UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number 811-1629
RIVERSOURCE DIMENSIONS SERIES, INC.
(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
(Address of principal executive offices) (Zip code)
Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474
(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 671-1947
Date of fiscal year end: 7/31
Date of reporting period: 1/31
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
DISCIPLINED SMALL AND MID CAP EQUITY FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2008
RIVERSOURCE DISCIPLINED SMALL AND
MID CAP 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........ 6
Fund Expenses Example............... 10
Portfolio of Investments............ 12
Financial Statements................ 19
Notes to Financial Statements....... 23
Proxy Voting........................ 39
</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 SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 1
FUND SNAPSHOT AT JAN. 31, 2008 (UNAUDITED)
FUND OBJECTIVE
RiverSource Disciplined Small and Mid Cap Equity Fund seeks to provide
shareholders with long-term capital growth.
SECTOR BREAKDOWN*
Percentage of portfolio assets
(PIE CHART)
<Table>
Industrials 20.7%
Consumer Discretionary 16.6%
Information Technology 12.3%
Financials 12.3%
Materials 10.1%
Energy 9.8%
Other(1) 18.2%
</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 Health Care 9.4%, Consumer Staples 3.4%, Utilities 1.9%,
Telecommunication Services 0.3% and Cash & Cash Equivalents 3.2%.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Western Digital 1.4%
Axis Capital Holdings 1.3%
NVR 1.3%
CF Inds Holdings 1.2%
Con-way 1.1%
UAL 1.0%
Frontier Oil 1.0%
Fidelity Natl Financial Cl A 1.0%
Helmerich & Payne 1.0%
Intuitive Surgical 1.0%
</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.
Investments in small- and mid-capitalization companies often involve greater
risks and potential volatility than investments in larger, more established
companies.
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2 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
FUND SNAPSHOT AT JAN. 31, 2008 (UNAUDITED)
STYLE MATRIX
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
LARGE
X MEDIUM SIZE
X 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
Steve Kokkotos, Ph.D. 10
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A RDSAX 05/18/06
Class B -- 05/18/06
Class C RDSCX 05/18/06
Class I RDSIX 05/18/06
Class R4 -- 05/18/06
Class W RSEWX 12/01/06
Total net assets $39.1 million
Number of holdings 301
</Table>
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RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 3
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the six-month period ended Jan. 31, 2008
(BAR CHART)
<Table>
RiverSource Disciplined Small and Mid Cap Equity
Fund Class A (excluding sales charge)# -10.78%
Russell 2500 Index (unmanaged) (1) -7.07%
Lipper Mid-Cap Core Funds Index -6.48%
</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 2500 Index, an unmanaged index, measures the performance of the
2,500 smallest companies in the Russell 3000 Index, which represents
approximately 16% of the total market capitalization of the Russell 3000
Index. The index reflects reinvestment of all distributions and changes in
market prices.
(2) The Lipper Mid-Cap Core Funds Index includes the 30 largest mid-cap core
funds tracked by Lipper Inc. The index's returns include net reinvested
dividends. The Fund's performance is currently measured against this index
for purposes of determining the performance incentive adjustment.
ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
<Table>
<Caption>
TOTAL NET EXPENSES(A)
Class A 1.67% 1.32%
Class B 2.12% 2.08%
Class C 2.16% 2.08%
Class I 0.96% 0.92%
Class R4 1.74% 1.19%
Class W 1.60% 1.37%
</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 0.04%), will not exceed 1.36% for Class A, 2.12% for
Class B, 2.12% for Class C, 0.96% for Class I, 1.23% for Class R4 and 1.41%
for Class W.
- --------------------------------------------------------------------------------
4 RIVERSOURCE DISCIPLINED SMALL AND MID 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 INCEPTION
Class A (inception 5/18/06) -10.78% -16.55% -5.84%
Class B (inception 5/18/06) -11.19% -17.22% -6.58%
Class C (inception 5/18/06) -11.19% -17.22% -6.61%
Class I (inception 5/18/06) -10.58% -16.26% -5.53%
Class R4 (inception 5/18/06) -10.53% -16.23% -5.60%
Class W (inception 12/1/06) -10.87% -16.64% -10.99%
WITH SALES CHARGE
Class A (inception 5/18/06) -15.89% -21.33% -5.84%
Class B (inception 5/18/06) -15.63% -21.36% -8.78%
Class C (inception 5/18/06) -12.08% -18.05% -6.61%
</Table>
<Table>
<Caption>
AT DEC. 31, 2007
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR INCEPTION
Class A (inception 5/18/06) -14.69% -10.20% -3.71%
Class B (inception 5/18/06) -15.01% -10.86% -4.41%
Class C (inception 5/18/06) -15.01% -10.86% -4.44%
Class I (inception 5/18/06) -14.56% -9.90% -3.38%
Class R4 (inception 5/18/06) -14.44% -9.86% -3.45%
Class W (inception 12/1/06) -14.75% -10.27% -8.25%
WITH SALES CHARGE
Class A (inception 5/18/06) -19.63% -15.34% -3.71%
Class B (inception 5/18/06) -19.25% -15.32% -6.77%
Class C (inception 5/18/06) -15.86% -11.75% -4.44%
</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 R4 and Class W shares. Class I and Class R4 are
available to institutional investors only. Class W shares are offered through
qualifying discretionary accounts.
* Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 5
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Portfolio Managers Dimitris Bertsimas, Gina Mourtzinou and Steve Kokkotos
discuss RiverSource Disciplined Small and Mid Cap Equity Fund's positioning and
results for the six-month period ended Jan. 31, 2008.
At Jan. 31, 2008, approximately 35% of the Fund's shares were owned in the
aggregate by affiliated funds-of-funds managed by RiverSource Investments, LLC
(RiverSource). As a result of asset allocation decisions by RiverSource, it is
possible that RiverSource Disciplined Small and Mid Cap Equity Fund may
experience relatively large purchases or redemptions from affiliated
funds-of-funds (see page 30, Class I capital share transactions for related
activity during the most recent fiscal period). RiverSource seeks to minimize
the impact of these transactions by structuring them over a reasonable period of
time. RiverSource Disciplined Small and Mid Cap Equity Fund may experience
increased expenses as it buys and sells securities as a result of purchases or
redemptions by affiliated funds-of-funds. For more information of the Fund's
expenses, see the discussions beginning on pages 10 and 27.
Q: How did RiverSource Disciplined Small and Mid Cap Equity Fund perform for the
semiannual period?
A: RiverSource Disciplined Small and Mid Cap Equity Fund's Class A shares
(excluding sales charge) declined 10.78% for the six-month period ended Jan.
31, 2008. The Fund underperformed its benchmark, the Russell 2500(TM) Index
(Russell Index), which fell 7.07%, as well as the Lipper Mid-Cap Core Funds
Index, representing the Fund's peer group, which declined 6.48%, for the same
period.
NEITHER THE VALUE NOR THE MOMENTUM QUANTITATIVE INVESTMENT MODEL MANAGED
TO OVERCOME THE PERIOD'S UNUSUALLY VOLATILE CONDITIONS, UNDERPERFORMING
THE RUSSELL INDEX DURING THE SIX MONTHS.
Q: What factors most significantly affected the Fund's performance?
A: The Fund's performance resulted from the quantitative investment models we
employ in selecting stocks for the Fund's portfolio. Early in the period, we
decided that the quality-adjusted value model would not be able to manage the
extremely volatile market conditions caused by subprime mortgage market
upheaval, surging oil prices, credit market troubles and recessionary fears
that dominated the equity market during these months, especially within the
small-
- --------------------------------------------------------------------------------
6 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
QUESTIONS & ANSWERS
and mid-cap segments of the market. Thus, we eliminated the Fund's use of the
quality-adjusted value model, which had been designed to select undervalued
securities by adjusting the valuations of stocks to take into account each
stock's historical earnings stability and debt load. We correspondingly
increased the Fund's weighting allotted to the value model, which selects
undervalued stocks based on proprietary estimates of future corporate
earnings. We also continued to use the momentum model, which singles out
groups of companies that appear to be having improving prospects based on the
pattern of stock returns observed over history. Under the Fund's investment
process, the models choose the small- and mid-cap stocks for the portfolio.
We then weight the models and determine the exposure to sectors and
industries.
Neither the value nor the momentum quantitative investment model managed to
overcome the period's unusually volatile conditions, underperforming the
Russell Index during the six months. The value model performed worse than the
momentum model for the semiannual period overall, though this reversed in
January 2008, supporting our research indicating that the style
diversification provided by the very different quantitative models is a
significant investment advantage over the long term, even though the Fund may
experience underperformance in the short term.
It is important to remember that we do not make sector or industry bets based
on our outlook for the economy or the equity markets. That said, during the
period, the Fund's quantitative models led to a bias toward small-cap stocks
and toward value-oriented stocks, which detracted from results. Most of the
small-cap value-oriented stocks were financials, a group that struggled
during the period, most especially during August and September.
From a sector allocation perspective, the Fund's greater-than-Russell Index
allocations to energy and materials contributed positively to its results as
did a lesser-than-Russell Index position in information technology.
Conversely, a sizable exposure to consumer discretionary and more modest
allocations to financials, health care and utilities detracted.
Because of our investment process, most of the Fund's underperformance was
the result of stock selection. Stock selection actually helped performance in
the materials and health care sectors. However, these positives were not
enough to offset our selections within financials, energy and industrials.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 7
QUESTIONS & ANSWERS
Among individual holdings, the stocks that detracted most from the Fund's
results were two financials companies, each selected by the value model -
namely PMI Group and Radian Group. Other poor performers during the period
included oil company Western Refining (selected by the momentum and value
models), food products company Seaboard (momentum and value models), and road
and rail company YRC Worldwide (value model).
On the positive side, stocks that contributed favorably to the Fund's return
included chemicals company Terra Inds (selected by the value and momentum
models), metals and mining company Cleveland-Cliffs (momentum and value
models), telecommunications services company Golden Telecom (momentum and
value models), consumer discretionary firm NVR (value model), and information
technology company Western Digital (value and momentum models).
At the end of January 2008, the Fund's largest individual stock holdings
included Western Digital, NVR, financials company Axis Capital Holdings
(selected by the value model), materials company CF Inds Holdings (momentum
and value models), and energy company Frontier Oil (momentum and value
models).
Q: What changes did you make to the Fund's portfolio during the period?
A: As mentioned, the biggest change we made during the period was the
elimination of our use of the quality-adjusted value model and the increased
Fund weighting to the value model. Also, as a result of quantitative models-
driven stock selection during the period, the portfolio's sector allocations
changed somewhat. For example, the Fund's exposure to industrials relative to
the Russell Index increased. Conversely, the Fund's relative position in
utilities and telecommunications decreased.
In managing risk associated with small- and mid-cap investing, we use a
proprietary risk management system that allows us to manage the Fund's
exposure to several key factors, including industry, sector, market
capitalization and portfolio turnover. During the period, we used these and
other techniques to avoid large deviations in exposure from the Index.
Q: How do you intend to manage the Fund in the coming months?
A: We believe our use of multiple investment disciplines serves the Fund well in
all investment environments over the long term, and the diversified portfolio
is
- --------------------------------------------------------------------------------
8 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
QUESTIONS & ANSWERS
well positioned for most potential market conditions. Whether there is a
surge in small- and mid-cap stocks or a downturn, the combination of models
should, in our view, help us deliver value relative to the Russell Index over
extended periods of time. We are convinced of the merit of our multifaceted,
disciplined approach to managing risk in the portfolio. We 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 SMALL AND MID CAP 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 SMALL AND MID CAP 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 $ 892.20 $ 5.96 1.25%
Hypothetical
(5% return before expenses) $1,000 $1,018.90 $ 6.36 1.25%
Class B
Actual(b) $1,000 $ 888.10 $ 9.61 2.02%
Hypothetical
(5% return before expenses) $1,000 $1,015.02 $10.26 2.02%
Class C
Actual(b) $1,000 $ 888.10 $ 9.57 2.01%
Hypothetical
(5% return before expenses) $1,000 $1,015.07 $10.21 2.01%
Class I
Actual(b) $1,000 $ 894.20 $ 4.20 .88%
Hypothetical
(5% return before expenses) $1,000 $1,020.77 $ 4.48 .88%
Class R4
Actual(b) $1,000 $ 894.70 $ 5.49 1.15%
Hypothetical
(5% return before expenses) $1,000 $1,019.41 $ 5.85 1.15%
Class W
Actual(b) $1,000 $ 891.30 $ 6.29 1.32%
Hypothetical
(5% return before expenses) $1,000 $1,018.55 $ 6.72 1.32%
</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: -10.78%
for Class A, -11.19% for Class B, -11.19% for Class C, -10.58% for Class I,
-10.53% for Class R4 and -10.87% for Class W.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP 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 (99.7%)
ISSUER SHARES VALUE(A)
AEROSPACE & DEFENSE (0.9%)
BE Aerospace 3,661(b) $141,351
Ceradyne 1,610(b) 77,522
Taser Intl 7,619(b) 87,542
Teledyne Technologies 958(b) 49,462
---------------
Total 355,877
- -----------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS (0.2%)
Park-Ohio Holdings 2,855(b) 63,838
- -----------------------------------------------------------------------------------
AIRLINES (3.7%)
Alaska Air Group 11,296(b) 285,789
Continental Airlines Cl B 12,329(b) 335,472
Pinnacle Airlines 6,248(b) 83,973
SkyWest 5,564 144,775
UAL 11,061 419,765
US Airways Group 12,841(b) 177,334
---------------
Total 1,447,108
- -----------------------------------------------------------------------------------
AUTO COMPONENTS (2.5%)
Aftermarket Technology 2,847(b) 72,342
Amerigon 4,633(b) 79,317
ArvinMeritor 4,159 56,479
BorgWarner 1,743 88,213
Cooper Tire & Rubber 5,969 101,891
Goodyear Tire & Rubber 4,076(b,d) 102,593
Lear 2,665(b) 78,244
Modine Mfg 5,490 84,766
Tenneco 3,143(b) 83,195
TRW Automotive Holdings 7,790(b) 178,625
Visteon 15,289(b) 61,156
---------------
Total 986,821
- -----------------------------------------------------------------------------------
BEVERAGES (0.6%)
Central European Distribution 925(b) 48,627
Hansen Natural 3,095(b) 119,343
PepsiAmericas 2,650 65,296
---------------
Total 233,266
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
BIOTECHNOLOGY (1.4%)
BioMarin Pharmaceutical 3,354(b) $124,299
Cepheid 4,237(b) 129,399
LifeCell 3,031(b) 119,755
Myriad Genetics 2,738(b) 117,761
Onyx Pharmaceuticals 1,008(b) 47,910
---------------
Total 539,124
- -----------------------------------------------------------------------------------
BUILDING PRODUCTS (1.0%)
Armstrong World Inds 1,224(b) 44,933
Owens Corning 8,370(b) 181,964
Universal Forest Products 862 31,204
USG 3,756(b) 137,470
---------------
Total 395,571
- -----------------------------------------------------------------------------------
CAPITAL MARKETS (0.7%)
Knight Capital Group Cl A 3,343(b) 55,995
optionsXpress Holdings 1,759 47,704
SWS Group 6,798 104,349
Waddell & Reed Financial Cl A 1,503 49,870
---------------
Total 257,918
- -----------------------------------------------------------------------------------
CHEMICALS (6.2%)
Ashland 8,440 384,272
Calgon Carbon 8,989(b) 138,251
Celanese Series A 4,826 179,431
CF Inds Holdings 4,407(d) 471,240
Eastman Chemical 3,315 219,022
Flotek Inds 4,834(b) 98,469
Koppers Holdings 1,400 46,844
LSB Inds 3,868(b) 106,641
NewMarket 905 48,761
Olin 5,175 106,036
PolyOne 7,060(b) 43,490
ShengdaTech 8,830(b,c) 108,962
Terra Inds 5,131(b) 231,254
Westlake Chemical 3,216 64,642
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CHEMICALS (CONT.)
WR Grace & Co 4,848(b) $109,662
Zoltek Companies 2,465(b) 89,973
---------------
Total 2,446,950
- -----------------------------------------------------------------------------------
COMMERCIAL BANKS (0.9%)
First BanCorp 6,493(c) 62,073
First Citizens BancShares Cl A 437 59,581
Oriental Financial Group 2,471(c) 39,462
UMB Financial 3,617 152,383
Whitney Holding 1,378 36,986
---------------
Total 350,485
- -----------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (1.9%)
CBIZ 7,846(b) 73,831
Copart 1,206(b) 49,301
FTI Consulting 1,361(b) 75,277
GeoEye 2,980(b) 104,181
IHS Cl A 1,342(b) 83,123
Layne Christensen 2,064(b) 76,162
Stericycle 2,212(b) 131,083
TEAM 3,145(b) 94,507
TrueBlue 3,843(b) 54,840
---------------
Total 742,305
- -----------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (0.7%)
Ciena 3,940(b) 106,892
CommScope 1,196(b) 53,043
EMS Technologies 1,776(b) 48,804
InterDigital 3,270(b) 66,087
---------------
Total 274,826
- -----------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (3.0%)
Immersion 8,418(b) 82,496
Lexmark Intl Cl A 6,862(b) 248,473
Novatel Wireless 5,259(b) 84,144
Stratasys 2,090(b) 46,189
Synaptics 5,606(b) 148,559
Western Digital 21,512(b,d) 568,993
---------------
Total 1,178,854
- -----------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (1.2%)
Jacobs Engineering Group 2,798(b) 213,879
Michael Baker 3,765(b) 128,876
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CONSTRUCTION & ENGINEERING (CONT.)
Perini 1,777(b) $62,106
Shaw Group 1,185(b) 66,953
---------------
Total 471,814
- -----------------------------------------------------------------------------------
CONSUMER FINANCE (0.4%)
First Marblehead 10,275 168,921
- -----------------------------------------------------------------------------------
CONTAINERS & PACKAGING (0.9%)
Owens-Illinois 6,668(b) 336,067
- -----------------------------------------------------------------------------------
DISTRIBUTORS (0.2%)
LKQ 4,448(b) 79,575
- -----------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (0.5%)
Career Education 2,218(b) 48,219
ITT Educational Services 710(b) 64,859
Strayer Education 498 85,945
---------------
Total 199,023
- -----------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.3%)
Ampal-American Israel Cl A 9,152(b,c) 67,633
NASDAQ Stock Market 877(b) 40,579
---------------
Total 108,212
- -----------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.3%)
NTELOS Holdings 2,848 60,605
Shenandoah Telecommunications 2,839 51,869
---------------
Total 112,474
- -----------------------------------------------------------------------------------
ELECTRIC UTILITIES (0.4%)
Central Vermont Public Service 4,957 144,397
- -----------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (1.8%)
American Superconductor 4,901(b) 99,245
Encore Wire 2,277 37,980
General Cable 5,359(b) 310,876
GrafTech Intl 4,696(b) 70,675
SunPower Cl A 2,436(b) 168,303
---------------
Total 687,079
- -----------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (3.3%)
Arrow Electronics 6,521(b) 223,148
Avnet 5,756(b) 204,971
Benchmark Electronics 9,918(b) 176,045
FLIR Systems 3,690(b) 111,733
Ingram Micro Cl A 11,625(b) 206,693
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 13
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
ELECTRONIC EQUIPMENT & INSTRUMENTS (CONT.)
Itron 1,383(b) $113,959
Plexus 5,898(b) 133,236
SYNNEX 2,326(b) 49,544
Trimble Navigation 3,067(b) 81,122
---------------
Total 1,300,451
- -----------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (5.1%)
Global Inds 5,822(b) 102,817
Grey Wolf 18,999(b) 113,234
Helmerich & Payne 10,294(d) 403,730
Oil States Intl 5,879(b) 206,118
Patterson-UTI Energy 16,129 315,806
SEACOR Holdings 2,219(b) 195,716
Tidewater 6,173 326,922
Unit 4,769(b) 239,022
Willbros Group 2,716(b,c) 90,497
---------------
Total 1,993,862
- -----------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (1.0%)
BJ's Wholesale Club 1,900(b) 61,636
Great Atlantic & Pacific Tea 3,757(b) 112,222
PriceSmart 1,617 46,020
Rite Aid 35,713(b) 105,710
Winn-Dixie Stores 2,718(b) 48,163
---------------
Total 373,751
- -----------------------------------------------------------------------------------
FOOD PRODUCTS (2.0%)
Cal-Maine Foods 3,180 91,679
Darling Intl 16,258(b) 188,593
Fresh Del Monte Produce 4,883(b,c) 156,451
Green Mountain Coffee Roasters 2,080(b) 80,122
Imperial Sugar 2,454 53,939
Sanderson Farms 3,016 101,368
Seaboard 75 96,394
---------------
Total 768,546
- -----------------------------------------------------------------------------------
GAS UTILITIES (1.1%)
Atmos Energy 3,015 86,591
New Jersey Resources 1,972 92,467
Nicor 6,062 248,542
---------------
Total 427,600
- -----------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (2.3%)
DENTSPLY Intl 1,978 81,711
IDEXX Laboratories 770(b) 43,405
Intuitive Surgical 1,573(b,d) 399,541
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HEALTH CARE EQUIPMENT & SUPPLIES (CONT.)
Meridian Bioscience 6,387 $200,616
NuVasive 2,185(b) 86,111
Regeneration Technologies 6,369(b) 50,952
Wright Medical Group 1,742(b) 47,557
---------------
Total 909,893
- -----------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (2.2%)
Air Methods 2,858(b) 131,125
AMERIGROUP 932(b) 34,969
HealthSpring 2,921(b) 60,435
Healthways 710(b) 39,973
HMS Holdings 2,841(b) 89,776
Kindred Healthcare 4,044(b) 111,372
Magellan Health Services 652(b) 28,518
Molina Healthcare 4,676(b) 159,498
ResCare 2,130(b) 47,648
WellCare Health Plans 3,532(b) 165,969
---------------
Total 869,283
- -----------------------------------------------------------------------------------
HEALTH CARE TECHNOLOGY (0.3%)
Emageon 14,621(b) 42,108
Phase Forward 3,779(b) 65,188
---------------
Total 107,296
- -----------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (0.5%)
Bally Technologies 2,127(b) 101,330
Penn Natl Gaming 909(b) 47,404
Premier Exhibitions 5,770(b) 35,082
---------------
Total 183,816
- -----------------------------------------------------------------------------------
HOUSEHOLD DURABLES (3.3%)
Avatar Holdings 2,476(b) 106,220
Beazer Homes USA 9,284 80,956
Champion Enterprises 4,924(b) 48,107
KB Home 3,170 87,175
MDC Holdings 2,452 113,454
Meritage Homes 4,426(b) 71,037
NVR 819(b,d) 517,200
Ryland Group 5,137 173,169
Toll Brothers 3,687(b) 85,833
---------------
Total 1,283,151
- -----------------------------------------------------------------------------------
INSURANCE (8.5%)
Allied World Assurance Holdings 2,690(c) 128,125
American Financial Group 7,044 195,330
Arch Capital Group 4,051(b,c) 285,433
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
INSURANCE (CONT.)
Aspen Insurance Holdings 7,497(c) $211,565
Axis Capital Holdings 13,078(c) 523,643
Conseco 11,847(b) 142,638
Fidelity Natl Financial Cl A 20,795 409,454
First American 7,946 346,048
Odyssey Re Holdings 1,754 66,617
Old Republic Intl 9,389 140,178
PartnerRe 4,832(c) 383,081
RenaissanceRe Holdings 6,147(c) 350,318
Transatlantic Holdings 2,448 166,954
---------------
Total 3,349,384
- -----------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL (1.1%)
1-800-FLOWERS.com Cl A 10,598(b) 82,770
Blue Nile 1,735(b) 95,859
Gaiam Cl A 2,079(b) 50,665
Priceline.com 1,725(b) 187,197
---------------
Total 416,491
- -----------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (1.3%)
Chordiant Software 6,782(b) 59,139
CMGI 5,938(b) 76,600
DealerTrack Holdings 2,639(b) 71,147
EarthLink 5,044(b) 34,350
RealNetworks 7,279(b) 42,437
Sohu.com 2,546(b,c) 118,465
Vocus 3,252(b) 95,674
---------------
Total 497,812
- -----------------------------------------------------------------------------------
IT SERVICES (1.1%)
Iron Mountain 1,447(b) 49,762
SAIC 20,574(b,d) 388,849
---------------
Total 438,611
- -----------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (1.0%)
Brunswick 14,232 270,266
JAKKS Pacific 5,484(b) 129,203
---------------
Total 399,469
- -----------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES (1.6%)
Bio-Rad Laboratories Cl A 538(b) 51,223
Covance 956(b) 79,501
eResearch Technology 9,189(b) 89,317
Illumina 1,394(b) 88,798
Invitrogen 931(b) 79,759
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
LIFE SCIENCES TOOLS & SERVICES (CONT.)
Luminex 4,815(b) $72,081
PAREXEL Intl 3,265(b) 177,648
---------------
Total 638,327
- -----------------------------------------------------------------------------------
MACHINERY (5.8%)
AGCO 4,167(b) 250,938
Barnes Group 1,657 44,159
Bucyrus Intl Cl A 1,025 95,028
Dynamic Materials 2,230 119,483
Flowserve 2,367 194,378
FreightCar America 3,790 142,921
Hardinge 3,481 59,351
Harsco 2,287 130,176
Hurco Companies 2,024(b) 74,018
Kennametal 1,118 34,244
LB Foster Cl A 3,563(b) 164,005
Lindsay 812 49,548
Manitowoc 6,226 237,335
Mueller Inds 5,155 144,340
NACCO Inds Cl A 640 64,038
Robbins & Myers 770 51,036
Sun Hydraulics 3,284 75,532
Tennant 1,372 45,262
Timken 5,049 152,631
Valmont Inds 1,603 134,171
---------------
Total 2,262,594
- -----------------------------------------------------------------------------------
MARINE (0.7%)
Genco Shipping & Trading 2,700 133,164
TBS Intl Series A 3,775(b,c) 125,745
---------------
Total 258,909
- -----------------------------------------------------------------------------------
MEDIA (0.5%)
Discovery Holding Cl A 2,444(b) 56,750
Gemstar-TV Guide Intl 20,068(b) 86,493
TiVo 7,060(b) 61,916
---------------
Total 205,159
- -----------------------------------------------------------------------------------
METALS & MINING (3.1%)
AK Steel Holding 2,433(b) 116,249
Century Aluminum 834(b) 43,360
Cleveland-Cliffs 2,558 260,507
Commercial Metals 12,252 347,344
General Moly 5,002(b) 50,420
Kaiser Aluminum 517 33,067
Metal Management 1,944 96,578
Quanex 3,110 162,995
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 15
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
METALS & MINING (CONT.)
Schnitzer Steel Inds Cl A 1,404 $79,551
Worthington Inds 2,378 38,975
---------------
Total 1,229,046
- -----------------------------------------------------------------------------------
MULTILINE RETAIL (0.8%)
Dillard's Cl A 15,928 315,852
- -----------------------------------------------------------------------------------
MULTI-UTILITIES (0.4%)
Integrys Energy Group 3,473 168,857
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (4.9%)
Cimarex Energy 7,219(d) 294,607
Forest Oil 2,672(b) 120,828
Frontier Oil 11,895(d) 419,537
Frontline 6,924(c) 294,755
Holly 1,997 96,695
Overseas Shipholding Group 3,046 198,660
St. Mary Land & Exploration 4,384 154,448
Stone Energy 2,320(b,d) 95,120
Swift Energy 3,072(b) 132,557
Whiting Petroleum 2,238(b) 120,270
---------------
Total 1,927,477
- -----------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.2%)
Louisiana-Pacific 4,573 69,830
- -----------------------------------------------------------------------------------
PHARMACEUTICALS (1.8%)
Auxilium Pharmaceuticals 1,691(b) 57,832
Durect 9,354(b) 47,612
King Pharmaceuticals 24,950(b) 261,726
Perrigo 2,694 83,083
ViroPharma 10,447(b) 92,560
XenoPort 2,800(b) 171,808
---------------
Total 714,621
- -----------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (0.8%)
Annaly Capital Management 5,784 114,060
Digital Realty Trust 2,212 79,035
MFA Mtge Investments 10,145 103,479
---------------
Total 296,574
- -----------------------------------------------------------------------------------
ROAD & RAIL (3.5%)
Arkansas Best 6,828 210,234
Avis Budget Group 3,605(b) 48,127
Con-way 8,915 434,071
Ryder System 5,598 291,432
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
ROAD & RAIL (CONT.)
Werner Enterprises 6,633 $135,114
YRC Worldwide 14,525(b) 265,953
---------------
Total 1,384,931
- -----------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (1.6%)
Advanced Analogic Technologies 10,701(b) 72,125
Amkor Technology 11,032(b) 84,284
ANADIGICS 7,783(b) 77,752
Cree 1,358(b) 40,129
Cypress Semiconductor 2,317(b) 49,236
Monolithic Power Systems 3,751(b) 58,666
NetLogic Microsystems 1,810(b) 47,060
OmniVision Technologies 9,915(b) 140,396
Pericom Semiconductor 3,467(b) 47,013
---------------
Total 616,661
- -----------------------------------------------------------------------------------
SOFTWARE (1.7%)
ANSYS 2,247(b) 78,443
Concur Technologies 6,306(b) 221,088
NAVTEQ 1,871(b) 138,267
Nuance Communications 6,200(b) 98,518
Taleo Cl A 3,143(b) 66,412
VASCO Data Security Intl 3,061(b) 58,067
---------------
Total 660,795
- -----------------------------------------------------------------------------------
SPECIALTY RETAIL (5.4%)
Asbury Automotive Group 7,026 99,629
AutoNation 13,765(b) 224,094
Barnes & Noble 9,010 305,890
Blockbuster Cl A 52,068(b,d) 162,452
Borders Group 5,589 62,932
Cato Cl A 8,358 136,820
Conn's 4,280(b) 82,604
Foot Locker 13,960 191,112
GameStop Cl A 2,974(b) 153,845
Group 1 Automotive 2,962 78,315
RadioShack 9,662 167,636
Rent-A-Center 7,914(b) 135,329
Sonic Automotive Cl A 8,936 179,167
Stage Stores 9,845 117,845
---------------
Total 2,097,670
- -----------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (1.3%)
crocs 2,080(b) 72,363
Deckers Outdoor 1,373(b) 166,463
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
16 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
TEXTILES, APPAREL & LUXURY GOODS (CONT.)
Hanesbrands 3,887(b) $99,546
Jones Apparel Group 10,812 181,641
---------------
Total 520,013
- -----------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (1.1%)
Corus Bankshares 15,736 200,161
PMI Group 18,405 174,848
Radian Group 4,578 41,843
---------------
Total 416,852
- -----------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (0.7%)
Kaman 1,415 41,799
Rush Enterprises Cl A 3,239(b) 54,350
United Rentals 4,384(b) 80,008
WESCO Intl 2,142(b) 90,479
---------------
Total 266,636
- -----------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $45,435,436) $38,950,725
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (3.3%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 1,298,754(e) $1,298,754
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $1,298,754) $1,298,754
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $46,734,190)(f) $40,249,479
===================================================================================
</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)
- ---------------------------------------------------------------------------------------------------
E-Mini S&P MidCap 400 Index 1 $80,640 March 2008 $(93)
Mini Russell 2000 Index 1 71,500 March 2008 6,696
- ---------------------------------------------------------------------------------------------------
Total $6,603
- ---------------------------------------------------------------------------------------------------
</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 7.5% of net assets.
(d) At Jan. 31, 2008, investments in securities included securities valued at
$3,173,980 that were partially pledged as collateral to cover initial
margin deposits on open stock index futures contracts.
(e) Affiliated Money Market Fund - See Note 5 to the financial statements.
(f) At Jan. 31, 2008, the cost of securities for federal income tax purposes
was approximately $46,734,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $1,839,000
Unrealized depreciation (8,324,000)
- ------------------------------------------------------------------------------
Net unrealized depreciation $(6,485,000)
- ------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 17
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
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 DISCIPLINED SMALL AND MID CAP EQUITY 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 $45,435,436) $ 38,950,725
Affiliated money market fund (identified cost $1,298,754) 1,298,754
- ----------------------------------------------------------------------------
Total investments in securities (identified cost
$46,734,190) 40,249,479
Cash 8,968
Capital shares receivable 117,494
Dividends receivable 11,521
Receivable for investment securities sold 1,892,533
Variation margin receivable 6,780
- ----------------------------------------------------------------------------
Total assets 42,286,775
- ----------------------------------------------------------------------------
LIABILITIES
Capital shares payable 312,372
Payable for investment securities purchased 2,836,561
Accrued investment management services fee 727
Accrued distribution fee 196
Accrued transfer agency fee 60
Accrued administrative services fee 62
Other accrued expenses 49,826
- ----------------------------------------------------------------------------
Total liabilities 3,199,804
- ----------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 39,086,971
============================================================================
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 19
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
JAN. 31, 2008 (UNAUDITED)
<Table>
REPRESENTED BY
Capital stock -- $.01 par value $ 46,013
Additional paid-in capital 59,262,665
Excess of distributions over net investment income (24,064)
Accumulated net realized gain (loss) (13,719,535)
Unrealized appreciation (depreciation) on investments (6,478,108)
- ----------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $ 39,086,971
============================================================================
</Table>
<Table>
Net assets applicable to outstanding shares: Class A $ 17,446,963
Class B $ 1,178,648
Class C $ 157,607
Class I $ 13,641,429
Class R4 $ 10,245
Class W $ 6,652,079
Net asset value per share of outstanding Class A
capital stock: shares(1) 2,053,022 $ 8.50
Class B shares 140,103 $ 8.41
Class C shares 18,731 $ 8.41
Class I shares 1,603,375 $ 8.51
Class R4 shares 1,204 $ 8.51
Class W shares 784,815 $ 8.48
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $9.02. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
20 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JAN. 31, 2008 (UNAUDITED)
<Table>
INVESTMENT INCOME
Income:
Dividends $ 567,113
Income distributions from affiliated money market fund 106,517
Less foreign taxes withheld (1,267)
- ----------------------------------------------------------------------------
Total income 672,363
- ----------------------------------------------------------------------------
Expenses:
Investment management services fee 272,157
Distribution fee
Class A 23,127
Class B 6,656
Class C 853
Class W 45,679
Transfer agency fee
Class A 11,832
Class B 952
Class C 118
Class R4 3
Class W 36,544
Administrative services fee 26,373
Plan administration services fee -- Class R4 16
Compensation of board members 717
Custodian fees 36,140
Printing and postage 21,014
Registration fees 23,034
Professional fees 10,800
Other 1,772
- ----------------------------------------------------------------------------
Total expenses 517,787
Expenses waived/reimbursed by the Investment Manager and
its affiliates (7,367)
- ----------------------------------------------------------------------------
510,420
Earnings and bank fee credits on cash balances (70)
- ----------------------------------------------------------------------------
Total net expenses 510,350
- ----------------------------------------------------------------------------
Investment income (loss) -- net 162,013
- ----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (13,290,997)
Futures contracts (351,686)
- ----------------------------------------------------------------------------
Net realized gain (loss) on investments (13,642,683)
Net change in unrealized appreciation (depreciation) on
investments 1,225,495
- ----------------------------------------------------------------------------
Net gain (loss) on investments (12,417,188)
- ----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $(12,255,175)
============================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP 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 $ 162,013 $ 236,927
Net realized gain (loss) on investments (13,642,683) 1,725
Net change in unrealized appreciation (depreciation)
on investments 1,225,495 (6,728,788)
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (12,255,175) (6,490,136)
- -----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (44,544) (51,227)
Class B -- (1,714)
Class C -- (180)
Class I (147,613) (86,805)
Class R4 (58) (57)
Class W (82,725) (25)
- -----------------------------------------------------------------------------------------
Total distributions (274,940) (140,008)
- -----------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares 3,596,044 9,526,024
Class B shares 260,392 1,559,049
Class C shares 43,891 186,778
Class I shares 2,037,108 41,657,381
Class R4 shares -- 4,169
Class W shares 34,259,574 74,596,249
Reinvestment of distributions at net asset value
Class A shares 23,307 12,334
Class B shares -- 1,637
Class C shares -- 133
Class I shares 147,564 86,753
Class R4 shares 14 12
Class W shares 82,712 --
Payments for redemptions
Class A shares (2,363,708) (602,001)
Class B shares (287,412) (163,893)
Class C shares (50,373) (1,577)
Class I shares (23,433,857) (1,367,934)
Class R4 shares (3,611) --
Class W shares (78,479,438) (12,494,015)
- -----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (64,167,793) 113,001,099
- -----------------------------------------------------------------------------------------
Total increase (decrease) in net assets (76,697,908) 106,370,955
Net assets at beginning of period 115,784,879 9,413,924
- -----------------------------------------------------------------------------------------
Net assets at end of period $ 39,086,971 $115,784,879
=========================================================================================
Undistributed (excess of distributions over) net
investment income $ (24,064) $ 88,863
- -----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
22 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
NOTES TO FINANCIAL STATEMENTS
(Unaudited as to Jan. 31, 2008)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Disciplined Small and Mid Cap Equity Fund (the Fund) is a series of
RiverSource Dimensions Series, Inc. and is registered under the Investment
Company Act of 1940 (as amended) as a diversified, open-end management
investment company. RiverSource Dimensions 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 market capitalizations of up to
$5 billion or that fall within the range of companies that comprise the Russell
2500(TM) Index at the time of investment.
The Fund offers Class A, Class B, Class C, Class I, Class R4 and Class W shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I and Class R4 shares 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.
At Jan. 31, 2008, the Investment Manager and the affiliated funds-of-funds owned
approximately 35% of the total outstanding Fund shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g. distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on 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 DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 23
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
- --------------------------------------------------------------------------------
24 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
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.
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
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 25
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.
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
- --------------------------------------------------------------------------------
26 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
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 0.70%
to 0.475% 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 Mid-
Cap Core Funds Index. In certain circumstances, the Board may approve a change
in the Index. The maximum adjustment is 0.12% per year. If the performance
difference is less than 0.50%, the adjustment will be zero. The adjustment
decreased the fee by $35,528 for the six months ended Jan. 31, 2008. The
management fee for the six months ended Jan. 31, 2008 was 0.62% of the Fund's
average daily net assets, including as 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
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 27
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 Funds and the Board. For the six months ended
Jan. 31, 2008, other expenses paid to this company were $399.
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 R4 shares and an
annual asset-based fee at a rate of 0.20% of the Fund's average daily net assets
attributable to Class W shares.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 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 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.
- --------------------------------------------------------------------------------
28 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
Under a Plan and Agreement of Distribution pursuant to Rule 12b-1, the Fund pays
a fee at an annual rate of up to 0.25% of the Fund's average daily net assets
attributable to Class A and Class W shares and a fee at an annual rate of up to
1.00% of the Fund's average daily net assets attributable to Class B and Class C
shares.
Sales charges received by the Distributor for distributing Fund shares were
$16,122 for Class A, $1,019 for Class B and $11 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 1.25% for Class A, 2.02%
for Class B, 2.01% for Class C, 0.88% for Class I, 0.90% for Class R4 and 1.32%
for Class W. Of these waived/reimbursed fees and expenses, the transfer agency
fee at the class level was $2 for Class R4, the plan administration services fee
at the class level was $16 for Class R4 and the management fees at the Fund
level were $7,349. 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 1.36% for Class A, 2.12% for
Class B, 2.12% for Class C, 0.96% for Class I, 1.23% for Class R4 and 1.41% for
Class W 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 transfer agency fees were
reduced by $70 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 $18,272,697 and $78,603,533, respectively, for the six
months ended Jan. 31, 2008. Realized gains and losses are determined on an
identified cost basis.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 29
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 393,826 2,670 (267,873) 128,623
Class B 28,854 -- (32,942) (4,088)
Class C 4,971 -- (5,647) (676)
Class I 221,097 16,884 (2,686,024) (2,448,043)
Class R4 -- 2 (384) (382)
Class W 3,690,324 9,475 (8,894,403) (5,194,604)
- ----------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 943,472 1,246 (59,415) 885,303
Class B 155,478 166 (15,613) 140,031
Class C 18,543 14 (150) 18,407
Class I 4,167,297 8,763 (131,451) 4,044,609
Class R4 421 1 -- 422
Class W* 7,145,709 -- (1,166,290) 5,979,419
- ----------------------------------------------------------------------------------------------
</Table>
* For the period from Dec. 1, 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 $34,422,396 and $34,883,429, 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 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
- --------------------------------------------------------------------------------
30 RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
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. CAPITAL LOSS CARRY-OVER AND POST-OCTOBER LOSS
For federal income tax purposes, the Fund had a capital loss carry-over of
$115,029 at July 31, 2007, that if not offset by capital gains will expire as
follows:
<Table>
<Caption>
2014 2015
$93,125 $21,904
</Table>
The Fund also had a post-October loss of $6,598 at July 31, 2007.
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.
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 Commerce (MDOC)
related to market timing activities. As a result, AEFC was
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 31
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 DISCIPLINED SMALL AND MID CAP 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(K) 2007 2006(B)
Net asset value, beginning of period $9.55 $8.95 $9.48
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(c) .05(c) --
Net gains (losses) (both realized and
unrealized) (1.04) .59 (.53)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.03) .64 (.53)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) (.04) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.50 $9.55 $8.95
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $17 $18 $9
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.30%(f) 1.67% 5.83%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.25%(f) 1.29% 1.26%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .23%(f) .52% .01%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 22% 84% 14%
- -----------------------------------------------------------------------------------------------------------
Total return(i) (10.78%)(j) 7.12% (5.59%)(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from May 18, 2006 (when shares became publicly available) to
July 31, 2006.
(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 year 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 SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 33
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007 2006(B)
Net asset value, beginning of period $9.47 $8.93 $9.48
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.02)(c) (.04)(c) (.01)
Net gains (losses) (both realized
and unrealized) (1.04) .62 (.54)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.06) .58 (.55)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.04) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.41 $9.47 $8.93
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $1 $1 $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 2.07%(f) 2.12% 6.64%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 2.02%(f) 2.06% 2.07%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.54%)(f) (.41%) (.37%)(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 22% 84% 14%
- -----------------------------------------------------------------------------------------------------------
Total return(i) (11.19%)(j) 6.43% (5.80%)(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from May 18, 2006 (when shares became publicly available) to
July 31, 2006.
(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 year 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).
- --------------------------------------------------------------------------------
34 RIVERSOURCE DISCIPLINED SMALL AND MID CAP 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(B)
Net asset value, beginning of period $9.47 $8.93 $9.48
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.02)(c) (.04)(c) (.01)
Net gains (losses) (both realized and
unrealized) (1.04) .61 (.54)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.06) .57 (.55)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.03) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.41 $9.47 $8.93
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 2.07%(f) 2.16% 6.61%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 2.01%(f) 2.06% 2.04%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.55%)(f) (.40%) (.78%)(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 22% 84% 14%
- -----------------------------------------------------------------------------------------------------------
Total return(i) (11.19%)(j) 6.37% (5.80%)(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from May 18, 2006 (when shares became publicly available) to
July 31, 2006.
(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 year 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 SMALL AND MID CAP EQUITY 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(B)
Net asset value, beginning of period $9.57 $8.95 $9.48
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(c) .08(c) --
Net gains (losses) (both realized and
unrealized) (1.04) .59 (.53)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.01) .67 (.53)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.05) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.51 $9.57 $8.95
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $14 $39 $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) .89%(f) .95% 5.58%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .88%(f) .95% 1.01%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .67%(f) .80% .19%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 22% 84% 14%
- -----------------------------------------------------------------------------------------------------------
Total return(i) (10.58%)(j) 7.48% (5.59%)(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from May 18, 2006 (when shares became publicly available) to
July 31, 2006.
(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 year 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 DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(A)
FISCAL PERIOD ENDED JULY 31, 2008(K) 2007 2006(B)
Net asset value, beginning of period $9.56 $8.95 $9.48
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(c) .07(c) --
Net gains (losses) (both realized and
unrealized) (1.04) .58 (.53)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.01) .65 (.53)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.04) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.51 $9.56 $8.95
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.21%(f) 1.68% 5.69%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .90%(f) 1.15% 1.12%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .59%(f) .71% .21%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 22% 84% 14%
- -----------------------------------------------------------------------------------------------------------
Total return(i) (10.53%)(j) 7.30% (5.59%)(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from May 18, 2006 (when shares became publicly available) to
July 31, 2006.
(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 year 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 SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 37
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 $9.54 $9.79
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .01 --
Net gains (losses) (both realized and
unrealized) (1.05) (.20)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.04) (.20)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) (.05)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.48 $9.54
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $7 $57
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.32%(f) 1.60%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.32%(f) 1.32%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .22%(f) .03%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 22% 84%
- -----------------------------------------------------------------------------------------------------------
Total return(i) (10.87%)(j) (2.06%)(j)
- -----------------------------------------------------------------------------------------------------------
</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 year 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 SMALL AND MID CAP EQUITY 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 DISCIPLINED SMALL AND MID CAP EQUITY FUND -- 2008 SEMIANNUAL
REPORT 39
RIVERSOURCE DISCIPLINED SMALL AND MID CAP EQUITY FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by
the Fund's current prospectus. RiverSource 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-6516 C 3/08
</Table>
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
DISCIPLINED SMALL CAP VALUE FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2008
RIVERSOURCE DISCIPLINED SMALL CAP
VALUE 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........ 6
Fund Expenses Example............... 10
Portfolio of Investments............ 12
Financial Statements................ 19
Notes to Financial Statements....... 25
Proxy Voting........................ 43
</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 DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 1
FUND SNAPSHOT AT JAN. 31, 2008 (UNAUDITED)
FUND OBJECTIVE
RiverSource Disciplined Small Cap Value Fund seeks to provide shareholders with
long-term capital growth.
SECTOR BREAKDOWN*
Percentage of portfolio assets
(PIE CHART)
<Table>
Financials 26.1%
Industrials 19.6%
Consumer Discretionary 12.2%
Information Technology 9.6%
Energy 9.3%
Materials 8.6%
Other(1) 14.6%
</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 4.7%, Health Care 4.7%, Utilities 2.2%,
Telecommunication Services 2.1% and Cash & Cash Equivalents 0.9%.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Aspen Insurance Holdings 1.9%
SkyWest 1.1%
Oil States Intl 1.0%
Platinum Underwriters Holdings 1.0%
CF Inds Holdings 0.9%
Selective Insurance Group 0.9%
Zenith Natl Insurance 0.9%
Commerce Group 0.9%
Swift Energy 0.9%
IPC Holdings 0.9%
</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.
Investments in small- and mid-capitalization companies often involve greater
risks and potential volatility than investments in larger, more established
companies.
- --------------------------------------------------------------------------------
2 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
FUND SNAPSHOT AT JAN. 31, 2008 (UNAUDITED)
STYLE MATRIX
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
LARGE
MEDIUM SIZE
X 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
Steve Kokkotos, Ph.D. 10
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A RDVAX 02/16/06
Class B -- 02/16/06
Class C RDVCX 02/16/06
Class I RCVIX 02/16/06
Class R2 -- 12/11/06
Class R3 -- 12/11/06
Class R4 RSDVX 02/16/06
Class R5 -- 12/11/06
Total net assets $38.0 million
Number of holdings 351
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 3
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the six-month period ended Jan. 31, 2008
(BAR CHART)
<Table>
RiverSource Disciplined Small Cap Value Fund Class
A (excluding sales charge) -10.80%
Russell 2000 Value Index(1) (unmanaged) -8.89%
Lipper Small-Cap Value Funds Index(2) -10.15%
</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 2000 Value Index, an unmanaged index, measures the performance
of those Russell 2000 companies with lower price-to-book ratios and lower
forecasted growth values. The index reflects reinvestment of all
distributions and changes in market prices.
(2) The Lipper Small-Cap Value Funds Index includes the 30 largest small-cap
value funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive
adjustment.
ANNUAL OPERATING EXPENSE RATIO (AS OF THE CURRENT PROSPECTUS)
<Table>
<Caption>
TOTAL NET EXPENSES(A)
Class A 1.73% 1.35%
Class B 2.38% 2.11%
Class C 2.47% 2.10%
Class I 1.19% 0.97%
Class R2 1.85% 1.77%
Class R3 1.60% 1.52%
Class R4 1.90% 1.27%
Class R5 1.10% 1.02%
</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 0.05%) will not exceed 1.40% for Class A, 2.16% for Class
B, 2.15% for Class C, 1.02% for Class I, 1.82% for Class R2, 1.57% for
Class R3, 1.32% for Class R4 and 1.07% for Class R5.
- --------------------------------------------------------------------------------
4 RIVERSOURCE DISCIPLINED SMALL 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 INCEPTION
Class A (inception 2/16/06) -10.80% -18.76% -5.78%
Class B (inception 2/16/06) -11.09% -19.39% -6.54%
Class C (inception 2/16/06) -11.15% -19.37% -6.52%
Class I (inception 2/16/06) -10.59% -18.48% -5.47%
Class R2 (inception 12/11/06) -10.84% -18.96% -15.41%
Class R3 (inception 12/11/06) -10.68% -18.81% -15.19%
Class R4 (inception 2/16/06) -10.61% -18.58% -5.61%
Class R5 (inception 12/11/06) -10.63% -18.52% -14.92%
WITH SALES CHARGE
Class A (inception 2/16/06) -15.93% -23.42% -8.57%
Class B (inception 2/16/06) -15.43% -23.33% -8.39%
Class C (inception 2/16/06) -12.02% -20.15% -6.52%
</Table>
<Table>
<Caption>
AT DEC. 31, 2007
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR INCEPTION
Class A (inception 2/16/06) -16.51% -14.81% -4.42%
Class B (inception 2/16/06) -16.75% -15.43% -5.15%
Class C (inception 2/16/06) -16.80% -15.41% -5.14%
Class I (inception 2/16/06) -16.30% -14.52% -4.10%
Class R2 (inception 12/11/06) -16.48% -15.01% -13.89%
Class R3 (inception 12/11/06) -16.41% -14.87% -13.75%
Class R4 (inception 2/16/06) -16.24% -14.53% -4.19%
Class R5 (inception 12/11/06) -16.34% -14.56% -13.45%
WITH SALES CHARGE
Class A (inception 2/16/06) -21.29% -19.71% -7.38%
Class B (inception 2/16/06) -20.81% -19.56% -7.12%
Class C (inception 2/16/06) -17.61% -16.23% -5.14%
</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 DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 5
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Portfolio Managers Dimitris Bertsimas, Gina Mourtzinou and Steve Kokkotos
discuss RiverSource Disciplined Small Cap Value Fund's positioning and results
for the six-month period ended Jan. 31, 2008.
At Jan. 31, 2008, approximately 66% of the Fund's shares were owned in the
aggregate by affiliated funds-of-funds managed by RiverSource Investments, LLC
(RiverSource). As a result of asset allocation decisions by RiverSource, it is
possible that RiverSource Disciplined Small Cap Value Fund may experience
relatively large purchases or redemptions from affiliated funds-of-funds (see
page 32, Class I capital share transactions for related activity during the most
recent fiscal period). RiverSource seeks to minimize the impact of these
transactions by structuring them over a reasonable period of time. RiverSource
Disciplined Small Cap Value Fund may experience increased expenses as it buys
and sells securities as a result of purchases or redemptions by affiliated
funds-of-funds. For more information of the Fund's expenses, see the discussions
beginning on pages 10 and 29.
Q: How did RiverSource Disciplined Small Cap Value Fund perform for the
semiannual period?
A: RiverSource Disciplined Small Cap Value Fund's Class A shares (excluding
sales charge) declined 10.80% for the six-month period ended Jan. 31, 2008.
The Fund underperformed its benchmark, the unmanaged Russell 2000 Value Index
(Russell Index), which fell 8.89%, as well as the Lipper Small-Cap Value
Funds Index, representing the Fund's peer group, which declined 10.15%, for
the same period.
DURING THE REPORTING PERIOD, ALL THREE QUANTITATIVE INVESTMENT MODELS
UNDERPERFORMED THE RUSSELL INDEX.
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. The momentum model identifies stocks that we believe will
experience improving investor sentiment over the next six to nine months. The
value model uses a proprietary earnings estimate and selects stocks with low
price-to-predicted-earnings ratios. The quality model selects companies that
we feel possess strong and stable fundamentals, adjusted for value. Under the
Fund's investment process, the three models choose the small-cap value stocks
- --------------------------------------------------------------------------------
6 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
QUESTIONS & ANSWERS
for the portfolio. We then weight the models and determine the exposure to
sectors and industries.
During the reporting period, all three quantitative investment models
underperformed the Russell Index. The momentum model performed worst,
followed by quality and value. However, in January 2008, the value and
quality models outperformed the Russell Index, supporting our research
indicating that the style diversification provided by the very different
quantitative models is a significant investment advantage over the long term,
even though the Fund may experience underperformance in the short term.
It is important to remember that we do not make sector or industry bets based
on our outlook for the economy or the equity markets. That said, during the
period, the Fund's quantitative models led to a bias toward smaller-cap
stocks within the Russell Index and toward the cheapest price/earnings
stocks. The tilt toward the smaller companies detracted from performance, as
the larger companies within the Russell Index performed better than the
smaller ones. However, the value tilt helped results a bit.
From a sector allocation perspective, the Fund's greater-than-Russell Index
allocations to materials and energy contributed positively to its results as
did a lesser-than-Russell Index position in information technology. These
positives, however, were not enough to offset the detracting effects of
sizable positions in industrials and consumer discretionary and more modest
allocations to utilities, health care and financials.
Stock selection overall helped the Fund's results relative to the Russell
Index. Stock selection was particularly effective in the telecommunication
services, health care, information technology and consumer staples sectors.
Detracting somewhat from performance was stock selection in materials, energy
and utilities.
Some stocks that contributed favorably to the Fund's return included
telecommunication services company Golden Telecom (selected by all three
models), financials company Aspen Insurance Holdings (all three models),
consumer staples company Cal-Maine Foods (momentum and value models),
financials company Commerce Group (value and quality models), and financials
company Annaly Capital Management (a value model pick at the time of its
purchase but no longer a model selection).
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 7
QUESTIONS & ANSWERS
Among individual holdings, the stocks that detracted most from the Fund's
results were financials company LandAmerica Financial Group (selected by all
three models), consumer discretionary firm Standard-Pacific (quality and
value models), energy company USEC (all three models), financials company
Thornburg Mtge (a value model pick at the time of its purchase but no longer
a model selection), and consumer discretionary firm ArvinMeritor (value and
quality models).
At the end of January, the Fund's largest individual stock holdings included
three financials companies: Aspen Insurance Holdings (selected by all three
models), Zenith Natl Insurance (value and quality models) and Platinum
Underwriters Holdings (value and quality models). Other top holdings at the
end of the period were airline company SkyWest (value and quality models) and
energy company Oil States Intl (momentum and value models).
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 portfolio's sector allocations changed somewhat. For example, the Fund's
exposure to energy and telecommunications relative to the Russell Index
increased, while its position in consumer discretionary decreased.
In managing risk associated with small-cap investing, we use a proprietary
risk management system that allows us to manage the Fund's exposure to
several key factors, including industry, sector, market capitalization and
portfolio turnover. During the period, we used these and other techniques to
avoid large deviations in exposure from the Russell Index.
- --------------------------------------------------------------------------------
8 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
QUESTIONS & ANSWERS
Q: How do you intend to manage the Fund in the coming months?
A: We believe our use of multiple investment disciplines serves the Fund well in
all investment environments over the long term, and the portfolio is well
positioned for most potential market conditions. Whether there is a surge in
small-cap stocks or a downturn, the combination of models should, in our
view, help us deliver value relative to the Russell Index over extended
periods of time. We are convinced that our multifaceted, disciplined approach
may assist in managing risk in the portfolio. We 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 SMALL 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 DISCIPLINED SMALL CAP VALUE 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 $ 892.00 $ 5.91 1.24%
Hypothetical
(5% return before
expenses) $1,000 $1,018.95 $ 6.31 1.24%
Class B
Actual(b) $1,000 $ 889.10 $ 9.52 2.00%
Hypothetical
(5% return before
expenses) $1,000 $1,015.12 $10.16 2.00%
Class C
Actual(b) $1,000 $ 888.50 $ 9.52 2.00%
Hypothetical
(5% return before
expenses) $1,000 $1,015.12 $10.16 2.00%
Class I
Actual(b) $1,000 $ 894.10 $ 4.44 .93%
Hypothetical
(5% return before
expenses) $1,000 $1,020.52 $ 4.74 .93%
Class R2
Actual(b) $1,000 $ 891.60 $ 8.20 1.72%
Hypothetical
(5% return before
expenses) $1,000 $1,016.53 $ 8.74 1.72%
Class R3
Actual(b) $1,000 $ 893.20 $ 7.01 1.47%
Hypothetical
(5% return before
expenses) $1,000 $1,017.80 $ 7.48 1.47%
Class R4
Actual(b) $1,000 $ 893.90 $ 5.82 1.22%
Hypothetical
(5% return before
expenses) $1,000 $1,019.06 $ 6.21 1.22%
Class R5
Actual(b) $1,000 $ 893.70 $ 4.68 .98%
Hypothetical
(5% return before
expenses) $1,000 $1,020.27 $ 4.99 .98%
</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: -10.80%
for Class A, -11.09% for Class B, -11.15% for Class C, -10.59% for Class I,
-10.84% for Class R2, -10.68% for Class R3, -10.61% for Class R4 and
-10.63% for Class R5.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL 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 (99.7%)
ISSUER SHARES VALUE(A)
AEROSPACE & DEFENSE (2.4%)
Ceradyne 2,982(b) $143,583
Cubic 2,189 58,797
Curtiss-Wright 3,968 165,466
Esterline Technologies 2,175(b) 101,333
Ladish 2,607(b) 92,522
Orbital Sciences 4,949(b) 115,312
Teledyne Technologies 2,238(b) 115,548
Triumph Group 2,041 110,214
---------------
Total 902,775
- ------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS (0.5%)
ABX Air 14,386(b) 51,070
Atlas Air Worldwide Holdings 1,137(b) 56,782
Park-Ohio Holdings 3,076(b) 68,779
---------------
Total 176,631
- ------------------------------------------------------------------------------------
AIRLINES (2.0%)
Alaska Air Group 12,301(b) 311,215
ExpressJet Holdings 13,333(b) 36,532
SkyWest 15,933 414,577
---------------
Total 762,324
- ------------------------------------------------------------------------------------
AUTO COMPONENTS (2.1%)
Aftermarket Technology 4,046(b) 102,809
American Axle & Mfg Holdings 2,970 64,598
ArvinMeritor 8,786 119,314
Cooper Tire & Rubber 3,693 63,040
Exide Technologies 3,662(b) 30,285
Lear 2,854(b) 83,793
Modine Mfg 8,428 130,127
Standard Motor Products 7,371 60,884
Superior Inds Intl 1,858 33,853
Tenneco 3,150(b) 83,381
Visteon 7,633(b) 30,532
---------------
Total 802,616
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
BEVERAGES (0.8%)
Boston Beer Cl A 3,919(b) $139,281
Central European Distribution 3,155(b) 165,859
---------------
Total 305,140
- ------------------------------------------------------------------------------------
BIOTECHNOLOGY (0.3%)
Isis Pharmaceuticals 7,598(b) 118,529
- ------------------------------------------------------------------------------------
BUILDING PRODUCTS (1.1%)
American Woodmark 2,700 56,646
Ameron Intl 2,024 181,857
Gibraltar Inds 3,490 46,068
Insteel Inds 1,811 18,599
Universal Forest Products 3,172 114,826
---------------
Total 417,996
- ------------------------------------------------------------------------------------
CAPITAL MARKETS (2.1%)
Apollo Investment 9,882 150,009
Cowen Group 3,993(b) 39,890
Evercore Partners Cl A 1,442 26,244
Knight Capital Group Cl A 7,928(b) 132,794
MCG Capital 7,447 98,151
MVC Capital 2,993 45,853
Piper Jaffray Companies 1,123(b) 53,208
SWS Group 9,559 146,731
Waddell & Reed Financial Cl A 2,617 86,832
---------------
Total 779,712
- ------------------------------------------------------------------------------------
CHEMICALS (4.9%)
Arch Chemicals 2,837 95,522
Calgon Carbon 11,313(b,d) 173,994
CF Inds Holdings 3,383 361,743
Georgia Gulf 5,337(d) 41,629
Innospec 5,052(c) 79,670
Koppers Holdings 5,007 167,534
NewMarket 2,115 113,956
Olin 14,946 306,244
OM Group 1,520(b) 87,218
PolyOne 20,728(b) 127,684
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CHEMICALS (CONT.)
Rockwood Holdings 3,810(b) $111,862
Tronox Cl B 3,361 24,603
WR Grace & Co 6,970(b) 157,661
---------------
Total 1,849,320
- ------------------------------------------------------------------------------------
COMMERCIAL BANKS (7.8%)
1st Source 943 18,389
BancFirst 4,048 182,281
Banner 788 20,354
Capital Corp of the West 1,011 20,089
Capitol Bancorp 7,257 151,091
Chemical Financial 6,654 184,183
City Bank 1,166 25,535
City Holding 528 20,286
Community Bancorp 1,053(b) 17,585
Community Bank System 1,043 22,758
Community Trust Bancorp 5,882 170,049
Farmers Capital Bank 3,336 89,405
First BanCorp 29,681(c) 283,749
First Regional Bancorp 862(b) 17,473
First State Bancorporation 6,808 85,508
Glacier Bancorp 3,678 68,448
Hanmi Financial 1,980 17,028
Heritage Commerce 1,067 20,198
Independent Bank 1,986 27,645
MainSource Financial Group 11,339 175,414
Omega Financial 750 22,853
Preferred Bank 1,065 23,462
Renasant 951 19,942
Royal Bancshares Cl A 2,913 42,472
Security Bank 12,265 91,620
Simmons First Natl Cl A 3,875 109,856
Southwest Bancorp 1,058 18,610
Sterling Financial 10,888 168,220
Taylor Capital Group 7,426 145,475
Trustmark 7,144(d) 164,383
UMB Financial 4,305 181,370
Umpqua Holdings 9,459 155,128
Union Bankshares 917 17,707
Univest Corp of Pennsylvania 852 22,152
W Holding 86,156(c) 124,926
West Coast Bancorp 951 14,455
Wilshire Bancorp 2,037 16,052
---------------
Total 2,956,151
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
COMMERCIAL SERVICES & SUPPLIES (3.0%)
ABM Inds 2,236 $46,330
AMREP 766 34,562
CBIZ 12,053(b) 113,419
CDI 930 18,089
Exponent 6,489(b) 199,861
GeoEye 5,097(b) 178,191
Heidrick & Struggles Intl 1,858 51,058
Kelly Services Cl A 3,901 67,175
Kimball Intl Cl B 2,935 36,335
PHH 3,814(b) 71,665
Spherion 6,173(b) 41,236
Standard Parking 4,709(b) 91,213
Tetra Tech 6,580(b) 129,560
Volt Information Sciences 2,388(b) 44,584
---------------
Total 1,123,278
- ------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (1.1%)
ARRIS Group 13,724(b) 120,634
Dycom Inds 2,219(b) 52,413
EMS Technologies 5,139(b) 141,219
Extreme Networks 8,243(b) 28,438
Foundry Networks 2,987(b) 41,221
Loral Space & Communications 1,769(b) 47,020
---------------
Total 430,945
- ------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (1.1%)
Adaptec 22,417(b) 69,941
Imation 4,278 110,843
Immersion 12,545(b) 122,942
Palm 9,720 52,682
Quantum 32,127(b) 73,892
---------------
Total 430,300
- ------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.4%)
EMCOR Group 4,510(b) 98,904
Perini 2,050(b) 71,648
---------------
Total 170,552
- ------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS (0.4%)
Headwaters 10,089(b) 113,703
U.S. Concrete 11,336(b) 42,397
---------------
Total 156,100
- ------------------------------------------------------------------------------------
CONSUMER FINANCE (0.3%)
Cash America Intl 3,489 113,427
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 13
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CONTAINERS & PACKAGING (0.1%)
Silgan Holdings 524 $24,817
- ------------------------------------------------------------------------------------
DISTRIBUTORS (0.2%)
Building Materials Holding 10,447 71,144
- ------------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (0.2%)
INVESTools 6,105(b) 83,394
- ------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.6%)
Ampal-American Israel Cl A 23,329(b,c) 172,401
Primus Guaranty 10,274(b,c) 51,884
---------------
Total 224,285
- ------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (1.8%)
Alaska Communications Systems Group 6,477 90,937
Atlantic Tele-Network 3,550 111,790
Golden Telecom 3,114(c) 319,839
Shenandoah Telecommunications 7,905 144,424
---------------
Total 666,990
- ------------------------------------------------------------------------------------
ELECTRIC UTILITIES (0.9%)
Central Vermont Public Service 4,796 139,706
Portland General Electric 4,379 107,899
UIL Holdings 1,817 62,051
Westar Energy 1,916 46,674
---------------
Total 356,330
- ------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (1.0%)
Encore Wire 7,767 129,554
GrafTech Intl 10,250(b) 154,262
Superior Essex 4,114(b) 98,942
---------------
Total 382,758
- ------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (3.2%)
Agilysys 1,452 22,099
Anixter Intl 2,603(b) 182,366
Benchmark Electronics 13,097(b) 232,471
Brightpoint 7,770(b) 98,834
Insight Enterprises 5,122(b) 88,457
Methode Electronics 2,508 30,397
Plexus 7,528(b) 170,058
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
ELECTRONIC EQUIPMENT & INSTRUMENTS (CONT.)
Rofin-Sinar Technologies 4,619(b) $196,354
SYNNEX 3,552(b) 75,658
Technitrol 6,006 136,096
---------------
Total 1,232,790
- ------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (5.0%)
BASiC Energy Services 2,870(b) 51,344
Bristow Group 2,853(b) 143,649
Bronco Drilling 6,667(b) 104,405
Dawson Geophysical 2,485(b) 142,341
Exterran Holdings 1,439(b) 93,880
Grey Wolf 51,744(b) 308,394
GulfMark Offshore 3,516(b) 147,039
Hornbeck Offshore Services 966(b) 37,365
Oil States Intl 10,532(b) 369,252
Parker Drilling 12,843(b) 89,259
Pioneer Drilling 13,982(b) 145,553
T-3 Energy Services 3,712(b) 167,003
Trico Marine Services 1,703(b) 54,649
Union Drilling 3,347(b) 51,477
---------------
Total 1,905,610
- ------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (2.4%)
Andersons 3,883 176,872
Great Atlantic & Pacific Tea 5,729(b) 171,125
Nash Finch 1,413 50,416
PriceSmart 5,192 147,764
Ruddick 3,902 132,980
Spartan Stores 2,378 41,805
Village Super Market Cl A 806 41,098
Weis Markets 1,162 43,447
Winn-Dixie Stores 4,977(b) 88,192
---------------
Total 893,699
- ------------------------------------------------------------------------------------
FOOD PRODUCTS (1.4%)
Cal-Maine Foods 7,535 217,234
Chiquita Brands Intl 1,712(b) 31,980
Fresh Del Monte Produce 1,859(b,c) 59,562
Imperial Sugar 3,311 72,776
Seaboard 128 164,512
---------------
Total 546,064
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
GAS UTILITIES (0.9%)
EnergySouth 2,807 $162,581
Nicor 1,840 75,440
South Jersey Inds 1,324 46,380
WGL Holdings 1,241 40,010
---------------
Total 324,411
- ------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.4%)
Inverness Medical Innovations 2,958(b) 133,258
- ------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (3.2%)
Alliance Imaging 12,397(b) 131,780
Amedisys 1,923(b) 81,977
AMERIGROUP 5,347(b) 200,620
Chemed 996 51,025
HealthSpring 2,331(b) 48,228
Kindred Healthcare 9,294(b) 255,958
Magellan Health Services 1,585(b) 69,328
Molina Healthcare 4,437(b) 151,346
RehabCare Group 3,865(b) 81,126
ResCare 6,119(b) 136,882
---------------
Total 1,208,270
- ------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (0.6%)
Bob Evans Farms 3,264 97,072
Jack in the Box 2,318(b) 67,755
O'Charley's 4,974 68,989
---------------
Total 233,816
- ------------------------------------------------------------------------------------
HOUSEHOLD DURABLES (2.0%)
Avatar Holdings 1,620(b) 69,498
Beazer Homes USA 11,104 96,827
Brookfield Homes 1,581 26,798
CSS Inds 778 22,702
Furniture Brands Intl 9,020 86,141
Hooker Furniture 1,456 31,945
Hovnanian Enterprises Cl A 5,816(b) 57,520
M/I Homes 1,703 25,409
Meritage Homes 6,503(b) 104,373
Standard-Pacific 16,361 62,335
Tupperware Brands 4,784 177,008
---------------
Total 760,556
- ------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (0.2%)
Tredegar 6,617 91,712
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
INSURANCE (11.3%)
American Physicians Capital 804 $33,221
Aspen Insurance Holdings 25,050(c) 706,911
Commerce Group 9,581 346,353
Employers Holdings 3,508 61,250
Infinity Property & Casualty 1,708 68,098
IPC Holdings 13,077(c) 336,471
LandAmerica Financial Group 4,701 245,204
Max Capital Group 11,612(c) 329,665
Montpelier Re Holdings 17,133(c) 293,660
Natl Western Life Insurance Cl A 369 69,295
Odyssey Re Holdings 5,893 223,816
Platinum Underwriters Holdings 10,769(c) 363,454
Presidential Life 6,153 112,846
Safety Insurance Group 4,931 192,408
Selective Insurance Group 15,073 360,395
Stewart Information Services 4,469 152,974
Zenith Natl Insurance 9,004 358,539
---------------
Total 4,254,560
- ------------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL (0.5%)
Gaiam Cl A 5,941(b) 144,782
Systemax 4,497 62,149
---------------
Total 206,931
- ------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (1.3%)
CMGI 10,309(b) 132,985
EarthLink 9,389(b) 63,939
InfoSpace 480 4,565
RealNetworks 19,066(b) 111,155
S1 15,033(b) 85,087
SonicWALL 9,737(b) 85,491
---------------
Total 483,222
- ------------------------------------------------------------------------------------
IT SERVICES (1.3%)
Perot Systems Cl A 6,208(b) 75,365
SAIC 17,772(b) 335,891
Wright Express 3,131(b) 93,742
---------------
Total 504,998
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 15
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
LEISURE EQUIPMENT & PRODUCTS (0.7%)
Arctic Cat 3,338 $30,877
JAKKS Pacific 8,259(b) 194,582
MarineMax 3,266(b) 50,525
---------------
Total 275,984
- ------------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES (0.4%)
Bio-Rad Laboratories Cl A 1,559(b) 148,432
- ------------------------------------------------------------------------------------
MACHINERY (5.2%)
Ampco-Pittsburgh 2,315 89,753
Badger Meter 2,216 83,765
Barnes Group 5,567 148,361
Blount Intl 1,113(b) 12,900
Briggs & Stratton 1,096 22,852
Cascade 1,121 57,866
CIRCOR Intl 4,130 175,236
Columbus McKinnon 471(b) 12,043
Commercial Vehicle Group 4,917(b) 49,170
FreightCar America 3,494 131,759
Hardinge 7,787 132,768
Kaydon 2,557 111,715
LB Foster Cl A 3,904(b) 179,700
Lindsay 1,454 88,723
Miller Inds 8,759(b) 116,495
Mueller Inds 4,815(d) 134,820
NACCO Inds Cl A 1,077 107,765
Robbins & Myers 2,664 176,569
Tennant 3,861 127,374
Wabash Natl 829 7,619
---------------
Total 1,967,253
- ------------------------------------------------------------------------------------
MARINE (1.4%)
Eagle Bulk Shipping 3,634 89,832
Genco Shipping & Trading 4,941 243,690
TBS Intl Series A 6,167(b,c) 205,423
---------------
Total 538,945
- ------------------------------------------------------------------------------------
MEDIA (1.0%)
DG FastChannel 8,421(b) 178,272
Gemstar-TV Guide Intl 24,061(b) 103,703
Knology 9,979(b) 113,262
---------------
Total 395,237
- ------------------------------------------------------------------------------------
METALS & MINING (3.0%)
AM Castle & Co 3,318 70,275
AMCOL Intl 4,738 116,176
Century Aluminum 2,827(b) 146,976
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
METALS & MINING (CONT.)
Compass Minerals Intl 1,413 $59,939
Metal Management 3,492 173,483
Olympic Steel 2,106 71,162
Quanex 5,187 271,850
Schnitzer Steel Inds Cl A 2,691 152,472
Worthington Inds 5,230 85,720
---------------
Total 1,148,053
- ------------------------------------------------------------------------------------
MULTILINE RETAIL (0.2%)
Fred's Cl A 8,050 75,912
- ------------------------------------------------------------------------------------
MULTI-UTILITIES (0.3%)
NorthWestern 2,756 79,648
PNM Resources 1,300 25,116
---------------
Total 104,764
- ------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (4.3%)
Berry Petroleum Cl A 2,328 87,230
Brigham Exploration 7,653(b) 53,112
Callon Petroleum 4,357(b) 67,141
General Maritime 3,791 94,168
Golar LNG 8,619(c) 177,982
Meridian Resource 20,127(b) 33,612
Petrohawk Energy 9,320(b) 146,790
Stone Energy 4,221(b) 173,061
Swift Energy 7,819(b) 337,391
USEC 20,945(b) 169,026
Whiting Petroleum 5,706(b) 306,641
---------------
Total 1,646,154
- ------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.3%)
Buckeye Technologies 3,973(b) 52,245
Schweitzer-Mauduit Intl 1,944 46,345
---------------
Total 98,590
- ------------------------------------------------------------------------------------
PHARMACEUTICALS (0.4%)
Perrigo 5,498 169,558
- ------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (3.4%)
Annaly Capital Management 8,709 171,741
BRT Realty Trust 3,773 59,500
Capital Trust Cl A 2,651 76,057
Crystal River Capital 4,784 67,072
Deerfield Capital 15,717 125,579
FelCor Lodging Trust 7,900 106,729
Kite Realty Group Trust 5,156 67,853
Medical Properties Trust 5,082 64,236
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
16 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
REAL ESTATE INVESTMENT TRUSTS (REITS) (CONT.)
MFA Mtge Investments 16,759 $170,942
Nationwide Health Properties 3,968 125,230
Redwood Trust 2,266 94,062
Senior Housing Properties Trust 3,794 84,948
Thornburg Mtge 6,109 68,421
---------------
Total 1,282,370
- ------------------------------------------------------------------------------------
ROAD & RAIL (1.2%)
Arkansas Best 6,552 201,736
Saia 3,835(b) 54,112
Werner Enterprises 9,500 193,515
---------------
Total 449,363
- ------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (1.3%)
MKS Instruments 9,771(b) 181,740
OmniVision Technologies 11,988(b) 169,750
Pericom Semiconductor 5,828(b) 79,028
Silicon Storage Technology 9,903(b) 28,125
Zoran 2,214(b) 26,125
---------------
Total 484,768
- ------------------------------------------------------------------------------------
SOFTWARE (0.2%)
Pegasystems 9,622 94,392
- ------------------------------------------------------------------------------------
SPECIALTY RETAIL (4.3%)
Asbury Automotive Group 10,056 142,594
Blockbuster Cl A 42,737(b) 133,339
Books-A-Million 1,585 16,912
Borders Group 5,556 62,561
Charming Shoppes 28,788(b) 185,682
Collective Brands 2,187(b) 38,535
Conn's 6,515(b) 125,740
Finish Line Cl A 13,512 30,267
Gander Mountain 130(b) 627
Group 1 Automotive 4,545 120,170
Haverty Furniture Companies 4,131 42,260
Hot Topic 4,901(b) 27,201
Lithia Motors Cl A 3,831 58,576
Rent-A-Center 13,027(b) 222,761
Shoe Carnival 2,763(b) 40,837
Sonic Automotive Cl A 8,562 171,668
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SPECIALTY RETAIL (CONT.)
Stage Stores 8,134 $97,364
Stein Mart 3,582 22,889
Talbots 416 4,023
Zale 6,388(b) 104,763
---------------
Total 1,648,769
- ------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (0.3%)
Kellwood 1,203 24,036
Perry Ellis Intl 3,306(b) 58,020
Warnaco Group 1,125(b) 40,376
---------------
Total 122,432
- ------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (1.0%)
BankUnited Financial Cl A 4,149 24,604
Corus Bankshares 12,404 157,778
Downey Financial 1,885 65,033
Fremont General 10,264 33,871
Imperial Capital Bancorp 1,061 21,496
K-Fed Bancorp 384 4,005
Ocwen Financial 6,989(b) 43,611
Triad Guaranty 4,020(b) 28,100
---------------
Total 378,498
- ------------------------------------------------------------------------------------
TOBACCO (0.1%)
Universal 967 48,166
- ------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (1.4%)
Kaman 5,899 174,256
Rush Enterprises Cl A 8,743(b) 146,708
UAP Holding 5,117 196,186
---------------
Total 517,150
- ------------------------------------------------------------------------------------
WATER UTILITIES (0.2%)
SJW 2,245 67,866
- ------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.3%)
Rural Cellular Cl A 1,798(b) 79,382
USA Mobility 3,106(b) 37,303
---------------
Total 116,685
- ------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $44,119,179) $37,864,752
- ------------------------------------------------------------------------------------
</Table>
See accompanying notes to portfolio of investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 17
<Table>
<Caption>
MONEY MARKET FUND (0.9%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 343,953(e) $343,953
- ------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $343,953) $343,953
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $44,463,132)(f) $38,208,705
====================================================================================
</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)
- --------------------------------------------------------------------------------------------------
Mini Russell 2000 Index 2 $143,000 March 2008 $4,753
</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 9.2% of net assets.
(d) At Jan. 31, 2008, investments in securities included securities valued at
$162,613 that were partially pledged as collateral to cover initial margin
deposits on open stock index futures contracts.
(e) Affiliated Money Market Fund - See Note 5 to the financial statements
(f) At Jan. 31, 2008, the cost of securities for federal income tax purposes
was approximately $44,463,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $1,626,000
Unrealized depreciation (7,880,000)
- ------------------------------------------------------------------------------
Net unrealized depreciation $(6,254,000)
- ------------------------------------------------------------------------------
</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 DISCIPLINED SMALL CAP VALUE 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 $44,119,179) $37,864,752
Affiliated money market fund (identified cost $343,953) 343,953
- ---------------------------------------------------------------------------
Total investments in securities (identified cost
$44,463,132) 38,208,705
Cash 4,343
Capital shares receivable 634
Dividends receivable 13,562
Receivable for investment securities sold 1,835,749
Variation margin receivable 6,900
- ---------------------------------------------------------------------------
Total assets 40,069,893
- ---------------------------------------------------------------------------
LIABILITIES
Capital shares payable 40,922
Payable for investment securities purchased 2,014,743
Accrued investment management services fee 854
Accrued distribution fee 95
Accrued transfer agency fee 24
Accrued administrative services fee 80
Other accrued expenses 32,911
- ---------------------------------------------------------------------------
Total liabilities 2,089,629
- ---------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $37,980,264
===========================================================================
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 19
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
JAN. 31, 2008 (UNAUDITED)
<Table>
REPRESENTED BY
Capital stock - $.01 par value $ 43,833
Additional paid-in capital 45,711,797
Undistributed net investment income 236,418
Accumulated net realized gain (loss) (1,762,110)
Unrealized appreciation (depreciation) on investments (6,249,674)
- ---------------------------------------------------------------------------
Total - representing net assets applicable to outstanding
capital stock $37,980,264
===========================================================================
</Table>
<Table>
Net assets applicable to outstanding shares: Class A $12,540,196
Class B $ 403,122
Class C $ 49,323
Class I $24,967,141
Class R2 $ 3,940
Class R3 $ 3,940
Class R4 $ 8,663
Class R5 $ 3,939
Net asset value per share of outstanding
capital stock: Class A shares(1) 1,448,075 $ 8.66
Class B shares 46,919 $ 8.59
Class C shares 5,741 $ 8.59
Class I shares 2,880,232 $ 8.67
Class R2 shares 455 $ 8.66
Class R3 shares 455 $ 8.66
Class R4 shares 1,000 $ 8.66
Class R5 shares 455 $ 8.66
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $9.19. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
20 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JAN. 31, 2008 (UNAUDITED)
<Table>
INVESTMENT INCOME
Income:
Dividends $ 423,082
Income distributions from affiliated money market fund 22,983
Less foreign taxes withheld (1,310)
- ---------------------------------------------------------------------------
Total income 444,755
- ---------------------------------------------------------------------------
Expenses:
Investment management services fee 151,467
Distribution fee
Class A 16,319
Class B 2,298
Class C 293
Class R2 11
Class R3 5
Transfer agency fee
Class A 4,232
Class B 174
Class C 21
Class R2 2
Class R3 2
Class R4 2
Class R5 2
Administrative services fee 15,991
Plan administration services fee
Class R2 5
Class R3 5
Class R4 12
Compensation of board members 377
Custodian fees 19,720
Printing and postage 2,760
Registration fees 40,957
Professional fees 9,725
Other 673
- ---------------------------------------------------------------------------
Total expenses 265,053
Expenses waived/reimbursed by the Investment Manager and
its affiliates (56,732)
- ---------------------------------------------------------------------------
Total net expenses 208,321
- ---------------------------------------------------------------------------
Investment income (loss) - net 236,434
- ---------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE 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 $(1,731,369)
Futures contracts (19,972)
- ---------------------------------------------------------------------------
Net realized gain (loss) on investments (1,751,341)
Net change in unrealized appreciation (depreciation) on
investments (2,933,804)
- ---------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (4,685,145)
- ---------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $(4,448,711)
===========================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
22 RIVERSOURCE DISCIPLINED SMALL CAP VALUE 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 $ 236,434 $ 346,396
Net realized gain (loss) on investments (1,751,341) 943,233
Net change in unrealized appreciation (depreciation)
on investments (2,933,804) (2,467,303)
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (4,448,711) (1,177,674)
- -----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (83,613) (22,789)
Class C (16) --
Class I (249,572) (22,690)
Class R2 (12) (17)
Class R3 (23) (17)
Class R4 (77) (58)
Class R5 (38) (18)
Net realized gain
Class A (316,596) (234,913)
Class B (9,723) (7,684)
Class C (1,289) (463)
Class I (625,909) (106,528)
Class R2 (99) (84)
Class R3 (99) (84)
Class R4 (216) (337)
Class R5 (99) (84)
- -----------------------------------------------------------------------------------------
Total distributions (1,287,381) (395,766)
- -----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE 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 $ 1,805,452 $ 3,183,242
Class B shares 96,140 600,360
Class C shares 19,964 23,355
Class I shares 4,374,478 23,678,701
Class R2 shares -- 5,000
Class R3 shares -- 5,000
Class R4 shares -- 8,003
Class R5 shares -- 5,000
Reinvestment of distributions at net asset value
Class A shares 127,449 55,291
Class B shares 9,506 7,499
Class C shares 1,086 278
Class I shares 875,178 128,993
Class R4 shares -- 178
Payments for redemptions
Class A shares (1,130,645) (1,077,624)
Class B shares (189,722) (269,435)
Class C shares (9,739) (4,930)
Class I shares (1,669,285) (115,893)
Class R4 shares -- (9,200)
- -----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 4,309,862 26,223,818
- -----------------------------------------------------------------------------------------
Total increase (decrease) in net assets (1,426,230) 24,650,378
Net assets at beginning of period 39,406,494 14,756,116
- -----------------------------------------------------------------------------------------
Net assets at end of period $37,980,264 $39,406,494
=========================================================================================
Undistributed net investment income $ 236,418 $ 333,335
- -----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
24 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
(Unaudited as to Jan. 31, 2008)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Disciplined Small Cap Value Fund (the Fund) is a series of
RiverSource Dimensions Series, Inc. and is registered under the Investment
Company Act of 1940 (as amended) as a diversified, open-end management
investment company. RiverSource Dimensions 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 small capitalization equity securities of companies with market
capitalizations that fall within the range of companies that comprise the
Russell 2000 Value Index at the time of investment.
The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4
and Class R5 shares.
- - Class A shares are 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, Class R4 and Class R5 shares.
At Jan. 31, 2008, the Investment Manager and the affiliated funds-of-funds owned
approximately 88% of the total outstanding Fund shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on 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 DISCIPLINED SMALL CAP VALUE 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.
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
- --------------------------------------------------------------------------------
26 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
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
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 27
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.
- --------------------------------------------------------------------------------
28 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
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 0.85%
to 0.725% 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 Small-
Cap Value Funds Index. In certain circumstances, the Board may approve a change
in the Index. The maximum adjustment is 0.12% per year. If the performance
difference is less than 0.50%, the adjustment will be zero. The adjustment
decreased the fee by $18,439 for the six months ended Jan. 31, 2008. The
management fee for the six months ended Jan. 31, 2008 was 0.76% 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 0.08% to 0.05% annually as the
Fund's assets increase. The fee for the six months ended Jan. 31, 2008 was 0.08%
of the Fund's average daily net assets.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 29
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 $126.
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
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
- --------------------------------------------------------------------------------
30 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
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
$2,284 for Class A and $542 for Class B 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 1.24% for Class A, 2.00%
for Class B, 2.00% for Class C, 0.93% for Class I, 1.47% for Class R2, 1.22% for
Class R3, 0.97% for Class R4 and 0.98% for Class R5. Of these waived/reimbursed
fees and expenses, the transfer agency fee at the class level was $1 for Class
R3, the plan administration services fees at the class level were $5, $5 and $12
for Class R2, Class R3 and Class R4, respectively, and the management fees at
the Fund level were $56,709. 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 1.40% for Class A, 2.16% for Class B, 2.15% for Class C, 1.02% for Class
I, 1.82% for Class R2, 1.57% for Class R3, 1.32% for Class R4 and 1.07% for
Class R5 of the Fund's average daily net assets, unless sooner terminated at the
discretion of the Board.
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 $17,524,344 and $14,249,523, respectively, for the six
months ended Jan. 31, 2008. Realized gains and losses are determined on an
identified cost basis.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 31
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 196,116 14,450 (124,120) 86,446
Class B 10,412 1,085 (20,257) (8,760)
Class C 2,058 124 (1,098) 1,084
Class I 456,840 99,227 (185,626) 370,441
Class R2 -- -- -- --
Class R3 -- -- -- --
Class R4 -- -- -- --
Class R5 -- -- -- --
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- --------------------------------------------------------------------------------------
Class A 299,874 5,134 (99,517) 205,491
Class B 56,474 700 (25,366) 31,808
Class C 2,131 26 (466) 1,691
Class I 2,182,119 11,966 (10,620) 2,183,465
Class R2* 455 -- -- 455
Class R3* 455 -- -- 455
Class R4 822 17 (839) --
Class R5* 455 -- -- 455
- --------------------------------------------------------------------------------------
</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 $6,880,551 and $8,042,850, 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 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
- --------------------------------------------------------------------------------
32 RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT
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 Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 33
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.
- --------------------------------------------------------------------------------
34 RIVERSOURCE DISCIPLINED SMALL 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(B)
Net asset value, beginning of period $10.00 $9.77 $10.22
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .05(c) .14(c) .02
Net gains (losses) (both realized and
unrealized) (1.12) .29 (.47)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.07) .43 (.45)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.01) --
Distributions from realized gains (.22) (.19) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.27) (.20) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.66 $10.00 $9.77
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $13 $14 $11
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.52%(f) 1.73% 3.27%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(g) 1.24%(f) 1.35% 1.40%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .98%(f) 1.30% .55%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 127% 40%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (10.80%)(i) 4.29% (4.40%)(i)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Feb. 16, 2006 (when shares became publicly available)
to July 31, 2006.
(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) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE 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(B)
Net asset value, beginning of period $9.90 $9.73 $10.22
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(c) .05(c) --
Net gains (losses) (both realized and
unrealized) (1.10) .31 (.49)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.09) .36 (.49)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains (.22) (.19) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.59 $9.90 $9.73
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $1 $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 2.27%(f) 2.38% 4.05%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(g) 2.00%(f) 2.11% 2.18%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .20%(f) .49% (.17%)(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 127% 40%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (11.09%)(i) 3.51% (4.79%)(i)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Feb. 16, 2006 (when shares became publicly available)
to July 31, 2006.
(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) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
36 RIVERSOURCE DISCIPLINED SMALL 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(B)
Net asset value, beginning of period $9.90 $9.73 $10.22
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(c) .05(c) --
Net gains (losses) (both realized and
unrealized) (1.10) .31 (.49)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.09) .36 (.49)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains (.22) (.19) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.59 $9.90 $9.73
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 2.27%(f) 2.47% 4.05%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(g) 2.00%(f) 2.11% 2.18%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .24%(f) .43% (.22%)(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 127% 40%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (11.15%)(i) 3.51% (4.79%)(i)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Feb. 16, 2006 (when shares became publicly available)
to July 31, 2006.
(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) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 37
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007 2006(B)
Net asset value, beginning of period $10.03 $9.78 $10.22
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .06(c) .15(c) .03
Net gains (losses) (both realized and
unrealized) (1.12) .32 (.47)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.06) .47 (.44)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08) (.03) --
Distributions from realized gains (.22) (.19) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.30) (.22) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.67 $10.03 $9.78
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $25 $25 $3
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.21%(f) 1.19% 3.00%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(g) .93%(f) 1.05% 1.13%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.30%(f) 1.43% .91%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 127% 40%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (10.59%)(i) 4.69% (4.31%)(i)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Feb. 16, 2006 (when shares became publicly available)
to July 31, 2006.
(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) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
38 RIVERSOURCE DISCIPLINED SMALL CAP VALUE 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 $9.97 $10.99
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .04 .06
Net gains (losses) (both realized and
unrealized) (1.11) (.86)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.07) (.80)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) (.03)
Distributions from realized gains (.22) (.19)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.24) (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.66 $9.97
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 2.02%(f) 1.85%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(g) 1.47%(f) 1.80%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .75%(f) .77%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 127%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (10.84%)(i) (7.40%)(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 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) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 39
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 $9.99 $10.99
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .06 .07
Net gains (losses) (both realized and
unrealized) (1.12) (.85)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.06) (.78)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.03)
Distributions from realized gains (.22) (.19)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.27) (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.66 $9.99
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.77%(f) 1.58%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(g) 1.22%(f) 1.55%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.00%(f) 1.02%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 127%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (10.68%)(i) (7.21%)(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 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) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
40 RIVERSOURCE DISCIPLINED SMALL 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(B)
Net asset value, beginning of period $10.00 $9.77 $10.22
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .07(c) .17(c) .02
Net gains (losses) (both realized and
unrealized) (1.12) .28 (.47)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (1.05) .45 (.45)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.07) (.03) --
Distributions from realized gains (.22) (.19) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.29) (.22) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.66 $10.00 $9.77
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.49%(f) 1.83% 3.12%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(g) .97%(f) 1.26% 1.25%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.26%(f) 1.60% .69%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 127% 40%
- -----------------------------------------------------------------------------------------------------------
Total return(h) (10.61%)(i) 4.42% (4.40%)(i)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Feb. 16, 2006 (when shares became publicly available)
to July 31, 2006.
(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) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 41
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008(J) 2007(B)
Net asset value, beginning of period $10.02 $10.99
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INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .06 .11
Net gains (losses) (both realized and
unrealized) (1.12) (.86)
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Total from investment operations (1.06) (.75)
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LESS DISTRIBUTIONS:
Dividends from net investment income (.08) (.03)
Distributions from realized gains (.22) (.19)
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Total distributions (.30) (.22)
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Net asset value, end of period $8.66 $10.02
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RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
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Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.27%(f) 1.09%(f)
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Net expenses after expense
waiver/reimbursement(d),(e),(g) .98%(f) 1.05%(f)
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Net investment income (loss) 1.25%(f) 1.53%(f)
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Portfolio turnover rate 37% 127%
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Total return(h) (10.63%)(i) (6.93%)(i)
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</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) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2008 (Unaudited).
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42 RIVERSOURCE DISCIPLINED SMALL 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.
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RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND -- 2008 SEMIANNUAL REPORT 43
RIVERSOURCE DISCIPLINED SMALL CAP VALUE FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by
the Fund's current prospectus. RiverSource 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-6509 C (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 Dimensions 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