. For collateral, the
Fund received $50,420,900 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 "Portfolio of Investments." Income from securities lending amounted to
$462,224 for the six months ended Jan. 31, 2008. Expenses paid to the Investment
Manager were $6,604 for the six months ended Jan. 31, 2008, 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.
6. 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, 2007 36,314 $ 5,116,314 25,224 $ 3,203,448
Opened 105,196 4,458,331 77,247 9,513,053
Closed (109,487) (8,168,791) (102,471) (12,716,501)
Expired (19,887) (318,888) -- --
- ------------------------------------------------------------------------------------------
Balance Jan. 31, 2008 12,136 $ 1,086,966 -- $ --
- ------------------------------------------------------------------------------------------
</Table>
See "Summary of significant accounting policies."
7. 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. The cost of
purchases and proceeds from sales of shares of RiverSource Short-Term Cash Fund
aggregated $764,797,671 and $733,155,132, respectively, for the six months ended
Jan. 31, 2008.
8. BANK BORROWINGS
The Fund has entered into a revolving credit facility 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 credit facility became effective on Oct. 18, 2007, replacing a
prior credit facility. The credit facility agreement, which is a collective
agreement between the Fund and certain other RiverSource funds, severally and
not jointly, permits collective borrowings up to $500 million. Interest is
charged to each Fund based on its borrowings at a rate equal to the federal
funds rate plus 0.30%. Each borrowing under the credit facility matures no later
than 60 days after
- --------------------------------------------------------------------------------
34 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
the date of borrowing. The Fund also pays a commitment fee equal to its pro rata
share of the amount of the credit facility at a rate of 0.06% per annum. Under
the prior credit facility, a Fund paid interest on its outstanding 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. The Fund had no borrowings during
the six months ended Jan. 31, 2008.
9. 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 realized
capital gains until the available capital loss carry-over has been offset or
expires.
10. 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 filed a notice of appeal with the Eighth Circuit Court of Appeals on
August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 35
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.
- --------------------------------------------------------------------------------
36 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
11. 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, 2008(H) 2007 2006 2005 2004
Net asset value, beginning of period $32.73 $28.61 $28.34 $23.73 $22.80
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .08(b) .23(b) .18 .04 .02
Net gains (losses) (both realized and
unrealized) (2.17) 4.11 .10 4.57 .91
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (2.09) 4.34 .28 4.61 .93
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.27) (.22) (.01) -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $30.37 $32.73 $28.61 $28.34 $23.73
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $2,042 $2,393 $2,351 $2,101 $2,117
- -----------------------------------------------------------------------------------------------------------
Total expenses(c),(d) .99%(e) 1.19% 1.14% 1.19% 1.03%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .46%(e) .71% .72% .16% .07%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 55% 98% 134% 136% 171%
- -----------------------------------------------------------------------------------------------------------
Total return(f) (6.43%)(g) 15.20% .98% 19.43% 4.08%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. The ratio of net expenses after reduction of earnings and bank
fee credits was 0.98% for the six months ended Jan. 31, 2008.
(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) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 37
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(H) 2007 2006 2005 2004
Net asset value, beginning of period $29.79 $26.06 $26.01 $21.95 $21.25
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.05)(b) (.02)(b) (.05) (.16) (.16)
Net gains (losses) (both realized and
unrealized) (1.97) 3.75 .10 4.22 .86
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (2.02) 3.73 .05 4.06 .70
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $27.77 $29.79 $26.06 $26.01 $21.95
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $314 $369 $462 $578 $598
- -----------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 1.76%(e) 1.96% 1.91% 1.97% 1.81%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.31%)(e) (.06%) (.06%) (.62%) (.71%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 55% 98% 134% 136% 171%
- -----------------------------------------------------------------------------------------------------------
Total return(f) (6.78%)(g) 14.31% .19% 18.50% 3.29%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. The ratio of net expenses after reduction of earnings and bank
fee credits was 1.75% for the six months ended Jan. 31, 2008.
(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) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
38 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(H) 2007 2006 2005 2004
Net asset value, beginning of period $29.77 $26.07 $26.01 $21.95 $21.25
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.05)(b) (.01)(b) (.04) (.16) (.16)
Net gains (losses) (both realized and
unrealized) (1.97) 3.74 .10 4.22 .86
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (2.02) 3.73 .06 4.06 .70
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.03) -- -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $27.70 $29.77 $26.07 $26.01 $21.95
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $18 $20 $19 $15 $13
- -----------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 1.75%(e) 1.95% 1.91% 1.97% 1.81%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.30%)(e) (.03%) (.03%) (.62%) (.71%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 55% 98% 134% 136% 171%
- -----------------------------------------------------------------------------------------------------------
Total return(f) (6.78%)(g) 14.31% .23% 18.50% 3.29%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. The ratio of net expenses after reduction of earnings and bank
fee credits was 1.74% for the six months ended Jan. 31, 2008.
(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) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 39
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(I) 2007 2006 2005 2004(B)
Net asset value, beginning of period $33.54 $29.31 $28.93 $24.10 $25.61
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .15(c) .40(c) .32 .12 .09
Net gains (losses) (both realized and
unrealized) (2.21) 4.19 .10 4.71 (1.60)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (2.06) 4.59 .42 4.83 (1.51)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.42) (.36) (.04) -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $31.06 $33.54 $29.31 $28.93 $24.10
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $239 $298 $256 $147 $18
- -----------------------------------------------------------------------------------------------------------
Total expenses(d),(e) .55%(f) .74% .68% .75% .57%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .90%(f) 1.21% 1.22% .55% .43%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 55% 98% 134% 136% 171%
- -----------------------------------------------------------------------------------------------------------
Total return(g) (6.20%)(h) 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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. The ratio of net expenses after reduction of earnings and bank
fee credits was 0.54% for the six months ended Jan. 31, 2008.
(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.
(i) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
40 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007(B)
Net asset value, beginning of period $33.13 $32.23
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .06 .13
Net gains (losses) (both realized and
unrealized) (2.16) 1.12
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (2.10) 1.25
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.22) (.35)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $30.81 $33.13
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e),(f) 1.35% 1.50%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(f),(g) 1.10% 1.50%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss)(f) .34% .63%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 55% 98%
- -----------------------------------------------------------------------------------------------------------
Total return(h),(i) (6.39%) 3.93%
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 41
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007(B)
Net asset value, beginning of period $33.18 $32.23
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .10 .18
Net gains (losses) (both realized and
unrealized) (2.17) 1.13
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (2.07) 1.31
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.30) (.36)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $30.81 $33.18
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e),(f) 1.12% 1.27%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(f),(g) .86% 1.27%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss)(f) .58% .87%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 55% 98%
- -----------------------------------------------------------------------------------------------------------
Total return(h),(i) (6.30%) 4.09%
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
42 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of period $33.34 $29.13 $28.81 $24.07 $23.09
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .13(b) .25(b) .24 .09 .07
Net gains (losses) (both realized and
unrealized) (2.20) 4.22 .10 4.65 .91
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (2.07) 4.47 .34 4.74 .98
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.33) (.26) (.02) -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $30.94 $33.34 $29.13 $28.81 $24.07
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $111 $146 $265 $304 $350
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) .84%(e) 1.03% .95% 1.02% .86%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) .67%(e) 1.03% .95% 1.02% .86%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .78%(e) .79% .89% .34% .25%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 55% 98% 134% 136% 171%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (6.28%)(i) 15.39% 1.17% 19.69% 4.24%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. The ratio of net expenses after reduction of earnings and bank
fee credits was 0.66% for the six months ended Jan. 31, 2008.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 43
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(I) 2007(B)
Net asset value, beginning of period $33.28 $32.23
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .14 .29
Net gains (losses) (both realized and
unrealized) (2.19) 1.12
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (2.05) 1.41
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.40) (.36)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $30.83 $33.28
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Total expenses(d),(e),(f) .60% .76%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss)(f) .84% 1.38%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 55% 98%
- -----------------------------------------------------------------------------------------------------------
Total return(g),(h) (6.22%) 4.41%
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(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.
(i) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
44 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(I) 2007(B)
Net asset value, beginning of period $33.21 $31.89
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .07 .24
Net gains (losses) (both realized and
unrealized) (2.18) 1.43
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (2.11) 1.67
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.27) (.35)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $30.83 $33.21
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Total expenses(d),(e),(f) 1.00% 1.17%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss)(f) .44% 1.09%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 55% 98%
- -----------------------------------------------------------------------------------------------------------
Total return(g),(h) (6.40%) 5.29%
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(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.
(i) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT 45
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.
- --------------------------------------------------------------------------------
46 RIVERSOURCE GROWTH FUND -- 2008 SEMIANNUAL REPORT
RIVERSOURCE 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 mutual
funds are distributed by RiverSource
Distributors, Inc., Member FINRA, and managed by
RiverSource Investments, LLC. These companies are
part of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2008 RiverSource Distributors, Inc. S-6456 Y (3/08)
</Table>
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
LARGE CAP EQUITY FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2008
RIVERSOURCE LARGE CAP EQUITY FUND
SEEKS TO PROVIDE SHAREHOLDERS WITH
LONG-TERM GROWTH OF CAPITAL.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 2
Performance Summary................. 4
Questions & Answers
with Portfolio Management........ 7
Fund Expenses Example............... 11
Portfolio of Investments............ 13
Financial Statements................ 26
Notes to Financial Statements....... 32
Proxy Voting........................ 52
</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.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 1
FUND SNAPSHOT AT JAN. 31, 2008 (UNAUDITED)
FUND OBJECTIVE
RiverSource Large Cap Equity Fund seeks to provide shareholders with long-term
growth of capital.
SECTOR BREAKDOWN*
Percentage of portfolio assets
(PIE CHART)
<Table>
Financials 15.8%
Information Technology 15.1%
Health Care 12.6%
Consumer Discretionary 11.1%
Energy 9.4%
Industrials 9.1%
Other(1) 26.9%
</Table>
* Sectors can be comprised of several industries. Please refer to the section
entitled "Portfolio of Investments" for a complete listing. No single
industry exceeds 25% of portfolio assets.
(1) Includes Consumer Staples 9.0%. Telecommunication Services 7.6%, Materials
3.0%, Utilities 2.5% and Cash & Cash Equivalents(2) 4.8%.
(2) Of the 4.8%, 1.6% is due to security lending activity and 3.2% is the
Fund's cash equivalent position.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Exxon Mobil 4.1%
Virgin Media 3.0%
AT&T 2.8%
QUALCOMM 2.5%
Pfizer 2.1%
Microsoft 2.1%
Bank of America 1.7%
Altria Group 1.6%
Boeing 1.5%
Boston Scientific 1.5%
</Table>
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
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.
- --------------------------------------------------------------------------------
2 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
FUND SNAPSHOT AT JAN. 31, 2008 (UNAUDITED)
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 MANAGERS
<Table>
<Caption>
YEARS IN INDUSTRY
Robert Ewing, CFA 20
Nick Thakore 15
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A ALEAX 03/28/02
Class B ALEBX 03/28/02
Class C ARQCX 03/28/02
Class I ALRIX 03/04/04
Class R2 -- 12/11/06
Class R3 -- 12/11/06
Class R4 ALEYX 03/28/02
Class R5 -- 12/11/06
Total net assets $5.228 billion
Number of holdings 476
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 3
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the six-month period ended Jan. 31, 2008
(BAR CHART)
<Table>
Large Cap Equity Fund Class A (excluding sales
charge) -5.85%
Russell 1000(R) Index(1) (unmanaged) -4.27%
S&P 500 Index(2) (unmanaged) -4.32%
Lipper Large-Cap Core Funds Index(3) -3.76%
</Table>
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.
(1) The Russell 1000(R) Index, an unmanaged index, measures the performance of
the 1,000 largest companies in the Russell 3000(R) Index, which represents
approximately 90% of the total market capitalization of the Russell 3000
Index. The index reflects reinvestment of all distributions and changes in
market prices.
(2) The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of
common stocks, is frequently used as a general measure of market
performance. The index reflects reinvestment of all distributions and
changes in market prices.
(3) The Lipper Large-Cap Core Funds Index includes the 30 largest large-cap
core funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive
adjustment.
ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
<Table>
<Caption>
TOTAL NET EXPENSES(A)
Class A 1.09% 1.06%
Class B 1.86% 1.82%
Class C 1.86% 1.82%
Class I 0.63% 0.63%
Class R2 1.44% 1.44%
Class R3 1.19% 1.19%
Class R4 0.92% 0.91%
Class R5 0.70% 0.70%
</Table>
(a) 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 0.01%), will not exceed 1.05% for Class A, 1.81% for
Class B, 1.81% for Class C, 0.67% for Class I, 1.47% for Class R2, 1.22%
for Class R3, 0.90% for Class R4 and 0.72% for Class R5.
- --------------------------------------------------------------------------------
4 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT JAN. 31, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception 3/28/02) -5.85% -5.07% +6.04% +10.01% +3.86%
Class B (inception 3/28/02) -6.25% -5.77% +5.25% +9.13% +3.05%
Class C (inception 3/28/02) -6.22% -5.58% +5.28% +9.14% +3.10%
Class I (inception 3/4/04) -5.68% -4.42% +6.58% N/A +5.50%
Class R2 (inception 12/11/06) -5.79% -5.00% N/A N/A -2.01%
Class R3 (inception 12/11/06) -5.71% -4.93% N/A N/A -1.80%
Class R4 (inception 3/28/02) -5.79% -4.70% +6.36% +10.23% +4.09%
Class R5 (inception 12/11/06) -6.02% -4.93% N/A N/A -1.79%
</Table>
<Table>
<Caption>
With sales charge
Class A (inception 3/28/02) -11.29% -10.59% +3.99% +8.69% +2.80%
Class B (inception 3/28/02) -10.41% -9.95% +4.03% +8.85% +2.90%
Class C (inception 3/28/02) -7.05% -6.42% +5.28% +9.14% +3.10%
</Table>
<Table>
<Caption>
AT DEC. 31, 2007
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception 3/28/02) -3.25% +2.68% +7.67% +10.94% +5.01%
Class B (inception 3/28/02) -3.63% +1.88% +6.84% +10.03% +4.16%
Class C (inception 3/28/02) -3.60% +1.90% +6.87% +10.04% +4.21%
Class I (inception 3/4/04) -3.10% +3.14% +8.14% N/A +7.23%
Class R2 (inception 12/11/06) -3.39% +2.49% N/A N/A +3.30%
Class R3 (inception 12/11/06) -3.15% +2.74% N/A N/A +3.55%
Class R4 (inception 3/28/02) -3.25% +2.77% +7.91% +11.10% +5.19%
Class R5 (inception 12/11/06) -3.34% +2.87% N/A N/A +3.68%
</Table>
<Table>
<Caption>
With sales charge
Class A (inception 3/28/02) -8.80% -3.25% +5.55% +9.63% +3.92%
Class B (inception 3/28/02) -7.91% -2.64% +5.65% +9.76% +4.01%
Class C (inception 3/28/02) -4.46% +1.00% +6.87% +10.04% +4.21%
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 5
PERFORMANCE SUMMARY
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 and Class R5 shares. Class I,
Class R2, Class R3, Class R4 and Class R5 are available to institutional
investors only.
* Not annualized.
- --------------------------------------------------------------------------------
6 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Bob Ewing and Nick Thakore, RiverSource Large Cap Equity Fund's portfolio
managers, discuss the Fund's results and positioning for the semiannual period
ended Jan. 31, 2008.
Q: How did RiverSource Large Cap Equity Fund perform for the six months ended
Jan. 31, 2008?
A: RiverSource Large Cap Equity Fund's Class A shares declined 5.85%,
excluding sales charge, for the semiannual period ended Jan. 31, 2008. The
Fund underperformed its benchmarks, the Russell 1000(R) Index (Russell Index)
and the Standard & Poor's 500 Index (S&P 500 Index), which declined 4.27% and
4.32%, respectively. The Fund's peer group, the Lipper Large-Cap Core Funds
Index, declined 3.76% during the same time frame.
Q: What factors most significantly affected performance during the six months?
A: In a period of decelerating economic growth and a difficult lending
environment, both stock selection and sector weightings had a negative impact
on the Fund's performance relative to the Russell Index. While stock
selection in the telecommunication services, consumer staples and information
technology sectors was favorable, this was offset by underperformance of the
Fund's holdings in the consumer discretionary, health care and financials
sectors.
Looking at sector weightings, the Fund benefited from lower exposure to
financials and greater exposure to health care, both versus the Russell
Index. On the other hand, a larger weighting in telecommunication services
and a smaller energy sector weighting versus the Russell Index were both
detrimental.
Although our telecommunication services sector weighting detracted, the
Fund's focus on European telecommunication services stocks was advantageous.
Stocks such as Vodafone Group and Deutsche Telekom benefited from a
turnaround in fundamentals. U.S. telecommunication services equipment stock
QUALCOMM also did well as the company experienced good fundamental trends and
made some progress on outstanding legal issues. We think QUALCOMM's stock
price reflects a negative outcome for these legal issues, which may be
resolved in 2008. If the resolution is neutral or favorable, the stock could
benefit.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 7
QUESTIONS & ANSWERS
ALTHOUGH OUR TELECOMMUNICATION SERVICES SECTOR WEIGHTING DETRACTED, THE
FUND'S FOCUS ON EUROPEAN TELECOMMUNICATION SERVICES STOCKS WAS
ADVANTAGEOUS.
Other positions in the portfolio did well. Lihir Gold benefited as gold
stocks performed strongly. This company appears well-positioned for
potentially explosive growth because it is one of the few gold stocks where
production is rising and costs are declining. Having a smaller position in
energy services stock Schlumberger relative to the Russell Index was also
advantageous. The North American segment of the energy services group
decelerated sharply, catching Schlumberger somewhat off guard.
Two individual detractors, Virgin Media and Harmon International Inds, were
almost solely responsible for the Fund's underperformance in the consumer
discretionary sector. Virgin Media was affected by general concerns about the
cable industry and negative response to an aggressive customer acquisition
strategy that reduced near-term cash flow. Additionally, Virgin Media
received an attractive acquisition offer in July that was later scuttled due
to weakening in high-yield credit markets. We continue to see hidden value in
this company and believe management may be able to realize on its own even
without a buyer. Harman International Inds is an audio equipment maker that
was in the midst of a leveraged buyout when the two private equity firms
involved pulled out of the deal.
Additional detractors included Countrywide Financial, Spansion and Sprint
Nextel. Mortgage lender Countrywide Financial declined in the face of a
challenging lending environment. We thought the company had navigated the
troubled waters, but liquidity issues subsequently surfaced. Toward the end
of the period, the company agreed to an acquisition by Bank of America, which
should close later this year. The stock's performance improved slightly
following the news. Spansion, a semiconductor memory chip company, suffered
as prices in the memory chip market eroded faster than expected. Sprint
Nextel continues to wrestle with effective company-level execution, mostly on
the wireless side of its business. The telecommunication services company has
experienced higher customer turnover than many of its
- --------------------------------------------------------------------------------
8 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
QUESTIONS & ANSWERS
competitors. Although there have been changes to senior management, Sprint
Nextel has yet to show any stabilization in its fundamentals.
Q: What changes did you make to the portfolio?
A: We decreased the Fund's health care weighting relative to the Russell Index.
This resulted from reduced exposure to biotechnology stocks due to both
valuation concerns and fundamental disappointments. Execution in the
biotechnology industry was not especially strong during this period. We also
decreased exposure to some larger cap pharmaceutical stocks that had gotten
more expensive and might be negatively affected by a change in presidential
administrations.
THE FUND'S WEIGHTING IN MATERIALS STOCKS HAS ALSO DECREASED, A FUNCTION OF
A REDUCTION IN THE PORTFOLIO'S EXPOSURE TO GOLD STOCKS.
We increased exposure to the consumer staples sector relative to the Russell
Index. Given that consumer staples stocks are a bit more expensive, we have
not been interested in the more traditional staples segments such as food
stocks and consumer goods companies. Rather, our interest has been very
selective, focusing on stocks with a consumer cyclical dimension. The Fund's
weighting in materials stocks has also decreased, a function of a reduction
in the portfolio's exposure to gold stocks.
Q: How do you plan to manage the Fund in coming months?
A: We manage the portfolio in three segments -- growth-oriented, value-oriented
and analyst-driven -- and several prominent themes cross the three segments.
There is a preference for high quality stocks over lower quality stocks.
Though high quality stocks lagged in 2007, we think investors are likely to
favor them in a period of slower economic activity, which seems probable for
2008.
IN A DIFFICULT ECONOMIC ENVIRONMENT WE WANT STOCK OF COMPANIES THAT HAVE
GREATER CONTROL OVER THEIR EARNINGS GROWTH RATHER THAN THOSE THAT DEPEND
ON THE ECONOMIC CYCLE.
The portfolio also has more exposure to stocks with stable growth patterns.
In a difficult economic environment we want stock of companies that have
greater control over their earnings growth rather than those that depend on
the
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 9
QUESTIONS & ANSWERS
economic cycle. We also continue to emphasize the larger stocks within our
universe. Large-cap stocks remain reasonably valued versus small- and mid-cap
stocks and they also have the potential to benefit from broader product
lines, greater international exposure and more extensive resources.
Our strategy has always been very sensitive to valuations and in the current
environment we have been finding more attractive valuation opportunities.
This allows us to add better quality companies to the portfolio at attractive
valuations or to improve the portfolio's overall valuation.
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 LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
FUND EXPENSES EXAMPLE
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the 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 Jan. 31, 2008.
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.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 11
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
AUG. 1, 2007 JAN. 31, 2008 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $ 941.50 $4.94 1.01%
Hypothetical
(5% return before
expenses) $1,000 $1,020.11 $5.14 1.01%
Class B
Actual(b) $1,000 $ 937.50 $8.64 1.77%
Hypothetical
(5% return before
expenses) $1,000 $1,016.28 $9.00 1.77%
Class C
Actual(b) $1,000 $ 937.80 $8.65 1.77%
Hypothetical
(5% return before
expenses) $1,000 $1,016.28 $9.00 1.77%
Class I
Actual(b) $1,000 $ 943.20 $2.94 .60%
Hypothetical
(5% return before
expenses) $1,000 $1,022.18 $3.06 .60%
Class R2
Actual(b) $1,000 $ 942.10 $6.80 1.39%
Hypothetical
(5% return before
expenses) $1,000 $1,018.20 $7.07 1.39%
Class R3
Actual(b) $1,000 $ 942.90 $5.58 1.14%
Hypothetical
(5% return before
expenses) $1,000 $1,019.46 $5.80 1.14%
Class R4
Actual(b) $1,000 $ 942.10 $4.26 .87%
Hypothetical
(5% return before
expenses) $1,000 $1,020.82 $4.43 .87%
Class R5
Actual(b) $1,000 $ 939.80 $3.28 .67%
Hypothetical
(5% return before
expenses) $1,000 $1,021.83 $3.41 .67%
</Table>
(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 184/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Jan. 31, 2008: -5.85%
for Class A, -6.25% for Class B, -6.22% for Class C, -5.68% for Class I,
-5.79% for Class R2, -5.71% for Class R3, -5.79% for Class R4 and -6.02%.
for Class R5.
- --------------------------------------------------------------------------------
12 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
PORTFOLIO OF INVESTMENTS
JAN. 31, 2008 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (96.0%)
ISSUER SHARES VALUE(A)
AEROSPACE & DEFENSE (4.1%)
Boeing 978,122 $81,360,189
DRS Technologies 57,475 3,084,683
General Dynamics 53,645 4,530,857
Goodrich 225,470 14,103,149
Honeywell Intl 673,182 39,764,861
L-3 Communications Holdings 128,280 14,217,272
Lockheed Martin 233,745 25,225,760
Northrop Grumman 97,343 7,725,140
United Technologies 325,906 23,924,759
---------------
Total 213,936,670
- ------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS (0.1%)
United Parcel Service Cl B 38,107 2,787,908
- ------------------------------------------------------------------------------------
AIRLINES (0.1%)
Northwest Airlines 174,472(b) 3,264,371
UAL 113,436 4,304,896
---------------
Total 7,569,267
- ------------------------------------------------------------------------------------
AUTO COMPONENTS (0.1%)
Goodyear Tire & Rubber 30,037(b) 756,031
Johnson Controls 84,559 2,990,852
---------------
Total 3,746,883
- ------------------------------------------------------------------------------------
AUTOMOBILES (0.2%)
BMW 32,184(c) 1,778,263
Fiat 73,987(c) 1,737,379
Ford Motor 298,884(b) 1,984,590
General Motors 80,554 2,280,483
Harley-Davidson 35,991 1,460,515
---------------
Total 9,241,230
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
BEVERAGES (2.4%)
Coca-Cola 751,559 $44,469,746
Hansen Natural 56,270(b) 2,169,771
Molson Coors Brewing Cl B 675,940 30,194,240
Pepsi Bottling Group 18,773 654,239
PepsiCo 718,986 49,027,655
---------------
Total 126,515,651
- ------------------------------------------------------------------------------------
BIOTECHNOLOGY (2.2%)
Amgen 620,976(b) 28,931,272
Biogen Idec 237,713(b) 14,488,607
Celgene 94,900(b) 5,324,839
Genentech 807,026(b) 56,645,155
Gilead Sciences 171,604(b) 7,840,587
---------------
Total 113,230,460
- ------------------------------------------------------------------------------------
BUILDING PRODUCTS (0.1%)
Masco 209,747(f) 4,809,499
- ------------------------------------------------------------------------------------
CAPITAL MARKETS (3.9%)
Apollo Mgmt LP 1,315,150(b,d,h) 22,193,156
Bank of New York Mellon 309,047 14,410,862
BlackRock 15,134 3,346,127
Federated Investors Cl B 146,224 6,224,756
Franklin Resources 84,183 8,774,394
Goldman Sachs Group 108,758(f) 21,835,344
KKR Private Equity Investors LP Unit 2,372,102 39,947,871
Lehman Brothers Holdings 194,868 12,504,680
Merrill Lynch & Co 383,533 21,631,261
Morgan Stanley 446,165 22,053,936
Oaktree Capital Group LLC Cl A Unit 237,000(d,h) 6,517,500
</Table>
See accompanying notes to portfolio
of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND - 2008 SEMIANNUAL REPORT 13
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CAPITAL MARKETS (CONT.)
Och-Ziff Capital Management Group LLC Cl A 440,059(f) $9,707,702
State Street 165,865 13,620,834
T Rowe Price Group 33,663 1,703,011
---------------
Total 204,471,434
- ------------------------------------------------------------------------------------
CHEMICALS (1.1%)
Air Products & Chemicals 30,759 2,768,925
Ashland 38,669 1,760,600
Dow Chemical 479,104 18,522,160
Eastman Chemical 73,266 4,840,685
Ecolab 24,792 1,196,214
EI du Pont de Nemours & Co 291,911 13,188,539
Hercules 16,913 296,485
Intl Flavors & Fragrances 11,918 507,826
Monsanto 77,648 8,730,741
PPG Inds 23,354 1,543,466
Praxair 45,533 3,684,075
Rohm & Haas 18,516 987,829
Sigma-Aldrich 19,144 950,691
---------------
Total 58,978,236
- ------------------------------------------------------------------------------------
COMMERCIAL BANKS (1.7%)
BB&T 283,408 10,282,042
Comerica 21,707 946,859
Huntington Bancshares 51,912 698,216
KeyCorp 55,238 1,444,474
M&T Bank 10,900 1,000,293
Marshall & Ilsley 37,814 1,055,011
Natl City 89,843 1,598,307
PNC Financial Services Group 149,179 9,789,126
Regions Financial 71,248 1,798,300
SunTrust Banks 38,981 2,687,740
US Bancorp 331,940 11,269,363
Wachovia 602,610 23,459,607
Wells Fargo & Co 618,525 21,036,035
Zions Bancorporation 15,634 855,805
---------------
Total 87,921,178
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
COMMERCIAL SERVICES & SUPPLIES (0.1%)
Allied Waste Inds 41,050(b) $404,343
Avery Dennison 31,270 1,620,411
Cintas 19,668 645,504
Equifax 14,327 531,388
Monster Worldwide 19,299(b) 537,477
Robert Half Intl 23,337 648,302
Waste Management 73,897 2,397,219
---------------
Total 6,784,644
- ------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (4.8%)
Ciena 80,099(b) 2,173,086
Cisco Systems 2,389,344(b) 58,538,928
Comverse Technology 284,999(b) 4,652,609
Corning 63,507 1,528,613
EchoStar Cl A 9,803(b) 286,444
JDS Uniphase 521,412(b) 5,427,899
Juniper Networks 75,320(b) 2,044,938
Motorola 1,008,684(f) 11,630,127
Nokia ADR 609,707(c) 22,528,674
QUALCOMM 3,062,790 129,923,551
Starent Networks 406,763(b) 5,027,591
Telefonaktiebolaget LM Ericsson ADR 213,488(c) 4,850,447
Tellabs 62,845(b) 428,603
---------------
Total 249,041,510
- ------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (2.8%)
Apple 342,197(b) 46,319,786
Dell 529,952(b,f) 10,620,238
EMC 281,246(b) 4,463,374
Hewlett-Packard 977,820 42,779,625
IBM 375,463 40,302,198
SanDisk 56,910(b) 1,448,360
---------------
Total 145,933,581
- ------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.2%)
Fluor 21,154 2,573,807
KBR 287,205(b) 9,072,806
---------------
Total 11,646,613
- ------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS (--%)
Vulcan Materials 15,749 1,235,667
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE LARGE CAP EQUITY FUND - 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CONSUMER FINANCE (0.8%)
American Express 458,311 $22,603,898
Capital One Financial 310,067 16,994,772
Discover Financial Services 227,455 3,980,463
SLM 33,254 723,275
---------------
Total 44,302,408
- ------------------------------------------------------------------------------------
CONTAINERS & PACKAGING (0.1%)
Ball 14,932 685,229
Bemis 15,238 414,169
Pactiv 19,059(b) 545,278
Sealed Air 22,992 601,241
Temple-Inland 35,351 662,831
---------------
Total 2,908,748
- ------------------------------------------------------------------------------------
DISTRIBUTORS (--%)
Genuine Parts 24,190 1,062,667
- ------------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (--%)
Apollo Group Cl A 20,717(b) 1,651,974
- ------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (4.0%)
Bank of America 2,070,064 91,807,339
CIT Group 27,846 778,574
Citigroup 1,551,639 43,787,253
CME Group 7,720 4,777,908
Consumer Discretionary Select Sector SPDR
Fund 48,886 1,592,706
IntercontinentalExchange 25,844(b) 3,617,126
iShares Dow Jones US Healthcare Sector Index
Fund 1 67
JPMorgan Chase & Co 1,215,901 57,816,093
Leucadia Natl 23,438 1,035,256
Materials Select Sector SPDR Fund 43,991 1,757,440
NYMEX Holdings 15,376 1,768,240
NYSE Euronext 37,454 2,945,757
---------------
Total 211,683,759
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
DIVERSIFIED TELECOMMUNICATION SERVICES (5.3%)
AT&T 3,838,498 $147,743,789
Cbeyond 19,649(b) 662,957
Chunghwa Telecom ADR 1(c) 21
Citizens Communications 183,179 2,101,063
Deutsche Telekom 1,665,833(c) 34,169,866
Deutsche Telekom ADR 254,782(c) 5,220,483
Embarq 1 45
Global Crossing 200,962(b,c) 4,324,702
Level 3 Communications 671,850(b) 2,311,164
Telefonica 308,894(c) 9,029,468
Telefonica ADR 92,244(c) 8,099,023
Time Warner Telecom Cl A 121,951(b) 2,131,703
Verizon Communications 1,483,318 57,612,072
Windstream 178,282 2,069,854
---------------
Total 275,476,210
- ------------------------------------------------------------------------------------
ELECTRIC UTILITIES (1.6%)
Allegheny Energy 23,641 1,295,290
American Electric Power 56,829 2,433,986
Duke Energy 179,398 3,347,567
Edison Intl 46,381 2,419,233
Entergy 140,371 15,185,335
Exelon 282,555 21,527,865
FirstEnergy 43,394 3,090,521
FPL Group 108,565 7,000,271
Pepco Holdings 27,548 701,372
Pinnacle West Capital 56,886 2,185,560
PPL 157,590 7,709,303
Progress Energy 36,855 1,664,740
Southern 482,425 17,536,149
---------------
Total 86,097,192
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio
of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND - 2008 SEMIANNUAL REPORT 15
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
ELECTRICAL EQUIPMENT (0.7%)
Emerson Electric 484,455 $24,629,692
First Solar 37,474(b) 6,811,649
SunPower Cl A 31,669(b,f) 2,188,011
Suntech Power Holdings ADR 94,609(b,c) 5,177,951
---------------
Total 38,807,303
- ------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.1%)
Agilent Technologies 19,697(b) 667,925
Tyco Electronics 151,521 5,122,925
---------------
Total 5,790,850
- ------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (0.8%)
Baker Hughes 23,279 1,511,505
Halliburton 118,861 3,942,619
Natl Oilwell Varco 130,650(b) 7,869,050
Pride Intl 283,974(b) 9,004,816
Schlumberger 64,114 4,838,042
Transocean 81,777(b) 10,025,861
Weatherford Intl 50,605(b) 3,127,895
---------------
Total 40,319,788
- ------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (1.3%)
Costco Wholesale 62,520(f) 4,247,609
CVS Caremark 392,132 15,320,597
Kroger 98,708 2,512,119
Safeway 91,798 2,844,820
SUPERVALU 28,966 870,718
SYSCO 86,157 2,502,861
Walgreen 194,203 6,818,467
Wal-Mart Stores 647,559 32,947,802
Whole Foods Market 20,187(f) 796,175
---------------
Total 68,861,168
- ------------------------------------------------------------------------------------
FOOD PRODUCTS (0.7%)
Archer-Daniels-Midland 91,008 4,008,902
General Mills 126,075 6,884,956
Kellogg 209,388 10,029,685
Kraft Foods Cl A 449,568 13,154,360
Tyson Foods Cl A 35,214 501,800
---------------
Total 34,579,703
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
GAS UTILITIES (0.1%)
Nicor 6,579 $269,739
ONEOK 120,616 5,668,952
Questar 24,575 1,251,113
---------------
Total 7,189,804
- ------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (1.8%)
Boston Scientific 6,437,718(b) 78,089,520
China Medical Technologies ADR 19,014(c) 906,397
Covidien 137,378 6,131,180
Medtronic 96,455 4,491,909
St. Jude Medical 30,459(b) 1,233,894
Stryker 51,582 3,454,447
---------------
Total 94,307,347
- ------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (1.9%)
Aetna 209,907 11,179,647
Cardinal Health 233,247 13,521,329
CIGNA 151,042 7,425,225
Coventry Health Care 22,249(b) 1,258,848
Express Scripts 36,705(b) 2,477,220
Humana 23,995(b) 1,926,799
Laboratory Corp of America Holdings 17,103(b) 1,263,570
McKesson 388,786 24,411,873
Patterson Companies 20,406(b) 653,808
Quest Diagnostics 22,252 1,097,469
Tenet Healthcare 67,455(b) 298,826
UnitedHealth Group 672,914 34,210,947
WellPoint 1(b) 78
---------------
Total 99,725,639
- ------------------------------------------------------------------------------------
HEALTH CARE TECHNOLOGY (--%)
IMS Health 27,754 663,043
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
16 RIVERSOURCE LARGE CAP EQUITY FUND - 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HOTELS, RESTAURANTS & LEISURE (0.9%)
Chipotle Mexican Grill Cl B 1(b) $96
Darden Restaurants 86,236 2,442,204
Intl Game Technology 446,546 19,054,117
Marriott Intl Cl A 143,359 5,155,190
McDonald's 189,542 10,149,973
MGM MIRAGE 47,487(b) 3,476,998
Pinnacle Entertainment 89,386(b,i) 1,631,295
Yum! Brands 130,298 4,450,980
---------------
Total 46,360,853
- ------------------------------------------------------------------------------------
HOUSEHOLD DURABLES (1.4%)
Black & Decker 9,580 694,933
Centex 212,758 5,910,417
DR Horton 474,710 8,188,748
Harman Intl Inds 849,868 39,578,354
Hovnanian Enterprises Cl A 385,419(b,f) 3,811,794
KB Home 292,704(f) 8,049,360
Leggett & Platt 24,869 473,008
Lennar Cl A 149,137 3,072,222
Meritage Homes 18,589(b,f) 298,353
Newell Rubbermaid 119,354 2,878,818
Snap-On 8,446 414,868
Standard-Pacific 187,625(f) 714,851
Stanley Works 11,970 614,779
Whirlpool 11,372 967,871
---------------
Total 75,668,376
- ------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (1.3%)
Colgate-Palmolive 374,206 28,813,862
Procter & Gamble 601,362 39,659,824
---------------
Total 68,473,686
- ------------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.1%)
AES 95,179(b) 1,816,015
Constellation Energy Group 25,695 2,414,302
Dynegy Cl A 70,546(b) 495,233
---------------
Total 4,725,550
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
INDUSTRIAL CONGLOMERATES (1.8%)
3M 37,132 $2,957,564
General Electric 2,076,590 73,532,052
Siemens 116,418(c) 15,069,815
Tyco Intl 107,226(c) 4,220,415
---------------
Total 95,779,846
- ------------------------------------------------------------------------------------
INSURANCE (4.1%)
ACE 461,954(c) 26,950,396
AFLAC 490,752 30,097,820
Allstate 19,041 938,150
American Intl Group 1,143,937 63,099,565
Aon 9,482 412,657
Arch Capital Group 40,347(b,c) 2,842,850
Assurant 17,893 1,161,077
Assured Guaranty 124,472(c) 2,945,008
Chubb 164,289 8,508,527
Endurance Specialty Holdings 61,902(c) 2,508,269
Genworth Financial Cl A 23,235 565,540
Hartford Financial Services Group 274,029 22,133,322
Lincoln Natl 10,411 565,942
MetLife 143,333 8,452,347
Principal Financial Group 11,306 673,951
Prudential Financial 451,166 38,064,875
Validus Holdings 16,654(b,c) 405,525
XL Capital Cl A 72,603(c) 3,267,135
---------------
Total 213,592,956
- ------------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL (0.1%)
Amazon.com 20,566(b) 1,597,978
Expedia 29,090(b) 669,652
IAC/ InterActiveCorp 27,193(b) 705,386
Liberty Media - Interactive Cl A 139,824(b,e) 2,224,600
---------------
Total 5,197,616
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND - 2008 SEMIANNUAL REPORT 17
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
INTERNET SOFTWARE & SERVICES (1.3%)
Akamai Technologies 23,590(b) $712,418
eBay 493,421(b) 13,268,091
Google Cl A 81,633(b) 46,065,501
VeriSign 31,839(b) 1,079,979
Yahoo! 222,621(b) 4,269,871
---------------
Total 65,395,860
- ------------------------------------------------------------------------------------
IT SERVICES (0.7%)
Accenture Cl A 9,776(c) 338,445
Affiliated Computer Services Cl A 123,829(b) 6,036,664
Automatic Data Processing 166,791 6,766,711
Broadridge Financial Solutions 1 22
Cognizant Technology Solutions Cl A 64,056(b) 1,787,162
Computer Sciences 23,705(b) 1,003,196
Convergys 19,672(b) 305,113
Electronic Data Systems 184,074 3,699,887
Fidelity Natl Information Services 24,841 1,054,500
Fiserv 31,388(b) 1,612,402
HCL Technologies 224,272(c) 1,395,751
MasterCard Cl A 50,004(f) 10,350,829
Ness Technologies 20,338(b,c) 186,906
Paychex 26,138 855,235
Satyam Computer Services ADR 17,561(c) 427,610
Unisys 45,058(b) 187,441
Western Union 116,763 2,615,491
---------------
Total 38,623,365
- ------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.1%)
Brunswick 12,963 246,167
Eastman Kodak 40,855 814,240
Hasbro 20,936 543,708
Mattel 52,222 1,097,185
---------------
Total 2,701,300
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MACHINERY (1.3%)
Caterpillar 215,922 $15,360,691
Deere & Co 221,920 19,475,700
Flowserve 176,771 14,516,435
Ingersoll-Rand Cl A 37,860(c) 1,496,227
ITT 30,586 1,817,726
Navistar Intl 8,705(b) 429,809
Parker Hannifin 191,535 12,949,681
---------------
Total 66,046,269
- ------------------------------------------------------------------------------------
MEDIA (6.7%)
Cablevision Systems Cl A 150,770(b) 3,540,080
CBS Cl B 97,502 2,456,075
Clear Channel Communications 103,014 3,163,560
Comcast Cl A 896,536(b) 16,281,094
Comcast Special Cl A 189,235(b) 3,404,338
DIRECTV Group 265,197(b) 5,988,148
DISH Network Cl A 157,738(b) 4,454,521
EW Scripps Cl A 13,086 532,862
Gannett 25,167 931,179
Interpublic Group of Companies 67,114(b) 599,328
McGraw-Hill Companies 36,623 1,565,999
Meredith 4,158 195,384
New York Times Cl A 15,552 260,340
News Corp Cl A 1,746,966 33,017,657
Omnicom Group 46,735 2,120,367
Time Warner 2,397,404 37,735,139
Viacom Cl B 222,878(b) 8,638,751
Virgin Media 9,524,155(j) 159,243,873
Vivendi 237,874(c) 9,584,623
Walt Disney 527,909 15,800,316
Washington Post Cl B 632 470,208
WorldSpace Cl A 263,942(b,f) 366,879
XM Satellite Radio Holdings Cl A 3,186,099(b) 39,507,629
---------------
Total 349,858,350
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
18 RIVERSOURCE LARGE CAP EQUITY FUND - 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
METALS & MINING (1.5%)
Alcoa 311,569(i) $10,312,934
Allegheny Technologies 14,904 1,049,242
Coeur d'Alene Mines 4,088,055(b,f) 18,682,411
Freeport-McMoRan Copper & Gold 54,340 4,837,890
Lihir Gold 8,000,566(b,c) 26,043,674
Newmont Mining 233,654 12,696,736
Nucor 40,984 2,368,875
Titanium Metals 12,309 267,598
---------------
Total 76,259,360
- ------------------------------------------------------------------------------------
MULTILINE RETAIL (0.5%)
Big Lots 13,336(b) 231,513
JC Penney 232,683 11,031,501
Kohl's 82,276(b) 3,755,077
Macy's 62,299 1,721,944
Nordstrom 27,051 1,052,284
Target 112,603 6,258,475
---------------
Total 24,050,794
- ------------------------------------------------------------------------------------
MULTI-UTILITIES (0.6%)
Ameren 29,553 1,324,270
CenterPoint Energy 45,720 731,977
CMS Energy 31,969 500,954
Consolidated Edison 38,574 1,681,055
Dominion Resources 252,904 10,874,871
DTE Energy 24,293 1,036,096
Integrys Energy Group 11,080 538,710
NiSource 39,028 741,142
PG&E 50,301 2,064,353
Public Service Enterprise Group 36,197 3,474,912
Sempra Energy 37,773 2,111,511
TECO Energy 29,971 499,617
Xcel Energy 319,396(f) 6,640,243
---------------
Total 32,219,711
- ------------------------------------------------------------------------------------
OFFICE ELECTRONICS (--%)
Xerox 44,611 687,009
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
OIL, GAS & CONSUMABLE FUELS (8.7%)
Anadarko Petroleum 38,907 $2,279,561
Apache 13,492 1,287,676
BP ADR 274,146(c) 17,476,808
Chesapeake Energy 58,950 2,194,709
Chevron 914,369 77,264,180
ConocoPhillips 510,310 40,988,099
CONSOL Energy 28,109 2,051,957
Devon Energy 96,232 8,177,795
El Paso 97,192 1,601,724
Exxon Mobil 2,482,178 214,460,178
Marathon Oil 148,028 6,935,112
Occidental Petroleum 188,742 12,809,920
Patriot Coal 3,928(b) 156,138
Peabody Energy 38,641 2,087,387
Range Resources 2,634 137,547
Royal Dutch Shell ADR 50,328(c) 3,593,922
Ship Finance Intl 118,974(c,f) 3,107,601
Spectra Energy 89,295 2,039,498
Sunoco 52,164 3,244,601
Tesoro 20,063 783,460
Total 438,321(c) 31,898,162
Valero Energy 218,146 12,912,062
Williams Companies 85,337 2,728,224
XTO Energy 61,019 3,169,327
---------------
Total 453,385,648
- ------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.4%)
AbitibiBowater 149,857(c,f) 3,711,958
Intl Paper 247,399 7,978,618
MeadWestvaco 26,111 731,108
Weyerhaeuser 118,488 8,024,007
---------------
Total 20,445,691
- ------------------------------------------------------------------------------------
PERSONAL PRODUCTS (1.7%)
Avon Products 2,001,253 70,083,880
Herbalife 451,589(c) 17,919,052
---------------
Total 88,002,932
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND - 2008 SEMIANNUAL REPORT 19
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
PHARMACEUTICALS (6.9%)
Abbott Laboratories 190,289 $10,713,271
Bristol-Myers Squibb 3,137,254 72,752,920
Eli Lilly & Co 327,503 16,872,955
Johnson & Johnson 389,140 24,616,996
Merck & Co 1,369,990 63,403,137
Pfizer 4,735,504 110,763,438
Roche Holding 51,284(c) 9,311,700
Schering-Plough 1,066,490 20,871,209
Teva Pharmaceutical Inds ADR 127,182(c,f) 5,855,459
Wyeth 582,604 23,187,639
---------------
Total 358,348,724
- ------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (0.4%)
Annaly Capital Management 134,637 2,655,042
Apartment Investment & Management Cl A 78,051 3,093,941
AvalonBay Communities 5,853 549,889
Boston Properties 12,357 1,135,855
Developers Diversified Realty 7,452 306,650
Host Hotels & Resorts 44,531 745,449
Kimco Realty 15,564 557,347
MFA Mtge Investments 418,869 4,272,463
Plum Creek Timber 21,630 903,053
ProLogis 33,650 1,997,128
Public Storage 14,190 1,110,368
Simon Property Group 23,551 2,104,988
Thornburg Mtge 194,369(f) 2,176,933
Vornado Realty Trust 14,837 1,341,265
---------------
Total 22,950,371
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
REAL ESTATE MANAGEMENT & DEVELOPMENT (--%)
CB Richard Ellis Group Cl A 14,747(b) $286,239
Forestar Real Estate Group 11,781(b) 269,078
---------------
Total 555,317
- ------------------------------------------------------------------------------------
ROAD & RAIL (0.6%)
CSX 70,736 3,429,281
Hertz Global Holdings 1,595,185(b) 23,800,160
Norfolk Southern 52,820 2,872,880
---------------
Total 30,102,321
- ------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (2.4%)
Analog Devices 41,781 1,184,909
Applied Materials 129,970 2,329,062
Atmel 2,442,350(b) 7,717,826
Broadcom Cl A 78,657(b) 1,736,747
Cypress Semiconductor 153,681(b) 3,265,721
Himax Technologies ADR 802,888(c) 3,958,238
Infineon Technologies 346,376(b,c) 3,533,695
Intel 2,619,272 55,528,566
KLA-Tencor 16,537 690,916
LDK Solar ADR 40,374(b,c,f) 1,423,184
LSI 542,220(b) 2,830,388
MEMC Electronic Materials 22,782(b) 1,628,002
Microchip Technology 25,293 807,100
Natl Semiconductor 19,006 350,281
NVIDIA 47,574(b) 1,169,845
PMC-Sierra 1,945,306(b) 9,123,485
Spansion Cl A 3,860,853(b) 14,748,458
Texas Instruments 420,910(i) 13,018,746
Xilinx 45,154 987,518
---------------
Total 126,032,687
- ------------------------------------------------------------------------------------
SOFTWARE (3.2%)
ACI Worldwide 32,858(b) 489,584
Adobe Systems 82,690(b) 2,888,362
Autodesk 33,120(b) 1,362,888
BEA Systems 178,668(b) 3,339,305
BMC Software 28,092(b) 900,068
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
20 RIVERSOURCE LARGE CAP EQUITY FUND - 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SOFTWARE (CONT.)
CA 56,206 $1,238,218
Citrix Systems 27,332(b) 946,234
Compuware 41,246(b) 350,591
Electronic Arts 45,394(b) 2,150,314
Intuit 47,954(b) 1,471,708
Microsoft 3,377,537 110,107,706
Nintendo ADR 204,690(c) 12,754,029
Novell 50,369(b) 320,347
Nuance Communications 539,672(b) 8,575,388
Oracle 758,389(b) 15,584,894
Quest Software 67,762(b) 1,013,042
Symantec 124,970(b) 2,240,712
---------------
Total 165,733,390
- ------------------------------------------------------------------------------------
SPECIALTY RETAIL (1.1%)
Abercrombie & Fitch Cl A 54,156 4,315,692
AutoNation 20,118(b) 327,521
AutoZone 6,671(b) 806,390
Bed Bath & Beyond 38,131(b) 1,229,343
Best Buy 50,579 2,468,761
Circuit City Stores 148,709 808,977
Gap 180,138 3,444,239
Home Depot 381,413 11,697,936
Limited Brands 78,384 1,496,351
Lowe's Companies 538,288(i) 14,232,334
Office Depot 68,183(b) 1,011,154
OfficeMax 10,984 272,074
Penske Automotive Group 48,455 879,943
RadioShack 20,089 348,544
Sherwin-Williams 15,832 905,749
Staples 101,630 2,433,022
Tiffany & Co 20,075 800,993
TJX Companies 189,145 5,969,416
Williams-Sonoma 171,518(f) 4,610,404
---------------
Total 58,058,843
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
TEXTILES, APPAREL & LUXURY GOODS (0.1%)
Jones Apparel Group 12,431 $208,841
Liz Claiborne 14,911 326,402
Nike Cl B 55,037 3,399,084
Polo Ralph Lauren 8,723 528,527
VF 12,957 1,002,483
---------------
Total 5,465,337
- ------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.9%)
Countrywide Financial 2,475,873(f) 17,232,076
Fannie Mae 358,585 12,141,688
Freddie Mac 485,358 14,750,030
Guaranty Financial Group 11,781(b) 163,756
Hudson City Bancorp 123,402 2,021,320
New York Community Bancorp 96,389 1,788,016
Washington Federal 14,270 348,473
---------------
Total 48,445,359
- ------------------------------------------------------------------------------------
TOBACCO (1.7%)
Altria Group 1,080,610 81,931,850
UST 90,431 4,698,795
---------------
Total 86,630,645
- ------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (2.4%)
America Movil ADR Series L 33,037(c) 1,979,247
American Tower Cl A 116,763(b) 4,382,115
Millicom Intl Cellular 36,361(b,c) 3,852,084
Orascom Telecom Holding GDR 47,201(c) 3,497,594
Sprint Nextel 1,323,704 13,938,603
Vodafone Group 21,819,938(c) 76,329,953
Vodafone Group ADR 645,350(c) 22,458,180
---------------
Total 126,437,776
- ------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $5,015,165,146) $5,017,513,976
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND - 2008 SEMIANNUAL REPORT 21
<Table>
<Caption>
OPTIONS PURCHASED (--%)
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
CALLS
Virgin Media 10,424 $17.50 June 2008 $1,954,500
XM Satellite Radio
Holdings Cl A 2,875 15.00 Feb. 2008 136,563
- --------------------------------------------------------------------------------------------------------------------------
PUTS
Oil Service Holders
Trust 457 165.00 Feb. 2008 444,433
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OPTIONS PURCHASED
(Cost: $3,500,063) $2,535,496
- --------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (4.9%)(g)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 254,723,246(k) $254,723,246
- ------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $254,723,246) $254,723,246
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $5,273,388,455)(l) $5,274,772,718
====================================================================================
</Table>
INVESTMENTS IN DERIVATIVES
FUTURES CONTRACTS OUTSTANDING AT JAN. 31, 2008
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION/
CONTRACT DESCRIPTION LONG/(SHORT) MARKET VALUE DATE (DEPRECIATION)
- --------------------------------------------------------------------------------------------------
S&P 500 Index 162 $55,873,800 March 2008 $58,166
</Table>
OPEN OPTIONS CONTRACTS WRITTEN AT JAN. 31, 2008
<Table>
<Caption>
NUMBER OF EXERCISE EXPIRATION
ISSUER PUTS/CALLS CONTRACTS PRICE DATE VALUE(A)
- ----------------------------------------------------------------------------------------------------
Virgin Media Call 7,582 $22.50 June 2008 $511,785
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
22 RIVERSOURCE LARGE CAP EQUITY FUND - 2008 SEMIANNUAL REPORT
TOTAL RETURN SWAP CONTRACTS OUTSTANDING AT JAN. 31, 2008
<Table>
<Caption>
NOTIONAL
EXPIRATION PRINCIPAL UNREALIZED UNREALIZED
COUNTERPARTY FUND RECEIVES FUND PAYS DATE AMOUNT APPRECIATION DEPRECIATION
- -----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Total return on a Floating rate based Oct. 17, 2008 $12,440,000 $ -- $(780,246)
International basket of large cap on 1-month LIBOR plus
health care 0.20%
securities
Citibank Total return on a Floating rate based May 7, 2008 8,850,000 -- (91,040)
basket of large cap on 1-month LIBOR plus
industrial 0.20%
securities
Goldman Sachs Total return on a Floating rate based Jan. 23, 2009 24,958 436,662
International custom basket of on 1-month LIBOR less
securities in the 0.75%
financial sector
Goldman Sachs Total return on a Floating rate based Jan. 23, 2009 33,764 715,488
International custom basket of on 1-month LIBOR less
securities in the 0.40%
consumer goods
sector
Goldman Sachs Total return on a Floating rate based Jan. 23, 2009 24,255 88,401
International custom basket of on 1-month LIBOR plus
securities in the 0.25%
technology sector
- -----------------------------------------------------------------------------------------------------------------------------
Total $1,240,551 $(871,286)
- -----------------------------------------------------------------------------------------------------------------------------
</Table>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JAN. 31, 2008
<Table>
<Caption>
CURRENCY TO BE UNREALIZED
EXCHANGE DATE CURRENCY TO BE DELIVERED RECEIVED DEPRECIATION
- ---------------------------------------------------------------------------------------------------
Feb. 11 2008 24,578,000 21,641,912 $(370,009)
Australian Dollar U.S. Dollar
Feb. 4, 2008 1,282,673 2,548,060 (2,533)
British Pound U.S. Dollar
March 10, 2008 19,122,000 37,949,139 (10,619)
British Pound U.S. Dollar
March 13, 2008 14,021,000 27,826,427 (7,155)
British Pound U.S. Dollar
Feb. 25, 2008 30,275,000 44,843,330 (136,431)
European Monetary Unit U.S. Dollar
Feb. 27, 2008 21,314,000 31,547,065 (117,468)
European Monetary Unit U.S. Dollar
- ---------------------------------------------------------------------------------------------------
Total $(644,215)
- ---------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND - 2008 SEMIANNUAL REPORT 23
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At Jan. 31, 2008, the
value of foreign securities represented 8.0% 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 Jan. 31,
2008, the value of these securities amounted to $28,710,656 or 0.5% of net
assets.
(e) Shareholders of tracking stocks have a financial interest only in a unit or
division of the company. Unlike the common stock of the company itself, a
tracking stock usually has limited or no voting rights. In the event of a
company's liquidation, tracking stock shareholders typically do not have a
legal claim on the company's assets.
(f) At Jan. 31, 2008, security was partially or fully on loan. See Note 5 to
the financial statements.
(g) Cash collateral received from security lending activity is invested in an
affiliated money market fund and represents 1.6% of net assets. See Note 5
to the financial statements. The Fund's cash equivalent position is 3.3% of
net assets.
(h) 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 Jan. 31,
2008, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ----------------------------------------------------------------------------------
Apollo Mgmt LP* 08-02-07 thru 01-16-08 $30,549,040
Oaktree Capital Group LLC Cl A Unit* 05-21-07 thru 07-20-07 9,915,440
</Table>
* Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended.
(i) At Jan. 31, 2008, investments in securities included securities valued at
$10,272,600 that were partially pledged as collateral to cover initial
margin deposits on open stock index futures contracts.
(j) At Jan. 31, 2008, securities valued at $12,677,104 were held to cover open
call options written. See Note 6 to the financial statements.
(k) Affiliated Money Market Fund - See Note 7 to the financial statements.
(l) At Jan. 31, 2008, the cost of securities for federal income tax purposes
was approximately $5,273,388,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $446,084,000
Unrealized depreciation (444,699,000)
- ------------------------------------------------------------------------------
Net unrealized appreciation $1,385,000
- ------------------------------------------------------------------------------
</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.
- --------------------------------------------------------------------------------
24 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
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 LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 25
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JAN. 31, 2008 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $5,018,665,209) $5,020,049,472
Affiliated money market fund (identified cost
$254,723,246) 254,723,246
- ------------------------------------------------------------------------------
Total investments in securities (identified cost
$5,273,388,455) 5,274,772,718
Cash 528,820
Foreign currency holdings (identified cost $435,566) 435,090
Capital shares receivable 913,063
Dividends and accrued interest receivable 7,262,317
Receivable for investment securities sold 97,558,219
Variation margin receivable 1,297,750
Unrealized appreciation on swap contracts 1,240,551
- ------------------------------------------------------------------------------
Total assets 5,384,008,528
- ------------------------------------------------------------------------------
LIABILITIES
Options contracts written, at value (premiums received
$679,104) 511,785
Capital shares payable 7,577,952
Payable for investment securities purchased 57,910,056
Payable upon return of securities loaned 82,441,000
Collateral and deposits payable 5,335,000
Unrealized depreciation on forward foreign currency
contracts 644,215
Unrealized depreciation on swap contracts 871,286
Accrued investment management services fee 77,981
Accrued distribution fee 48,031
Accrued transfer agency fee 24,311
Accrued administrative services fee 6,654
Accrued plan administration services fee 1,555
Other accrued expenses 304,562
- ------------------------------------------------------------------------------
Total liabilities 155,754,388
- ------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $5,228,254,140
==============================================================================
</Table>
- --------------------------------------------------------------------------------
26 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
JAN. 31, 2008 (UNAUDITED)
<Table>
REPRESENTED BY
Capital stock -- $.01 par value $ 10,430,186
Additional paid-in capital 5,426,787,176
Undistributed net investment income 30,877,620
Accumulated net realized gain (loss) (241,135,079)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies 1,294,237
- ----------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding capital
stock $5,228,254,140
==================================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $4,213,887,862
Class B $ 704,353,984
Class C $ 26,381,619
Class I $ 52,206,914
Class R2 $ 4,166
Class R3 $ 4,167
Class R4 $ 231,411,218
Class R5 $ 4,210
Net asset value per share of outstanding Class A
capital stock: shares(1) 838,868,256 $ 5.02
Class B shares 143,045,799 $ 4.92
Class C shares 5,351,947 $ 4.93
Class I shares 10,341,269 $ 5.05
Class R2 shares 822 $ 5.07
Class R3 shares 822 $ 5.07
Class R4 shares 45,408,871 $ 5.10
Class R5 shares 822 $ 5.12
- -------------------------------------------------------------------------------------------
*Including securities on loan, at value $ 80,633,997
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $5.33. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 27
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JAN. 31, 2008 (UNAUDITED)
<Table>
INVESTMENT INCOME
Income:
Dividends $ 56,485,043
Interest 283,908
Income distributions from affiliated money market fund 6,594,288
Fee income from securities lending 513,750
Less foreign taxes withheld (61,926)
- -----------------------------------------------------------------------------
Total income 63,815,063
- -----------------------------------------------------------------------------
Expenses:
Investment management services fee 15,626,557
Distribution fee
Class A 6,063,945
Class B 4,022,578
Class C 151,969
Class R2 12
Class R3 6
Transfer agency fee
Class A 4,795,298
Class B 856,509
Class C 31,264
Class R2 2
Class R3 2
Class R4 75,687
Class R5 3,534
Administrative services fee 1,403,252
Plan administration services fee
Class R2 6
Class R3 6
Class R4 378,434
Compensation of board members 56,219
Custodian fees 286,050
Printing and postage 785,300
Registration fees 54,197
Professional fees 50,364
Other 88,967
- -----------------------------------------------------------------------------
Total expenses 34,730,158
Expenses waived/reimbursed by the Investment Manager
and its affiliates (1,207,473)
- -----------------------------------------------------------------------------
33,522,685
Earnings and bank fee credits on cash balances (290,150)
- -----------------------------------------------------------------------------
Total net expenses 33,232,535
- -----------------------------------------------------------------------------
Investment income (loss) -- net 30,582,528
- -----------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
28 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS (CONTINUED)
SIX MONTHS ENDED JAN. 31, 2008 (UNAUDITED)
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions 171,536,039
Foreign currency transactions (5,216,373)
Futures contracts (4,444,163)
Options contracts written 890,410
Swap transactions 341,138
- -----------------------------------------------------------------------------
Net realized gain (loss) on investments 163,107,051
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies (522,702,794)
- -----------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (359,595,743)
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $(329,013,215)
=============================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 29
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2008 JULY 31, 2007
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 30,582,528 $ 63,564,209
Net realized gain (loss) on investments 163,107,051 703,349,838
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies (522,702,794) 323,820,329
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (329,013,215) 1,090,734,376
- -----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (36,407,344) (51,279,745)
Class B -- (2,969,618)
Class C -- (121,537)
Class I (866,696) (1,522,653)
Class R2 (31) (65)
Class R3 (44) (66)
Class R4 (2,588,075) (5,679,767)
Class R5 -- (322,641)
Net realized gain
Class A (503,800,045) (125,265,857)
Class B (85,854,373) (27,693,216)
Class C (3,230,993) (831,229)
Class I (7,554,314) (2,640,713)
Class R2 (539) (115)
Class R3 (539) (115)
Class R4 (31,125,821) (13,607,896)
Class R5 (539) (560,037)
- -----------------------------------------------------------------------------------------
Total distributions (671,429,353) (232,495,270)
- -----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
30 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2008 JULY 31, 2007
(UNAUDITED)
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares 54,771,661 370,676,879
Class B shares 20,673,749 57,068,487
Class C shares 1,087,279 2,755,399
Class I shares 3,728,696 15,570,677
Class R2 shares -- 5,000
Class R3 shares -- 5,000
Class R4 shares 18,627,143 28,329,694
Class R5 shares -- 26,931,801
Reinvestment of distributions at net asset value
Class A shares 523,668,114 171,429,375
Class B shares 85,243,826 30,416,192
Class C shares 3,174,764 939,571
Class I shares 8,419,823 4,163,008
Class R4 shares 33,713,417 19,287,529
Class R5 shares -- 882,497
Payments for redemptions
Class A shares (599,373,190) (1,564,111,579)
Class B shares (101,653,373) (569,109,428)
Class C shares (4,499,980) (10,923,150)
Class I shares (15,518,632) (69,035,113)
Class R4 shares (104,084,121) (882,819,499)
Class R5 shares (26,533,250) (2,629,011)
- -----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (98,554,074) (2,370,166,671)
- -----------------------------------------------------------------------------------------
Total increase (decrease) in net assets (1,098,996,642) (1,511,927,565)
Net assets at beginning of period 6,327,250,782 7,839,178,347
- -----------------------------------------------------------------------------------------
Net assets at end of period $ 5,228,254,140 $ 6,327,250,782
=========================================================================================
Undistributed net investment income $ 30,877,620 $ 40,157,282
- -----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 31
NOTES TO FINANCIAL STATEMENTS
(Unaudited as to Jan. 31, 2008)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Large Cap Equity Fund (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 of
Directors (the Board). The Fund invests primarily in equity securities of
companies with a market capitalization greater than $5 billion at the time of
purchase.
The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4
and Class R5 shares.
- - Class A shares are 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, Class R2, Class R3, Class R4 and Class R5 shares are sold without a
front-end sales charge or CDSC and are offered to qualifying institutional
investors.
At Jan. 31, 2008, RiverSource Investments, LLC (the Investment Manager) and the
affiliated funds-of-funds owned 100% of Class I shares and the Investment
Manager owned 100% of Class R2, Class R3 and Class R5 shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
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-
- --------------------------------------------------------------------------------
32 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
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
generally contemplate the use of fair valuation in the event that price
quotations or valuations are not readily available, price quotations or
valuations from other sources are not reflective of market value and thus deemed
unreliable, or a significant event has occurred in relation to a security or
class of securities (such as foreign securities) that is not reflected in price
quotations or valuations from other sources. A fair value price is a good faith
estimate of the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the 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, Inc. (Ameriprise
Financial), parent company of the Investment Manager, as administrator to the
Fund, will fair value foreign securities pursuant to procedures adopted by the
Board, including utilizing a third party pricing service to determine these fair
values. These procedures take into account multiple factors, including movements
in the U.S. securities markets, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the 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 Jan. 31, 2008, investments in securities included issues that are illiquid
which the Fund limits to 15% of net assets, at market value, at the time of
purchase. The aggregate value of such securities at Jan. 31, 2008 was
$28,710,656 representing 0.55% of net assets. These securities may be valued at
fair value 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 at 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.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 33
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 loss when the contract is closed or expires.
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
- --------------------------------------------------------------------------------
34 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
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 Jan. 31,
2008, foreign currency holdings consisted of European monetary units and Indian
rupees.
The Fund may enter into forward foreign currency contracts for operational
purposes. 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.
TOTAL RETURN EQUITY SWAP TRANSACTIONS
The Fund may enter into swap agreements to earn the total return on a specified
security, basket of securities or security indexes during the specified period,
in return for periodic payments based on a fixed or variable interest rate of
the total return from other underlying assets. Total return swap agreements may
be used to obtain exposure to a security or market without owning or taking
physical custody of such security or market. Under the terms of a total return
equity swap agreement, payments made by the Fund or the counterparty are based
on the total return of a particular reference asset or assets (such as an equity
security, a combination of such securities, or an index). That is, one party
agrees to pay another party the return on a stock, basket of stocks, or stock
index in return for a specified interest rate.
The notional amounts of swap contracts are not recorded in the financial
statements. Swap contracts are valued daily, and the change in value is recorded
as unrealized appreciation (depreciation) until the termination of the swap, at
which time realized gain (loss) is recorded. Payments received or made are
recorded as realized gains (losses).
Swap agreements may be subject to liquidity risk, which exists when a particular
swap is difficult to purchase or sell. It may not be possible for the Fund to
initiate a transaction or liquidate a position at an advantageous time or price,
which may result in significant losses. Total return swaps are subject to the
risk associated with the investment in the underlying securities and also the
risk of the counterparty not fulfilling its obligations under the agreement.
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
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 35
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 shareholders. No provision for income or excise
taxes is thus required.
The Fund has adopted Financial Accounting Standards Board (FASB) Interpretation
48 (FIN 48), "Accounting for Uncertainty in Income Taxes," which is effective
for fiscal periods beginning after Dec. 15, 2006. 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. Management of the Fund has concluded that there are no significant
uncertain tax positions that would require recognition in the financial
statements. Generally, the tax authorities can examine all the tax returns filed
for the last three years.
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, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes and losses deferred due to
"wash sale" transactions. The character of distributions made during the year
from net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
RECENT ACCOUNTING PRONOUNCEMENT
On Sept. 20, 2006, the 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 hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported in
the Statement of operations for a fiscal period. The application of SFAS 157
will be effective for the Fund's fiscal year beginning Aug. 1, 2008. The
adoption of SFAS 157 is not anticipated to have a material impact on the Fund's
financial statements.
- --------------------------------------------------------------------------------
36 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including amortization of premium, market discount and original issue discount
using the effective interest method, is accrued daily.
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 determined monthly by
measuring the percentage difference over a rolling 12-month period between the
performance of one Class A share of the Fund and the change in the Lipper Large-
Cap Core Funds Index. In certain circumstances, the Board may approve a change
in the index. The maximum adjustment is 0.12% per year. If the performance
difference is less than 0.50%, the adjustment will be zero. The adjustment
decreased the fee by $1,044,917 for the six months ended Jan. 31, 2008. The
management fee for the six months ended Jan. 31, 2008 was 0.52% of the Fund's
average daily net assets, including an adjustment under the terms of the
performance incentive arrangement.
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. The fee for the six months ended Jan. 31, 2008 was 0.05%
of the Fund's average daily net assets.
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended Jan.
31, 2008, other expenses paid to this company were $19,032.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 37
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.
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
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, Class R4
and Class R5 shares.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the Statement of operations.
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Prior to Oct. 1, 2007, Ameriprise
Financial Services, Inc. also served as a principal underwriter and distributor
to the Fund. Under a Plan and Agreement of Distribution pursuant to Rule 12b-1,
the Fund pays a fee at an annual rate of up to 0.25% of the Fund's average daily
net assets attributable to Class A and Class R3 shares, a fee at an annual rate
of up to 0.50% of the Fund's average daily net assets attributable to Class R2
shares and a fee at an annual rate of up to 1.00% of the Fund's average daily
net assets attributable to Class B and Class C shares.
Sales charges received by the Distributor for distributing Fund shares were
$1,370,536 for Class A, $398,649 for Class B and $1,673 for Class C for the six
months ended Jan. 31, 2008.
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
- --------------------------------------------------------------------------------
38 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
Fund may own different proportions of acquired funds at different times, the
amount of fees and expenses incurred indirectly by the Fund will vary.
For the six months ended Jan. 31, 2008, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds) were 1.01% for Class A, 1.77%
for Class B, 1.77% for Class C, 1.14% for Class R2, 0.89% for Class R3 and 0.86%
for Class R4. Of these waived/reimbursed fees and expenses, the transfer agency
fees at the class level were $949,592, $185,600, $5,933 and $60,275 for Class A,
Class B, Class C and Class R4, respectively, and the plan administration
services fees were $6, $6 and $6,061 for Class R2, Class R3 and Class R4,
respectively. In addition, the Investment Manager and its affiliates have
contractually agreed to waive certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds), before giving effect to any
performance incentive adjustment, will not exceed 1.05% for Class A, 1.81% for
Class B, 1.81% for Class C, 0.67% for Class I, 1.47% for Class R2, 1.22% for
Class R3, 0.90% for Class R4 and 0.72% for Class R5 of the Fund's average daily
net assets until July 31, 2008, unless sooner terminated at the discretion of
the Board.
During the six months ended Jan. 31, 2008, the Fund's custodian and transfer
agency fees were reduced by $290,150 as a result of earnings and bank fee
credits from overnight cash balances. The Fund pays custodian fees to Ameriprise
Trust Company, a subsidiary of Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $1,897,572,491 and $2,642,491,177, respectively, for the
six months ended Jan. 31, 2008. Realized gains and losses are determined on an
identified cost basis.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED JAN. 31, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 9,316,514 98,992,067 (102,962,966) 5,345,615
Class B 3,602,635 16,424,628 (17,870,565) 2,156,698
Class C 188,411 611,708 (789,339) 10,780
Class I 624,467 1,585,654 (3,028,525) (818,404)
Class R2 -- -- -- --
Class R3 -- -- -- --
Class R4 3,145,294 6,289,817 (17,913,250) (8,478,139)
Class R5 -- -- (4,152,231) (4,152,231)
- ----------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 39
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 59,268,105 29,154,657 (265,432,267) (177,009,505)
Class B 9,841,913 5,262,317 (95,077,518) (79,973,288)
Class C 475,544 162,555 (1,886,761) (1,248,662)
Class I 2,660,792 705,595 (11,591,197) (8,224,810)
Class R2* 822 -- -- 822
Class R3* 822 -- -- 822
Class R4 4,699,528 3,241,602 (149,629,106) (141,687,976)
Class R5* 4,421,287 149,070 (417,304) 4,153,053
- ----------------------------------------------------------------------------------------------
</Table>
* For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
5. 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 Jan. 31, 2008, securities valued at $80,633,997 were
on loan to brokers. For collateral, the Fund received $82,441,000 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 "Portfolio of Investments." Income
from securities lending amounted to $513,750 for the six months ended Jan. 31,
2008. Expenses paid to the Investment Manager were $15,734 for the six months
ended Jan. 31, 2008, 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.
- --------------------------------------------------------------------------------
40 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
6. OPTIONS CONTRACTS WRITTEN
Contracts and premiums associated with options contracts written are as follows:
<Table>
<Caption>
SIX MONTHS ENDED
JAN. 31, 2008
CALLS
CONTRACTS PREMIUMS
- -----------------------------------------------------------------------------
Balance July 31, 2007 27,883 $ 3,953,892
Opened 69,333 3,039,221
Closed (78,127) (6,127,966)
Expired (11,507) (186,043)
- -----------------------------------------------------------------------------
Balance Jan. 31, 2008 7,582 $ 679,104
- -----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SIX MONTHS ENDED
JAN. 31, 2008
PUTS
CONTRACTS PREMIUMS
- -----------------------------------------------------------------------------
Balance July 31, 2007 20,639 $ 2,621,153
Opened 60,225 6,986,068
Closed (80,864) (9,607,221)
- -----------------------------------------------------------------------------
Balance Jan. 31, 2008 -- $ --
- -----------------------------------------------------------------------------
</Table>
See "Summary of significant accounting policies."
7. 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. The cost of the
Fund's purchases and proceeds from sales of shares of the RiverSource Short-Term
Cash fund aggregated $1,825,856,449 and $1,804,523,335, respectively, for the
six months ended Jan. 31, 2008.
8. BANK BORROWINGS
The Fund has entered into a revolving credit facility 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 credit facility became effective on Oct. 18, 2007, replacing a
prior credit facility. The credit facility agreement, which is a collective
agreement between the Fund and certain other RiverSource funds, severally and
not jointly, permits collective borrowings up to $500 million. Interest is
charged to each Fund based on its borrowings at a rate equal to the federal
funds rate plus 0.30%. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.06% per annum. Under the
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 41
prior credit facility, a Fund paid interest on its outstanding 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. The Fund had no borrowings during
the six months ended Jan. 31, 2008.
9. CAPITAL LOSS CARRY-OVER
For federal income tax purposes, the Fund had a capital loss carry-over of
$158,388,854 at July 31, 2007, that if not offset by capital gains will expire
as follows:
<Table>
<Caption>
2008 2009 2010 2011
$51,243,861 $70,190,395 $24,231,893 $12,722,705
</Table>
RiverSource Large Cap Equity Fund acquired $33,183,702 of capital loss carry-
overs in connection with a merger on March 10, 2006, as well as capital loss
carry-overs acquired as a result of prior mergers. In addition to the acquired
capital loss carry-overs, the Fund also acquired unrealized capital gains as a
result of the mergers. The yearly utilization of the acquired capital losses as
well as the utilization of the acquired unrealized losses is limited by the
Internal Revenue Code. 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.
10. 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 filed a notice of appeal with the Eighth Circuit Court of Appeals on
August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of
- --------------------------------------------------------------------------------
42 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
Commerce (MDOC) related to market timing activities. As a result, AEFC was
censured and ordered to cease and desist from committing or causing any
violations of certain provisions of the Investment Advisers Act of 1940, the
Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to retain an independent distribution consultant to assist in developing
a plan for distribution of all disgorgement and civil penalties ordered by the
SEC in accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of Directors/
Trustees.
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 LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 43
11. 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, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of
period $6.05 $5.40 $5.26 $4.64 $4.53
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(b) .06(b) .06 .04 .01
Net gains (losses) (both realized
and unrealized) (.36) .79 .12 .61 .32
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (.33) .85 .18 .65 .33
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.05) (.06) (.04) (.02) --
Distributions from realized gains (.65) (.14) -- (.01) (.22)
- ---------------------------------------------------------------------------------------------------------
Total distributions (.70) (.20) (.04) (.03) (.22)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.02 $6.05 $5.40 $5.26 $4.64
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $4,214 $5,039 $5,461 $1,030 $1,248
- ---------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (c),(d) 1.05%(e) 1.09% 1.06% 1.16% 1.23%
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement (d),(f),(g) 1.01%(e) 1.09% 1.06% 1.11% 1.20%
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.10%(e) .99% 1.08% .79% .36%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 33% 66% 116% 128% 99%
- ---------------------------------------------------------------------------------------------------------
Total return(h) (5.85%)(i) 15.79% 3.51% 13.99% 7.19%
- ---------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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 expenses ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. The ratio of net expenses after expense waiver/reimbursement and
after reduction of earnings and bank fee credits was 1.00% for the six
months ended Jan. 31, 2008.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
44 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of
period $5.91 $5.29 $5.15 $4.56 $4.48
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(b) .01(b) .02 -- (.01)
Net gains (losses) (both realized
and unrealized) (.35) .76 .12 .60 .31
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (.34) .77 .14 .60 .30
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income -- (.01) -- -- --
Distributions from realized gains (.65) (.14) -- (.01) (.22)
- ---------------------------------------------------------------------------------------------------------
Total distributions (.65) (.15) -- (.01) (.22)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.92 $5.91 $5.29 $5.15 $4.56
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $704 $833 $1,169 $472 $572
- ---------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (c),(d) 1.82%(e) 1.86% 1.84% 1.93% 1.98%
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement (d),(f),(g) 1.77%(e) 1.86% 1.84% 1.88% 1.95%
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) .40%(e) .23% .28% .02% (.46%)
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 33% 66% 116% 128% 99%
- ---------------------------------------------------------------------------------------------------------
Total return(h) (6.25%)(i) 14.71% 2.72% 13.09% 6.48%
- ---------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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 expenses ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. The ratio of net expenses after expense waiver/reimbursement and
after reduction of earnings and bank fee credits was 1.76% for the six
months ended Jan. 31, 2008.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 45
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of
period $5.92 $5.30 $5.16 $4.57 $4.49
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(b) .01(b) .02 -- (.01)
Net gains (losses) (both realized
and unrealized) (.35) .77 .12 .60 .31
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (.34) .78 .14 .60 .30
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income -- (.02) -- -- --
Distributions from realized gains (.65) (.14) -- (.01) (.22)
- ---------------------------------------------------------------------------------------------------------
Total distributions (.65) (.16) -- (.01) (.22)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.93 $5.92 $5.30 $5.16 $4.57
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $26 $32 $35 $9 $11
- ---------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (c),(d) 1.81%(e) 1.86% 1.84% 1.93% 2.01%
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement (d),(f),(g) 1.77%(e) 1.86% 1.84% 1.88% 1.98%
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) .34%(e) .23% .28% .02% (.43%)
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 33% 66% 116% 128% 99%
- ---------------------------------------------------------------------------------------------------------
Total return(h) (6.22%)(i) 14.80% 2.71% 13.06% 6.46%
- ---------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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 expenses ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. The ratio of net expenses after expense waiver/reimbursement and
after reduction of earnings and bank fee credits was 1.76% for the six
months ended Jan. 31, 2008.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
46 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007 2006 2005 2004(B)
Net asset value, beginning of
period $6.09 $5.44 $5.31 $4.67 $5.08
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .05(c) .09(c) .10 .05 --
Net gains (losses) (both realized
and unrealized) (.36) .78 .12 .63 (.28)
- ---------------------------------------------------------------------------------------------------------
Total from investment operations (.31) .87 .22 .68 (.28)
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.08) (.08) (.09) (.03) --
Distributions from realized gains (.65) (.14) -- (.01) (.13)
- ---------------------------------------------------------------------------------------------------------
Total distributions (.73) (.22) (.09) (.04) (.13)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.05 $6.09 $5.44 $5.31 $4.67
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $52 $68 $105 $43 $14
- ---------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (d),(e) .60%(f) .63% .59% .70% .72%(f)
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement (e),(g),(h) .60%(f) .63% .59% .65% .71%(f)
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.53%(f) 1.44% 1.53% 1.24% .74%(f)
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 33% 66% 116% 128% 99%
- ---------------------------------------------------------------------------------------------------------
Total return(i) (5.68%)(j) 16.13% 4.06% 14.64% (5.65%)(j)
- ---------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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 expenses ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. The ratio of net expenses after reduction of earnings and bank
fee credits was 0.59% for the six months ended Jan. 31, 2008.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 47
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007(B)
Net asset value, beginning of period $6.08 $6.08
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .03 .03
Net gains (losses) (both realized and
unrealized) (.35) .19
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.32) .22
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.08)
Distributions from realized gains (.65) (.14)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.69) (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.07 $6.08
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (d),(e) 1.39%(f) 1.44%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement (e),(g),(h) 1.14%(f) 1.44%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .97%(f) .67%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 33% 66%
- -----------------------------------------------------------------------------------------------------------
Total return(i) (5.79%)(j) 3.71%(j)
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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 expenses ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
48 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007(B)
Net asset value, beginning of
period $6.09 $6.08
- --------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .04 .04
Net gains (losses) (both realized
and unrealized) (.36) .19
- --------------------------------------------------------------------------------------------------------
Total from investment operations (.32) .23
- --------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.05) (.08)
Distributions from realized gains (.65) (.14)
- --------------------------------------------------------------------------------------------------------
Total distributions (.70) (.22)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.07 $6.09
- --------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- --------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (d),(e) 1.14%(f) 1.19%(f)
- --------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement (e),(g),(h) .89%(f) 1.19%(f)
- --------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.22%(f) .92%(f)
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate 33% 66%
- --------------------------------------------------------------------------------------------------------
Total return(i) (5.71%)(j) 3.88%(j)
- --------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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 expenses ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 49
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of
period $6.13 $5.47 $5.28 $4.66 $4.54
- --------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04(b) .07(b) .09 .04 .01
Net gains (losses) (both realized
and unrealized) (.37) .79 .12 .61 .34
- --------------------------------------------------------------------------------------------------------
Total from investment operations (.33) .86 .21 .65 .35
- --------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.05) (.06) (.02) (.02) (.01)
Distributions from realized gains (.65) (.14) -- (.01) (.22)
- --------------------------------------------------------------------------------------------------------
Total distributions (.70) (.20) (.02) (.03) (.23)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.10 $6.13 $5.47 $5.28 $4.66
- --------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $231 $330 $1,069 $-- $8
- --------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (c),(d) .91%(e) .90% .81% .95% 1.03%
- --------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement (d),(f),(g) .86%(e) .89% .81% .90% 1.00%
- --------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.26(e) 1.14% 1.41% 1.08% .50%
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate 33% 66% 116% 128% 99%
- --------------------------------------------------------------------------------------------------------
Total return(h) (5.79%)(i) 15.80% 4.03% 14.06% 7.44%
- --------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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 expenses ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. The ratio of net expenses after expense waiver/reimbursement and
after reduction of earnings and bank fee credits was 0.85% for the six
months ended Jan. 31, 2008.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
50 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(I) 2007(B)
Net asset value, beginning of period $6.11 $6.08
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .04 .06
Net gains (losses) (both realized and
unrealized) (.38) .19
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.34) .25
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.08)
Distributions from realized gains (.65) (.14)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.65) (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.12 $6.11
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $25
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (d),(e) .67%(f) .70%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement (e),(g) .67%(f) .70%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.20%(f) 1.44%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 33% 66%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (6.02%)(i) 4.24%(i)
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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 expenses ratios.
(f) Adjusted to an annual basis.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. The ratio of net expenses after expense waiver/reimbursement and
after reduction of earnings and bank fee credits was 0.66% for the six
months ended Jan. 31, 2008.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT 51
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.
- --------------------------------------------------------------------------------
52 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 SEMIANNUAL REPORT
RIVERSOURCE LARGE CAP EQUITY FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by
the Fund's current prospectus. RiverSource mutual
funds are distributed by RiverSource
Distributors, Inc., Member FINRA, and managed by
RiverSource Investments, LLC. These companies are
part of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2008 RiverSource Distributors, Inc. S-6255 G (3/08)
</Table>
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
LARGE CAP VALUE FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2008
RIVERSOURCE LARGE CAP VALUE FUND
SEEKS TO PROVIDE SHAREHOLDERS WITH
LONG-TERM GROWTH OF CAPITAL.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 2
Performance Summary................. 4
Questions & Answers
with Portfolio Management........ 6
Fund Expenses Example............... 10
Portfolio of Investments............ 12
Financial Statements................ 18
Notes to Financial Statements....... 23
Proxy Voting........................ 41
</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.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 1
FUND SNAPSHOT AT JAN. 31, 2008 (UNAUDITED)
FUND OBJECTIVE
RiverSource Large Cap Value Fund seeks to provide shareholders with long-term
growth of capital.
SECTOR BREAKDOWN*
Percentage of portfolio assets
(PIE CHART)
<Table>
Financials 25.7%
Energy 14.6%
Industrials 10.9%
Consumer Discretionary 10.0%
Health Care 8.7%
Consumer Staples 7.3%
Other(1) 22.8%
</Table>
* Sectors can be comprised of several industries. Please refer to the section
entitled "Portfolio of Investments" for a complete listing. No single industry
exceeds 25% of portfolio assets.
(1) Includes Information Technology 7.2%, Telecommunication Services 6.6%,
Utilities 4.0%, Materials 2.8% and Cash & Cash Equivalents 2.2%.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Exxon Mobil 5.6%
Bank of America 3.9%
AT&T 3.0%
Pfizer 2.9%
Chevron 2.8%
JP Morgan Chase & Co 2.2%
American Intl Group 2.1%
ConocoPhillips 2.1%
Verizon Communications 2.1%
General Electric 2.1%
</Table>
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
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.
- --------------------------------------------------------------------------------
2 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
FUND SNAPSHOT AT JAN. 31, 2008 (UNAUDITED)
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
Robert Ewing, CFA 20
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A ALVAX 06/27/02
Class B ALVBX 06/27/02
Class C RLVCX 06/27/02
Class I ALCIX 03/04/04
Class R2 -- 12/11/06
Class R3 -- 12/11/06
Class R4 RSLVX 06/27/02
Class R5 -- 12/11/06
Total net assets $71.4 million
Number of holdings 201
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 3
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the six-month period ended Jan. 31, 2008
(BAR CHART)
<Table>
RiverSource Large Cap Value Fund Class A
(excluding sales charge) -7.16%
Russell 1000 Value Index (unmanaged) -5.42%
Lipper Large-Cap Value Funds Index -5.53%
</Table>
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.
(1) The Russell 1000 Value Index, an unmanaged index, measures the performance
of those stocks in the Russell 1000(R) Index with lower price-to-book
ratios and lower forecasted growth values. The index reflects reinvestment
of all distributions and changes in market prices.
(2) The Lipper Large-Cap Value Funds Index includes the 30 largest large-cap
value funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive
adjustment.
ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
<Table>
<Caption>
TOTAL NET EXPENSES
Class A 1.28% 1.28%
Class B 2.05% 2.05%
Class C 2.04% 2.04%
Class I 0.85% 0.85%
Class R2 1.63% 1.63%
Class R3 1.38% 1.38%
Class R4 1.15% 1.13%(a)
Class R5 0.83% 0.83%
</Table>
(a) 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 decreased the
management fee by 0.003), will not exceed 1.13% for Class R4.
- --------------------------------------------------------------------------------
4 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT JAN. 31, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception 6/27/02) -7.16% -6.84% +6.17% +11.46% +7.56%
Class B (inception 6/27/02) -7.49% -7.33% +5.36% +10.64% +6.77%
Class C (inception 6/27/02) -7.32% -7.32% +5.36% +10.68% +6.78%
Class I (inception 3/4/04) -6.95% -6.30% +6.65% N/A +6.47%
Class R2 (inception 12/11/06) -6.93% -6.77% N/A N/A -3.77%
Class R3 (inception 12/11/06) -6.86% -6.53% N/A N/A -3.55%
Class R4 (inception 6/27/02) -6.72% -6.23% +6.45% +11.77% +7.83%
Class R5 (inception 12/11/06) -6.92% -6.27% N/A N/A -3.31%
WITH SALES CHARGE
Class A (inception 6/27/02) -12.52% -12.23% +4.09% +10.15% +6.42%
Class B (inception 6/27/02) -11.70% -11.54% +4.31% +10.37% +6.64%
Class C (inception 6/27/02) -8.16% -8.16% +5.36% +10.68% +6.78%
</Table>
<Table>
<Caption>
AT DEC. 31, 2007
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception 6/27/02) -6.08% -0.56% +7.29% +11.98% +8.68%
Class B (inception 6/27/02) -6.44% -1.24% +6.53% +11.16% +7.88%
Class C (inception 6/27/02) -6.44% -1.40% +6.47% +11.11% +7.85%
Class I (inception 3/4/04) -5.70% -0.01% +7.77% N/A +8.05%
Class R2 (inception 12/11/06) -6.05% -0.86% N/A N/A +0.50%
Class R3 (inception 12/11/06) -5.96% -0.60% N/A N/A +0.75%
Class R4 (inception 6/27/02) -5.82% -0.31% +7.55% +12.24% +8.92%
Class R5 (inception 12/11/06) -5.76% -0.22% N/A N/A +1.13%
WITH SALES CHARGE
Class A (inception 6/27/02) -11.45% -6.24% +5.17% +10.65% +7.52%
Class B (inception 6/27/02) -10.69% -5.73% +5.47% +10.89% +7.75%
Class C (inception 6/27/02) -7.29% -2.30% +6.47% +11.11% +7.85%
</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 and Class R5 shares. Class I,
Class R2, Class R3, Class R4 and Class R5 are available to institutional
investors only.
* Not annualized
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 5
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Portfolio Manager Bob Ewing discusses the Fund's results and positioning
for the semiannual period ended Jan. 31, 2008.
Q: How did RiverSource Large Cap Value Fund perform for the six months ended
Jan. 31, 2008?
A: RiverSource Large Cap Value Fund's Class A shares declined 7.16%,
excluding sales charge, for the semiannual period ended Jan. 31, 2008. The
Fund's benchmark, the Russell 1000(R) Value Index (Russell Index), declined
5.42% during the period. The Fund's peer group, the Lipper Large-Cap Value
Funds Index, declined 5.53% during the same time frame.
Q: What factors most significantly affected performance for the period?
A: The past six months were difficult for the U.S. stock markets, characterized
by economic deceleration and a great deal of credit uncertainty precipitated
by subprime mortgage lending difficulties. This combination proved especially
damaging to the Fund's financial holdings. In response to the economic
challenges, the Federal Reserve Board (the Fed) reduced the federal funds
rate five times between September and January, reversing its previous
monetary policy stance, which had been more focused on fighting inflation.
THE MORTGAGE ISSUES OF 2007 CAME TO A HEAD DURING THE SEMIANNUAL PERIOD,
AFFECTING A NUMBER OF INDIVIDUAL STOCKS IN THE PORTFOLIO.
Both stock selection and sector weightings relative to the Russell Index
hampered the Fund's results. While stock selection in the industrials,
information technology and telecommunication services sectors were favorable,
the Fund's holdings in the financials, energy and health care sectors
underperformed. In terms of sector weightings, having less exposure to
financials was advantageous, as was a larger health care weighting. However,
an overweight in technology and an underweight in utilities was detrimental.
The mortgage issues of 2007 came to a head during the semiannual period,
affecting a number of individual stocks in the portfolio. On the positive
side, the Fund benefited from having a smaller position versus the Russell
Index in Washington Mutual, a large mortgage issuer. Conversely, the Fund's
position in mortgage lender Countrywide Financial was the most significant
individual
- --------------------------------------------------------------------------------
6 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
QUESTIONS & ANSWERS
detractor from return. Toward the end of the six-month period, Countrywide
agreed to be acquired by Bank of America, a deal expected to close later this
year. The stock's performance improved slightly following the announcement.
The Fund's holdings of government-sponsored Federal Home Loan Mortgage Corp.
(Freddie Mac) were also caught up in the negative lending environment.
Although Freddie Mac was not directly affected by mortgage problems,
investors became concerned that weakness could eventually affect it.
Additional contributors included AFLAC, Microsoft, KB Home and Lockheed
Martin. Life and disability insurance company AFLAC benefited from improving
fundamentals and a substantial Japanese presence that allowed the company to
benefit from currency exchange rates as the U.S. dollar remained weak
relative to the Japanese yen. Microsoft benefited as its Windows Vista
operating system began to gain traction. Though homebuilders were weak during
the six month period and, as a group, did not add value for the Fund, we
bought KB Home after much of the decline in the homebuilding sector. We feel
that investors have since begun to anticipate some stabilization in the
homebuilding environment. Defense contractor Lockheed Martin benefited from
its stable business and performed well during the period.
Additional detractors versus the Russell Index included overweight positions
in Spansion and Virgin Media and an underweight in Occidental Petroleum.
Spansion, a semiconductor memory chip company, detracted as prices in the
memory chip market eroded faster than expected. Virgin Media received an
attractive acquisition offer in July and was in the midst of a strategic
auction at the start of the semiannual period. However, weakness in the high
yield bond market halted the process and the stock price fell below even the
original bid amount. We continue to see hidden value in Virgin Media and
think management may realize it without an acquisition. Having an underweight
position in Occidental Petroleum detracted from performance as energy stocks
generally benefited from high commodity prices throughout the period.
However, we believed there were better opportunities elsewhere in the energy
sector.
Q: What changes did you make to the Fund during this period?
A: We increased exposure to the consumer discretionary sector relative to the
Russell Index. Stocks in this sector had become relatively inexpensive and
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 7
QUESTIONS & ANSWERS
initially drove this change. We also concluded that the Fed's efforts to
fight economic deceleration by reducing short-term interest rates should
benefit this sector, particularly selected homebuilders and retailers.
WE ALSO INCREASED EXPOSURE TO THE TELECOMMUNICATION SERVICES INDUSTRY
GROUP, THOUGH THIS IS NOT A THEMATIC CHANGE, BUT A BOTTOM-UP OPPORTUNITY.
We decreased the Fund's utilities position relative to the Russell Index.
This reflects our belief that if the Fed continues to stimulate the economy,
certain types of cyclical companies may benefit more than companies with less
cyclical businesses, such as utilities. We also increased exposure to the
telecommunication services industry group, though this is not a thematic
change, but a bottom-up opportunity. Several telecommunication services
stocks, specifically telephone companies, had become inexpensive and
subsequently quite attractive to us.
Q: How do you plan to manage the Fund in the coming months?
In general, we agree with the broad consensus that the U.S. is in an economic
deceleration. However, we think the Fed will take steps to aggressively
combat this situation and nine months to a year from now we could be on
better economic footing.
Consequently, we are striving to hold stocks that we believe will be
beneficiaries of economic stabilization.
In such an environment, we believe the portfolio's three primary themes
continue to present attractive opportunities. First, we still think large-cap
stocks are more attractive than small- and mid-cap stocks. They have greater
international exposure, while trading at about the same price-to-earnings
multiple as small- and mid-cap stocks. Second, we also maintain the Fund's
current preference for reasonably priced stocks with growth characteristics
over those with value traits. Third, we think an emphasis on high quality
stocks is likely to be advantageous going forward. These stocks are trading
at the same valuations as low quality stocks and with economic expansion
faltering, we think investors will begin to favor them.
- --------------------------------------------------------------------------------
8 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
QUESTIONS & ANSWERS
WE HAVE IMPLEMENTED A NEW THEME IN THE PORTFOLIO, A FOCUS ON CONTRARIAN
OPPORTUNITIES.
We have implemented a new theme in the portfolio, a focus on contrarian
opportunities. These are stocks whose valuations are so low that they are
compelling to us even after taking into account the companies' troubled
fundamental conditions. Examples include segments of the financial market
such as mortgage companies and savings and loans, many of which are trading
at highly discounted levels. In the consumer discretionary sector examples
include homebuilders, which we believe are trading below liquidation values,
and selected retailers. Traditionally, stocks purchased at valuations like
these contribute to outperformance over time and we are carefully considering
individual opportunities. Stocks that fit this theme also have the potential
to benefit from the Fed's apparent willingness to lower interest rates to
stimulate economic growth.
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.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 9
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 Jan. 31, 2008.
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.
- --------------------------------------------------------------------------------
10 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
ENDING
BEGINNING ACCOUNT VALUE EXPENSES
ACCOUNT VALUE JAN. 31, PAID DURING ANNUALIZED
AUG. 1, 2007 2008 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $ 928.40 $ 5.93 1.22%
Hypothetical
(5% return before
expenses) $1,000 $1,019.06 $ 6.21 1.22%
Class B
Actual(b) $1,000 $ 925.10 $ 9.61 1.98%
Hypothetical
(5% return before
expenses) $1,000 $1,015.22 $10.06 1.98%
Class C
Actual(b) $1,000 $ 926.80 $ 9.62 1.98%
Hypothetical
(5% return before
expenses) $1,000 $1,015.22 $10.06 1.98%
Class I
Actual(b) $1,000 $ 930.50 $ 3.80 .78%
Hypothetical
(5% return before
expenses) $1,000 $1,021.27 $ 3.97 .78%
Class R2
Actual(b) $1,000 $ 930.70 $ 7.74 1.59%
Hypothetical
(5% return before
expenses) $1,000 $1,017.19 $ 8.08 1.59%
Class R3
Actual(b) $1,000 $ 931.40 $ 6.52 1.34%
Hypothetical
(5% return before
expenses) $1,000 $1,018.45 $ 6.82 1.34%
Class R4
Actual(b) $1,000 $ 932.80 $ 5.26 1.08%
Hypothetical
(5% return before
expenses) $1,000 $1,019.76 $ 5.50 1.08%
Class R5
Actual(b) $1,000 $ 930.80 $ 4.09 .84%
Hypothetical
(5% return before
expenses) $1,000 $1,020.97 $ 4.28 .84%
</Table>
(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 184/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Jan. 31, 2008: -7.16%
for Class A, -7.49% for Class B, -7.32% for Class C, -6.95% for Class I,
-6.93% for Class R2, -6.86% for Class R3, -6.72% for Class R4 and -6.92%.
for Class R5.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 11
PORTFOLIO OF INVESTMENTS
JAN. 31, 2008 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (97.8%)
ISSUER SHARES VALUE(A)
AEROSPACE & DEFENSE (5.1%)
Boeing 6,415 $533,600
DRS Technologies 2,416 129,667
General Dynamics 2,255 190,457
Goodrich 7,022 439,226
Honeywell Intl 13,909 821,604
L-3 Communications Holdings 2,657 294,475
Lockheed Martin 5,205 561,724
Northrop Grumman 4,092 324,741
United Technologies 4,860 356,773
---------------
Total 3,652,267
- ------------------------------------------------------------------------------------
AIRLINES (0.1%)
UAL 1,151 43,680
- ------------------------------------------------------------------------------------
AUTOMOBILES (0.2%)
BMW 1,377(c) 76,084
Fiat 3,111(c) 73,053
---------------
Total 149,137
- ------------------------------------------------------------------------------------
BEVERAGES (1.5%)
Coca-Cola 8,525 504,424
Molson Coors Brewing Cl B 5,257 234,830
PepsiCo 4,704 320,766
---------------
Total 1,060,020
- ------------------------------------------------------------------------------------
BIOTECHNOLOGY (0.3%)
Amgen 1,602(b) 74,637
Genentech 1,703(b) 119,534
---------------
Total 194,171
- ------------------------------------------------------------------------------------
BUILDING PRODUCTS (0.3%)
Masco 8,818 202,197
- ------------------------------------------------------------------------------------
CAPITAL MARKETS (4.3%)
Apollo Mgmt LP 11,000(b,d,e) 185,625
Bank of New York Mellon 9,998 466,207
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CAPITAL MARKETS (CONT.)
Franklin Resources 1,058 $110,275
Goldman Sachs Group 872 175,071
KKR Private Equity Investors LP Unit 6,046 101,819
Lehman Brothers Holdings 5,595 359,031
Merrill Lynch & Co 11,695 659,598
Morgan Stanley 12,357 610,807
Oaktree Capital Group LLC Cl A Unit 4,000(d,e) 110,000
Och-Ziff Capital Management Group LLC Cl A 1,562 34,458
State Street 2,617 214,908
T Rowe Price Group 1,415 71,585
---------------
Total 3,099,384
- ------------------------------------------------------------------------------------
CHEMICALS (1.5%)
Ashland 1,291 58,779
Dow Chemical 14,456 558,870
Eastman Chemical 2,577 170,262
EI du Pont de Nemours & Co 6,763 305,552
---------------
Total 1,093,463
- ------------------------------------------------------------------------------------
COMMERCIAL BANKS (2.1%)
PNC Financial Services Group 4,232 277,704
US Bancorp 6,367 216,160
Wachovia 14,709 572,621
Wells Fargo & Co 12,414 422,200
---------------
Total 1,488,685
- ------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (0.1%)
Avery Dennison 1,315 68,143
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
COMMUNICATIONS EQUIPMENT (1.9%)
Cisco Systems 13,412(b) $328,594
EchoStar Cl A 399(b) 11,659
Motorola 19,222 221,630
Nokia ADR 3,142(c) 116,097
QUALCOMM 11,703 496,441
Telefonaktiebolaget LM Ericsson ADR 8,975(c) 203,912
---------------
Total 1,378,333
- ------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (1.9%)
Dell 3,654(b) 73,226
Hewlett-Packard 12,787 559,431
IBM 6,542 702,219
SanDisk 1,729(b) 44,003
---------------
Total 1,378,879
- ------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.3%)
Fluor 889 108,165
KBR 3,716(b) 117,388
---------------
Total 225,553
- ------------------------------------------------------------------------------------
CONSUMER FINANCE (1.9%)
American Express 10,603 522,940
Capital One Financial 12,718 697,073
Discover Financial Services 6,217 108,798
---------------
Total 1,328,811
- ------------------------------------------------------------------------------------
CONTAINERS & PACKAGING (--%)
Temple-Inland 1,486 27,863
- ------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (8.1%)
Bank of America 62,999 2,794,005
Citigroup 51,386 1,450,113
JPMorgan Chase & Co 32,321 1,536,863
---------------
Total 5,780,981
- ------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (5.6%)
AT&T 55,555 2,138,313
Citizens Communications 7,701 88,330
Deutsche Telekom 9,598(c) 196,876
Verizon Communications 38,342 1,489,203
Windstream 7,495 87,017
---------------
Total 3,999,739
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
ELECTRIC UTILITIES (2.9%)
Entergy 4,688 $507,148
Exelon 7,781 592,835
FPL Group 2,129 137,278
Pinnacle West Capital 1,791 68,810
PPL 4,333 211,970
Southern 15,755 572,694
---------------
Total 2,090,735
- ------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (0.5%)
Emerson Electric 6,461 328,477
- ------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.2%)
Tyco Electronics 3,395 114,785
- ------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (1.2%)
Baker Hughes 970 62,982
Halliburton 4,997 165,750
Natl Oilwell Varco 2,834(b) 170,692
Pride Intl 3,309(b) 104,928
Transocean 1,763(b) 216,144
Weatherford Intl 2,139(b) 132,212
---------------
Total 852,708
- ------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (1.1%)
CVS Caremark 5,167 201,875
Safeway 1,271 39,388
Walgreen 2,167 76,083
Wal-Mart Stores 9,411 478,832
---------------
Total 796,178
- ------------------------------------------------------------------------------------
FOOD PRODUCTS (1.1%)
General Mills 3,270 178,575
Kellogg 7,345 351,825
Kraft Foods Cl A 9,497 277,882
---------------
Total 808,282
- ------------------------------------------------------------------------------------
GAS UTILITIES (0.3%)
ONEOK 5,071 238,337
- ------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.8%)
Boston Scientific 35,138(b) 426,224
Covidien 3,395 151,519
---------------
Total 577,743
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio
of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 13
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HEALTH CARE PROVIDERS & SERVICES (1.4%)
Aetna 5,764 $306,991
Cardinal Health 3,104 179,939
CIGNA 4,657 228,938
McKesson 1,828 114,780
UnitedHealth Group 3,139 159,587
---------------
Total 990,235
- ------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (1.0%)
Darden Restaurants 2,117 59,953
Intl Game Technology 4,841 206,566
Marriott Intl Cl A 4,141 148,910
McDonald's 3,185 170,557
Pinnacle Entertainment 3,758(b) 68,584
Yum! Brands 2,552 87,176
---------------
Total 741,746
- ------------------------------------------------------------------------------------
HOUSEHOLD DURABLES (1.8%)
Centex 8,945 248,492
DR Horton 18,218 314,260
Harman Intl Inds 3,013 140,315
Hovnanian Enterprises Cl A 16,203(b) 160,248
KB Home 11,074 304,535
Lennar Cl A 3,580 73,748
Standard-Pacific 6,260 23,851
---------------
Total 1,265,449
- ------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (1.3%)
Colgate-Palmolive 5,543 426,811
Procter & Gamble 7,361 485,458
---------------
Total 912,269
- ------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (2.5%)
3M 1,561 124,334
General Electric 41,726 1,477,517
Tyco Intl 4,508(c) 177,435
---------------
Total 1,779,286
- ------------------------------------------------------------------------------------
INSURANCE (7.2%)
ACE 12,480(c) 728,083
AFLAC 9,488 581,899
American Intl Group 27,795 1,533,171
Arch Capital Group 1,555(b,c) 109,565
Assured Guaranty 2,975(c) 70,389
Chubb 5,101 264,181
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
INSURANCE (CONT.)
Endurance Specialty Holdings 2,602(c) $105,433
Hartford Financial Services Group 8,401 678,549
MetLife 4,175 246,200
Prudential Financial 8,466 714,276
XL Capital Cl A 1,972(c) 88,740
---------------
Total 5,120,486
- ------------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL (0.1%)
Liberty Media - Interactive Cl A 5,878(b,f) 93,519
- ------------------------------------------------------------------------------------
IT SERVICES (0.7%)
Affiliated Computer Services Cl A 3,685(b) 179,644
Automatic Data Processing 4,432 179,806
Electronic Data Systems 4,618 92,822
HCL Technologies 5,800(c) 36,096
---------------
Total 488,368
- ------------------------------------------------------------------------------------
MACHINERY (2.1%)
Caterpillar 3,238 230,351
Deere & Co 6,189 543,147
Flowserve 2,723 223,613
Ingersoll-Rand Cl A 1,592(c) 62,916
ITT 1,286 76,427
Parker Hannifin 4,951 334,737
---------------
Total 1,471,191
- ------------------------------------------------------------------------------------
MEDIA (4.6%)
Comcast Cl A 12,270(b) 222,823
Comcast Special Cl A 7,956(b) 143,128
DISH Network Cl A 1,994(b) 56,311
News Corp Cl A 35,092 663,239
Time Warner 44,085 693,898
Viacom Cl B 6,510(b) 252,328
Virgin Media 27,231 455,302
Vivendi 10,000(c) 402,929
Walt Disney 13,652 408,604
---------------
Total 3,298,562
- ------------------------------------------------------------------------------------
METALS & MINING (0.4%)
Alcoa 7,808 258,445
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MULTILINE RETAIL (1.0%)
JC Penney 8,441 $400,187
Kohl's 2,454(b) 112,001
Target 3,391 188,472
---------------
Total 700,660
- ------------------------------------------------------------------------------------
MULTI-UTILITIES (0.7%)
Dominion Resources 7,149 307,407
Xcel Energy 10,915 226,923
---------------
Total 534,330
- ------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (13.4%)
Anadarko Petroleum 1,636 95,853
BP ADR 6,291(c) 401,051
Chesapeake Energy 2,478 92,256
Chevron 23,935 2,022,508
ConocoPhillips 18,820 1,511,622
Devon Energy 4,046 343,829
Exxon Mobil 46,042 3,978,028
Marathon Oil 3,689 172,830
Royal Dutch Shell ADR 2,116(c) 151,104
Total 8,098(c) 589,320
Valero Energy 2,006 118,735
XTO Energy 1,777 92,297
---------------
Total 9,569,433
- ------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.9%)
AbitibiBowater 6,300(c) 156,051
Intl Paper 7,830 252,517
Weyerhaeuser 3,690 249,887
---------------
Total 658,455
- ------------------------------------------------------------------------------------
PERSONAL PRODUCTS (0.6%)
Avon Products 10,087 353,247
Herbalife 2,011(c) 79,796
---------------
Total 433,043
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
PHARMACEUTICALS (6.2%)
Bristol-Myers Squibb 29,323 $680,000
Eli Lilly & Co 1,556 80,165
Johnson & Johnson 5,639 356,723
Merck & Co 14,390 665,969
Pfizer 89,632 2,096,493
Schering-Plough 12,007 234,977
Wyeth 8,442 335,992
---------------
Total 4,450,319
- ------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (0.3%)
Annaly Capital Management 3,643 71,840
Apartment Investment & Management Cl A 3,281 130,059
---------------
Total 201,899
- ------------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (--%)
Forestar Real Estate Group 495(b) 11,306
- ------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (1.2%)
Atmel 29,172(b) 92,184
Cypress Semiconductor 4,917(b) 104,486
Intel 18,099 383,699
LSI 17,486(b) 91,277
Spansion Cl A 31,234(b) 119,314
Texas Instruments 1,525 47,168
---------------
Total 838,128
- ------------------------------------------------------------------------------------
SOFTWARE (1.3%)
ACI Worldwide 1,389(b) 20,696
BEA Systems 7,511(b) 140,381
Microsoft 16,915 551,428
Oracle 7,965(b) 163,681
Quest Software 2,849(b) 42,593
---------------
Total 918,779
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio
of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 15
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SPECIALTY RETAIL (1.3%)
Circuit City Stores 5,211 $28,348
Gap 4,754 90,896
Home Depot 5,812 178,254
Limited Brands 3,296 62,921
Lowe's Companies 13,773 364,158
Penske Automotive Group 2,037 36,992
TJX Companies 5,306 167,457
---------------
Total 929,026
- ------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (1.8%)
Countrywide Financial 64,338 447,792
Fannie Mae 11,301 382,652
Freddie Mac 15,562 472,929
Guaranty Financial Group 495(b) 6,881
---------------
Total 1,310,254
- ------------------------------------------------------------------------------------
TOBACCO (1.7%)
Altria Group 14,842 1,125,320
UST 1,406 73,056
---------------
Total 1,198,376
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
WIRELESS TELECOMMUNICATION SERVICES (1.0%)
Sprint Nextel 31,570 $332,432
Vodafone Group ADR 10,683(c) 371,769
---------------
Total 704,201
- ------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $67,869,275) $69,856,316
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (2.2%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 1,591,742(g) $1,591,742
- ------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $1,591,742) $1,591,742
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $69,461,017)(h) $71,448,058
====================================================================================
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At Jan. 31, 2008, the
value of foreign securities represented 5.9% 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 Jan. 31,
2008, the value of these securities amounted to $295,625 or 0.4% of net
assets.
(e) 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 Jan. 31,
2008, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ----------------------------------------------------------------------------------
Apollo Mgmt LP* 08-02-07 thru 01-16-08 $249,080
Oaktree Capital Group LLC Cl A Unit* 05-21-07 thru 07-19-07 166,700
</Table>
* Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended.
(f) Shareholders of tracking stocks have a financial interest only in a unit or
division of the company. Unlike the common stock of the company itself, a
tracking stock usually has limited or no voting rights. In the event of a
company's liquidation, tracking stock shareholders typically do not have a
legal claim on the company's assets.
(g) Affiliated Money Market Fund - See Note 5 to the financial statements.
- --------------------------------------------------------------------------------
16 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(h) At Jan. 31, 2008, the cost of securities for federal income tax purposes
was approximately $69,461,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $8,779,000
Unrealized depreciation (6,792,000)
- ------------------------------------------------------------------------------
Net unrealized appreciation $1,987,000
- ------------------------------------------------------------------------------
</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 LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 17
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JAN. 31, 2008 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value
Unaffiliated issuers (identified cost $67,869,275) $ 69,856,316
Affiliated money market fund (identified cost $1,591,742) 1,591,742
- ------------------------------------------------------------------------------
Total investments in securities (identified cost
$69,461,017) 71,448,058
Cash 11,178
Foreign currency holdings (identified cost $4,952) 4,952
Capital shares receivable 29,677
Dividends receivable 109,433
Receivable for investment securities sold 462,453
- ------------------------------------------------------------------------------
Total assets 72,065,751
- ------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 296,309
Payable for investment securities purchased 251,790
Accrued investment management services fee 1,156
Accrued distribution fee 659
Accrued transfer agency fee 148
Accrued administrative services fee 116
Other accrued expenses 65,780
- ------------------------------------------------------------------------------
Total liabilities 615,958
- ------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 71,449,793
==============================================================================
</Table>
- --------------------------------------------------------------------------------
18 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
JAN. 31, 2008 (UNAUDITED)
<Table>
REPRESENTED BY
Capital stock - $.01 par value $ 149,647
Additional paid-in capital 68,414,111
Undistributed net investment income 60,166
Accumulated net realized gain (loss) 838,828
Unrealized appreciation (depreciation) on investments and on
translation of assets and liabilities in foreign
currencies 1,987,041
- ------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $ 71,449,793
==============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $ 47,306,914
Class B $ 11,717,415
Class C $ 855,248
Class I $ 11,535,710
Class R2 $ 3,640
Class R3 $ 3,640
Class R4 $ 23,517
Class R5 $ 3,709
Net asset value per share of
outstanding capital stock: Class A shares(1) 9,908,092 $ 4.77
Class B shares 2,461,484 $ 4.76
Class C shares 180,491 $ 4.74
Class I shares 2,407,449 $ 4.79
Class R2 shares 763 $ 4.77
Class R3 shares 763 $ 4.77
Class R4 shares 4,902 $ 4.80
Class R5 shares 763 $ 4.86
- --------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $5.06. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 19
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JAN. 31, 2008 (UNAUDITED)
<Table>
INVESTMENT INCOME
Income:
Dividends $ 1,089,572
Income distributions from affiliated money market fund 74,345
Less foreign taxes withheld (1,741)
- ---------------------------------------------------------------------------
Total income 1,162,176
- ---------------------------------------------------------------------------
Expenses:
Investment management services fee 247,690
Distribution fee
Class A 72,550
Class B 70,070
Class C 4,967
Class R2 11
Class R3 5
Transfer agency fee
Class A 54,810
Class B 14,069
Class C 975
Class R2 1
Class R3 1
Class R4 9
Class R5 1
Administrative services fee 26,986
Plan administration services fee
Class R2 5
Class R3 5
Class R4 47
Compensation of board members 821
Custodian fees 12,520
Printing and postage 18,400
Registration fees 31,800
Professional fees 10,809
Other 2,013
- ---------------------------------------------------------------------------
Total expenses 568,565
Expenses waived/reimbursed by the Investment Manager and
its affiliates (57)
- ---------------------------------------------------------------------------
568,508
Earnings and bank fee credits on cash balances (1,594)
- ---------------------------------------------------------------------------
Total net expenses 566,914
- ---------------------------------------------------------------------------
Investment income (loss) -- net 595,262
- ---------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
20 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS (CONTINUED)
SIX MONTHS ENDED JAN. 31, 2008 (UNAUDITED)
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $ 2,932,870
Foreign currency transactions (111)
Futures contracts (2,300)
- ---------------------------------------------------------------------------
Net realized gain (loss) on investments 2,930,459
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies (9,603,673)
- ---------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (6,673,214)
- ---------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $(6,077,952)
===========================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2008 JULY 31, 2007
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 595,262 $ 917,420
Net realized gain (loss) on investments 2,930,459 7,965,867
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies (9,603,673) 4,751,162
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (6,077,952) 13,634,449
- -----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (682,628) (754,607)
Class B (32,633) (58,266)
Class C (4,493) (4,777)
Class I (311,395) (250,586)
Class R2 (49) (78)
Class R3 (60) (78)
Class R4 (623) (453)
Class R5 -- (79)
Net realized gain
Class A (4,625,594) (9,225,989)
Class B (1,148,253) (2,795,600)
Class C (84,730) (166,141)
Class I (1,493,181) (2,248,825)
Class R2 (369) (708)
Class R3 (369) (708)
Class R4 (3,183) (5,335)
Class R5 (369) (708)
- -----------------------------------------------------------------------------------------
Total distributions (8,387,929) (15,512,938)
- -----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 21
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2008 JULY 31, 2007
(UNAUDITED)
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 1,819,485 $ 10,152,788
Class B shares 363,825 1,711,166
Class C shares 72,724 211,888
Class I shares 1,249,372 2,650,378
Class R2 shares -- 5,000
Class R3 shares -- 5,000
Class R4 shares -- 1,000
Class R5 shares -- 2,488,893
Reinvestment of distributions at net asset value
Class A shares 5,196,120 9,755,373
Class B shares 1,166,160 2,826,941
Class C shares 87,581 162,715
Class I shares 1,804,062 2,498,502
Class R4 shares 2,650 3,775
Payments for redemptions
Class A shares (12,978,925) (19,024,336)
Class B shares (2,744,167) (8,203,518)
Class C shares (184,261) (420,058)
Class I shares (5,424,121) (1,080,983)
Class R4 shares (10,330) --
Class R5 shares -- (2,561,087)
- -----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (9,579,825) 1,183,437
- -----------------------------------------------------------------------------------------
Total increase (decrease) in net assets (24,045,706) (695,052)
Net assets at beginning of period 95,495,499 96,190,551
- -----------------------------------------------------------------------------------------
Net assets at end of period $ 71,449,793 $ 95,495,499
=========================================================================================
Undistributed net investment income $ 60,166 $ 496,785
- -----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
22 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
(Unaudited as to Jan. 31, 2008)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Large Cap Value Fund (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 of
Directors (the Board). The Fund invests primarily in equity securities of
companies with a market capitalization greater than $5 billion.
The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4
and Class R5 shares
- - Class A shares are 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, Class R2, Class R3, Class R4 and Class R5 shares are sold without a
front-end sales charge or CDSC and are offered to qualifying institutional
investors.
At Jan. 31, 2008, RiverSource Investments, LLC (the Investment Manager) and the
affiliated funds-of-funds owned 100% of Class I shares and the Investment
Manager owned 100% of Class R2, Class R3 and Class R5 shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
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-
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 23
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
generally contemplate the use of fair valuation in the event that price
quotations or valuations are not readily available, price quotations or
valuations from other sources are not reflective of market value and thus deemed
unreliable, or a significant event has occurred in relation to a security or
class of securities (such as foreign securities) that is not reflected in price
quotations or valuations from other sources. A fair value price is a good faith
estimate of the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the 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, Inc. (Ameriprise
Financial), parent company of the Investment Manager, as administrator to the
Fund, will fair value foreign securities pursuant to procedures adopted by the
Board, including utilizing a third party pricing service to determine these fair
values. These procedures take into account multiple factors, including movements
in the U.S. securities markets, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the New
York Stock Exchange.
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 Jan. 31, 2008, 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. The aggregate value of such securities at Jan. 31, 2008 was
$295,625 representing 0.41% of net assets. These securities may be valued at
fair value 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 at 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
- --------------------------------------------------------------------------------
24 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
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. During
the six months ended Jan. 31, 2008, the Fund had no outstanding option
contracts.
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 loss when the contract is closed or expires. At Jan. 31, 2008, 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
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 25
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 Jan. 31,
2008, foreign currency holdings were entirely comprised of Indian rupees.
The Fund may enter into forward foreign currency 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. At Jan. 31, 2008, the Fund had no outstanding
forward foreign currency contracts.
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 shareholders. No provision for income or excise
taxes is thus required.
The Fund has adopted Financial Accounting Standards Board (FASB) Interpretation
48 (FIN 48), "Accounting for Uncertainty in Income Taxes," which is effective
for fiscal periods beginning after Dec. 15, 2006. 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. Management of the Fund has concluded that there are no significant
uncertain tax positions that would require recognition in the financial
statements. Generally, the tax authorities can examine all the tax returns filed
for the last three years.
- --------------------------------------------------------------------------------
26 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
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, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes and losses deferred due to
"wash sale" transactions. The character of distributions made during the year
from net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
RECENT ACCOUNTING PRONOUNCEMENT
On Sept. 20, 2006, the 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 hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported in
the Statement of operations for a fiscal period. The application of SFAS 157
will be effective for the Fund's fiscal year beginning Aug. 1, 2008. The
adoption of SFAS 157 is not anticipated to have a material impact on the Fund's
financial statements.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including amortization of premium, market discount and original issue discount
using the effective interest method, is accrued daily.
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 determined monthly by
measuring the percentage difference over a rolling 12-month period between the
performance of one Class A share of the Fund and the change in the Lipper Large-
Cap Value Funds Index. In certain circumstances, the Board may approve a change
in the index. The maximum adjustment is 0.12% per year. If the performance
difference is less than 0.50%, the adjustment will be zero. The adjustment
decreased the fee by $22,174 for the six months ended Jan. 31, 2008. The
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 27
management fee for the six months ended Jan. 31, 2008 was 0.55% of the Fund's
average daily net assets, including an adjustment under the terms of the
performance incentive arrangement.
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. The fee for the six months ended Jan. 31, 2008 was 0.06%
of the Fund's average daily net assets.
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended Jan.
31, 2008, other expenses paid to this company were $310.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former 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.
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
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, Class R4
and Class R5 shares.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the Statement of operations.
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
- --------------------------------------------------------------------------------
28 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Prior to Oct. 1, 2007, Ameriprise
Financial Services, Inc. also served as a principal underwriter and distributor
to the Fund. Under a Plan and Agreement of Distribution pursuant to Rule 12b-1,
the Fund pays a fee at an annual rate of up to 0.25% of the Fund's average daily
net assets attributable to Class A and Class R3 shares, a fee at an annual rate
of up to 0.50% of the Fund's average daily net assets attributable to Class R2
shares and a fee at an annual rate of up to 1.00% of the Fund's average daily
net assets attributable to Class B and Class C shares.
Sales charges received by the Distributor for distributing Fund shares were
$21,809 for Class A, $7,247 for Class B and $43 for Class C for the six months
ended Jan. 31, 2008.
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.
For the six months ended Jan. 31, 2008, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds) were 1.34% for Class R2, 1.09%
for Class R3 and 0.83% for Class R4. Of these waived/reimbursed fees and
expenses, the plan administration services fees at the class level were $5, $5
and $47 for Class R2, Class R3 and Class R4, respectively. In addition, the
Investment Manager and its affiliates have contractually agreed to waive certain
fees and expenses until July 31, 2008, such that net expenses (excluding fees
and expenses of acquired funds), before giving effect to any performance
incentive adjustment, will not exceed 1.13% of the Fund's average daily net
assets for Class R4, unless sooner terminated at the discretion of the Board.
During the six months ended Jan. 31, 2008, the Fund's custodian and transfer
agency fees were reduced by $1,594 as a result of earnings and bank fee credits
from overnight cash balances. The Fund pays custodian fees to Ameriprise Trust
Company, a subsidiary of Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $9,040,527 and $24,366,759, respectively, for the six
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 29
months ended Jan. 31, 2008. Realized gains and losses are determined on an
identified cost basis.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED JAN. 31, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- --------------------------------------------------------------------------------------
Class A 336,036 1,043,398 (2,399,762) (1,020,328)
Class B 67,087 234,640 (512,499) (210,772)
Class C 13,042 17,693 (34,791) (4,056)
Class I 218,541 361,535 (1,107,289) (527,213)
Class R2 -- -- -- --
Class R3 -- -- -- --
Class R4 -- 530 (2,217) (1,687)
Class R5 -- -- -- --
- --------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ---------------------------------------------------------------------------------------
Class A 1,700,418 1,738,926 (3,203,244) 236,100
Class B 290,285 506,620 (1,386,106) (589,201)
Class C 36,321 29,213 (71,502) (5,968)
Class I 440,786 443,784 (184,695) 699,875
Class R2* 763 -- -- 763
Class R3* 763 -- -- 763
Class R4 165 671 -- 836
Class R5* 439,307 -- (438,544) 763
- ---------------------------------------------------------------------------------------
</Table>
* For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
5. 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. The cost of the
Fund's purchases and proceeds from sales of shares of the RiverSource Short-Term
Cash Fund aggregated $17,215,766 and $18,941,321, respectively, for the six
months ended Jan. 31, 2008.
6. BANK BORROWINGS
The Fund has entered into a revolving credit facility 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
- --------------------------------------------------------------------------------
30 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
emergency purposes. The credit facility became effective on Oct. 18, 2007,
replacing a prior credit facility. The credit facility agreement, which is a
collective agreement between the Fund and certain other RiverSource funds,
severally and not jointly, permits collective borrowings up to $500 million.
Interest is charged to each Fund based on its borrowings at a rate equal to the
federal funds rate plus 0.30%. Each borrowing under the credit facility matures
no later than 60 days after the date of borrowing. The Fund also pays a
commitment fee equal to its pro rata share of the amount of the credit facility
at a rate of 0.06% per annum. Under the prior credit facility, a Fund paid
interest on its outstanding 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. The Fund had no borrowings during the six months ended Jan. 31,
2008.
7. CONCENTRATION OF RISK
SECTOR RISK
If a fund emphasizes one or more economic sectors, it may be more susceptible to
the financial, market or economic events affecting the particular issuers and
industries in which it invests than funds that do not emphasize particular
sectors. The more a fund diversifies, the more it spreads risk and potentially
reduces the risks of loss and volatility.
8. 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 filed a notice of appeal with the Eighth Circuit Court of Appeals on
August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 31
Commerce (MDOC) related to market timing activities. As a result, AEFC was
censured and ordered to cease and desist from committing or causing any
violations of certain provisions of the Investment Advisers Act of 1940, the
Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to retain an independent distribution consultant to assist in developing
a plan for distribution of all disgorgement and civil penalties ordered by the
SEC in accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of Directors/
Trustees.
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.
- --------------------------------------------------------------------------------
32 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
9. 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, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of period $5.71 $5.88 $5.83 $5.34 $4.98
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04(b) .06(b) .09 .06 .04
Net gains (losses) (both realized and
unrealized) (.43) .77 .32 .70 .59
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.39) .83 .41 .76 .63
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.07) (.07) (.07) (.04) (.03)
Distributions from realized gains (.48) (.93) (.29) (.23) (.24)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.55) (1.00) (.36) (.27) (.27)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.77 $5.71 $5.88 $5.83 $5.34
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $47 $62 $63 $74 $67
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.22%(e) 1.28% 1.21% 1.29% 1.54%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 1.22%(e) 1.28% 1.21% 1.29% 1.24%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.36%(e) .99% 1.35% 1.07% .95%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 35% 46% 57% 59%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (7.16%)(i) 14.47% 7.39% 14.52% 12.85%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees of acquired funds), before giving effect to
any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 33
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of period $5.66 $5.82 $5.77 $5.29 $4.95
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02(b) .01(b) .04 .01 --
Net gains (losses) (both realized and
unrealized) (.42) .78 .32 .70 .59
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.40) .79 .36 .71 .59
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) (.02) (.02) -- (.01)
Distributions from realized gains (.48) (.93) (.29) (.23) (.24)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.50) (.95) (.31) (.23) (.25)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.76 $5.66 $5.82 $5.77 $5.29
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $12 $15 $19 $28 $25
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.98%(e) 2.05% 1.97% 2.05% 2.30%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 1.98%(e) 2.05% 1.97% 2.05% 2.00%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .60%(e) .23% .59% .30% .16%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 35% 46% 57% 59%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (7.49%)(i) 13.75% 6.51% 13.66% 12.00%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees of acquired funds), before giving effect to
any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
34 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of period $5.64 $5.82 $5.77 $5.29 $4.94
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02(b) .01(b) .04 .01 --
Net gains (losses) (both realized and
unrealized) (.41) .76 .32 .70 .60
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.39) .77 .36 .71 .60
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.03) (.02) (.02) -- (.01)
Distributions from realized gains (.48) (.93) (.29) (.23) (.24)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.51) (.95) (.31) (.23) (.25)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.74 $5.64 $5.82 $5.77 $5.29
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $1 $1 $1 $1 $1
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.98%(e) 2.04% 1.98% 2.06% 2.30%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 1.98%(e) 2.04% 1.98% 2.06% 2.00%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .60%(e) .23% .58% .30% .19%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 35% 46% 57% 59%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (7.32%)(i) 13.50% 6.56% 13.62% 12.19%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees of acquired funds), before giving effect to
any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 35
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007 2006 2005 2004(B)
Net asset value, beginning of period $5.75 $5.91 $5.86 $5.36 $5.57
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .05(c) .08(c) .12 .07 .03
Net gains (losses) (both realized and
unrealized) (.43) .79 .32 .72 (.24)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.38) .87 .44 .79 (.21)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.10) (.10) (.10) (.06) --
Distributions from realized gains (.48) (.93) (.29) (.23) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.58) (1.03) (.39) (.29) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.79 $5.75 $5.91 $5.86 $5.36
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $12 $17 $13 $38 $16
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) .78%(f) .85% .75% .86% 1.02%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .78%(f) .85% .75% .86% .93%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.83%(f) 1.41% 1.85% 1.50% 1.33%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 35% 46% 57% 59%
- -----------------------------------------------------------------------------------------------------------
Total return(i) (6.95%)(j) 15.10% 7.86% 14.97% (3.77%)(j)
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees of acquired funds), before giving effect to
any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
36 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007(B)
Net asset value, beginning of period $5.69 $6.55
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .03 .02
Net gains (losses) (both realized and
unrealized) (.40) .15
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.37) .17
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.07) (.10)
Distributions from realized gains (.48) (.93)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.55) (1.03)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.77 $5.69
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e),(f) 1.59% 1.63%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(f),(g),(h) 1.34% 1.63%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss)(f) 1.23% .55%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 35%
- -----------------------------------------------------------------------------------------------------------
Total return(i),(j) (6.93%) 2.84%
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees of acquired funds), before giving effect to
any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 37
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007(B)
Net asset value, beginning of period $5.70 $6.55
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .04 .03
Net gains (losses) (both realized and
unrealized) (.41) .15
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.37) .18
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08) (.10)
Distributions from realized gains (.48) (.93)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.56) (1.03)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.77 $5.70
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e),(f) 1.34% 1.38%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(f),(g),(h) 1.09% 1.38%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss)(f) 1.48% .80%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 35%
- -----------------------------------------------------------------------------------------------------------
Total return(i),(j) (6.86%) 3.03%
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees of acquired funds), before giving effect to
any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
38 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of period $5.74 $5.90 $5.85 $5.36 $4.99
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .05(b) .07(b) .10 .07 .04
Net gains (losses) (both realized and
unrealized) (.41) .78 .32 .70 .61
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.36) .85 .42 .77 .65
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.10) (.08) (.08) (.05) (.04)
Distributions from realized gains (.48) (.93) (.29) (.23) (.24)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.58) (1.01) (.37) (.28) (.28)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.80 $5.74 $5.90 $5.85 $5.36
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.08%(e) 1.13% 1.00% 1.11% 1.36%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) .83%(e) 1.12% 1.00% 1.11% 1.06%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.75%(e) 1.14% 1.69% 1.25% 1.12%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 35% 46% 57% 59%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (6.72%)(i) 14.67% 7.55% 14.67% 13.14%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances.
(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) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees of acquired funds), before giving effect to
any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 39
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(I) 2007(B)
Net asset value, beginning of period $5.72 $6.55
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .05 .05
Net gains (losses) (both realized and
unrealized) (.43) .15
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.38) .20
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.10)
Distributions from realized gains (.48) (.93)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.48) (1.03)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.86 $5.72
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Total expenses(d),(e),(f) .84% .83%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss)(f) 1.73% 1.45%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 2% 35%
- -----------------------------------------------------------------------------------------------------------
Total return(g),(h) (6.92%) 3.40%
- -----------------------------------------------------------------------------------------------------------
</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 the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment fee, if any.
Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2008 were less than 0.01% of average net assets.
(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.
(i) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
40 RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
PROXY VOTING
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling 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.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 41
RIVERSOURCE LARGE CAP VALUE FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by
the Fund's current prospectus. RiverSource mutual
funds are distributed by RiverSource
Distributors, Inc., Member FINRA, and managed by
RiverSource Investments, LLC. These companies are
part of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2008 RiverSource Distributors, Inc. S-6257 G (3/08)
</Table>
Item 2. Code of Ethics. Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert. Not applicable for semi-annual
reports.
Item 4. Principal Accountant Fees and Services. Not applicable for
semi-annual reports.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. The complete schedule of investments is included in Item 1 of this
Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. Not applicable.
Item 10. Submission of matters to a vote of security holders. Not applicable.
Item 11. Controls and Procedures.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form N-CSR,
the registrant's Principal Financial Officer and Principal Executive Officer
have concluded that those disclosure controls and procedures provide reasonable
assurance that the material information required to be disclosed by the
registrant on this report is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's last fiscal half-year (the
registrant's second fiscal half-year in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable for semi-annual reports.
(a)(2) Separate certification for the Registrant's principal executive officer
and principal financial officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of
1940, are attached as EX.99.CERT.
(a)(3) Not applicable.
(b) A certification by the Registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940, is attached
as EX.99.906 CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) RiverSource Large Cap Series, Inc.
By /s/ Patrick T. Bannigan
-----------------------
Patrick T. Bannigan
President and Principal Executive Officer
Date April 3, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By /s/ Patrick T. Bannigan
-----------------------
Patrick T. Bannigan
President and Principal Executive Officer
Date April 3, 2008
By /s/ Jeffrey P. Fox
------------------
Jeffrey P. Fox
Treasurer and Principal Financial Officer
Date April 3, 2008