UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number 811-2111
RIVERSOURCE LARGE CAP SERIES, INC.
(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 EQUITY FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2009
RIVERSOURCE DISCIPLINED EQUITY FUND SEEKS TO PROVIDE
SHAREHOLDERS WITH LONG-TERM CAPITAL GROWTH.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 2
Fund Expenses Example.............. 8
Portfolio of Investments........... 11
Statement of Assets and
Liabilities...................... 19
Statement of Operations............ 21
Statements of Changes in Net
Assets........................... 23
Financial Highlights............... 25
Notes to Financial Statements...... 34
Proxy Voting....................... 49
</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 EQUITY FUND -- 2009 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> RiverSource Disciplined Equity Fund (the Fund) Class A shares declined 36.05%
(excluding sales charge) for the six months ended Jan. 31, 2009.
> The Fund underperformed the unmanaged Standard & Poor's 500 Index (S&P 500
Index), which fell 33.95% for the same period.
> The Fund also underperformed the Lipper Large-Cap Core Funds Index,
representing the Fund's peer group, which declined 33.98%, for the same
period.
ANNUALIZED TOTAL RETURNS (for period ended Jan. 31, 2009)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Since
inception
6 months* 1 year 3 years 5 years 4/24/03
- ---------------------------------------------------------------------------
RiverSource Disciplined
Equity Fund Class A
(excluding sales charge) -36.05% -41.79% -13.95% -5.24% -0.64%
- ---------------------------------------------------------------------------
S&P 500 Index
(unmanaged)(1) -33.95% -38.63% -11.78% -4.24% +0.22%
- ---------------------------------------------------------------------------
Lipper Large-Cap Core
Funds Index(2) -33.98% -38.34% -11.95% -4.55% -0.54%
- ---------------------------------------------------------------------------
</Table>
* Not annualized.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses. See the Average Annual Total Returns table for performance of other
share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
2 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
(1) The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of
common stocks, is frequently used as a general measure of market
performance. The index reflects reinvestment of all distributions and
changes in market prices.
(2) The Lipper Large-Cap Core Funds Index includes the 30 largest large-cap core
funds tracked by Lipper Inc. The index's returns include net reinvested
dividends. The Fund's performance is currently measured against this index
for purposes of determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT JAN. 31, 2009
SINCE
Without sales charge 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS INCEPTION
- ---------------------------------------------------------------------------
Class A (inception
4/24/03) -36.05% -41.79% -13.95% -5.24% -0.64%
- ---------------------------------------------------------------------------
Class B (inception
4/24/03) -36.36% -42.33% -14.63% -6.00% -1.43%
- ---------------------------------------------------------------------------
Class C (inception
4/24/03) -36.26% -42.26% -14.61% -6.00% -1.40%
- ---------------------------------------------------------------------------
Class I (inception
7/15/04) -36.07% -41.52% -13.58% N/A -4.76%
- ---------------------------------------------------------------------------
Class R2 (inception
12/11/06) -36.15% -41.97% N/A N/A -23.05%
- ---------------------------------------------------------------------------
Class R3 (inception
12/11/06) -36.03% -41.76% N/A N/A -22.84%
- ---------------------------------------------------------------------------
Class R4 (inception
4/24/03) -36.05% -41.77% -13.84% -5.12% -0.48%
- ---------------------------------------------------------------------------
Class R5 (inception
12/11/06) -35.97% -41.61% N/A N/A -22.64%
- ---------------------------------------------------------------------------
Class W (inception
12/1/06) -36.10% -41.94% N/A N/A -22.21%
- ---------------------------------------------------------------------------
With sales charge
Class A (inception
4/24/03) -39.74% -45.10% -15.63% -6.37% -1.67%
- ---------------------------------------------------------------------------
Class B (inception
4/24/03) -39.43% -45.11% -15.59% -6.30% -1.56%
- ---------------------------------------------------------------------------
Class C (inception
4/24/03) -36.88% -42.81% -14.61% -6.00% -1.40%
- ---------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
4 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT DEC. 31, 2008
SINCE
Without sales charge 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS INCEPTION
- ---------------------------------------------------------------------------
Class A (inception
4/24/03) -29.09% -38.74% -9.10% -2.59% +1.44%
- ---------------------------------------------------------------------------
Class B (inception
4/24/03) -29.24% -39.16% -9.76% -3.31% +0.68%
- ---------------------------------------------------------------------------
Class C (inception
4/24/03) -29.26% -39.20% -9.79% -3.31% +0.67%
- ---------------------------------------------------------------------------
Class I (inception
7/15/04) -28.85% -38.47% -8.78% N/A -2.30%
- ---------------------------------------------------------------------------
Class R2 (inception
12/11/06) -29.15% -38.77% N/A N/A -19.27%
- ---------------------------------------------------------------------------
Class R3 (inception
12/11/06) -28.90% -38.56% N/A N/A -19.04%
- ---------------------------------------------------------------------------
Class R4 (inception
4/24/03) -29.12% -38.72% -9.00% -2.43% +1.60%
- ---------------------------------------------------------------------------
Class R5 (inception
12/11/06) -29.00% -38.55% N/A N/A -18.91%
- ---------------------------------------------------------------------------
Class W (inception
12/1/06) -29.13% -38.89% N/A N/A -18.48%
- ---------------------------------------------------------------------------
With sales charge
Class A (inception
4/24/03) -33.13% -42.25% -10.87% -3.74% +0.37%
- ---------------------------------------------------------------------------
Class B (inception
4/24/03) -32.65% -42.09% -10.78% -3.61% +0.54%
- ---------------------------------------------------------------------------
Class C (inception
4/24/03) -29.94% -39.79% -9.79% -3.31% +0.67%
- ---------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum sales charge of 5.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I, Class R2, Class R3, Class R4, Class R5 and Class W shares.
Class I, Class R2, Class R3, Class R4 and Class R5 are available to
institutional investors only. Class W shares are offered through qualifying
discretionary accounts.
*Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 5
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
STYLE MATRIX
- --------------------------------------------------------------------------------
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund is designed to
generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
ANNUAL OPERATING EXPENSE RATIO
(as of the current prospectus)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Total Net
fund fund
expenses expenses(a)
- -----------------------------------------
Class A 0.96% 0.96%
- -----------------------------------------
Class B 1.72% 1.72%
- -----------------------------------------
Class C 1.72% 1.72%
- -----------------------------------------
Class I 0.61% 0.61%
- -----------------------------------------
Class R2 1.41% 1.41%
- -----------------------------------------
Class R3 1.15% 1.15%
- -----------------------------------------
Class R4 0.91% 0.84%
- -----------------------------------------
Class R5 0.66% 0.66%
- -----------------------------------------
Class W 1.06% 1.06%
- -----------------------------------------
</Table>
(a) The Investment Manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until July 31, 2009, 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%
for the year ended July 31, 2008), will not exceed 1.05% for Class A, 1.81%
for Class B, 1.81% for Class C, 0.72% for Class I, 1.52% for Class R2, 1.27%
for Class R3, 0.88% for Class R4, 0.77% for Class R5 and 1.17% for Class W.
- --------------------------------------------------------------------------------
6 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
SECTOR DIVERSIFICATION(1) (at Jan. 31, 2009; % of portfolio assets)
- ---------------------------------------------------------------------
<Table>
<Caption>
Consumer Discretionary 10.3%
- ------------------------------------------------
Consumer Staples 13.3%
- ------------------------------------------------
Energy 15.6%
- ------------------------------------------------
Financials 12.7%
- ------------------------------------------------
Health Care 16.2%
- ------------------------------------------------
Industrials 8.0%
- ------------------------------------------------
Information Technology 10.6%
- ------------------------------------------------
Materials 2.9%
- ------------------------------------------------
Telecommunication Services 0.4%
- ------------------------------------------------
Utilities 0.8%
- ------------------------------------------------
Other(2) 9.2%
- ------------------------------------------------
</Table>
(1) Sectors can be comprised of several industries. Please refer to the section
entitled "Portfolio of Investments" for a complete listing. No single
industry exceeds 25% of portfolio assets.
(2) Cash & Cash Equivalents. Of the 9.2%, 7.3% is due to security lending
activity and 1.9% is the Fund's cash equivalent position.
The sectors identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
TOP TEN HOLDINGS (at Jan. 31, 2009; % of portfolio assets)
- ---------------------------------------------------------------------
<Table>
<Caption>
Chevron 5.7%
- ------------------------------------------------
Johnson & Johnson 4.7%
- ------------------------------------------------
Wal-Mart Stores 4.4%
- ------------------------------------------------
Pfizer 4.4%
- ------------------------------------------------
Home Depot 2.4%
- ------------------------------------------------
IBM 2.2%
- ------------------------------------------------
Exxon Mobil 2.2%
- ------------------------------------------------
Intel 1.8%
- ------------------------------------------------
PepsiCo 1.7%
- ------------------------------------------------
Comcast Cl A 1.5%
- ------------------------------------------------
</Table>
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 7
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 expense ratio of each of the acquired funds as of the acquired fund's
most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended Jan. 31, 2009.
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.
- --------------------------------------------------------------------------------
8 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
AUG. 1, 2008 JAN. 31, 2009 THE PERIOD(A) EXPENSE RATIO
- ------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 639.50 $4.03 .98%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.16 $4.96 .98%
- ------------------------------------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 636.40 $7.14 1.74%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.34 $8.80 1.74%
- ------------------------------------------------------------------------------------------
Class C
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 637.40 $7.14 1.74%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.34 $8.80 1.74%
- ------------------------------------------------------------------------------------------
Class I
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 641.00 $2.43 .59%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,022.11 $2.99 .59%
- ------------------------------------------------------------------------------------------
Class R2
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 638.50 $5.63 1.37%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.20 $6.93 1.37%
- ------------------------------------------------------------------------------------------
Class R3
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 639.70 $4.69 1.14%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,019.35 $5.77 1.14%
- ------------------------------------------------------------------------------------------
Class R4
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 639.50 $3.33 .81%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,021.01 $4.10 .81%
- ------------------------------------------------------------------------------------------
Class R5
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 640.30 $2.51 .61%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,022.01 $3.09 .61%
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 9
FUND EXPENSES EXAMPLE (continued) ---------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
AUG. 1, 2008 JAN. 31, 2009 THE PERIOD(A) EXPENSE RATIO
- ------------------------------------------------------------------------------------------
Class W
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 639.00 $4.27 1.04%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,019.85 $5.27 1.04%
- ------------------------------------------------------------------------------------------
</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 183/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Jan. 31, 2009: -36.05%
for Class A, -36.36% for Class B, -36.26% for Class C, -36.07% for Class I,
-36.15% for Class R2, -36.03% for Class R3, -36.05% for Class R4, -35.97%
for Class R5 and -36.10% for Class W.
- --------------------------------------------------------------------------------
10 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
JAN. 31, 2009 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (98.1%)
ISSUER SHARES VALUE(a)
AEROSPACE & DEFENSE (0.6%)
General Dynamics 144,205 $8,180,750
United Technologies 64,197 3,080,814
---------------
Total 11,261,564
- -------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS (0.2%)
CH Robinson Worldwide 92,540 4,254,989
- -------------------------------------------------------------------------------------
AIRLINES (0.1%)
Southwest Airlines 273,867(e) 1,925,285
- -------------------------------------------------------------------------------------
AUTOMOBILES (0.3%)
Ford Motor 1,518,855(b,e) 2,840,260
General Motors 561,121(e) 1,688,974
Harley-Davidson 144,208(e) 1,756,453
---------------
Total 6,285,687
- -------------------------------------------------------------------------------------
BEVERAGES (3.2%)
Brown-Forman Cl B 42,720 1,939,915
Coca-Cola 568,927 24,304,561
PepsiCo 690,410 34,679,295
---------------
Total 60,923,771
- -------------------------------------------------------------------------------------
BIOTECHNOLOGY (2.4%)
Amgen 397,145(b) 21,783,403
Cephalon 51,854(b,e) 4,002,092
Gilead Sciences 365,720(b) 18,567,604
---------------
Total 44,353,099
- -------------------------------------------------------------------------------------
BUILDING PRODUCTS (0.1%)
Masco 274,495 2,146,551
- -------------------------------------------------------------------------------------
CAPITAL MARKETS (1.6%)
E*TRADE Financial 256,004(b,e) 291,845
Goldman Sachs Group 74,459 6,011,075
Morgan Stanley 998,145 20,192,472
State Street 155,918(e) 3,628,212
T Rowe Price Group 28,175 777,067
---------------
Total 30,900,671
- -------------------------------------------------------------------------------------
CHEMICALS (2.0%)
CF Inds Holdings 31,771 1,493,237
Dow Chemical 1,666,654 19,316,519
Ecolab 34,297 1,164,726
EI du Pont de Nemours & Co 125,659 2,885,131
PPG Inds 66,308(e) 2,491,855
Praxair 157,495(e) 9,805,639
---------------
Total 37,157,107
- -------------------------------------------------------------------------------------
COMMERCIAL BANKS (1.6%)
Banco Santander ADR 83,264(c) 652,792
BB&T 289,577(e) 5,730,729
Comerica 118,453 1,973,427
Fifth Third Bancorp 601,610 1,437,848
First Horizon Natl 181,074(e) 1,723,826
Huntington Bancshares 363,386(e) 1,046,552
KeyCorp 328,985 2,395,011
Marshall & Ilsley 169,248(e) 966,406
PNC Financial Services Group 351,414 11,427,982
SunTrust Banks 164,950 2,022,287
Synovus Financial 135,983(e) 538,493
Wells Fargo & Co 56,909 1,075,580
---------------
Total 30,990,933
- -------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (0.9%)
Avery Dennison 38,795(e) 940,003
Republic Services 243,219 6,289,643
RR Donnelley & Sons 79,664 777,521
Waste Management 264,866 8,261,170
---------------
Total 16,268,337
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 11
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
COMMUNICATIONS EQUIPMENT (1.0%)
Corning 734,439(e) $7,425,178
Motorola 248,544 1,101,050
QUALCOMM 297,886(e) 10,291,962
---------------
Total 18,818,190
- -------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (3.9%)
Apple 155,131(b) 13,981,957
Dell 817,705(b,e) 7,768,198
IBM 494,262 45,299,111
Lexmark Intl Cl A 180,264(b) 4,268,652
QLogic 139,178(b,e) 1,575,495
---------------
Total 72,893,413
- -------------------------------------------------------------------------------------
CONSUMER FINANCE (0.2%)
American Express 68,310 1,142,826
SLM 210,091(b,e) 2,405,542
---------------
Total 3,548,368
- -------------------------------------------------------------------------------------
DISTRIBUTORS (0.2%)
Genuine Parts 104,179 3,335,812
- -------------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (0.4%)
H&R Block 391,532 8,116,458
- -------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (3.7%)
Bank of America 3,198,568 21,046,577
CIT Group 293,875 819,911
Citigroup 5,968,599(e) 21,188,526
JPMorgan Chase & Co 1,027,716 26,217,036
---------------
Total 69,272,050
- -------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.3%)
Embarq 97,099 3,468,376
Frontier Communications 173,926 1,410,540
---------------
Total 4,878,916
- -------------------------------------------------------------------------------------
ELECTRIC UTILITIES (0.6%)
FirstEnergy 121,190 6,058,289
Southern 146,152 4,888,784
---------------
Total 10,947,073
- -------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (0.3%)
Emerson Electric 155,014 5,068,958
- -------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (0.2%)
FLIR Systems 132,734(b) 3,314,368
Tyco Electronics 80,159(c) 1,135,051
---------------
Total 4,449,419
- -------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (1.7%)
BJ Services 200,667 2,207,337
ENSCO Intl 84,641 2,315,778
Halliburton 535,561 9,238,428
Nabors Inds 236,334(b,c,e) 2,587,857
Natl Oilwell Varco 197,191(b) 5,213,730
Noble 146,159(e) 3,968,217
Smith Intl 50,852 1,154,340
Weatherford Intl 430,448(b) 4,747,841
---------------
Total 31,433,528
- -------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (5.7%)
Costco Wholesale 88,113 3,967,728
Safeway 216,984 4,649,967
SUPERVALU 79,252 1,390,080
SYSCO 103,485 2,306,681
Walgreen 155,755(e) 4,269,245
Wal-Mart Stores 1,914,179 90,196,115
---------------
Total 106,779,816
- -------------------------------------------------------------------------------------
FOOD PRODUCTS (2.3%)
Archer-Daniels-Midland 133,678 3,660,104
Campbell Soup 74,438(e) 2,260,682
Dean Foods 27,032(b,e) 522,799
General Mills 388,802(e) 22,997,637
HJ Heinz 77,259 2,819,954
JM Smucker 66,166 2,987,395
Kellogg 91,146 3,982,169
Sara Lee 351,117 3,521,704
Tyson Foods Cl A 112,926(e) 999,395
---------------
Total 43,751,839
- -------------------------------------------------------------------------------------
GAS UTILITIES (0.1%)
Questar 71,190(e) 2,419,036
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
HEALTH CARE EQUIPMENT & SUPPLIES (0.7%)
Becton Dickinson & Co 52,477 $3,813,504
Covidien 182,195(c) 6,985,356
Varian Medical Systems 52,680(b,e) 1,956,008
---------------
Total 12,754,868
- -------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (0.7%)
Cardinal Health 71,711 2,699,919
CIGNA 399,133 6,928,948
Quest Diagnostics 59,390 2,930,897
Tenet Healthcare 456,110(b,e) 488,038
---------------
Total 13,047,802
- -------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (1.4%)
Intl Game Technology 117,047(e) 1,240,698
McDonald's 423,142 24,550,699
Wyndham Worldwide 46,479 284,916
---------------
Total 26,076,313
- -------------------------------------------------------------------------------------
HOUSEHOLD DURABLES (0.5%)
Black & Decker 29,679(e) 858,020
Centex 121,143 1,030,927
DR Horton 313,448 1,868,150
KB Home 36,839(e) 393,072
Leggett & Platt 116,545 1,455,647
Lennar Cl A 85,838 660,094
Pulte Homes 111,499 1,131,715
Snap-On 47,778 1,441,940
Stanley Works 13,005 406,536
---------------
Total 9,246,101
- -------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (2.6%)
Colgate-Palmolive 212,124 13,796,545
Kimberly-Clark 79,020 4,067,159
Procter & Gamble 563,360 30,703,120
---------------
Total 48,566,824
- -------------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.1%)
Constellation Energy Group 94,112 2,475,145
Dynegy Cl A 200,023(b) 422,049
---------------
Total 2,897,194
- -------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (1.4%)
3M 233,882 12,580,512
Textron 114,451 1,033,493
Tyco Intl 577,631(c) 12,141,804
---------------
Total 25,755,809
- -------------------------------------------------------------------------------------
INSURANCE (6.3%)
ACE 224,162(c) 9,786,913
AFLAC 239,320 5,554,617
Allstate 913,087 19,786,594
Ambac Financial Group 288,197(e) 328,545
American Intl Group 1,536,860 1,967,181
Aon 101,123 3,746,607
Assurant 63,505 1,676,532
Chubb 186,118 7,924,904
Cincinnati Financial 28,900 633,777
Genworth Financial Cl A 656,721 1,523,593
Hartford Financial Services Group 200,394(e) 2,637,185
Lincoln Natl 120,907 1,829,323
Marsh & McLennan Companies 383,572 7,414,447
MBIA 209,475(b,e) 808,574
MetLife 374,982 10,773,233
Progressive 1,189,984(b) 14,458,306
Prudential Financial 200,346 5,158,910
Torchmark 66,836(e) 2,005,080
Travelers Companies 454,944 17,579,036
Unum Group 120,100 1,700,616
XL Capital Cl A 210,930(c) 611,697
---------------
Total 117,905,670
- -------------------------------------------------------------------------------------
IT SERVICES (1.0%)
Affiliated Computer Services Cl A 57,245(b) 2,625,256
Automatic Data Processing 183,752(e) 6,675,709
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 13
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
IT SERVICES (CONT.)
MasterCard Cl A 28,772(e) $3,906,662
Paychex 98,702(e) 2,397,472
Total System Services 17,806 225,424
Western Union 151,118 2,064,272
---------------
Total 17,894,795
- -------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.4%)
Brunswick 100,213(e) 278,592
Eastman Kodak 232,404(e) 1,052,790
Hasbro 92,091(e) 2,222,156
Mattel 221,386 3,141,467
---------------
Total 6,695,005
- -------------------------------------------------------------------------------------
MACHINERY (1.3%)
Cummins 95,151 2,281,721
Deere & Co 154,045 5,351,523
Dover 34,526 976,395
Eaton 77,917 3,429,906
Flowserve 23,515 1,253,585
Illinois Tool Works 99,790 3,259,141
Ingersoll-Rand Cl A 250,754(c) 4,064,722
Manitowoc 41,277(e) 227,024
Pall 21,838 569,317
Parker Hannifin 58,170 2,222,676
---------------
Total 23,636,010
- -------------------------------------------------------------------------------------
MEDIA (2.4%)
CBS Cl B 599,908 3,431,474
Comcast Cl A 2,148,695 31,478,381
DIRECTV Group 204,716(b) 4,483,280
Gannett 498,635(e) 2,877,124
Meredith 14,134(e) 225,720
New York Times Cl A 109,515(e) 544,290
News Corp Cl A 259,074 1,655,483
---------------
Total 44,695,752
- -------------------------------------------------------------------------------------
METALS & MINING (1.1%)
AK Steel Holding 105,674(e) 852,789
Alcoa 474,946 3,699,829
Freeport-McMoRan Copper & Gold 63,591(e) 1,598,678
Nucor 278,500(e) 11,360,015
United States Steel 107,701 3,234,261
---------------
Total 20,745,572
- -------------------------------------------------------------------------------------
MULTILINE RETAIL (0.4%)
Big Lots 49,161(b,e) 661,215
Family Dollar Stores 137,895 3,829,345
JC Penney 50,077(e) 838,790
Kohl's 65,693(b,e) 2,411,590
Macy's 66,493 595,112
---------------
Total 8,336,052
- -------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (15.1%)
Anadarko Petroleum 227,182 8,346,667
Apache 49,069 3,680,175
Cabot Oil & Gas 61,226 1,683,103
Chesapeake Energy 304,346 4,811,710
Chevron 1,644,212 115,949,829
ConocoPhillips 561,368 26,681,821
CONSOL Energy 72,035 1,963,674
Devon Energy 48,553 2,990,865
EOG Resources 104,193 7,061,160
Exxon Mobil 586,725(d) 44,872,728
Hess 134,042(e) 7,454,076
Marathon Oil 363,777 9,905,648
Massey Energy 104,037 1,579,282
Murphy Oil 90,076 3,979,558
Occidental Petroleum 405,601 22,125,535
Peabody Energy 124,318 3,107,950
Pioneer Natural Resources 100,107 1,465,566
Southwestern Energy 203,387(b,e) 6,437,199
Spectra Energy 242,810 3,523,173
Sunoco 54,967(e) 2,546,071
Tesoro 98,048(e) 1,689,367
Valero Energy 170,934(e) 4,122,928
---------------
Total 285,978,085
- -------------------------------------------------------------------------------------
PERSONAL PRODUCTS (0.1%)
Estee Lauder Companies Cl A 92,113(e) 2,417,966
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
PHARMACEUTICALS (13.7%)
Bristol-Myers Squibb 373,524 $7,997,149
Eli Lilly & Co 295,088(e) 10,865,140
Forest Laboratories 200,439(b) 5,018,993
Johnson & Johnson 1,640,525 94,641,886
King Pharmaceuticals 400,546(b) 3,500,772
Merck & Co 772,283 22,048,680
Mylan 53,769(b,e) 609,203
Pfizer 6,118,008 89,200,557
Schering-Plough 908,187 15,947,764
Wyeth 235,581 10,122,916
---------------
Total 259,953,060
- -------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (0.2%)
Public Storage 58,068(e) 3,592,667
- -------------------------------------------------------------------------------------
ROAD & RAIL (3.6%)
Burlington Northern Santa Fe 219,040 14,511,400
CSX 390,872 11,319,653
Norfolk Southern 430,857 16,527,675
Ryder System 54,245(e) 1,832,396
Union Pacific 547,180 23,961,012
---------------
Total 68,152,136
- -------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (2.9%)
Altera 284,124 4,369,827
Intel 2,783,428 35,906,221
Linear Technology 166,697(e) 3,904,044
LSI 237,133(b,e) 754,083
MEMC Electronic Materials 144,127(b) 1,960,127
Microchip Technology 138,807 2,633,169
NVIDIA 95,822(b,e) 761,785
Xilinx 255,847 4,311,022
---------------
Total 54,600,278
- -------------------------------------------------------------------------------------
SOFTWARE (2.5%)
Microsoft 1,151,519 19,690,975
Oracle 1,507,562(b,e) 25,372,268
Salesforce.com 11,626(b,e) 309,368
Symantec 154,679(b) 2,371,229
---------------
Total 47,743,840
- -------------------------------------------------------------------------------------
SPECIALTY RETAIL (4.7%)
Abercrombie & Fitch Cl A 133,207(e) 2,377,745
AutoNation 173,695(b,e) 1,611,890
AutoZone 28,942(b,e) 3,846,102
Bed Bath & Beyond 144,495(b,e) 3,356,619
Best Buy 144,404 4,046,200
Gap 286,082 3,227,005
Home Depot 2,249,714(d) 48,436,343
Limited Brands 114,145(e) 904,028
Lowe's Companies 752,480 13,747,810
Office Depot 149,209(b) 322,291
RadioShack 168,700(e) 1,933,302
Sherwin-Williams 53,160(e) 2,538,390
Staples 28,256 450,401
TJX Companies 76,140 1,478,639
---------------
Total 88,276,765
- -------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (0.5%)
Coach 206,729(b) 3,018,243
Jones Apparel Group 116,009 401,391
Liz Claiborne 229,550(e) 505,010
Nike Cl B 51,608 2,335,262
VF 55,629 3,116,337
---------------
Total 9,376,243
- -------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.1%)
Fannie Mae 1,336,093 809,139
Freddie Mac 794,150 472,519
MGIC Investment 154,094(e) 425,299
---------------
Total 1,706,957
- -------------------------------------------------------------------------------------
TOBACCO (0.4%)
Philip Morris Intl 191,327 7,107,798
- -------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (0.2%)
Fastenal 47,200(e) 1,613,296
WW Grainger 29,299(e) 2,137,362
---------------
Total 3,750,658
- -------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.2%)
Sprint Nextel 1,511,110(b) 3,671,997
- -------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $3,080,078,855) $1,846,763,087
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 15
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
MONEY MARKET FUND (2.0%)
SHARES VALUE(a)
RiverSource Short-Term Cash Fund, 0.47% 38,574,554(f) $38,574,554
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $38,574,554) $38,574,554
- -------------------------------------------------------------------------------------
<Caption>
INVESTMENTS OF CASH COLLATERAL
RECEIVED FOR SECURITIES ON LOAN (7.9%)
SHARES VALUE(a)
CASH COLLATERAL REINVESTMENT FUND
JPMorgan Prime
Money Market Fund 149,027,673 $149,027,673
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $149,027,673) $149,027,673
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $3,267,681,082)(g) $2,034,365,314
=====================================================================================
</Table>
INVESTMENTS IN DERIVATIVES
FUTURES CONTRACTS OUTSTANDING AT JAN. 31, 2009
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION
CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION)
- -----------------------------------------------------------------------------------
S&P 500 Index 184 $37,835,000 March 2009 $(2,208,635)
- -----------------------------------------------------------------------------------
</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, 2009, the
value of foreign securities represented 2.0% of net assets.
(d) At Jan. 31, 2009, investments in securities included securities valued at
$19,236,164 that were partially pledged as collateral to cover initial
margin deposits on open stock index futures contracts.
(e) At Jan. 31, 2009, security was partially or fully on loan. See Note 5 to
the financial statements.
(f) Affiliated Money Market Fund -- See Note 6 to the financial statements. The
rate shown is the seven-day current annualized yield at Jan. 31, 2009.
(g) At Jan. 31, 2009, the cost of securities for federal income tax purposes
was approximately $3,267,681,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $19,778,000
Unrealized depreciation (1,253,094,000)
-------------------------------------------------------------
Net unrealized depreciation $(1,233,316,000)
-------------------------------------------------------------
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
- --------------------------------------------------------------------------------
16 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS
Statement of Financial Accounting Standards No. 157 (SFAS 157) seeks to
implement more uniform reporting relating to the fair valuation of securities
for financial statement purposes. Mutual funds are required to implement the
requirements of this standard for fiscal years beginning after Nov. 15, 2007.
While uniformity of presentation is the objective of the standard, it is likely
that there may be a range of practices utilized and it may be some period of
time before industry practices become more uniform. For this reason care should
be exercised in interpreting this information and/or using it for comparison
with other mutual funds.
Various inputs are used in determining the value of the Fund's investments.
These inputs are summarized in the three broad levels listed below:
- Level 1 -- quoted prices in active markets for identical securities
- Level 2 -- other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit risks,
etc.)
- Level 3 -- significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
Observable inputs are those based on market data obtained from sources
independent of the fund, and unobservable inputs reflect the fund's own
assumptions based on the best information available. The input levels are not
necessarily an indication of the risk or liquidity associated with investments
at that level.
The following table is a summary of the inputs used to value the Fund's
investments as of Jan. 31, 2009:
<Table>
<Caption>
FAIR VALUE AT JAN. 31, 2009
------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- ------------------------------------------------------------------------------------
Investments in
securities $2,034,365,314 $-- $-- $2,034,365,314
Other financial
instruments* (2,208,635) -- -- (2,208,635)
- ------------------------------------------------------------------------------------
Total $2,032,156,679 $-- $-- $2,032,156,679
- ------------------------------------------------------------------------------------
</Table>
* Other financial instruments are derivative instruments, such as futures, which
are valued at the unrealized appreciation/depreciation on the instrument.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 17
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
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 EQUITY FUND -- 2009 SEMIANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $3,080,078,855) $ 1,846,763,087
Affiliated money market fund (identified cost $38,574,554) 38,574,554
Investments of cash collateral received for securities on loan
(identified cost $149,027,673) 149,027,673
- -----------------------------------------------------------------------------------------
Total investments in securities (identified cost $3,267,681,082) 2,034,365,314
Capital shares receivable 66,185,449
Dividends and accrued interest receivable 2,055,385
Receivable for investment securities sold 93,236,508
- -----------------------------------------------------------------------------------------
Total assets 2,195,842,656
- -----------------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 3,547,314
Payable for investment securities purchased 158,103,932
Payable upon return of securities loaned 149,027,673
Variation margin payable on futures contracts 2,517,200
Accrued investment management services fees 31,159
Accrued distribution fees 11,214
Accrued transfer agency fees 8,253
Accrued administrative services fees 2,855
Accrued plan administration services fees 546
Other accrued expenses 267,753
- -----------------------------------------------------------------------------------------
Total liabilities 313,517,899
- -----------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 1,882,324,757
- -----------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 5,262,532
Additional paid-in capital 3,403,669,559
Undistributed net investment income 21,936,708
Accumulated net realized gain (loss) (313,048,070)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (1,235,495,972)
- -----------------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding capital stock $ 1,882,324,757
- -----------------------------------------------------------------------------------------
*Including securities on loan, at value $ 140,468,510
- -----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 19
STATEMENT OF ASSETS AND LIABILITIES (continued) --------------------------------
JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $620,051,403 173,305,774 $3.58(1)
Class B $ 19,832,792 5,570,594 $3.56
Class C $ 1,814,010 512,826 $3.54
Class I $276,904,563 77,058,471 $3.59
Class R2 $ 2,365 661 $3.58
Class R3 $ 2,365 661 $3.58
Class R4 $ 77,831,387 21,684,784 $3.59
Class R5 $ 2,364 661 $3.58
Class W $885,883,508 248,118,779 $3.57
- -----------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $3.80. 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 EQUITY FUND -- 2009 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS --------------------------------------------------------
SIX MONTHS ENDED JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $ 32,351,835
Income distributions from affiliated money market fund 257,424
Fee income from securities lending 353,713
- -----------------------------------------------------------------------------
Total income 32,962,972
- -----------------------------------------------------------------------------
Expenses:
Investment management services fees 5,895,042
Distribution fees
Class A 1,034,280
Class B 135,737
Class C 11,125
Class R2 8
Class R3 4
Class W 1,278,447
Transfer agency fees
Class A 573,318
Class B 21,290
Class C 1,643
Class R2 1
Class R3 1
Class R4 25,031
Class R5 1
Class W 1,022,756
Administrative services fees 614,408
Plan administration services fees
Class R2 4
Class R3 4
Class R4 125,156
Compensation of board members 37,256
Custodian fees 89,895
Printing and postage 80,050
Registration fees 64,275
Professional fees 32,297
Other 30,170
- -----------------------------------------------------------------------------
Total expenses 11,072,199
Expenses waived/reimbursed by the Investment Manager and
its affiliates (43,631)
Earnings and bank fee credits on cash balances (7,886)
- -----------------------------------------------------------------------------
Total net expenses 11,020,682
- -----------------------------------------------------------------------------
Investment income (loss) -- net 21,942,290
- -----------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 21
STATEMENT OF OPERATIONS (continued) -------------------------------------------
SIX MONTHS ENDED JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $ (289,383,497)
Futures contracts (18,917,134)
- -----------------------------------------------------------------------------
Net realized gain (loss) on investments (308,300,631)
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies (745,252,457)
- -----------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (1,053,553,088)
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $(1,031,610,798)
- -----------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
22 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2009 JULY 31, 2008
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 21,942,290 $ 44,172,325
Net realized gain (loss) on investments (308,300,631) 103,837,007
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies (745,252,457) (641,572,651)
- ----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (1,031,610,798) (493,563,319)
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (9,214,668) (11,230,396)
Class C (7,117) (4,379)
Class I (5,438,440) (5,698,153)
Class R2 (33) (28)
Class R3 (41) (40)
Class R4 (1,326,570) (1,390,578)
Class R5 (49) (54)
Class W (10,297,303) (14,867,518)
Net realized gain
Class A (24,419,810) (68,772,061)
Class B (803,415) (3,058,960)
Class C (70,547) (169,022)
Class I (10,144,769) (24,176,366)
Class R2 (97) (244)
Class R3 (96) (244)
Class R4 (2,985,348) (7,584,972)
Class R5 (96) (244)
Class W (30,699,663) (74,056,615)
- ----------------------------------------------------------------------------------------------
Total distributions (95,408,062) (211,009,874)
- ----------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 23
STATEMENTS OF CHANGES IN NET ASSETS (continued) --------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2009 JULY 31, 2008
(UNAUDITED)
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 21,635,577 $ 49,740,163
Class B shares 1,577,268 5,505,096
Class C shares 405,262 976,461
Class I shares 62,015,970 120,762,575
Class R4 shares 5,399,913 25,111,692
Class W shares 288,169,838 1,465,443,768
Reinvestment of distributions at net asset value
Class A shares 31,099,175 74,058,485
Class B shares 793,672 3,022,150
Class C shares 73,505 167,943
Class I shares 15,582,928 29,873,023
Class R4 shares 4,311,918 8,975,550
Class W shares 40,996,838 88,923,836
Payments for redemptions
Class A shares (97,184,696) (215,746,354)
Class B shares (4,836,168) (24,117,349)
Class C shares (363,398) (1,059,851)
Class I shares (30,431,811) (108,422,258)
Class R4 shares (9,097,585) (37,030,416)
Class W shares (299,180,516) (622,614,805)
- ----------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 30,967,690 863,569,709
- ----------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (1,096,051,170) 158,996,516
Net assets at beginning of period 2,978,375,927 2,819,379,411
- ----------------------------------------------------------------------------------------------
Net assets at end of period $ 1,882,324,757 $2,978,375,927
- ----------------------------------------------------------------------------------------------
Undistributed net investment income $ 21,936,708 $ 26,278,639
- ----------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
24 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
FINANCIAL HIGHLIGHTS ----------------------------------------------------------
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007 2006 2005
Net asset value, beginning of
period $5.88 $7.22 $6.74 $6.70 $5.95
- ------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .04(b) .09(b) .08(b) .06 .04
Net gains (losses) (both
realized and unrealized) (2.14) (1.00) .97 .35 .90
- ------------------------------------------------------------------------------------------------
Total from investment
operations (2.10) (.91) 1.05 .41 .94
- ------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.05) (.06) (.06) (.06) (.03)
Distributions from realized
gains (.15) (.37) (.51) (.31) (.16)
- ------------------------------------------------------------------------------------------------
Total distributions (.20) (.43) (.57) (.37) (.19)
- ------------------------------------------------------------------------------------------------
Net asset value, end of period $3.58 $5.88 $7.22 $6.74 $6.70
- ------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $620 $1,067 $1,410 $1,368 $28
- ------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) .98%(e) .96% 1.05% 1.05% 1.35%
- ------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reim-
bursement(d),(f),(g) .98%(e) .96% 1.03% 1.02% 1.25%
- ------------------------------------------------------------------------------------------------
Net investment income (loss) 1.88%(e) 1.35% 1.13% .95% .84%
- ------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 58% 62% 137% 64%
- ------------------------------------------------------------------------------------------------
Total return(h) (36.05%)(i) (13.40%) 15.92% 6.25% 15.95%
- ------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 25
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007 2006 2005
Net asset value, beginning of
period $5.80 $7.12 $6.65 $6.62 $5.90
- ------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .03(b) .04(b) .03(b) .01 .02
Net gains (losses) (both
realized and unrealized) (2.12) (.99) .96 .34 .86
- ------------------------------------------------------------------------------------------------
Total from investment
operations (2.09) (.95) .99 .35 .88
- ------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income -- -- (.01) (.01) --
Distributions from realized
gains (.15) (.37) (.51) (.31) (.16)
- ------------------------------------------------------------------------------------------------
Total distributions (.15) (.37) (.52) (.32) (.16)
- ------------------------------------------------------------------------------------------------
Net asset value, end of period $3.56 $5.80 $7.12 $6.65 $6.62
- ------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $20 $35 $62 $73 $9
- ------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.74%(e) 1.72% 1.82% 1.85% 2.13%
- ------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reim-
bursement(d),(f),(g) 1.74%(e) 1.72% 1.79% 1.82% 2.04%
- ------------------------------------------------------------------------------------------------
Net investment income (loss) 1.12%(e) .59% .37% .20% .06%
- ------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 58% 62% 137% 64%
- ------------------------------------------------------------------------------------------------
Total return(h) (36.36%)(i) (14.07%) 15.18% 5.42% 15.03%
- ------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
26 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007 2006 2005
Net asset value, beginning of
period $5.78 $7.11 $6.65 $6.62 $5.90
- ------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .03(b) .04(b) .03(b) .01 .01
Net gains (losses) (both
realized and unrealized) (2.11) (.99) .96 .35 .87
- ------------------------------------------------------------------------------------------------
Total from investment
operations (2.08) (.95) .99 .36 .88
- ------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.01) (.01) (.02) (.02) --
Distributions from realized
gains (.15) (.37) (.51) (.31) (.16)
- ------------------------------------------------------------------------------------------------
Total distributions (.16) (.38) (.53) (.33) (.16)
- ------------------------------------------------------------------------------------------------
Net asset value, end of period $3.54 $5.78 $7.11 $6.65 $6.62
- ------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $2 $3 $3 $3 $--
- ------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.74%(e) 1.72% 1.81% 1.84% 2.13%
- ------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reim-
bursement(d),(f),(g) 1.74%(e) 1.72% 1.79% 1.81% 2.06%
- ------------------------------------------------------------------------------------------------
Net investment income (loss) 1.10%(e) .59% .36% .20% .02%
- ------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 58% 62% 137% 64%
- ------------------------------------------------------------------------------------------------
Total return(h) (36.26%)(i) (14.11%) 15.14% 5.51% 15.03%
- ------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 27
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(i) 2008 2007 2006 2005
Net asset value, beginning of
period $5.93 $7.27 $6.78 $6.73 $5.96
- ------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .05(b) .11(b) .11(b) .08 .04
Net gains (losses) (both
realized and unrealized) (2.17) (.99) .97 .36 .92
- ------------------------------------------------------------------------------------------------
Total from investment
operations (2.12) (.88) 1.08 .44 .96
- ------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.07) (.09) (.08) (.08) (.03)
Distributions from realized
gains (.15) (.37) (.51) (.31) (.16)
- ------------------------------------------------------------------------------------------------
Total distributions (.22) (.46) (.59) (.39) (.19)
- ------------------------------------------------------------------------------------------------
Net asset value, end of period $3.59 $5.93 $7.27 $6.78 $6.73
- ------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $277 $391 $441 $252 $82
- ------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) .59%(e) .61% .70% .72% .91%
- ------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reim-
bursement(d),(f),(g) .59%(e) .61% .67% .70% .91%
- ------------------------------------------------------------------------------------------------
Net investment income (loss) 2.26%(e) 1.69% 1.47% 1.41% 1.19%
- ------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 58% 62% 137% 64%
- ------------------------------------------------------------------------------------------------
Total return (36.07%)(h) (12.98%) 16.29% 6.73% 16.29%
- ------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(h) Not annualized.
(i) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
28 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007(b)
Net asset value, beginning of
period $5.88 $7.21 $7.57
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(c) .04 .08 .03
Net gains (losses) (both
realized and unrealized) (2.15) (1.00) .20
- -----------------------------------------------------------------------------------------------
Total from investment
operations (2.11) (.92) .23
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.04) (.04) (.08)
Distributions from realized
gains (.15) (.37) (.51)
- -----------------------------------------------------------------------------------------------
Total distributions (.19) (.41) (.59)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $3.58 $5.88 $7.21
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $--
- -----------------------------------------------------------------------------------------------
Gross expenses prior to
expense
waiver/reimbursement(d),(e) 1.37%(f) 1.41% 1.49%(f)
- -----------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reim-
bursement(e),(g),(h) 1.11%(f) 1.16% 1.48%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) 1.78%(f) 1.15% .55%(f)
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 58% 62%
- -----------------------------------------------------------------------------------------------
Total return (36.15%)(i) (13.51%) 3.31%(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, if any. Expense
ratio is before reduction for 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/reimburse
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, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 29
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007(b)
Net asset value, beginning of
period $5.89 $7.22 $7.57
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(c) .05 .09 .04
Net gains (losses) (both
realized and unrealized) (2.15) (.99) .20
- -----------------------------------------------------------------------------------------------
Total from investment
operations (2.10) (.90) .24
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.06) (.06) (.08)
Distributions from realized
gains (.15) (.37) (.51)
- -----------------------------------------------------------------------------------------------
Total distributions (.21) (.43) (.59)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $3.58 $5.89 $7.22
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $--
- -----------------------------------------------------------------------------------------------
Gross expenses prior to
expense
waiver/reimbursement(d),(e) 1.14%(f) 1.15% 1.24%(f)
- -----------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reim-
bursement(e),(g),(h) .87%(f) .90% 1.22%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) 1.99%(f) 1.41% .81%(f)
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 58% 62%
- -----------------------------------------------------------------------------------------------
Total return (36.03%)(i) (13.26%) 3.46%(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, if any. Expense
ratio is before reduction for 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/reimburse
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, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
30 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(i) 2008 2007 2006 2005
Net asset value, beginning of
period $5.91 $7.25 $6.76 $6.71 $5.95
- ------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .05(b) .10(b) .09(b) .07 .05
Net gains (losses) (both
realized and unrealized) (2.16) (1.00) .98 .36 .91
- ------------------------------------------------------------------------------------------------
Total from investment
operations (2.11) (.90) 1.07 .43 .96
- ------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.06) (.07) (.07) (.07) (.04)
Distributions from realized
gains (.15) (.37) (.51) (.31) (.16)
- ------------------------------------------------------------------------------------------------
Total distributions (.21) (.44) (.58) (.38) (.20)
- ------------------------------------------------------------------------------------------------
Net asset value, end of period $3.59 $5.91 $7.25 $6.76 $6.71
- ------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $78 $126 $158 $224 $--
- ------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) .89%(e) .91% .95% .87% 1.18%
- ------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reim-
bursement(d),(f),(g) .81%(e) .84% .87% .84% 1.06%
- ------------------------------------------------------------------------------------------------
Net investment income (loss) 2.05%(e) 1.47% 1.29% 1.10% 1.03%
- ------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 58% 62% 137% 64%
- ------------------------------------------------------------------------------------------------
Total return (36.05%)(h) (13.26%) 16.15% 6.48% 16.25%
- ------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(h) Not annualized.
(i) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 31
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007(b)
Net asset value, beginning of
period $5.90 $7.24 $7.57
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(c) .05 .11 .06
Net gains (losses) (both
realized and unrealized) (2.15) (1.00) .20
- -----------------------------------------------------------------------------------------------
Total from investment
operations (2.10) (.89) .26
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.07) (.08) (.08)
Distributions from realized
gains (.15) (.37) (.51)
- -----------------------------------------------------------------------------------------------
Total distributions (.22) (.45) (.59)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $3.58 $5.90 $7.24
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $--
- -----------------------------------------------------------------------------------------------
Gross expenses prior to
expense
waiver/reimbursement(d),(e) .61%(f) .66% .75%(f)
- -----------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reim-
bursement(e),(g),(h) .61%(f) .66% .74%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) 2.25%(f) 1.66% 1.28%(f)
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 58% 62%
- -----------------------------------------------------------------------------------------------
Total return (35.97%)(i) (13.09%) 3.76%(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, if any. Expense
ratio is before reduction for 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/reimburse
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, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
32 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007(b)
Net asset value, beginning of
period $5.86 $7.22 $7.46
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(c) .04 .08 .03
Net gains (losses) (both
realized and unrealized) (2.14) (1.00) .32
- -----------------------------------------------------------------------------------------------
Total from investment
operations (2.10) (.92) .35
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.04) (.07) (.08)
Distributions from realized
gains (.15) (.37) (.51)
- -----------------------------------------------------------------------------------------------
Total distributions (.19) (.44) (.59)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $3.57 $5.86 $7.22
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $886 $1,355 $745
- -----------------------------------------------------------------------------------------------
Gross expenses prior to
expense
waiver/reimbursement(d),(e) 1.04%(f) 1.06% 1.18%(f)
- -----------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reim-
bursement(e),(g),(h) 1.04%(f) 1.06% 1.13%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) 1.80%(f) 1.22% .59%(f)
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 58% 62%
- -----------------------------------------------------------------------------------------------
Total return (36.10%)(i) (13.52%) 5.01%(i)
- -----------------------------------------------------------------------------------------------
</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, if any. Expense
ratio is before reduction for 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/reimburse
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, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 33
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS TO JAN. 31, 2009)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Disciplined Equity Fund (the Fund) is a series of RiverSource Large
Cap Series, Inc. and is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company. RiverSource
Large Cap Series, Inc. has 10 billion authorized shares of capital stock that
can be allocated among the separate series as designated by the Board of
Directors (the Board). The Fund invests primarily in equity securities of
companies listed on U.S. exchanges with market capitalizations greater than $5
billion at the time of purchase.
The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class
R4, Class R5 and Class W shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I, Class R2, Class R3, Class R4 and Class R5 shares are sold without a
front-end sales charge or CDSC and are offered to qualifying institutional
investors.
- - Class W shares are sold without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts.
At Jan. 31, 2009, RiverSource Investments, LLC (RiverSource Investments or the
Investment Manager) and the RiverSource affiliated funds-of-funds owned 100% of
Class I shares and the Investment Manager owned 100% of Class R2, Class R3 and
Class R5 shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
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34 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
Effective Aug. 1, 2008, the Fund adopted 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. There was no impact to the
Fund's net assets or results of operations upon adoption. The fair valuation
measurements disclosure can be found following the Notes to Portfolio of
Investments.
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.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities (such as foreign securities)
that is not reflected in price quotations or valuations from other sources. A
fair value price is a good faith estimate of the value of a security at a given
point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the 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
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 35
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
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, which
approximates fair value.
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 (OTC options) trades. Cash collateral held by the Fund for such option
trades must be returned to the counterparty upon closure, exercise or expiration
of the contract. The Fund also may buy and sell put and call options and write
covered call options on portfolio securities as well as write cash-secured put
options. The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases. The risk
in writing a put option is that the Fund may incur a loss if the market price of
the security decreases and the option is exercised. The risk in buying an option
is that the Fund pays a premium whether or not the option is exercised. The Fund
also has the additional risk of being unable to enter into a closing transaction
if a liquid secondary market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. Option
contracts, including OTC option contracts, with no readily available market
value are valued using quotations obtained from independent brokers as of the
close of the New York Stock Exchange. 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. At Jan. 31, 2009, and for the six
months then ended, 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
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36 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
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 and options on futures are valued daily based upon the last sale price
at the close of the market on the principal exchange on which they are traded.
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the contract is closed
or expires.
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 using foreign currency exchange rates from an independent pricing
service. The Fund is subject to the credit risk that the counterparty will not
complete its contract obligations. At Jan. 31, 2009, 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.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 37
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
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.
Financial Accounting Standards Board (FASB) Interpretation 48 (FIN 48),
"Accounting for Uncertainty in Income Taxes," clarifies the accounting for
uncertainty in income taxes recognized in accordance with FASB Statement 109,
"Accounting for Income Taxes." FIN 48 provides guidance for how uncertain tax
positions should be recognized, measured, presented and disclosed in the
financial statements. 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 futures contracts, re-
characterization of REIT distributions and losses deferred due to wash sales.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for
federal income tax purposes. Also, due to the timing of dividend distributions,
the fiscal year in which amounts are distributed may differ from the year that
the income or realized gains (losses) were recorded by the Fund.
RECENT ACCOUNTING PRONOUNCEMENTS
The Fund has adopted FASB Staff Position No. 133-1 and FIN No. 45-4 (FSP FAS
133-1 and FIN 45-4), "Disclosures about Credit Derivatives and Certain
Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No.
45". The amendments to FSP FAS 133-1 and FIN 45-4 require enhanced disclosures
about a fund's derivatives and guarantees. Funds are required to provide
enhanced disclosures about (a) how and why a fund uses derivative instruments,
(b) how derivative instruments and related hedged items are accounted for under
SFAS 133 and its related interpretations, (c) how derivative instruments and
related hedged items affect a fund's financial position, financial performance,
and cash flows and (d) the current status of the payment/performance risk of the
credit derivative. The amendments to FSP FAS 133-1 and FIN 45-4 also require
additional disclosures about the current status of the payment/performance risk
of a guarantee. At Jan. 31, 2009, the Fund did not own nor was it a party to any
credit derivative contracts within the scope of these amendments.
- --------------------------------------------------------------------------------
38 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
In March 2008, the FASB issued Statement of Financial Accounting Standards No.
161 (SFAS 161), "Disclosures about Derivative Instruments and Hedging
Activities -- an amendment of FASB Statement No. 133," which requires enhanced
disclosures about a fund's derivative and hedging activities. SFAS 161 is
effective for financial statements issued for fiscal years and interim periods
beginning after Nov. 15, 2008. As of Jan. 31, 2009, management does not believe
the adoption of SFAS 161 will impact the financial statement amounts; however,
additional footnote disclosures may be required about the use of derivative
instruments and hedging items.
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
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.60%
to 0.375% annually as the Fund's assets increase. The fee may be adjusted upward
or downward by a performance incentive adjustment determined monthly by
measuring the percentage difference over a rolling 12-month period between the
annualized performance of one Class A share of the Fund and the annualized
performance of the Lipper Large-Cap Core Funds Index. In certain circumstances,
the Board may approve a change in the index. The maximum adjustment is 0.12% per
year. If the performance difference is less than 0.50%, the adjustment will be
zero. The adjustment decreased the management fee by $823,118 for the six months
ended Jan. 31, 2009. The management fee for the six months ended Jan. 31, 2009
was 0.51% of the Fund's average daily net assets, including the adjustment under
the terms of the performance incentive arrangement.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 39
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.06% to 0.03% annually as the
Fund's assets increase. The fee for the six months ended Jan. 31, 2009 was 0.05%
of the Fund's average daily net assets.
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended Jan.
31, 2009, other expenses paid to this company were $9,182.
COMPENSATION OF BOARD MEMBERS
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.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual account-based fee at a rate equal to $19.50 for Class A, $20.50
for Class B and $20.00 for Class C for this service. The Fund also pays the
Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's
average daily net assets attributable to Class R2, Class R3, Class R4 and Class
R5 shares 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.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
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40 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
DISTRIBUTION FEES
The Fund has agreements with RiverSource Distributors, Inc. and RiverSource Fund
Distributors, Inc. (collectively, the Distributor) for distribution and
shareholder services. Under a Plan and Agreement of Distribution pursuant to
Rule 12b-1, the Fund pays a fee at an annual rate of up to 0.25% of the Fund's
average daily net assets attributable to Class A, Class R3 and Class W shares, a
fee at an annual rate of up to 0.50% of the Fund's average daily net assets
attributable to Class R2 shares and a fee at an annual rate of up to 1.00% of
the Fund's average daily net assets attributable to Class B and Class C shares.
For Class B and Class C shares, up to 0.75% of the fee is reimbursed for
distribution expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed expense") was approximately $794,000 and $24,000 for
Class B and Class C shares, respectively. These amounts are based on the most
recent information available as of Jan. 31, 2009, and may be recovered from
future payments under the distribution plan or CDSC. To the extent the
unreimbursed expense has been fully recovered, the distribution fee is reduced.
SALES CHARGE
Sales charges received by the Distributor for distributing Fund shares were
$127,507 for Class A, $9,742 for Class B and $168 for Class C for the six months
ended Jan. 31, 2009.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the six months ended Jan. 31, 2009, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds*), including the adjustment under
the terms of a performance incentive adjustment, were as follows:
<Table>
Class A............................................. 0.98%
Class B............................................. 1.74
Class R2............................................ 1.11
Class R3............................................ 0.87
Class R4............................................ 0.81
</Table>
The waived/reimbursed fees and expenses for the transfer agency fees at the
class level were as follows:
<Table>
Class A........................................... $659
Class B........................................... 844
Class R4.......................................... 25,031
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
The waived/reimbursed fees and expenses for the plan administration services
fees at the class level were as follows:
<Table>
Class R2.......................................... $4
Class R3.......................................... 4
Class R4.......................................... 17,089
</Table>
The Investment Manager and its affiliates have contractually agreed to waive
certain fees and expenses until July 31, 2009, unless sooner terminated at the
discretion of the Board, such that net expenses (excluding fees and expenses of
acquired funds*), before giving effect to any performance incentive adjustment,
will not exceed the following percentage of the Fund's average daily net assets:
<Table>
Class A............................................. 1.05%
Class B............................................. 1.81
Class C............................................. 1.81
Class I............................................. 0.72
Class R2............................................ 1.52
Class R3............................................ 1.27
Class R4............................................ 0.88
Class R5............................................ 0.77
Class W............................................. 1.17
</Table>
* In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in
which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and the Fund may own different proportions of
acquired funds at different times, the amount of fees and expenses incurred
indirectly by the Fund will vary.
EARNINGS AND BANK FEE CREDITS
During the six months ended Jan. 31, 2009, the Fund's transfer agency fees were
reduced by $7,886 as a result of bank fee credits from overnight cash balances.
CUSTODIAN FEES
Effective Dec. 15, 2008, the Fund pays custodian fees to JPMorgan Chase Bank,
N.A. Prior to Dec. 15, 2008, the Fund paid custodian fees amounting to $80,093
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 $810,453,672 and $889,997,817, respectively, for the six
months ended Jan. 31, 2009. Realized gains and losses are determined on an
identified cost basis.
- --------------------------------------------------------------------------------
42 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED JAN. 31, 2009
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------
Class A 4,912,041 7,833,545 (20,960,397) (8,214,811)
Class B 344,354 200,930 (1,077,413) (532,129)
Class C 88,401 18,704 (76,413) 30,692
Class I 13,540,925 3,905,496 (6,447,275) 10,999,146
Class R4 1,188,589 1,083,396 (1,954,501) 317,484
Class W 67,432,096 10,352,737 (60,791,010) 16,993,823
- ----------------------------------------------------------------------------------
<Caption>
YEAR ENDED JULY 31, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------
Class A 7,609,621 10,923,080 (32,329,627) (13,796,926)
Class B 826,089 449,725 (3,897,874) (2,622,060)
Class C 150,658 25,066 (161,175) 14,549
Class I 17,804,029 4,380,209 (16,813,974) 5,370,264
Class R4 3,752,567 1,317,996 (5,442,436) (371,873)
Class W 213,069,694 13,134,983 (98,243,751) 127,960,926
- ----------------------------------------------------------------------------------
</Table>
5. LENDING OF PORTFOLIO SECURITIES
Effective Dec. 1, 2008, the Fund has entered into a Master Securities Lending
Agreement ("the Agreement") with JPMorgan Chase Bank, National Association
("JPMorgan"). The Agreement authorizes JPMorgan as lending agent to lend
securities to authorized borrowers on behalf of the Fund. Pursuant to the
Agreement, all loaned securities are initially collateralized in an amount
equivalent to 102% (for securities denominated in U.S. dollars) or 105% (for all
other securities) of the value of the loaned securities, including accrued
interest in the case of fixed income securities. Collateral is maintained over
the life of the loan thereafter in an amount not less than 100% of the market
value of loaned securities, as determined at the close of each business day,
except to the extent that a collateral shortfall is due to a diminution in the
market value of authorized investments in which cash collateral is invested. Any
additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Collateral is either in the form of cash or U.S. government securities. Cash
collateral received is invested by the
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
lending agent on behalf of the Fund into authorized investments pursuant to the
Agreement. The investments made with the cash collateral are listed on the
Portfolio of Investments and the value of cash collateral received at period end
is disclosed on the Statement of Assets and Liabilities along with the related
obligation to return the collateral upon return of the securities loaned. At
Jan. 31, 2009, securities valued at $140,468,510 were on loan secured by cash
collateral of $149,027,673 invested in short-term securities or cash
equivalents.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Income of
$136,882 earned from securities lending from Dec. 1, 2008 through Jan. 31, 2009
is included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Funds or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Prior to Dec. 1, 2008, RiverSource Investments, LLC served as securities lending
agent for the Fund under the Securities Lending Agency Agreement pursuant to
which the Fund agreed to reimburse RiverSource Investments, LLC for expenses
incurred by it in connection with the lending program. Expenses paid to
RiverSource Investments, LLC as securities lending agent were $8,054 through
Nov. 30, 2008 and are included in other expenses on the Statement of Operations.
Cash collateral received on loaned securities had been invested in an affiliated
money market fund. Income of $216,831 earned from securities lending from Feb.
1, 2008 through Nov. 30, 2008 is included in the Statement of Operations.
6. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. The cost of the
Fund's purchases and proceeds from sales of shares of the RiverSource
- --------------------------------------------------------------------------------
44 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
Short-Term Cash Fund aggregated $312,879,084 and $303,464,571, respectively, for
the six months ended Jan. 31, 2009. The income distributions received with
respect to the Fund's investment in RiverSource Short-Term Cash Fund can be
found on the Statement of Operations and the Fund's invested balance in
RiverSource Short-Term Cash Fund at Jan. 31, 2009, can be found in the Portfolio
of Investments.
7. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
16, 2008, 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 $475
million. The borrowers shall have the right, upon written notice to the
Administrative Agent to request an increase of up to $175 million in the
aggregate amount of the credit facility from new or existing lenders, provided
that the aggregate amount of the credit facility shall at no time exceed $650
million. Participation in such increase by any existing lender shall be at such
lender's sole discretion. Interest is charged to each Fund based on its
borrowings at a rate equal to the federal funds rate plus 0.75%. 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, in addition to
an upfront fee equal to its pro rata share of 0.02% of the amount of the credit
facility. The Fund had no borrowings during the six months ended Jan. 31, 2009.
Under the prior credit facility which was effective until Oct. 15, 2008, the
Fund had entered into a revolving credit facility with a syndicate of banks
headed by JPMorgan Chase Bank, N.A., whereby the Fund was permitted to borrow
for the temporary funding of shareholder redemptions or for other temporary or
emergency purposes. The credit facility agreement, which was a collective
agreement between the Fund and certain other RiverSource funds, severally and
not jointly, permitted collective borrowings up to $500 million. Interest was
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 matured no later
than 60 days after the date of borrowing. The Fund also paid a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.06% per annum.
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 45
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
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 violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise
Financial, Inc., acquired J. & W. Seligman & Co., Inc. (Seligman). In late 2003,
Seligman conducted an extensive internal review concerning mutual fund trading
practices. Seligman's review, which covered the period 2001-2003, noted one
arrangement that permitted frequent trading in certain open-end registered
investment companies managed by Seligman (the Seligman Funds);
- --------------------------------------------------------------------------------
46 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
this arrangement was in the process of being closed down by Seligman before
September 2003. Seligman identified three other arrangements that permitted
frequent trading, all of which had been terminated by September 2002. In January
2004, Seligman, on a voluntary basis, publicly disclosed these four arrangements
to its clients and to shareholders of the Seligman Funds. Seligman also provided
information concerning mutual fund trading practices to the SEC and the Office
of the Attorney General of the State of New York (NYAG). In September 2005, the
New York staff of the SEC indicated that it was considering recommending to the
Commissioners of the SEC the instituting of a formal action against Seligman and
the distributor of the Seligman Funds, Seligman Advisors, Inc. (which is now
known as RiverSource Fund Distributors, Inc.), relating to frequent trading in
the Seligman Funds. Seligman responded to the staff in October 2005 that it
believed that any action would be both inappropriate and unnecessary, especially
in light of the fact that Seligman had previously resolved the underlying issue
with the Independent Directors of the Seligman Funds and made recompense to the
affected Seligman Funds.
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc., Seligman Data Corp. and Brian
T. Zino (collectively, the Seligman Parties), alleging, in substance, that the
Seligman Parties permitted various persons to engage in frequent trading and, as
a result, the prospectus disclosure used by the registered investment companies
then managed by Seligman is and has been misleading. The NYAG included other
related claims and also claimed that the fees charged by Seligman to the
Seligman Funds were excessive. On March 13, 2009, without admitting or denying
any violations of law or wrongdoing, the Seligman Parties entered into a
stipulation of settlement with the NYAG and settled the claims made by the NYAG.
Under the terms of the settlement, Seligman will pay $11.3 million to four
Seligman Funds. This settlement resolved all outstanding matters between the
Seligman Parties and the NYAG. In addition to the foregoing matter, the New York
staff of the SEC indicated in September 2005 that it was considering
recommending to the Commissioners of the SEC the instituting of a formal action
against Seligman and Seligman Advisors, Inc. relating to frequent trading in the
Seligman Funds. Seligman responded to the staff in October 2005 that it believed
that any action would be both inappropriate and unnecessary, especially in light
of the fact that Seligman had previously resolved the underlying issue with the
Independent Directors of the Seligman Funds and made recompense to the affected
Seligman Funds. There have been no further developments with the SEC on this
matter.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine
- --------------------------------------------------------------------------------
RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 SEMIANNUAL REPORT 47
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
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.
- --------------------------------------------------------------------------------
48 RIVERSOURCE DISCIPLINED EQUITY FUND -- 2009 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 EQUITY FUND -- 2009 SEMIANNUAL REPORT 49
RIVERSOURCE DISCIPLINED EQUITY FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. RiverSource(R) mutual funds are
distributed by RiverSource Distributors, Inc., and
RiverSource Fund Distributors, Inc., Members FINRA, and
managed by RiverSource Investments, LLC. RiverSource is part
of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2009 RiverSource Investments, LLC. S-6274 G (4/09)
</Table>
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
GROWTH FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2009
RIVERSOURCE GROWTH FUND SEEKS TO PROVIDE SHAREHOLDERS
WITH LONG-TERM CAPITAL GROWTH.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 2
Fund Expenses Example.............. 8
Portfolio of Investments........... 11
Statement of Assets and
Liabilities...................... 16
Statement of Operations............ 18
Statements of Changes in Net
Assets........................... 20
Financial Highlights............... 22
Notes to Financial Statements...... 31
Proxy Voting....................... 49
</Table>
(DALBAR LOGO)
The RiverSource mutual fund shareholder reports have
been awarded the Communications Seal from Dalbar Inc.,
an independent financial services research firm. The
Seal recognizes communications demonstrating a level
of excellence in the industry.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> RiverSource Growth Fund (the Fund) Class A shares declined 38.02% (excluding
sales charge) for the semiannual period ended Jan. 31, 2009.
> The Fund underperformed its benchmark, the Russell 1000(R) Growth Index, which
fell 34.31%, and its peer group as represented by the Lipper Large-Cap Growth
Funds Index, which declined 36.79% for the same period.
ANNUALIZED TOTAL RETURNS (for period ended Jan. 31, 2009)
- --------------------------------------------------------------------------------
<Table>
<Caption>
6 months* 1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------
RiverSource Growth Fund
Class A (excluding
sales charge) -38.02% -44.47% -16.46% -6.98% -7.61%
- ------------------------------------------------------------------------
Russell 1000 Growth
Index (unmanaged)(1) -34.31% -36.44% -11.11% -4.76% -5.29%
- ------------------------------------------------------------------------
Lipper Large-Cap Growth
Funds Index(2) -36.79% -39.22% -13.32% -5.37% -5.86%
- ------------------------------------------------------------------------
</Table>
* Not annualized.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
- --------------------------------------------------------------------------------
2 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses. See the Average Annual Total Returns table for performance of other
share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
(1) The Russell 1000 Growth Index, an unmanaged index, measures the performance
of those stocks in the Russell 1000 Index with higher price-to-book ratios
and higher forecasted growth values. The index reflects reinvestment of all
distributions and changes in market prices.
(2) The Lipper Large-Cap Growth Funds Index includes the 30 largest large-cap
growth funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT JAN. 31, 2009
SINCE
Without sales charge 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION**
Class A (inception
3/1/72) -38.02% -44.47% -16.46% -6.98% -7.61% N/A
- -------------------------------------------------------------------------------------
Class B (inception
3/20/95) -38.26% -44.91% -17.11% -7.70% -8.33% N/A
- -------------------------------------------------------------------------------------
Class C (inception
6/26/00) -38.24% -44.88% -17.09% -7.68% N/A -12.75%
- -------------------------------------------------------------------------------------
Class I (inception
3/4/04) -37.82% -44.15% -16.05% N/A N/A -7.15%
- -------------------------------------------------------------------------------------
Class R2 (inception
12/11/06) -37.99% -44.43% N/A N/A N/A -24.98%
- -------------------------------------------------------------------------------------
Class R3 (inception
12/11/06) -37.92% -44.28% N/A N/A N/A -24.80%
- -------------------------------------------------------------------------------------
Class R4 (inception
3/20/95) -37.92% -44.28% -16.25% -6.77% -7.43% N/A
- -------------------------------------------------------------------------------------
Class R5 (inception
12/11/06) -37.85% -44.20% N/A N/A N/A -24.61%
- -------------------------------------------------------------------------------------
Class W (inception
12/1/06) -37.97% -44.43% N/A N/A N/A -24.26%
- -------------------------------------------------------------------------------------
With sales charge
Class A (inception
3/1/72) -41.59% -47.66% -18.09% -8.07% -8.08% N/A
- -------------------------------------------------------------------------------------
Class B (inception
3/20/95) -41.23% -47.56% -18.18% -8.05% -8.33% N/A
- -------------------------------------------------------------------------------------
Class C (inception
6/26/00) -38.83% -45.41% -17.09% -7.68% N/A -12.75%
- -------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
4 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT DEC. 31, 2008
SINCE
Without sales charge 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION**
Class A (inception
3/1/72) -34.54% -44.59% -14.18% -5.75% -6.17% N/A
- -------------------------------------------------------------------------------------
Class B (inception
3/20/95) -34.79% -45.01% -14.84% -6.48% -6.89% N/A
- -------------------------------------------------------------------------------------
Class C (inception
6/26/00) -34.79% -45.01% -14.82% -6.47% N/A -12.24%
- -------------------------------------------------------------------------------------
Class I (inception
3/4/04) -34.34% -44.28% -13.76% N/A N/A -6.10%
- -------------------------------------------------------------------------------------
Class R2 (inception
12/11/06) -34.54% -44.57% N/A N/A N/A -23.63%
- -------------------------------------------------------------------------------------
Class R3 (inception
12/11/06) -34.44% -44.44% N/A N/A N/A -23.44%
- -------------------------------------------------------------------------------------
Class R4 (inception
3/20/95) -34.44% -44.42% -13.97% -5.54% -5.99% N/A
- -------------------------------------------------------------------------------------
Class R5 (inception
12/11/06) -34.38% -44.35% N/A N/A N/A -23.26%
- -------------------------------------------------------------------------------------
Class W (inception
12/1/06) -34.50% -44.57% N/A N/A N/A -22.89%
- -------------------------------------------------------------------------------------
With sales charge
Class A (inception
3/1/72) -38.30% -47.77% -15.86% -6.86% -6.65% N/A
- -------------------------------------------------------------------------------------
Class B (inception
3/20/95) -37.92% -47.65% -15.94% -6.84% -6.89% N/A
- -------------------------------------------------------------------------------------
Class C (inception
6/26/00) -35.41% -45.54% -14.82% -6.47% N/A -12.24%
- -------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum sales charge of 5.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I, Class R2, Class R3, Class R4, Class R5 and Class W shares.
Class I, Class R2, Class R3, Class R4 and Class R5 are available to
institutional investors only. Class W shares are offered through qualifying
discretionary accounts.
*Not annualized.
**For classes with less than 10 years performance.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 5
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
STYLE MATRIX
- --------------------------------------------------------------------------------
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund is designed to
generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
ANNUAL OPERATING EXPENSE RATIO
(as of the current prospectus)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Net fund
and acquired
Total fund fund fees
expenses and expenses(a)
- --------------------------------------------
Class A 1.00% 1.04%
- --------------------------------------------
Class B 1.76% 1.80%
- --------------------------------------------
Class C 1.76% 1.80%
- --------------------------------------------
Class I 0.54% 0.58%
- --------------------------------------------
Class R2 1.36% 1.40%
- --------------------------------------------
Class R3 1.12% 1.16%
- --------------------------------------------
Class R4 0.84% 0.88%
- --------------------------------------------
Class R5 0.61% 0.65%
- --------------------------------------------
Class W 1.00% 1.04%
- --------------------------------------------
</Table>
(a) In addition to the Fund's total annual operating expenses that the Fund
bears directly, the Fund's shareholders indirectly bear the expenses of
acquired funds in which the Fund invests. The Fund's "Acquired fund fees and
expenses," based on its investment in the acquired funds, was 0.04% for the
year ended July 31, 2008.
- --------------------------------------------------------------------------------
6 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
SECTOR DIVERSIFICATION(1) (at Jan. 31, 2009; % of portfolio assets)
- ---------------------------------------------------------------------
<Table>
Consumer Discretionary 6.3%
- ------------------------------------------------
Consumer Staples 12.6%
- ------------------------------------------------
Energy 7.3%
- ------------------------------------------------
Financials 4.1%
- ------------------------------------------------
Health Care 17.3%
- ------------------------------------------------
Industrials 7.5%
- ------------------------------------------------
Information Technology 26.8%
- ------------------------------------------------
Materials 4.6%
- ------------------------------------------------
Telecommunication Services 0.7%
- ------------------------------------------------
Utilities 0.5%
- ------------------------------------------------
Other(2) 12.3%
- ------------------------------------------------
</Table>
(1) Sectors can be comprised of several industries. Please refer to the section
entitled "Portfolio of Investments" for a complete listing. No single
industry exceeds 25% of portfolio assets.
(2) Cash & Cash Equivalents. Of the 12.3%, 9.3% is due to security lending
activity and 3.0% is the Fund's cash equivalent position.
The sectors identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
TOP TEN HOLDINGS (at Jan. 31, 2009; % of portfolio assets)
- ---------------------------------------------------------------------
<Table>
CVS Caremark 3.5%
- ------------------------------------------------
IBM 3.3%
- ------------------------------------------------
Hewlett-Packard 3.1%
- ------------------------------------------------
Microsoft 3.0%
- ------------------------------------------------
Wal-Mart Stores 2.9%
- ------------------------------------------------
Abbott Laboratories 2.5%
- ------------------------------------------------
Barrick Gold 2.1%
- ------------------------------------------------
Boeing 2.1%
- ------------------------------------------------
QUALCOMM 2.1%
- ------------------------------------------------
Transocean 2.0%
- ------------------------------------------------
</Table>
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 7
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 expense ratio of each of the acquired funds as of the acquired fund's
most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended Jan. 31, 2009.
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.
- --------------------------------------------------------------------------------
8 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
DIRECT AND
DIRECT INDIRECT
BEGINNING ENDING EXPENSES EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING PAID DURING
AUG. 1, 2008 JAN. 31, 2009 THE PERIOD(A) THE PERIOD(B)
- ------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 619.80 $4.51 $4.63
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,019.50 $5.62 $5.77
- ------------------------------------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 617.40 $7.62 $7.74
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,015.64 $9.50 $9.65
- ------------------------------------------------------------------------------------------
Class C
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 617.60 $7.58 $7.70
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,015.69 $9.45 $9.60
- ------------------------------------------------------------------------------------------
Class I
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 621.80 $2.15 $2.28
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,022.41 $2.69 $2.84
- ------------------------------------------------------------------------------------------
Class R2
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 620.10 $5.56 $5.69
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.20 $6.93 $7.08
- ------------------------------------------------------------------------------------------
Class R3
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 620.80 $4.55 $4.67
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,019.45 $5.67 $5.82
- ------------------------------------------------------------------------------------------
Class R4
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 620.80 $3.21 $3.33
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,021.11 $4.00 $4.15
- ------------------------------------------------------------------------------------------
Class R5
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 621.50 $2.48 $2.60
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,022.01 $3.09 $3.24
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 9
FUND EXPENSES EXAMPLE (continued) ---------------------------------------------
<Table>
<Caption>
DIRECT AND
DIRECT INDIRECT
BEGINNING ENDING EXPENSES EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING PAID DURING
AUG. 1, 2008 JAN. 31, 2009 THE PERIOD(A) THE PERIOD(B)
- ------------------------------------------------------------------------------------------
Class W
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 620.30 $4.14 $4.26
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,019.95 $5.16 $5.32
- ------------------------------------------------------------------------------------------
</Table>
ANNUALIZED EXPENSE RATIOS
<Table>
<Caption>
FUND'S ACQUIRED FUND
ANNUALIZED FEES AND NET FUND
EXPENSE RATIO EXPENSES EXPENSES
- -----------------------------------------------------------------------------
Class A 1.11% .03% 1.14%
- -----------------------------------------------------------------------------
Class B 1.88% .03% 1.91%
- -----------------------------------------------------------------------------
Class C 1.87% .03% 1.90%
- -----------------------------------------------------------------------------
Class I .53% .03% .56%
- -----------------------------------------------------------------------------
Class R2 1.37% .03% 1.40%
- -----------------------------------------------------------------------------
Class R3 1.12% .03% 1.15%
- -----------------------------------------------------------------------------
Class R4 .79% .03% .82%
- -----------------------------------------------------------------------------
Class R5 .61% .03% .64%
- -----------------------------------------------------------------------------
Class W 1.02% .03% 1.05%
- -----------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the Fund's annualized expense ratio for each class,
multiplied by the average account value over the period, multiplied by
183/365 (to reflect the one-half year period).
(b) Expenses are equal to the Fund's annualized expense ratio for each class
plus the acquired fund fees and expenses, multiplied by the average account
value over the period, multiplied by 183/365 (to reflect the one-half year
period).
(c) Based on the actual return for the six months ended Jan. 31, 2009: -38.02%
for Class A, -38.26% for Class B, -38.24% for Class C, -37.82% for Class I,
-37.99% for Class R2, -37.92% for Class R3, -37.92% for Class R4, -37.85%
for Class R5 and -37.97% for Class W.
- --------------------------------------------------------------------------------
10 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
JAN. 31, 2009 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (98.2%)
ISSUER SHARES VALUE(a)
AEROSPACE & DEFENSE (4.1%)
Boeing 611,173 $25,858,730
Honeywell Intl 222,600 7,303,506
Lockheed Martin 152,000(e) 12,470,080
---------------
Total 45,632,316
- -------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS (0.6%)
United Parcel Service Cl B 145,600 6,186,544
- -------------------------------------------------------------------------------------
AIRLINES (1.2%)
Delta Air Lines 1,939,900(b) 13,385,310
- -------------------------------------------------------------------------------------
BEVERAGES (2.1%)
PepsiCo 474,364 23,827,304
- -------------------------------------------------------------------------------------
BIOTECHNOLOGY (6.6%)
Amgen 107,360(b,e) 5,888,696
Biogen Idec 209,000(b,e) 10,167,850
Celgene 135,300(b) 7,164,135
Genentech 281,698(b) 22,885,145
Genzyme 164,792(b,e) 11,357,465
Gilead Sciences 313,965(b,e) 15,940,003
---------------
Total 73,403,294
- -------------------------------------------------------------------------------------
CAPITAL MARKETS (1.1%)
BlackRock 114,600(e) 12,468,480
Lehman Brothers Holdings 372,416(g) 15,548
---------------
Total 12,484,028
- -------------------------------------------------------------------------------------
CHEMICALS (1.9%)
Monsanto 154,228(e) 11,730,582
Potash Corp of Saskatchewan 126,800(c) 9,492,248
---------------
Total 21,222,830
- -------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (5.4%)
Cisco Systems 1,623,172(b,e) 24,298,885
Nokia ADR 787,834(c) 9,666,723
QUALCOMM 743,189(e) 25,677,180
---------------
Total 59,642,788
- -------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (9.1%)
Apple 236,159(b) 21,285,011
Hewlett-Packard 1,098,284 38,165,369
IBM 453,900 41,599,934
---------------
Total 101,050,314
- -------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.6%)
Foster Wheeler 143,600(b) 2,867,692
KBR 271,297(e) 3,841,566
---------------
Total 6,709,258
- -------------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (1.0%)
Apollo Group Cl A 134,300(b) 10,940,078
- -------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.2%)
Apollo Management LP 1,671,300(d,f) 2,506,950
- -------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.8%)
Qwest Communications Intl 2,894,535(e) 9,320,403
- -------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (5.0%)
Schlumberger 544,335 22,214,311
Transocean 467,600(b,c) 25,540,312
Weatherford Intl 668,100(b) 7,369,143
---------------
Total 55,123,766
- -------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (7.1%)
CVS Caremark 1,599,163(e) 42,985,500
Wal-Mart Stores 774,100 36,475,592
---------------
Total 79,461,092
- -------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (1.8%)
Baxter Intl 113,372 6,649,268
Becton Dickinson & Co 78,100 5,675,527
Boston Scientific 858,891(b) 7,618,363
---------------
Total 19,943,158
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 11
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
HEALTH CARE PROVIDERS & SERVICES (3.6%)
Aetna 452,900 $14,039,900
Medco Health Solutions 321,818(b,e) 14,459,283
UnitedHealth Group 423,140(e) 11,987,556
---------------
Total 40,486,739
- -------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (2.6%)
Colgate-Palmolive 100,338 6,525,984
Procter & Gamble 402,324 21,926,658
---------------
Total 28,452,642
- -------------------------------------------------------------------------------------
INSURANCE (3.2%)
ACE 275,300(c) 12,019,598
AFLAC 1,030,241 23,911,894
---------------
Total 35,931,492
- -------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (1.9%)
Google Cl A 61,709(b) 20,890,348
- -------------------------------------------------------------------------------------
IT SERVICES (0.7%)
MasterCard Cl A 59,864 8,128,334
- -------------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES (0.6%)
Thermo Fisher Scientific 180,900(b,e) 6,499,737
- -------------------------------------------------------------------------------------
MACHINERY (0.6%)
Deere & Co 187,800 6,524,172
- -------------------------------------------------------------------------------------
MEDIA (5.1%)
Comcast Cl A 1,384,436 20,281,987
Time Warner Cable Cl A 867,876(b) 16,168,530
Virgin Media 4,358,337(f) 19,786,850
---------------
Total 56,237,367
- -------------------------------------------------------------------------------------
METALS & MINING (3.3%)
Barrick Gold 704,800(c) 26,422,952
Lihir Gold 3,330,123(b,c) 6,604,297
Newmont Mining 88,006 3,500,879
---------------
Total 36,528,128
- -------------------------------------------------------------------------------------
MULTI-UTILITIES (0.5%)
Public Service Enterprise Group 181,900 5,742,583
- -------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (3.2%)
Chesapeake Energy 546,900 8,646,489
Chevron 81,300 5,733,276
Devon Energy 22,762 1,402,139
Kinder Morgan Management LLC --(b) 19
Noble Energy 405,100 19,821,543
---------------
Total 35,603,466
- -------------------------------------------------------------------------------------
PHARMACEUTICALS (6.8%)
Abbott Laboratories 572,700 31,750,487
Bristol-Myers Squibb 778,004 16,657,066
Novo Nordisk ADR 108,200(c) 5,748,666
Pfizer 453,785 6,616,185
Teva Pharmaceutical Inds ADR 207,600(c,e) 8,605,020
Wyeth 143,300 6,157,601
---------------
Total 75,535,025
- -------------------------------------------------------------------------------------
ROAD & RAIL (1.3%)
CSX 114,400 3,313,024
Union Pacific 262,400(e) 11,490,496
---------------
Total 14,803,520
- -------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (4.3%)
Intel 1,204,159 15,533,651
Marvell Technology Group 2,834,025(b,c) 20,660,042
Microsemi 1,374,100(b) 11,542,440
Spansion Cl A 2,243,321(b) 150,303
---------------
Total 47,886,436
- -------------------------------------------------------------------------------------
SOFTWARE (8.7%)
Adobe Systems 418,500(b) 8,081,235
Macrovision Solutions 1,118,500(b,e) 14,663,535
McAfee 374,800(b,e) 11,427,652
Microsoft 2,161,400 36,959,939
Oracle 1,502,320(b,e) 25,284,046
---------------
Total 96,416,407
- -------------------------------------------------------------------------------------
SPECIALTY RETAIL (1.0%)
Urban Outfitters 712,800(b,e) 11,105,424
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
TOBACCO (2.2%)
Philip Morris Intl 660,971 $24,555,073
- -------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $1,309,882,536) $1,092,166,326
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (3.4%)
SHARES VALUE(a)
RiverSource Short-Term
Cash Fund, 0.47% 37,995,723(h) $37,995,723
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $37,995,723) $37,995,723
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (10.4%)
SHARES VALUE(a)
CASH COLLATERAL REINVESTMENT FUND
JPMorgan Prime Money Market Fund 115,771,102 $115,771,102
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $115,771,102) $115,771,102
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $1,463,649,361)(i) $1,245,933,151
=====================================================================================
</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, 2009, the
value of foreign securities represented 11.2% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
may be determined to be liquid under guidelines established by the Fund's
Board of Directors. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At Jan. 31,
2009, the value of these securities amounted to $2,506,950 or 0.2% of net
assets.
(e) At Jan. 31, 2009, security was partially or fully on loan. See Note 5 to
the financial statements.
(f) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Jan. 31, 2009, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
-----------------------------------------------------------------------
Apollo Management LP* 08-02-07 thru 03-07-08 $37,083,962
Virgin Media 01-09-08 thru 08-06-08 58,291,567
</Table>
* Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended.
(g) This position is in bankruptcy.
(h) Affiliated Money Market Fund -- See Note 7 to the financial statements. The
rate shown is the seven-day current annualized yield at Jan. 31, 2009.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 13
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(i) At Jan. 31, 2009, the cost of securities for federal income tax purposes
was approximately $1,463,649,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $32,140,000
Unrealized depreciation (249,856,000)
------------------------------------------------------------
Net unrealized depreciation $(217,716,000)
------------------------------------------------------------
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
- --------------------------------------------------------------------------------
14 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
FAIR VALUE MEASUREMENTS
Statement of Financial Accounting Standards No. 157 (SFAS 157) seeks to
implement more uniform reporting relating to the fair valuation of securities
for financial statement purposes. Mutual funds are required to implement the
requirements of this standard for fiscal years beginning after Nov. 15, 2007.
While uniformity of presentation is the objective of the standard, it is likely
that there may be a range of practices utilized and it may be some period of
time before industry practices become more uniform. For this reason care should
be exercised in interpreting this information and/or using it for comparison
with other mutual funds.
Various inputs are used in determining the value of the Fund's investments.
These inputs are summarized in the three broad levels listed below:
- Level 1 -- quoted prices in active markets for identical securities
- Level 2 -- other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit risks,
etc.)
- Level 3 -- significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
Observable inputs are those based on market data obtained from sources
independent of the fund, and unobservable inputs reflect the fund's own
assumptions based on the best information available. The input levels are not
necessarily an indication of the risk or liquidity associated with investments
at that level.
The following table is a summary of the inputs used to value the Fund's
investments as of Jan. 31, 2009:
<Table>
<Caption>
FAIR VALUE AT JAN. 31, 2009
------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- -----------------------------------------------------------------------------------
Investments in
securities $1,239,328,854 $6,604,297 $-- $1,245,933,151
</Table>
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 15
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $1,309,882,536) $ 1,092,166,326
Affiliated money market fund (identified cost $37,995,723) 37,995,723
Investments of cash collateral received for securities on loan
(identified cost $115,771,102) 115,771,102
- ----------------------------------------------------------------------------------
Total investments in securities (identified cost $1,463,649,361) 1,245,933,151
Capital shares receivable 214,374
Dividends and accrued interest receivable 1,895,416
Receivable for investment securities sold 10,018,948
- ----------------------------------------------------------------------------------
Total assets 1,258,061,889
- ----------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 1,425,890
Payable for investment securities purchased 28,161,550
Payable upon return of securities loaned 115,771,102
Accrued investment management services fees 18,636
Accrued distribution fees 8,534
Accrued transfer agency fees 10,933
Accrued administrative services fees 1,766
Accrued plan administration services fees 170
Other accrued expenses 348,552
Collateral and deposits payable 90,000
- ----------------------------------------------------------------------------------
Total liabilities 145,837,133
- ----------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 1,112,224,756
- ----------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 698,363
Additional paid-in capital 2,557,304,666
Excess of distributions over net investment income (55,325,800)
Accumulated net realized gain (loss) (1,172,727,754)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (217,724,719)
- ----------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $ 1,112,224,756
- ----------------------------------------------------------------------------------
*Including securities on loan, at value $ 110,196,246
- ----------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
16 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $799,574,882 49,971,753 $16.00(1)
Class B $ 97,613,583 6,639,181 $14.70
Class C $ 6,420,846 438,965 $14.63
Class I $184,337,943 11,297,665 $16.32
Class R2 $ 2,514 155 $16.22
Class R3 $ 2,511 155 $16.20
Class R4 $ 24,267,421 1,488,091 $16.31
Class R5 $ 2,510 155 $16.19
Class W $ 2,546 157 $16.22
- -----------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $16.98. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 17
STATEMENT OF OPERATIONS -------------------------------------------------------
SIX MONTHS ENDED JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $ 15,191,219
Interest 6,031
Income distributions from affiliated money market fund 480,885
Fee income from securities lending 57,785
Less foreign taxes withheld (170,302)
- --------------------------------------------------------------------------------
Total income 15,565,618
- --------------------------------------------------------------------------------
Expenses:
Investment management services fees 3,226,962
Distribution fees
Class A 1,408,357
Class B 674,834
Class C 45,484
Class R2 8
Class R3 4
Class W 4
Transfer agency fees
Class A 1,865,684
Class B 239,476
Class C 15,530
Class R2 1
Class R3 1
Class R4 8,553
Class R5 1
Class W 3
Administrative services fees 427,537
Plan administration services fees
Class R2 4
Class R3 4
Class R4 42,765
Compensation of board members 24,334
Custodian fees 127,180
Printing and postage 245,664
Registration fees 31,120
Professional fees 28,625
Other 17,807
- --------------------------------------------------------------------------------
Total expenses 8,429,942
Expenses waived/reimbursed by the Investment Manager and its
affiliates (6,569)
Earnings and bank fee credits on cash balances (8,220)
- --------------------------------------------------------------------------------
Total net expenses 8,415,153
- --------------------------------------------------------------------------------
Investment income (loss) -- net 7,150,465
- --------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
18 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $(943,397,408)
Foreign currency transactions 60,217,186
Options contracts written (11,307,044)
- --------------------------------------------------------------------------------
Net realized gain (loss) on investments (894,487,266)
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies 114,973,208
- --------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (779,514,058)
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $(772,363,593)
- --------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 19
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2009 JULY 31, 2008
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 7,150,465 $ 22,991,812
Net realized gain (loss) on investments (894,487,266) 18,445,072
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies 114,973,208 (492,536,692)
- -----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (772,363,593) (451,099,808)
- -----------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (44,910,862) (18,613,899)
Class B (4,161,278) --
Class C (290,906) (35,082)
Class I (13,320,253) (3,250,974)
Class R2 (146) (34)
Class R3 (156) (46)
Class R4 (1,366,434) (1,320,924)
Class R5 (164) (63)
Class W (149) (42)
- -----------------------------------------------------------------------------------------------
Total distributions (64,050,348) (23,221,064)
- -----------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
20 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2009 JULY 31, 2008
(UNAUDITED)
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 28,146,145 $ 158,922,224
Class B shares 3,608,809 21,028,069
Class C shares 670,291 2,204,302
Class I shares 25,582,473 38,802,667
Class R4 shares 6,042,047 25,787,191
Fund merger (Note 10)
Class A shares -- 18,206,825
Class B shares -- 5,395,871
Class C shares -- 739,026
Class I shares -- 161,620,525
Class R4 shares -- 39,465
Reinvestment of distributions at net asset value
Class A shares 43,556,566 18,132,589
Class B shares 4,110,479 --
Class C shares 285,490 34,035
Class I shares 13,319,983 3,250,578
Class R4 shares 1,366,091 1,320,795
Payments for redemptions
Class A shares (258,802,415) (642,466,071)
Class B shares (27,961,260) (151,381,443)
Class C shares (2,818,226) (7,113,707)
Class I shares (42,132,853) (132,345,429)
Class R4 shares (21,650,042) (99,292,710)
- -----------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (226,676,422) (577,115,198)
- -----------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (1,063,090,363) (1,051,436,070)
Net assets at beginning of period 2,175,315,119 3,226,751,189
- -----------------------------------------------------------------------------------------------
Net assets at end of period $ 1,112,224,756 $ 2,175,315,119
- -----------------------------------------------------------------------------------------------
Undistributed (excess of distributions over)
net investment income $ (55,325,800) $ 1,574,083
- -----------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 21
FINANCIAL HIGHLIGHTS ----------------------------------------------------------
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(h) 2008 2007 2006 2005
Net asset value, beginning of period $27.22 $32.73 $28.61 $28.34 $23.73
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .09(b) .26(b) .23(b) .18 .04
Net gains (losses) (both realized and
unrealized) (10.40) (5.50) 4.11 .10 4.57
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (10.31) (5.24) 4.34 .28 4.61
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.91) (.27) (.22) (.01) --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.00 $27.22 $32.73 $28.61 $28.34
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $800 $1,591 $2,393 $2,351 $2,101
- --------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 1.11%(e) 1.00% 1.19% 1.14% 1.19%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) .88%(e) .84% .71% .72% .16%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 112% 98% 134% 136%
- --------------------------------------------------------------------------------------------------------------
Total return(f) (38.02%)(g) (16.14%) 15.20% .98% 19.43%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
22 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(h) 2008 2007 2006 2005
Net asset value, beginning of period $24.79 $29.79 $26.06 $26.01 $21.95
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(b) .02(b) (.02)(b) (.05) (.16)
Net gains (losses) (both realized and
unrealized) (9.47) (5.02) 3.75 .10 4.22
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (9.46) (5.00) 3.73 .05 4.06
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.63) -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.70 $24.79 $29.79 $26.06 $26.01
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $98 $189 $369 $462 $578
- --------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 1.88%(e) 1.76% 1.96% 1.91% 1.97%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) .11%(e) .08% (.06%) (.06%) (.62%)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 112% 98% 134% 136%
- --------------------------------------------------------------------------------------------------------------
Total return(f) (38.26%)(g) (16.78%) 14.31% .19% 18.50%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 23
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(h) 2008 2007 2006 2005
Net asset value, beginning of period $24.73 $29.77 $26.07 $26.01 $21.95
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(b) .02(b) (.01)(b) (.04) (.16)
Net gains (losses) (both realized and
unrealized) (9.44) (5.01) 3.74 .10 4.22
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (9.43) (4.99) 3.73 .06 4.06
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.67) (.05) (.03) -- --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.63 $24.73 $29.77 $26.07 $26.01
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $6 $13 $20 $19 $15
- --------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 1.87%(e) 1.76% 1.95% 1.91% 1.97%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) .12%(e) .08% (.03%) (.03%) (.62%)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 112% 98% 134% 136%
- --------------------------------------------------------------------------------------------------------------
Total return(f) (38.24%)(g) (16.78%) 14.31% .23% 18.50%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
24 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(g) 2008 2007 2006 2005
Net asset value, beginning of period $27.90 $33.54 $29.31 $28.93 $24.10
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .16(b) .44(b) .40(b) .32 .12
Net gains (losses) (both realized and
unrealized) (10.67) (5.66) 4.19 .10 4.71
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (10.51) (5.22) 4.59 .42 4.83
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (1.07) (.42) (.36) (.04) --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.32 $27.90 $33.54 $29.31 $28.93
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $184 $326 $298 $256 $147
- --------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) .53%(e) .54% .74% .68% .75%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.47%(e) 1.40% 1.21% 1.22% .55%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 112% 98% 134% 136%
- --------------------------------------------------------------------------------------------------------------
Total return (37.82%)(f) (15.74%) 15.70% 1.44% 20.04%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Not annualized.
(g) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 25
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007(b)
Net asset value, beginning of period $27.61 $33.13 $32.23
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .09 .24 .13
Net gains (losses) (both realized and
unrealized) (10.54) (5.54) 1.12
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (10.45) (5.30) 1.25
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.94) (.22) (.35)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.22 $27.61 $33.13
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.37%(f) 1.36% 1.50%(f)
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.12%(f) 1.11% 1.50%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) .87%(f) .76% .63%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 112% 98%
- --------------------------------------------------------------------------------------------------------------
Total return (37.99%)(i) (16.11%) 3.93%(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, if any. Expense
ratio is before reduction for 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/reimburse
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, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of net average
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
26 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007(b)
Net asset value, beginning of period $27.65 $33.18 $32.23
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .12 .31 .18
Net gains (losses) (both realized and
unrealized) (10.56) (5.54) 1.13
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (10.44) (5.23) 1.31
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (1.01) (.30) (.36)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.20 $27.65 $33.18
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.12%(f) 1.12% 1.27%(f)
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .87%(f) .86% 1.27%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.12%(f) 1.00% .87%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 112% 98%
- --------------------------------------------------------------------------------------------------------------
Total return (37.92%)(i) (15.91%) 4.09%(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, if any. Expense
ratio is before reduction for 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/reimburse
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, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 27
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(i) 2008 2007 2006 2005
Net asset value, beginning of period $27.78 $33.34 $29.13 $28.81 $24.07
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .13(b) .35(b) .25(b) .24 .09
Net gains (losses) (both realized and
unrealized) (10.62) (5.58) 4.22 .10 4.65
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (10.49) (5.23) 4.47 .34 4.74
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.98) (.33) (.26) (.02) --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.31 $27.78 $33.34 $29.13 $28.81
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $24 $56 $146 $265 $304
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) .83%(e) .84% 1.03% .95% 1.02%
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) .79%(e) .66% 1.03% .95% 1.02%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.20%(e) 1.11% .79% .89% .34%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 112% 98% 134% 136%
- --------------------------------------------------------------------------------------------------------------
Total return (37.92%)(h) (15.85%) 15.39% 1.17% 19.69%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(h) Not annualized.
(i) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
28 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(h) 2008 2007(b)
Net asset value, beginning of period $27.68 $33.28 $32.23
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .15 .39 .29
Net gains (losses) (both realized and
unrealized) (10.58) (5.59) 1.12
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (10.43) (5.20) 1.41
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (1.06) (.40) (.36)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.19 $27.68 $33.28
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- --------------------------------------------------------------------------------------------------------------
Total expenses(d),(e) .61%(f) .61% .76%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.37%(f) 1.25% 1.38%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 112% 98%
- --------------------------------------------------------------------------------------------------------------
Total return (37.85%)(g) (15.80%) 4.41%(g)
- --------------------------------------------------------------------------------------------------------------
</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, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Not annualized.
(h) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 29
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(h) 2008 2007(b)
Net asset value, beginning of period $27.62 $33.21 $31.89
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .10 .27 .24
Net gains (losses) (both realized and
unrealized) (10.55) (5.59) 1.43
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (10.45) (5.32) 1.67
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.95) (.27) (.35)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.22 $27.62 $33.21
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- --------------------------------------------------------------------------------------------------------------
Total expenses(d),(e) 1.02%(f) 1.00% 1.17%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) .97%(f) .86% 1.09%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 90% 112% 98%
- --------------------------------------------------------------------------------------------------------------
Total return (37.97%)(g) (16.15%) 5.29%(g)
- --------------------------------------------------------------------------------------------------------------
</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, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Not annualized.
(h) Six months ended Jan. 31, 2009 (Unaudited)
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
30 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS TO JAN. 31, 2009)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Growth Fund (the Fund) is a series of RiverSource Large Cap Series,
Inc. and is registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company. RiverSource Large Cap
Series, Inc. has 10 billion authorized shares of capital stock that can be
allocated among the separate series as designated by the Board of Directors (the
Board). The Fund invests primarily in common stocks of U.S. and foreign
companies that appear to offer growth opportunities.
The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class
R4, Class R5 and Class W shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I, Class R2, Class R3, Class R4 and Class R5 shares are sold without a
front-end sales charge or CDSC and are 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, 2009, RiverSource Investments, LLC (RiverSource Investments or the
Investment Manager) and the RiverSource affiliated funds-of-funds owned 100% of
Class I shares and the Investment Manager owned 100% of Class R2, Class R3,
Class R5 and Class W shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 31
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
VALUATION OF SECURITIES
Effective Aug. 1, 2008, the Fund adopted 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. There was no impact to the
Fund's net assets or results of operations upon adoption. The fair valuation
measurements disclosure can be found following the Notes to Portfolio of
Investments.
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.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities (such as foreign securities)
that is not reflected in price quotations or valuations from other sources. A
fair value price is a good faith estimate of the value of a security at a given
point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the 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
- --------------------------------------------------------------------------------
32 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
Exchange. Swap transactions are valued through an authorized pricing service,
broker, or an internal model.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates; those maturing in 60 days or less are valued at amortized cost, which
approximates fair value.
ILLIQUID SECURITIES
At Jan. 31, 2009, investments in securities included issues that are illiquid
which the Fund currently limits to 15% of net assets, at market value, at the
time of purchase. The aggregate value of such securities at Jan. 31, 2009 was
$22,293,800 representing 0.20% of net assets. Certain illiquid securities may be
valued by management at fair value according to procedures approved, in good
faith, by the Board. According to Board guidelines, certain unregistered
securities are determined to be liquid and are not included within the 15%
limitation specified above. Assets are liquid if they can be sold or disposed of
in the ordinary course of business within seven days at approximately the value
at which the asset is valued by the Fund.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the Fund may buy and write options traded on any
U.S. or foreign exchange or in the over-the-counter market where completing the
obligation depends upon the credit standing of the other party. Cash collateral
may be collected by the Fund to secure certain over-the-counter options (OTC
options) trades. Cash collateral held by the Fund for such option trades must be
returned to the counterparty upon closure, exercise or expiration of the
contract. The Fund also may buy and sell put and call options and write covered
call options on portfolio securities as well as write cash-secured put options.
The risk in writing a call option is that the Fund gives up the opportunity for
profit if the market price of the security increases. The risk in writing a put
option is that the Fund may incur a loss if the market price of the security
decreases and the option is exercised. The risk in buying an option is that the
Fund pays a premium whether or not the option is exercised. The Fund also has
the additional risk of being unable to enter into a closing transaction if a
liquid secondary market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. Option
contracts, including OTC option contracts, with no readily available market
value are valued using quotations obtained from independent brokers as of the
close of the New York Stock Exchange. The Fund will realize a gain or loss when
the option
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 33
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
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. At Jan. 31, 2009, 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 and options on futures are valued daily based upon the last sale price
at the close of the market on the principal exchange on which they are traded.
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the contract is closed
or expires. At Jan. 31, 2009, the Fund had no outstanding futures contracts.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes.
The Fund may enter into forward foreign currency contracts for operational
purposes and to protect against adverse exchange rate fluctuation. The net U.S.
dollar value of foreign currency underlying all contractual commitments held by
the Fund and the resulting unrealized appreciation or depreciation are
determined using foreign currency exchange rates from an independent pricing
service. The Fund is subject to the credit risk that the counterparty will not
complete its
- --------------------------------------------------------------------------------
34 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
contract obligations. At Jan. 31, 2009, the Fund had no outstanding forward
foreign currency contracts.
TOTAL RETURN EQUITY SWAP TRANSACTIONS
The Fund may enter into swap agreements to gain exposure to the total return on
a specified security, basket of securities or security indexes during the
specified period, in return for periodic payments based on a fixed or variable
interest rate. Total return swap agreements may be used to obtain exposure to a
security or market without owning or taking physical custody of such security or
market. Under the terms of a total return equity swap agreement, payments made
by the Fund or the counterparty are based on the total return of a particular
reference asset or assets (such as an equity security, a combination of such
securities, or an index). That is, one party agrees to pay another party the
return on a stock, basket of stocks, or stock index in return for a specified
interest rate.
The notional amounts of swap contracts are not recorded in the financial
statements. Swap contracts are valued daily, and the change in value is recorded
as unrealized appreciation (depreciation) until the termination of the swap, at
which time realized gain (loss) is recorded. Payments received or made are
recorded as realized gains (losses).
Swap agreements may be subject to liquidity risk, which exists when a particular
swap is difficult to purchase or sell. It may not be possible for the Fund to
initiate a transaction or liquidate a position at an advantageous time or price,
which may result in significant losses. Total return swaps are subject to the
risk associated with the investment in the underlying securities and also the
risk of the counterparty not fulfilling its obligations under the agreement. At
Jan. 31, 2009, the Fund had no outstanding total return equity swap 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.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 35
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
Financial Accounting Standards Board (FASB) Interpretation 48 (FIN 48),
"Accounting for Uncertainty in Income Taxes," clarifies the accounting for
uncertainty in income taxes recognized in accordance with FASB Statement 109,
"Accounting for Income Taxes." FIN 48 provides guidance for how uncertain tax
positions should be recognized, measured, presented and disclosed in the
financial statements. 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 options contracts,
foreign currency transactions, recognition of unrealized appreciation
(depreciation) for certain derivative investments, investments in partnerships,
post-October losses and losses deferred due to wash sales. The character of
distributions made during the year from net investment income or net realized
gains may differ from their ultimate characterization for federal income tax
purposes. Also, due to the timing of dividend distributions, the fiscal year in
which amounts are distributed may differ from the year that the income or
realized gains (losses) were recorded by the Fund.
RECENT ACCOUNTING PRONOUNCEMENTS
The Fund has adopted FASB Staff Position No. 133-1 and FIN No. 45-4 (FSP FAS
133-1 and FIN 45-4), "Disclosures about Credit Derivatives and Certain
Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No.
45." The amendments to FSP FAS 133-1 and FIN 45-4 require enhanced disclosures
about a fund's derivatives and guarantees. Funds are required to provide
enhanced disclosures about (a) how and why a fund uses derivative instruments,
(b) how derivative instruments and related hedged items are accounted for under
SFAS 133 and its related interpretations, (c) how derivative instruments and
related hedged items affect a fund's financial position, financial performance,
and cash flows and (d) the current status of the payment/performance risk of the
credit derivative. The amendments to FSP FAS 133-1 and FIN 45-4 also require
additional disclosures about the current status of the payment/performance risk
of a guarantee. At Jan. 31, 2009, the Fund did not own nor was it a party to any
credit derivative contracts within the scope of these amendments.
In March 2008, the FASB issued Statement of Financial Accounting Standards No.
161 (SFAS 161), "Disclosures about Derivative Instruments and Hedging
Activities -- an amendment of FASB Statement No. 133," which requires enhanced
disclosures about a fund's derivative and hedging activities. SFAS 161
- --------------------------------------------------------------------------------
36 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
is effective for financial statements issued for fiscal years and interim
periods beginning after Nov. 15, 2008. As of Jan. 31, 2009, management does not
believe the adoption of SFAS 161 will impact the financial statement amounts;
however, additional footnote disclosures may be required about the use of
derivative instruments and hedging items.
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
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.60%
to 0.375% annually as the Fund's assets increase. The fee may be adjusted upward
or downward by a performance incentive adjustment determined monthly by
measuring the percentage difference over a rolling 12-month period between the
annualized performance of one Class A share of the Fund and the annualized
performance of the Lipper Large-Cap Growth Funds Index. In certain
circumstances, the Board may approve a change in the index. The maximum
adjustment is 0.12% per year. If the performance difference is less than 0.50%,
the adjustment will be zero. The adjustment decreased the management fee by
$1,379,213 for the six months ended Jan. 31, 2009. The management fee for the
six months ended Jan. 31, 2009 was 0.41% of the Fund's average daily net assets,
including the adjustment under the terms of the performance incentive
arrangement.
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.06% to 0.03% annually as the
Fund's assets increase. The fee for the six months ended Jan. 31, 2009 was 0.06%
of the Fund's average daily net assets.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 37
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended Jan.
31, 2009, other expenses paid to this company were $7,689.
COMPENSATION OF BOARD MEMBERS
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.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual account-based fee at a rate equal to $19.50 for Class A, $20.50
for Class B and $20.00 for Class C for this service. The Fund also pays the
Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's
average daily net assets attributable to Class R2, Class R3, Class R4 and Class
R5 shares 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.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
DISTRIBUTION FEES
The Fund has agreements with RiverSource Distributors, Inc. and RiverSource Fund
Distributors, Inc. (collectively, the Distributor) for distribution and
shareholder services. Under a Plan and Agreement of Distribution pursuant to
Rule 12b-1, the Fund pays a fee at an annual rate of up to 0.25% of the Fund's
average daily net assets attributable to Class A, Class R3 and Class W shares, a
fee at an annual rate of up to 0.50% of the Fund's average daily net assets
- --------------------------------------------------------------------------------
38 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
attributable to Class R2 shares and a fee at an annual rate of up to 1.00% of
the Fund's average daily net assets attributable to Class B and Class C shares.
For Class B and Class C shares, up to 0.75% of the fee is reimbursed for
distribution expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed expense") was approximately $4,680,000 and $113,000
for Class B and Class C shares, respectively. These amounts are based on the
most recent information available as of Jan. 31, 2009, and may be recovered from
future payments under the distribution plan or CDSC. To the extent the
unreimbursed expense has been fully recovered, the distribution fee is reduced.
SALES CHARGES
Sales charges received by the Distributor for distributing Fund shares were
$534,874 for Class A, $74,520 for Class B and $859 for Class C for the six
months ended Jan. 31, 2009.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the six months ended Jan. 31, 2009, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds*), including the adjustment under
the terms of a performance incentive arrangement, were as follows:
<Table>
Class R2............................................ 1.12%
Class R3............................................ 0.87
Class R4............................................ 0.79
</Table>
The waived/reimbursed fees and expenses for the transfer agency fees at the
class level were as follows:
<Table>
Class R4.......................................... $5,385
</Table>
The waived/reimbursed fees and expenses for the plan administration services
fees at the class level were as follows:
<Table>
Class R2........................................... $4
Class R3........................................... 4
Class R4........................................... 1,176
</Table>
The Investment Manager and its affiliates have contractually agreed to waive
certain fees and expenses until July 31, 2009, unless sooner terminated at the
discretion of the Board, such that net expenses (excluding fees and expenses of
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 39
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
acquired funds*), before giving effect to any performance incentive adjustment,
will not exceed the following percentage of the Fund's average daily net assets:
<Table>
Class R4............................................ 0.97%
</Table>
* In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in
which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and the Fund may own different proportions of
acquired funds at different times, the amount of fees and expenses incurred
indirectly by the Fund will vary.
EARNINGS AND BANK FEE CREDITS
During the six months ended Jan. 31, 2009, the Fund's transfer agency fees were
reduced by $8,220 as a result of bank fee credits from overnight cash balances.
CUSTODIAN FEES
Effective Dec. 15, 2008, the fund pays custodian fees to JPMorgan Chase Bank,
N.A. Prior to Dec. 15, 2008, the Fund paid custodian fees amounting to $58,493
to Ameriprise Trust Company, a subsidiary of Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $1,378,875,074 and $1,515,663,027, respectively, for the
six months ended Jan. 31, 2009. Realized gains and losses are determined on an
identified cost basis.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED JAN. 31, 2009
ISSUED FOR
FUND REINVESTED NET
SOLD MERGER DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------
Class A 1,419,288 N/A 2,608,177 (12,491,513) (8,464,048)
Class B 196,510 N/A 267,609 (1,456,937) (992,818)
Class C 36,589 N/A 18,684 (146,551) (91,278)
Class I 1,198,193 N/A 782,608 (2,380,645) (399,844)
Class R4 295,801 N/A 80,311 (901,291) (525,179)
- ----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
40 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED JULY 31, 2008
ISSUED FOR
REINVESTED NET
SOLD FUND MERGER DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------
Class A 5,325,900 647,067 561,728 (21,198,973) (14,664,278)
Class B 733,992 209,948 -- (5,712,960) (4,769,020)
Class C 78,462 28,823 1,155 (261,120) (152,680)
Class I 1,272,282 5,614,412 98,532 (4,180,720) 2,804,506
Class R4 815,040 1,376 40,170 (3,217,095) (2,360,509)
- ----------------------------------------------------------------------------------------
</Table>
5. LENDING OF PORTFOLIO SECURITIES
Effective Dec. 1, 2008, the Fund has entered into a Master Securities Lending
Agreement ("the Agreement") with JPMorgan Chase Bank, National Association
("JPMorgan"). The Agreement authorizes JPMorgan as lending agent to lend
securities to authorized borrowers on behalf of the Fund. Pursuant to the
Agreement, all loaned securities are initially collateralized in an amount
equivalent to 102% (for securities denominated in U.S. dollars) or 105% (for all
other securities) of the value of the loaned securities, including accrued
interest in the case of fixed income securities. Collateral is maintained over
the life of the loan thereafter in an amount not less than 100% of the market
value of loaned securities, as determined at the close of each business day,
except to the extent that a collateral shortfall is due to a diminution in the
market value of authorized investments in which cash collateral is invested. Any
additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Collateral is either in the form of cash or U.S. government securities. Cash
collateral received is invested by the lending agent on behalf of the Fund into
authorized investments pursuant to the Agreement. The investments made with the
cash collateral are listed on the Portfolio of Investments and the value of cash
collateral received at period end is disclosed on the Statement of Assets and
Liabilities along with the related obligation to return the collateral upon
return of the securities loaned. At Jan. 31, 2009, securities valued at
$110,196,246 were on loan secured by cash collateral of $115,771,102 invested in
short-term securities or cash equivalents.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Income of
$26,532 earned from securities lending from Dec. 1, 2008 through Jan. 31, 2009
is
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Funds or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Prior to Dec. 1, 2008, RiverSource Investments, LLC served as securities lending
agent for the Fund under the Securities Lending Agency Agreement pursuant to
which the Fund agreed to reimburse RiverSource Investments, LLC for expenses
incurred by it in connection with the lending program. Expenses paid to
RiverSource Investments, LLC as securities lending agent were $1,771 through
Nov. 30, 2008 and are included in other expenses on the Statement of Operations.
Cash collateral received on loaned securities had been invested in an affiliated
money market fund. Income of $31,253 earned from securities lending from Aug. 1,
2008 through Nov. 30, 2008 is included in the Statement of Operations.
6. OPTIONS CONTRACTS WRITTEN
Contracts and premiums associated with options contracts written are as follows:
<Table>
<Caption>
CALLS PUTS
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- --------------------------------------------------------------------------
Balance July 31, 2008 26,796 $ 2,162,573 5,537 $ 3,967,499
Opened 118,661 9,695,534 34,599 6,791,899
Closed (69,042) (8,731,415) (40,136) (10,759,398)
Expired (76,415) (3,126,692) -- --
- --------------------------------------------------------------------------
Balance Jan. 31, 2009 -- $ -- -- $ --
- --------------------------------------------------------------------------
</Table>
7. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of the RiverSource Investments. The cost of the
Fund's purchases and proceeds from sales of shares of RiverSource Short-Term
Cash Fund aggregated $479,431,482 and $510,263,639, respectively, for the
- --------------------------------------------------------------------------------
42 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
six months ended Jan. 31, 2009. The income distributions received with respect
to the Fund's investment in RiverSource Short-Term Cash Fund can be found on the
Statement of Operations and the Fund's invested balance in RiverSource Short-
Term Cash Fund at Jan. 31, 2009, can be found in the Portfolio of Investments.
8. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
16, 2008, 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 $475
million. The borrowers shall have the right, upon written notice to the
Administrative Agent to request an increase of up to $175 million in the
aggregate amount of the credit facility from new or existing lenders, provided
that the aggregate amount of the credit facility shall at no time exceed $650
million. Participation in such increase by any existing lender shall be at such
lender's sole discretion. Interest is charged to each Fund based on its
borrowings at a rate equal to the federal funds rate plus 0.75%. 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, in addition to
an upfront fee equal to its pro rata share of 0.02% of the amount of the credit
facility. The Fund had no borrowings during the six months ended Jan. 31, 2009.
Under the prior credit facility which was effective until Oct. 15, 2008, the
Fund had entered into a revolving credit facility with a syndicate of banks
headed by JPMorgan Chase Bank, N.A., whereby the Fund was permitted to borrow
for the temporary funding of shareholder redemptions or for other temporary or
emergency purposes. The credit facility agreement, which was a collective
agreement between the Fund and certain other RiverSource funds, severally and
not jointly, permitted collective borrowings up to $500 million. Interest was
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 matured no later
than 60 days after the date of borrowing. The Fund also paid a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.06% per annum.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
9. CAPITAL LOSS CARRY-OVER, POST-OCTOBER LOSS AND RECOGNIZED BUILT-IN LOSSES
For federal income tax purposes, the Fund had a capital loss carry-over of
$178,158,939 at July 31, 2008, that if not offset by capital gains will expire
in 2011.
Because the measurement periods for a regulated investment company's income are
different for excise tax purposes versus income tax purposes, special rules are
in place to protect the amount of earnings and profits needed to support excise
tax distributions. As a result, the Fund is permitted to treat net capital
losses realized between Nov. 1, 2007 and its fiscal year end ("post-October
loss") as occurring on the first day of the following year. At July 31, 2008,
the Fund had a post-October loss of $22,735,098 that is treated for income tax
purposes as occurring on Aug. 1, 2008.
The Fund had recognized built-in losses of $1,133,547 at July 31, 2008, that if
not offset by capital gains will expire in 2017. As a result if the fund merger
(Note 10) the Fund acquired unrealized capital losses, which are limited by
Internal Revenue Code section 382.
It is unlikely the Board will authorize a distribution of any net realized
capital gains until the available capital loss carry-over and recognized built-
in losses have been offset or expires.
10. FUND MERGER
At the close of business on March 14, 2008, RiverSource Growth Fund acquired the
assets and assumed the identified liabilities of RiverSource Fundamental Growth
Fund. The reorganization was completed after shareholders approved the plan on
Jan. 29, 2008.
The aggregate net assets of RiverSource Growth Fund immediately before the
acquisition were $2,444,672,413 and the combined net assets immediately after
the acquisition were $2,630,674,125.
The merger was accomplished by a tax-free exchange of 36,872,082 shares of
RiverSource Fundamental Growth Fund valued at $186,001,712.
- --------------------------------------------------------------------------------
44 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
In exchange for the RiverSource Fundamental Growth Fund shares and net assets,
RiverSource Growth Fund issued the following number of shares:
<Table>
<Caption>
SHARES
- ------------------------------------------------------------
Class A.......................................... 647,067
Class B.......................................... 209,948
Class C.......................................... 28,823
Class I.......................................... 5,614,412
Class R4......................................... 1,376
</Table>
The components of RiverSource Fundamental Growth Fund's net assets after
adjustments for any permanent book-to-tax differences at the merger date were as
follows:
<Table>
<Caption>
EXCESS OF
DISTRIBUTIONS
ACCUMULATED OVER NET
TOTAL CAPITAL UNREALIZED NET INVESTMENT
NET ASSETS STOCK DEPRECIATION REALIZED GAIN INCOME
- ----------------------------------------------------------------------------------------
RiverSource
Fundamental
Growth Fund $186,001,712 $209,335,799 $(24,043,308) $4,925,716 $(4,216,495)
</Table>
11. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc., was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company mutual funds and
they purport to bring the action derivatively on behalf of those funds under the
Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid
to the defendants by the funds for investment advisory and administrative
services are excessive. The plaintiffs seek remedies including restitution and
rescission of investment advisory and distribution agreements. The plaintiffs
voluntarily agreed to transfer this case to the United States District Court for
the District of Minnesota. In response to defendants' motion to dismiss the
complaint, the Court dismissed one of plaintiffs' four claims and granted
plaintiffs limited discovery. Defendants moved for summary judgment in April
2007. Summary judgment was granted in the defendants' favor on July 9, 2007. The
plaintiffs 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
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 45
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
Financial, Inc. (Ameriprise Financial)), entered into settlement agreements with
the Securities and Exchange Commission (SEC) and Minnesota Department of
Commerce (MDOC) related to market timing activities. As a result, AEFC was
censured and ordered to cease and desist from committing or causing any
violations of certain provisions of the Investment Advisers Act of 1940, the
Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to retain an independent distribution consultant to assist in developing
a plan for distribution of all disgorgement and civil penalties ordered by the
SEC in accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise
Financial, Inc., acquired J. & W. Seligman & Co., Inc. (Seligman). In late 2003,
Seligman conducted an extensive internal review concerning mutual fund trading
practices. Seligman's review, which covered the period 2001-2003, noted one
arrangement that permitted frequent trading in certain open-end registered
investment companies managed by Seligman (the Seligman Funds); this arrangement
was in the process of being closed down by Seligman before September 2003.
Seligman identified three other arrangements that permitted frequent trading,
all of which had been terminated by September 2002. In January 2004, Seligman,
on a voluntary basis, publicly disclosed these four arrangements to its clients
and to shareholders of the Seligman Funds. Seligman also provided information
concerning mutual fund trading practices to the SEC and the Office of the
Attorney General of the State of New York (NYAG). In September 2005, the New
York staff of the SEC indicated that it was considering recommending to the
Commissioners of the SEC the instituting of a formal action against Seligman and
the distributor of the Seligman Funds, Seligman Advisors, Inc. (which is now
known as RiverSource Fund Distributors, Inc.), relating to frequent trading in
the Seligman Funds. Seligman responded to the staff in October 2005 that it
believed that any action would be both inappropriate and unnecessary, especially
in light of the fact that Seligman had previously resolved the underlying issue
with the Independent Directors of the Seligman Funds and made recompense to the
affected Seligman Funds.
- --------------------------------------------------------------------------------
46 RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc., Seligman Data Corp. and Brian
T. Zino (collectively, the Seligman Parties), alleging, in substance, that the
Seligman Parties permitted various persons to engage in frequent trading and, as
a result, the prospectus disclosure used by the registered investment companies
then managed by Seligman is and has been misleading. The NYAG included other
related claims and also claimed that the fees charged by Seligman to the
Seligman Funds were excessive. On March 13, 2009, without admitting or denying
any violations of law or wrongdoing, the Seligman Parties entered into a
stipulation of settlement with the NYAG and settled the claims made by the NYAG.
Under the terms of the settlement, Seligman will pay $11.3 million to four
Seligman Funds. This settlement resolved all outstanding matters between the
Seligman Parties and the NYAG. In addition to the foregoing matter, the New York
staff of the SEC indicated in September 2005 that it was considering
recommending to the Commissioners of the SEC the instituting of a formal action
against Seligman and Seligman Advisors, Inc. relating to frequent trading in the
Seligman Funds. Seligman responded to the staff in October 2005 that it believed
that any action would be both inappropriate and unnecessary, especially in light
of the fact that Seligman had previously resolved the underlying issue with the
Independent Directors of the Seligman Funds and made recompense to the affected
Seligman Funds. There have been no further developments with the SEC on this
matter.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
- --------------------------------------------------------------------------------
RIVERSOURCE GROWTH FUND -- 2009 SEMIANNUAL REPORT 47
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
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.
- --------------------------------------------------------------------------------
48 RIVERSOURCE GROWTH FUND -- 2009 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 GROWTH FUND -- 2009 SEMIANNUAL REPORT 49
RIVERSOURCE GROWTH FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. RiverSource(R) mutual funds are
distributed by RiverSource Distributors, Inc., and
RiverSource Fund Distributors, Inc., Members FINRA, and
managed by RiverSource Investments, LLC. RiverSource is part
of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2009 RiverSource Investments, LLC. S-6456 Z (4/09)
</Table>
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
LARGE CAP EQUITY FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2009
RIVERSOURCE LARGE CAP EQUITY FUND SEEKS TO PROVIDE
SHAREHOLDERS WITH LONG-TERM GROWTH OF CAPITAL.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 2
Fund Expenses Example.............. 8
Portfolio of Investments........... 11
Statement of Assets and
Liabilities...................... 25
Statement of Operations............ 27
Statements of Changes in Net
Assets........................... 29
Financial Highlights............... 31
Notes to Financial Statements...... 39
Proxy Voting....................... 56
</Table>
(DALBAR LOGO)
The RiverSource mutual fund shareholder reports have
been awarded the Communications Seal from Dalbar Inc.,
an independent financial services research firm. The
Seal recognizes communications demonstrating a level
of excellence in the industry.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> RiverSource Large Cap Equity Fund (the Fund) Class A shares declined 39.47%
(excluding sales charge) for the semiannual period ended Jan. 31, 2009.
> The Fund underperformed its benchmarks, the Standard & Poor's 500 Index (S&P
500 Index), which declined 33.95% and the Russell 1000(R) Index (Russell
Index), which declined 34.71% in the same six-month period.
> The Fund's peer group, the Lipper Large-Cap Core Funds Index, fell 33.98%
during the same time frame.
ANNUALIZED TOTAL RETURNS (for period ended Jan. 31, 2009)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Since
inception
6 months* 1 year 3 years 5 years 3/28/02
- -------------------------------------------------------------------------
RiverSource Large Cap
Equity Fund Class A
(excluding sales
charge) -39.47% -45.50% -15.96% -7.68% -5.47%
- -------------------------------------------------------------------------
Russell 1000 Index
(unmanaged)(1) -34.71% -39.04% -12.03% -4.05% -2.56%
- -------------------------------------------------------------------------
S&P 500 Index
(unmanaged)(2) -33.95% -38.63% -11.78% -4.24% -2.86%
- -------------------------------------------------------------------------
Lipper Large-Cap Core
Funds Index(3) -33.98% -38.34% -11.95% -4.55% -3.40%
- -------------------------------------------------------------------------
</Table>
* Not annualized.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
- --------------------------------------------------------------------------------
2 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses. See the Average Annual Total Returns table for performance of other
share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
It is not possible to invest directly in an index.
(1) The Russell 1000 Index, an unmanaged index, measures the performance of the
1,000 largest companies in the Russell 3000(R) Index, which represents
approximately 90% of the total market capitalization of the Russell 3000
Index. The index reflects reinvestment of all distributions and changes in
market prices.
(2) The Standard & Poor's 500 Index (S&P 500 Index), an unmanaged index of
common stocks, is frequently used as a general measure of market
performance. The index reflects reinvestment of all distributions and
changes in market prices.
(3) The Lipper Large-Cap Core Funds Index includes the 30 largest large-cap core
funds tracked by Lipper Inc. The index's returns include net reinvested
dividends. The Fund's performance is currently measured against this index
for purposes of determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT JAN. 31, 2009
SINCE
Without sales charge 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception
3/28/02) -39.47% -45.50% -15.96% -7.68% -5.47%
- ---------------------------------------------------------------------------
Class B (inception
3/28/02) -39.64% -45.89% -16.62% -8.37% -6.21%
- ---------------------------------------------------------------------------
Class C (inception
3/28/02) -39.39% -45.79% -16.53% -8.32% -6.14%
- ---------------------------------------------------------------------------
Class I (inception
3/4/04) -39.23% -45.24% -15.59% N/A -7.69%
- ---------------------------------------------------------------------------
Class R2 (inception
12/11/06) -39.26% -45.49% N/A N/A -25.50%
- ---------------------------------------------------------------------------
Class R3 (inception
12/11/06) -39.17% -45.29% N/A N/A -25.29%
- ---------------------------------------------------------------------------
Class R4 (inception
3/28/02) -39.24% -45.43% -15.78% -7.47% -5.28%
- ---------------------------------------------------------------------------
Class R5 (inception
12/11/06) -39.21% -45.27% N/A N/A -25.27%
- ---------------------------------------------------------------------------
With sales charge
Class A (inception
3/28/02) -43.00% -48.67% -17.60% -8.75% -6.30%
- ---------------------------------------------------------------------------
Class B (inception
3/28/02) -42.57% -48.53% -17.56% -8.67% -6.21%
- ---------------------------------------------------------------------------
Class C (inception
3/28/02) -39.98% -46.31% -16.53% -8.32% -6.14%
- ---------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
4 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT DEC. 31, 2008
SINCE
Without sales charge 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception
3/28/02) -32.82% -42.40% -12.07% -5.37% -3.92%
- ---------------------------------------------------------------------------
Class B (inception
3/28/02) -32.94% -42.70% -12.71% -6.05% -4.65%
- ---------------------------------------------------------------------------
Class C (inception
3/28/02) -33.05% -42.78% -12.72% -6.07% -4.63%
- ---------------------------------------------------------------------------
Class I (inception
3/4/04) -32.57% -42.03% -11.64% N/A -5.60%
- ---------------------------------------------------------------------------
Class R2 (inception
12/11/06) -32.81% -42.32% N/A N/A -22.21%
- ---------------------------------------------------------------------------
Class R3 (inception
12/11/06) -32.57% -42.11% N/A N/A -21.97%
- ---------------------------------------------------------------------------
Class R4 (inception
3/28/02) -32.81% -42.27% -11.93% -5.19% -3.74%
- ---------------------------------------------------------------------------
Class R5 (inception
12/11/06) -32.66% -42.21% N/A N/A -21.99%
- ---------------------------------------------------------------------------
With sales charge
Class A (inception
3/28/02) -36.70% -45.76% -13.77% -6.49% -4.77%
- ---------------------------------------------------------------------------
Class B (inception
3/28/02) -36.20% -45.49% -13.70% -6.36% -4.65%
- ---------------------------------------------------------------------------
Class C (inception
3/28/02) -33.70% -43.33% -12.72% -6.07% -4.63%
- ---------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum sales charge of 5.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I, Class R2, Class R3, Class R4 and Class R5 shares. Class I,
Class R2, Class R3, Class R4 and Class R5 are available to institutional
investors only.
*Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 5
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
STYLE MATRIX
- --------------------------------------------------------------------------------
Style Matrix
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund is designed to
generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
ANNUAL OPERATING EXPENSE RATIO
(as of the current prospectus)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Net fund
and acquired
Total fund Net fund fund fees
expenses expenses(a) and expenses(b)
- --------------------------------------------------------
Class A 1.03% 0.96% 0.98%
- --------------------------------------------------------
Class B 1.79% 1.73% 1.75%
- --------------------------------------------------------
Class C 1.79% 1.72% 1.74%
- --------------------------------------------------------
Class I 0.57% 0.54% 0.56%
- --------------------------------------------------------
Class R2 1.39% 1.34% 1.36%
- --------------------------------------------------------
Class R3 1.14% 1.09% 1.11%
- --------------------------------------------------------
Class R4 0.87% 0.82% 0.84%
- --------------------------------------------------------
Class R5 0.67% 0.59% 0.61%
- --------------------------------------------------------
</Table>
(a) The Investment Manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until July 31, 2009, 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 0.08%
for the year ended July 31, 2008), will not exceed 1.04% for Class A, 1.81%
for Class B, 1.80% for Class C, 0.62% for Class I, 1.42% for Class R2, 1.17%
for Class R3, 0.90% for Class R4 and 0.67% for Class R5.
(b) In addition to the Fund's total annual operating expenses that the Fund
bears directly, the Fund's shareholders indirectly bear the expenses of
acquired funds in which the Fund invests. The Fund's "Acquired fund fees and
expenses," based on its investment in the acquired funds, was 0.02% for the
year ended July 31, 2008.
- --------------------------------------------------------------------------------
6 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
SECTOR DIVERSIFICATION(1) (at Jan. 31, 2009; % of portfolio assets)
- ---------------------------------------------------------------------
<Table>
<Caption>
Consumer Discretionary 11.4%
- ------------------------------------------------
Consumer Staples 11.7%
- ------------------------------------------------
Energy 14.2%
- ------------------------------------------------
Financials 11.5%
- ------------------------------------------------
Health Care 16.0%
- ------------------------------------------------
Industrials 8.8%
- ------------------------------------------------
Information Technology 10.2%
- ------------------------------------------------
Materials 2.4%
- ------------------------------------------------
Telecommunication Services 0.4%
- ------------------------------------------------
Utilities 1.8%
- ------------------------------------------------
Other(2) 11.6%
- ------------------------------------------------
</Table>
(1) Sectors can be comprised of several industries. Please refer to the section
entitled "Portfolio of Investments" for a complete listing. No single
industry exceeds 25% of portfolio assets.
(2) Cash & Cash Equivalents. Of the 11.6%, 8.7% is due to security lending
activity and 2.9% is the Fund's cash equivalent position.
The sectors identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
TOP TEN HOLDINGS (at Jan. 31, 2009; % of portfolio assets)
- ---------------------------------------------------------------------
<Table>
<Caption>
Wal-Mart Stores 4.6%
- ------------------------------------------------
Pfizer 4.4%
- ------------------------------------------------
Chevron 4.2%
- ------------------------------------------------
Johnson & Johnson 4.1%
- ------------------------------------------------
Home Depot 2.2%
- ------------------------------------------------
JPMorgan Chase & Co 2.2%
- ------------------------------------------------
Exxon Mobil 2.1%
- ------------------------------------------------
IBM 1.6%
- ------------------------------------------------
Microsoft 1.6%
- ------------------------------------------------
PepsiCo 1.4%
- ------------------------------------------------
</Table>
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 7
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 expense ratio of each of the acquired funds as of the acquired fund's
most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended Jan. 31, 2009.
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.
- --------------------------------------------------------------------------------
8 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
DIRECT AND
DIRECT INDIRECT
BEGINNING ENDING EXPENSES EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING PAID DURING
AUG. 1, 2008 JAN. 31, 2009 THE PERIOD(A) THE PERIOD(B)
- ------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 605.30 $3.46 $3.50
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.76 $4.36 $4.41
- ------------------------------------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 603.60 $6.55 $6.59
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.90 $8.24 $8.29
- ------------------------------------------------------------------------------------------
Class C
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 606.10 $6.52 $6.56
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.95 $8.19 $8.24
- ------------------------------------------------------------------------------------------
Class I
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 607.70 $1.77 $1.81
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,022.86 $2.23 $2.28
- ------------------------------------------------------------------------------------------
Class R2
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 607.40 $5.00 $5.04
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.85 $6.28 $6.33
- ------------------------------------------------------------------------------------------
Class R3
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 608.30 $3.99 $4.03
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.10 $5.01 $5.06
- ------------------------------------------------------------------------------------------
Class R4
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 607.60 $2.90 $2.94
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,021.46 $3.65 $3.70
- ------------------------------------------------------------------------------------------
Class R5
- ------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 607.90 $1.81 $1.85
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,022.81 $2.28 $2.33
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 9
FUND EXPENSES EXAMPLE (continued) ----------------------------------------------
ANNUALIZED EXPENSE RATIOS
<Table>
<Caption>
FUND'S ACQUIRED FUND
ANNUALIZED FEES AND NET FUND
EXPENSE RATIO EXPENSES EXPENSES
- ----------------------------------------------------------------------
Class A .86% .01% .87%
- ----------------------------------------------------------------------
Class B 1.63% .01% 1.64%
- ----------------------------------------------------------------------
Class C 1.62% .01% 1.63%
- ----------------------------------------------------------------------
Class I .44% .01% .45%
- ----------------------------------------------------------------------
Class R2 1.24% .01% 1.25%
- ----------------------------------------------------------------------
Class R3 .99% .01% 1.00%
- ----------------------------------------------------------------------
Class R4 .72% .01% .73%
- ----------------------------------------------------------------------
Class R5 .45% .01% .46%
- ----------------------------------------------------------------------
</Table>
(a) Expenses are equal to the Fund's annualized expense ratio for each class,
multiplied by the average account value over the period, multiplied by
183/365 (to reflect the one-half year period).
(b) Expenses are equal to the Fund's annualized expense ratio for each class
plus the acquired fund fees and expenses, multiplied by the average account
value over the period, multiplied by 183/365 (to reflect the one-half year
period).
(c) Based on the actual return for the six months ended Jan. 31, 2009: -39.47%
for Class A, -39.64% for Class B, -39.39% for Class C, -39.23% for Class I,
-39.26% for Class R2, -39.17% for Class R3, -39.24% for Class R4 and -39.21%
for Class R5.
- --------------------------------------------------------------------------------
10 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
JAN. 31, 2009 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (96.8%)
ISSUER SHARES VALUE(a)
AEROSPACE & DEFENSE (0.8%)
AeroVironment 8,500(b,f) $315,010
American Science & Engineering 3,213 250,614
Ceradyne 25,331(b,f) 578,053
General Dynamics 172,255(f) 9,772,027
Rockwell Collins 33,368 1,257,306
United Technologies 99,020 4,751,970
---------------
Total 16,924,980
- -------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS (0.2%)
CH Robinson Worldwide 95,986 4,413,437
Hub Group Cl A 16,373(b) 371,667
Pacer Intl 46,242(f) 397,681
---------------
Total 5,182,785
- -------------------------------------------------------------------------------------
AIRLINES (0.4%)
Alaska Air Group 31,558(b) 831,869
Allegiant Travel 8,541(b,f) 305,426
AMR 30,335(b) 180,190
Continental Airlines Cl B 14,891(b) 200,582
Delta Air Lines 59,755(b) 412,310
Hawaiian Holdings 65,225(b) 265,466
JetBlue Airways 37,430(b) 210,731
SkyWest 71,912 1,125,423
Southwest Airlines 502,569(f) 3,533,059
UAL 73,227(b) 691,263
US Airways Group 81,594(b) 462,638
---------------
Total 8,218,957
- -------------------------------------------------------------------------------------
AUTO COMPONENTS (0.1%)
Cooper Tire & Rubber 56,651(f) 264,560
Exide Technologies 62,946(b) 228,494
Fuel Systems Solutions 7,302(b,f) 190,874
Goodyear Tire & Rubber 194,518(b) 1,200,176
Johnson Controls 65,605 820,719
---------------
Total 2,704,823
- -------------------------------------------------------------------------------------
AUTOMOBILES (0.1%)
Ford Motor 249,800(b,f) 467,126
General Motors 62,539(f) 188,242
Harley-Davidson 164,139(f) 1,999,213
---------------
Total 2,654,581
- -------------------------------------------------------------------------------------
BEVERAGES (2.9%)
Brown-Forman Cl B 56,384 2,560,397
Coca-Cola 631,980 26,998,186
PepsiCo 653,531 32,826,862
---------------
Total 62,385,445
- -------------------------------------------------------------------------------------
BIOTECHNOLOGY (2.6%)
Amgen 405,762(b) 22,256,046
Cephalon 45,699(b,f) 3,527,049
CV Therapeutics 32,590(b) 510,034
Emergent BioSolutions 13,873(b,f) 304,235
Genentech 14,017(b) 1,138,741
Gilead Sciences 524,678(b) 26,637,901
Myriad Genetics 19,227(b) 1,433,757
NPS Pharmaceuticals 36,398(b) 227,124
Vertex Pharmaceuticals 8,688(b,f) 287,138
---------------
Total 56,322,025
- -------------------------------------------------------------------------------------
BUILDING PRODUCTS (0.1%)
American Woodmark 16,024(f) 241,161
Insteel Inds 27,417(f) 211,111
Masco 291,531 2,279,772
Owens Corning 7,565(b) 100,917
Trex 11,677(b,f) 172,703
---------------
Total 3,005,664
- -------------------------------------------------------------------------------------
CAPITAL MARKETS (1.5%)
Goldman Sachs Group 133,369 10,766,879
Knight Capital Group Cl A 24,027(b) 433,207
Morgan Stanley 1,011,014(f) 20,452,814
Stifel Financial 11,707(b,f) 410,213
SWS Group 45,991(f) 673,768
---------------
Total 32,736,881
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 11
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
CHEMICALS (1.5%)
Ashland 21,801 $174,844
Balchem 10,066(f) 224,774
CF Inds Holdings 28,881 1,357,407
Dow Chemical 1,772,219 20,540,017
Ecolab 19,484 661,677
EI du Pont de Nemours & Co 108,801 2,498,071
Innophos Holdings 15,945 241,248
OM Group 16,873(b,f) 326,999
PPG Inds 77,165 2,899,861
Sigma-Aldrich 56,009 2,020,805
Solutia 48,200(b,f) 188,462
Stepan 6,925(f) 254,078
Westlake Chemical 14,332(f) 195,918
WR Grace & Co 100,680(b) 580,924
---------------
Total 32,165,085
- -------------------------------------------------------------------------------------
COMMERCIAL BANKS (1.1%)
BancFirst 6,108(f) 217,567
BB&T 292,392(f) 5,786,437
Comerica 125,875 2,097,078
Community Trust Bancorp 6,575 183,903
Fifth Third Bancorp 606,788 1,450,223
First BanCorp 15,522(c,f) 110,361
First Citizens BancShares Cl A 949 132,727
First Financial 7,250(f) 240,338
First Financial Bankshares 9,490(f) 421,261
Home BancShares 8,731(f) 179,771
Intl Bancshares 20,109(f) 366,386
KeyCorp 343,879 2,503,439
MainSource Financial Group 17,647(f) 172,411
Marshall & Ilsley 204,955(f) 1,170,293
Popular 18,530(c,f) 50,772
Republic Bancorp Cl A 11,372(f) 204,696
SunTrust Banks 146,867 1,800,589
TowneBank 11,883 247,642
Trico Bancshares 9,961(f) 200,615
Trustmark 13,543 274,923
UMB Financial 10,116 391,894
Wells Fargo & Co 268,910(f) 5,082,399
Wilshire Bancorp 33,656(f) 230,880
Zions Bancorporation 9,592(f) 143,113
---------------
Total 23,659,718
- -------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (0.9%)
ABM Inds 9,515(f) 141,298
Avery Dennison 48,390(f) 1,172,490
Clean Harbors 5,723(b,f) 306,238
HNI 20,631(f) 272,536
Kimball Intl Cl B 44,536 306,853
Republic Services 248,682 6,430,916
RR Donnelley & Sons 80,980 790,365
Sykes Enterprises 13,650(b) 228,092
Tetra Tech 6,789(b) 157,708
United Stationers 7,598(b,f) 212,820
Waste Management 282,337 8,806,090
---------------
Total 18,825,406
- -------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (1.4%)
3Com 129,413(b) 301,532
Airvana 49,195(b) 250,403
ARRIS Group 40,980(b) 291,778
Cisco Systems 489,238(b) 7,323,893
Corning 747,258(f) 7,554,778
InterDigital 28,749(b,f) 929,455
Motorola 133,924 593,283
NETGEAR 21,473(b,f) 238,780
QUALCOMM 328,496 11,349,536
Tekelec 18,199(b) 226,032
---------------
Total 29,059,470
- -------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (3.5%)
Adaptec 83,576(b,f) 233,177
Apple 120,797(b) 10,887,434
Dell 831,979(b) 7,903,801
Electronics for Imaging 26,387(b,f) 234,580
Hewlett-Packard 338,952 11,778,582
IBM 414,283 37,969,036
Lexmark Intl Cl A 207,679(b) 4,917,839
NCR 18,658(b,f) 234,158
Western Digital 26,046(b) 382,355
---------------
Total 74,540,962
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
CONSTRUCTION & ENGINEERING (0.3%)
EMCOR Group 21,413(b,f) $440,894
Fluor 66,753 2,596,691
Foster Wheeler 2,749(b) 54,898
Granite Construction 36,466(f) 1,284,333
Michael Baker 3,799(b) 132,813
Perini 48,557(b,f) 1,012,413
---------------
Total 5,522,042
- -------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS (--%)
Vulcan Materials 3,181(f) 157,332
- -------------------------------------------------------------------------------------
CONSUMER FINANCE (0.2%)
Advanta Cl B 88,512(f) 69,039
American Express 60,682 1,015,210
Discover Financial Services 80,265(f) 573,895
SLM 248,814(b,f) 2,848,920
---------------
Total 4,507,064
- -------------------------------------------------------------------------------------
CONTAINERS & PACKAGING (--%)
Rock-Tenn Cl A 25,329(f) 789,505
- -------------------------------------------------------------------------------------
DISTRIBUTORS (0.2%)
Genuine Parts 106,374 3,406,095
- -------------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (0.5%)
Apollo Group Cl A 20,567(b) 1,675,388
Career Education 4,579(b,f) 99,822
Corinthian Colleges 37,035(b,f) 691,814
H&R Block 372,711 7,726,298
Regis 22,824 256,770
Universal Technical Institute 12,637(b,f) 221,527
---------------
Total 10,671,619
- -------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (4.8%)
Apollo Management LP 1,406,500(d,e) 2,109,750
Bank of America 3,728,404 24,532,898
Citigroup 6,585,055(f) 23,376,945
JPMorgan Chase & Co 1,969,323 50,237,430
KKR Financial Holdings LLC 563,202 799,747
Life Partners Holdings 6,727(f) 255,626
Moody's 6,357(f) 136,167
---------------
Total 101,448,563
- -------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.3%)
CenturyTel 45,084(f) 1,223,580
Embarq 106,239 3,794,856
Frontier Communications 134,518 1,090,941
Qwest Communications Intl 87,185 280,736
Shenandoah Telecommunications 8,904(f) 217,080
---------------
Total 6,607,193
- -------------------------------------------------------------------------------------
ELECTRIC UTILITIES (1.1%)
Entergy 43,933(f) 3,354,724
Exelon 142,513(f) 7,727,055
FirstEnergy 141,478(f) 7,072,485
Hawaiian Electric Inds 20,076 435,248
Pinnacle West Capital 1,445 48,364
Portland General Electric 20,589 400,456
Southern 149,523 5,001,544
---------------
Total 24,039,876
- -------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (0.3%)
American Superconductor 10,335(b,f) 167,220
Emerson Electric 138,702(f) 4,535,556
Encore Wire 14,462 238,768
Energy Conversion Devices 10,231(b,f) 257,514
GrafTech Intl 25,000(b) 200,250
---------------
Total 5,399,308
- -------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (0.3%)
Anixter Intl 14,075(b) 379,744
Arrow Electronics 34,712(b,f) 661,958
Avnet 35,573(b) 705,057
Benchmark Electronics 82,459(b) 968,069
Ingram Micro Cl A 49,358(b) 605,623
Insight Enterprises 47,127(b,f) 244,118
Jabil Circuit 365,781 2,128,844
L-1 Identity Solutions 16,308(b) 118,233
Methode Electronics 32,965(f) 152,298
SYNNEX 23,322(b,f) 357,993
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 13
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (CONT.)
Tyco Electronics 65,715(c,f) $930,524
---------------
Total 7,252,461
- -------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (2.0%)
Baker Hughes 96,051 3,200,419
BASiC Energy Services 52,684(b) 505,766
BJ Services 228,552 2,514,072
Complete Production Services 30,311(b) 194,294
ENSCO Intl 149,498 4,090,265
GulfMark Offshore 12,678(b) 303,511
Halliburton 554,230 9,560,469
Helmerich & Payne 14,600 327,916
Lufkin Inds 8,971 313,536
Nabors Inds 270,635(b,c,f) 2,963,453
Natl Oilwell Varco 200,633(b) 5,304,737
Newpark Resources 39,801(b) 167,562
Noble 139,883(f) 3,797,823
Oil States Intl 7,333(b) 134,267
Parker Drilling 149,991(b,f) 317,981
Patterson-UTI Energy 28,165 269,257
Pioneer Drilling 40,209(b,f) 199,839
Rowan Companies 84,835 1,074,011
Smith Intl 45,574 1,034,530
Tidewater 6,622 275,541
Unit 7,740(b,f) 193,036
Weatherford Intl 586,296(b) 6,466,845
---------------
Total 43,209,130
- -------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (5.7%)
Casey's General Stores 12,446(f) 264,478
Costco Wholesale 34,790(f) 1,566,594
Ingles Markets Cl A 17,188(f) 245,101
Nash Finch 8,093 348,242
Pantry 11,709(b,f) 194,721
SUPERVALU 121,694 2,134,513
SYSCO 119,812 2,670,609
Walgreen 242,493(f) 6,646,733
Wal-Mart Stores 2,280,221 107,444,013
Winn-Dixie Stores 44,499(b,f) 611,416
---------------
Total 122,126,420
- -------------------------------------------------------------------------------------
FOOD PRODUCTS (2.3%)
Bunge 5,267(f) 226,165
Cal-Maine Foods 11,403(f) 308,793
Campbell Soup 93,880(f) 2,851,136
Darling Intl 42,476(b) 194,965
Dean Foods 78,795(b) 1,523,895
Diamond Foods 7,437(f) 190,982
Flowers Foods 33,535(f) 720,667
Fresh Del Monte Produce 16,371(b,c,f) 394,541
General Mills 405,435 23,981,480
Hershey 14,498(f) 540,485
J&J Snack Foods 7,348 256,519
JM Smucker 79,073(f) 3,570,146
Kellogg 100,341 4,383,898
Lance 11,712(f) 220,537
Ralcorp Holdings 17,045(b) 1,009,405
Sanderson Farms 8,480 306,806
Sara Lee 505,990 5,075,080
TreeHouse Foods 17,104(b,f) 451,375
Tyson Foods Cl A 189,641(f) 1,678,323
---------------
Total 47,885,198
- -------------------------------------------------------------------------------------
GAS UTILITIES (0.3%)
Atmos Energy 8,037 197,308
Laclede Group 9,965(f) 452,311
New Jersey Resources 25,623(f) 1,027,226
Nicor 32,666 1,117,504
Piedmont Natural Gas 25,754 667,286
Questar 73,004(f) 2,480,677
---------------
Total 5,942,312
- -------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.9%)
Becton Dickinson & Co 94,068 6,835,922
Covidien 200,575(c,f) 7,690,045
CryoLife 19,446(b,f) 160,235
Cyberonics 11,792(b) 181,479
Greatbatch 9,720(b,f) 226,476
Immucor 7,503(b) 207,908
St. Jude Medical 32,370(b) 1,177,297
STERIS 35,623(f) 947,572
Thoratec 29,234(b,f) 846,909
Volcano 28,992(b) 378,925
---------------
Total 18,652,768
- -------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (1.2%)
Almost Family 4,966(b,f) 153,151
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
HEALTH CARE PROVIDERS & SERVICES (CONT.)
AMERIGROUP 31,195(b) $872,524
Cardinal Health 93,991(g) 3,538,761
CIGNA 460,711 7,997,943
Coventry Health Care 16,443(b) 248,783
DaVita 39,752(b) 1,868,344
Gentiva Health Services 12,919(b) 326,592
HealthSpring 60,412(b) 1,052,377
Humana 19,622(b) 744,262
Kindred Healthcare 60,238(b) 817,430
Landauer 5,797(f) 397,558
LHC Group 6,103(b) 162,401
Magellan Health Services 26,612(b) 963,887
Molina Healthcare 21,468(b) 376,549
Omnicare 9,838(f) 275,070
Quest Diagnostics 71,854 3,545,995
Tenet Healthcare 606,612(b) 649,075
UnitedHealth Group 48,487 1,373,637
Universal American Financial 25,232(b,f) 249,040
Universal Health Services Cl B 3,693 139,780
---------------
Total 25,753,159
- -------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (1.3%)
Bob Evans Farms 6,334(f) 111,225
Darden Restaurants 28,115(f) 737,175
Intl Game Technology 86,368(f) 915,501
McDonald's 426,834 24,764,910
Panera Bread Cl A 2,788(b,f) 130,980
Starwood Hotels & Resorts Worldwide 23,901(f) 361,383
Wyndham Worldwide 168,588 1,033,444
---------------
Total 28,054,618
- -------------------------------------------------------------------------------------
HOUSEHOLD DURABLES (0.6%)
Black & Decker 39,371(f) 1,138,216
Centex 133,790 1,138,553
DR Horton 201,667 1,201,935
Garmin 15,642(c,f) 274,204
Harman Intl Inds 72,907(f) 1,173,074
KB Home 54,179(f) 578,090
Leggett & Platt 102,924(f) 1,285,521
Lennar Cl A 134,250 1,032,383
Natl Presto Inds 8,400 563,976
Newell Rubbermaid 40,565 327,765
NVR 401(b) 170,862
Pulte Homes 111,267 1,129,360
Ryland Group 16,765(f) 261,534
Snap-On 32,903 993,013
Stanley Works 8,721 272,618
Toll Brothers 6,345(b) 107,992
Whirlpool 51,835(f) 1,732,843
---------------
Total 13,381,939
- -------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (1.8%)
Clorox 32,837 1,646,776
Kimberly-Clark 85,492 4,400,273
Procter & Gamble 576,352 31,411,184
---------------
Total 37,458,233
- -------------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.2%)
Calpine 8,553(b) 63,378
Constellation Energy Group 104,964(f) 2,760,553
Dynegy Cl A 466,585(b) 984,494
---------------
Total 3,808,425
- -------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (1.3%)
3M 217,362 11,691,902
Seaboard 471 473,355
Textron 93,093 840,630
Tredegar 16,209 267,449
Tyco Intl 654,427(c,g) 13,756,055
---------------
Total 27,029,391
- -------------------------------------------------------------------------------------
INSURANCE (4.5%)
AFLAC 147,289 3,418,578
Allied World Assurance Holdings 6,869(c) 258,961
Allstate 1,197,191(g) 25,943,129
American Financial Group 11,304 191,942
Aon 103,317 3,827,895
Arch Capital Group 6,237(b,c,f) 375,156
Aspen Insurance Holdings 66,891(c) 1,478,291
Assurant 56,546 1,492,814
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 15
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
INSURANCE (CONT.)
Axis Capital Holdings 20,174(c) $489,421
Chubb 140,797(f) 5,995,136
Cincinnati Financial 12,519 274,542
Employers Holdings 36,927 499,992
Everest Re Group 5,516(c) 347,508
Hartford Financial Services Group 158,284(f) 2,083,017
HCC Insurance Holdings 14,014 328,068
IPC Holdings 33,187(c,f) 851,578
Marsh & McLennan Companies 440,703 8,518,789
Montpelier Re Holdings 71,187(c) 1,006,584
Odyssey Re Holdings 25,577(f) 1,203,398
PartnerRe 6,873(c) 450,388
Platinum Underwriters Holdings 45,109(c,f) 1,254,481
Progressive 1,242,638(b) 15,098,052
RenaissanceRe Holdings 8,305(c) 371,150
RLI 12,392 700,024
Travelers Companies 434,027 16,770,803
Validus Holdings 48,236(c,f) 1,100,746
WR Berkley 19,445 514,904
Zenith Natl Insurance 29,120 816,525
---------------
Total 95,661,872
- -------------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL (--%)
NutriSystem 41,148(f) 530,398
PetMed Express 10,222(b) 147,606
Ticketmaster Entertainment 26,034(b) 154,902
---------------
Total 832,906
- -------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (0.1%)
Ariba 38,540(b,f) 294,446
EarthLink 70,156(b,f) 528,274
ModusLink Global Solutions 71,828(b) 167,359
RealNetworks 67,312(b) 189,820
---------------
Total 1,179,899
- -------------------------------------------------------------------------------------
IT SERVICES (1.4%)
Affiliated Computer Services Cl A 103,970(b) 4,768,064
Automatic Data Processing 202,289(f) 7,349,159
Ciber 52,635(b,f) 229,489
Computer Sciences 17,530(b) 645,805
Convergys 13,435(b,f) 101,166
CSG Systems Intl 22,398(b) 324,771
Integral Systems 17,756(b) 194,073
ManTech Intl Cl A 21,514(b,f) 1,153,796
MasterCard Cl A 39,332 5,340,499
NCI Cl A 8,433(b) 252,990
Paychex 127,898 3,106,642
Perot Systems Cl A 28,231(b,f) 366,721
SAIC 36,100(b,f) 712,614
Total System Services 21,811 276,127
Western Union 345,685(f) 4,722,057
---------------
Total 29,543,973
- -------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.4%)
Brunswick 79,223(f) 220,240
Eastman Kodak 257,081(f) 1,164,577
Hasbro 117,369 2,832,114
JAKKS Pacific 40,483(b,f) 742,458
Mattel 253,773 3,601,039
---------------
Total 8,560,428
- -------------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES (0.1%)
Luminex 15,394(b) 313,576
PerkinElmer 125,550(f) 1,584,440
Sequenom 19,260(b,f) 426,802
---------------
Total 2,324,818
- -------------------------------------------------------------------------------------
MACHINERY (1.2%)
Cummins 100,950 2,420,781
Deere & Co 92,031 3,197,157
Dover 77,239(f) 2,184,319
Eaton 74,070 3,260,561
Flowserve 30,090 1,604,098
Force Protection 68,911(b) 414,155
FreightCar America 7,315 140,082
Gardner Denver 8,822(b) 192,055
Illinois Tool Works 154,278 5,038,720
Ingersoll-Rand Cl A 183,012(c) 2,966,625
Joy Global 9,129(f) 190,157
Manitowoc 146,341 804,876
Mueller Inds 51,804 1,042,296
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
16 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
MACHINERY (CONT.)
NACCO Inds Cl A 8,300(f) $265,517
Pall 49,291 1,285,016
Terex 16,330(b,f) 193,347
Wabtec 28,621(f) 856,627
---------------
Total 26,056,389
- -------------------------------------------------------------------------------------
MEDIA (3.1%)
CBS Cl B 608,287 3,479,402
Comcast Cl A 1,292,482(f) 18,934,862
DIRECTV Group 209,156(b) 4,580,516
DreamWorks Animation SKG Cl A 3,854(b) 84,595
Gannett 501,357 2,892,830
Marvel Entertainment 14,171(b) 389,844
Meredith 86,571(f) 1,382,539
New York Times Cl A 266,866(f) 1,326,324
News Corp Cl A 283,178(f) 1,809,507
Sirius XM Radio 15,046,171(b) 1,805,541
Time Warner Cable Cl A 59,461(b,f) 1,107,758
Virgin Media 5,987,186(e) 27,181,825
WorldSpace Cl A 263,942(b) 3,167
---------------
Total 64,978,710
- -------------------------------------------------------------------------------------
METALS & MINING (1.0%)
AK Steel Holding 137,071(f) 1,106,163
Alcoa 48,086 374,590
AM Castle & Co 26,449(f) 223,759
Cliffs Natural Resources 14,804(f) 343,009
Compass Minerals Intl 5,450 327,927
Freeport-McMoRan Copper & Gold 42,418(f) 1,066,389
Horsehead Holding 25,185(b) 99,733
Kaiser Aluminum 8,262(f) 205,228
Nucor 314,082(f) 12,811,404
Olympic Steel 15,484 245,731
Reliance Steel & Aluminum 15,731(f) 348,127
RTI Intl Metals 9,465(b) 125,979
Timminco 510,164(b,c,f) 1,441,189
United States Steel 112,157(f) 3,368,074
Worthington Inds 22,881 230,183
---------------
Total 22,317,485
- -------------------------------------------------------------------------------------
MULTILINE RETAIL (0.7%)
Big Lots 80,289(b,f) 1,079,887
Dillard's Cl A 53,223(f) 231,520
Dollar Tree 8,846(b) 377,813
Family Dollar Stores 175,923(f) 4,885,382
Fred's Cl A 33,104(f) 339,647
JC Penney 51,311(f) 859,459
Kohl's 113,484(b,f) 4,165,998
Macy's 83,729 749,375
Nordstrom 82,493(f) 1,046,836
Sears Holdings 8,132(b,f) 332,761
---------------
Total 14,068,678
- -------------------------------------------------------------------------------------
MULTI-UTILITIES (0.4%)
CH Energy Group 3,442 174,096
DTE Energy 2,526 87,147
MDU Resources Group 10,592 210,675
PG&E 80,109 3,097,815
TECO Energy 120,193 1,443,518
Vectren 7,668 197,758
Wisconsin Energy 51,986(f) 2,317,536
---------------
Total 7,528,545
- -------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (13.6%)
Apache 176,609 13,245,675
Cabot Oil & Gas 55,530(f) 1,526,520
Chesapeake Energy 289,099 4,570,655
Chevron 1,385,499 97,705,390
Cimarex Energy 13,126(f) 326,050
Clayton Williams Energy 5,179(b) 206,124
Comstock Resources 20,170(b,f) 769,082
ConocoPhillips 584,206 27,767,311
CONSOL Energy 85,435 2,328,958
Contango Oil & Gas 5,181(b,f) 231,073
EOG Resources 112,266(f) 7,608,267
EXCO Resources 18,093(b) 183,463
Exxon Mobil 625,884 47,867,608
Frontier Oil 14,907(f) 212,872
Frontline 4,642(c,f) 132,343
Goodrich Petroleum 7,657(b) 221,287
Gran Tierra Energy 87,228(b,c) 246,855
Hess 127,604(f) 7,096,058
James River Coal 16,847(b) 228,445
Marathon Oil 412,818 11,241,034
Massey Energy 92,601 1,405,683
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 17
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
OIL, GAS & CONSUMABLE FUELS (CONT.)
McMoRan Exploration 30,874(b) $206,547
Murphy Oil 111,186 4,912,197
Newfield Exploration 7,467(b) 143,292
Noble Energy 103,023 5,040,915
Occidental Petroleum 312,463(f) 17,044,857
Peabody Energy 136,760 3,419,000
Penn Virginia 11,931(f) 245,779
Petrohawk Energy 3,969(b,f) 78,229
PetroQuest Energy 24,474(b,f) 154,920
Pioneer Natural Resources 141,145 2,066,363
Plains Exploration & Production 7,946(b,f) 167,820
Range Resources 33,648 1,205,944
Rosetta Resources 43,026(b) 261,168
Southwestern Energy 218,764(b) 6,923,881
Spectra Energy 479,403 6,956,138
St. Mary Land & Exploration 10,285(f) 199,015
Stone Energy 22,251(b) 190,914
Sunoco 42,251(f) 1,957,066
Swift Energy 45,994(b,f) 704,628
Tesoro 77,808(f) 1,340,632
USEC 77,943(b) 396,730
VAALCO Energy 46,283(b,f) 347,585
Valero Energy 204,530 4,933,264
Western Refining 23,140 269,812
Williams Companies 202,174 2,860,762
World Fuel Services 7,441(f) 251,283
---------------
Total 287,399,494
- -------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (--%)
Wausau Paper 39,145(f) 372,269
- -------------------------------------------------------------------------------------
PERSONAL PRODUCTS (0.1%)
Estee Lauder Companies Cl A 87,587(f) 2,299,159
- -------------------------------------------------------------------------------------
PHARMACEUTICALS (12.8%)
Abbott Laboratories 122,292 6,779,868
Eli Lilly & Co 283,187 10,426,945
Forest Laboratories 430,301(b) 10,774,737
Johnson & Johnson 1,636,996 94,438,299
King Pharmaceuticals 793,580(b) 6,935,889
Merck & Co 508,625 14,521,244
Mylan 123,475(b,f) 1,398,972
Par Pharmaceutical Companies 19,731(b) 242,889
Pfizer 7,072,211 103,112,837
Schering-Plough 434,393 7,627,941
Valeant Pharmaceuticals Intl 36,414(b,f) 790,184
ViroPharma 92,903(b) 1,114,836
VIVUS 21,562(b) 105,869
Watson Pharmaceuticals 46,739(b,f) 1,275,040
Wyeth 266,933 11,470,111
---------------
Total 271,015,661
- -------------------------------------------------------------------------------------
PROFESSIONAL SERVICES (0.1%)
Administaff 15,452 325,883
Heidrick & Struggles Intl 15,205 231,116
Huron Consulting Group 4,487(b) 224,260
Kelly Services Cl A 32,477 294,242
Korn/Ferry Intl 21,781(b,f) 204,741
Manpower 8,767 249,509
TrueBlue 49,670(b,f) 422,195
---------------
Total 1,951,946
- -------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (0.2%)
American Campus Communities 11,424(f) 244,131
BRE Properties Cl A 3,175(f) 80,613
Capstead Mtge 26,825 286,223
Digital Realty Trust 3,469(f) 110,661
Equity Residential 144,231 3,451,449
Health Care REIT 5,787(f) 218,806
Investors Real Estate Trust 22,612 224,989
Liberty Property Trust 7,850 157,000
UDR 9,138(f) 107,190
---------------
Total 4,881,062
- -------------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (--%)
Avatar Holdings 8,745(b) 226,933
St. Joe 6,506(b,f) 156,469
---------------
Total 383,402
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
18 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
ROAD & RAIL (3.8%)
Arkansas Best 33,461 $782,653
Burlington Northern Santa Fe 314,011 20,803,229
Con-way 3,857 84,970
CSX 417,739(f) 12,097,721
Genesee & Wyoming Cl A 10,684(b,f) 290,284
Kansas City Southern 6,630(b,f) 120,401
Norfolk Southern 452,461 17,356,404
Old Dominion Freight Line 10,109(b,f) 253,534
Ryder System 84,319 2,848,296
Saia 26,543(b) 283,745
Union Pacific 566,518 24,807,822
Werner Enterprises 18,060 270,900
---------------
Total 79,999,959
- -------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (2.0%)
Altera 281,189 4,324,687
Amkor Technology 141,788(b,f) 328,948
Atmel 32,711(b,f) 109,255
Infineon Technologies 806,777(b,c,f) 718,921
Infineon Technologies ADR 614,065(b,c) 528,096
Intel 1,283,714 16,559,910
Lam Research 26,944(b,f) 544,538
Linear Technology 203,498(f) 4,765,923
LSI 406,802(b,f) 1,293,630
MEMC Electronic Materials 152,983(b) 2,080,569
Microchip Technology 121,743 2,309,465
MKS Instruments 29,302(b,f) 411,693
Natl Semiconductor 114,937(f) 1,165,461
NVIDIA 21,718(b,f) 172,658
OmniVision Technologies 40,728(b) 272,470
Sigma Designs 26,295(b,f) 268,735
Silicon Image 79,753(b,f) 292,694
Spansion Cl A 1,738,038(b) 116,449
Teradyne 33,804(b) 162,597
Xilinx 290,253(f) 4,890,763
Zoran 33,505(b) 199,020
---------------
Total 41,516,482
- -------------------------------------------------------------------------------------
SOFTWARE (2.5%)
BMC Software 41,845(b,f) 1,059,934
Compuware 240,368(b) 1,562,392
Intuit 47,822(b) 1,083,168
Microsoft 2,175,020 37,192,842
Oracle 659,566(b,f) 11,100,496
Quality Systems 8,208(f) 305,994
Red Hat 6,267(b,f) 91,812
Salesforce.com 47,195(b,f) 1,255,859
Take-Two Interactive Software 20,438 143,475
TeleCommunication Systems Cl A 31,053(b) 222,339
---------------
Total 54,018,311
- -------------------------------------------------------------------------------------
SPECIALTY RETAIL (4.8%)
Aaron Rents 24,988(f) 546,238
Abercrombie & Fitch Cl A 121,228 2,163,920
Advance Auto Parts 4,756 155,664
Aeropostale 18,721(b,f) 395,200
American Eagle Outfitters 12,985 116,995
Asbury Automotive Group 38,005(f) 136,058
AutoNation 212,973(b,f) 1,976,389
AutoZone 23,871(b,f) 3,172,217
Barnes & Noble 14,133(f) 232,064
Bed Bath & Beyond 193,604(b,f) 4,497,421
Best Buy 125,015 3,502,920
Blockbuster Cl A 261,540(b,f) 333,464
Brown Shoe 35,184(f) 165,013
Cato Cl A 27,254(f) 360,570
Chico's FAS 96,855(b) 383,546
Children's Place Retail Stores 22,270(b,f) 418,899
Collective Brands 48,547(b) 517,996
Dress Barn 37,279(b,f) 321,345
Finish Line Cl A 51,549 244,858
Foot Locker 60,996(f) 448,931
Gap 290,846 3,280,743
Group 1 Automotive 34,272(f) 341,692
Home Depot 2,397,534 51,618,906
Hot Topic 49,620(b,f) 423,755
Jo-Ann Stores 18,977(b,f) 242,336
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 19
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
SPECIALTY RETAIL (CONT.)
Jos A Bank Clothiers 19,777(b,f) $543,076
Limited Brands 133,601 1,058,120
Lowe's Companies 749,982(g) 13,702,170
Men's Wearhouse 37,223(f) 433,648
Monro Muffler Brake 6,976 169,308
Office Depot 499,362(b) 1,078,622
PetSmart 9,435(f) 177,095
RadioShack 165,444(f) 1,895,988
Rent-A-Center 43,584(b) 647,222
Ross Stores 9,891(f) 290,993
Sherwin-Williams 45,446 2,170,047
Stage Stores 34,037 243,365
Staples 100,397 1,600,328
Tiffany & Co 51,022(f) 1,058,707
Urban Outfitters 3,466(b,f) 54,000
Wet Seal Cl A 86,206(b,f) 224,998
---------------
Total 101,344,827
- -------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (0.7%)
Carter's 26,542(b,f) 450,949
Coach 320,745(b,f) 4,682,876
Jones Apparel Group 143,519 496,576
Liz Claiborne 253,530(f) 557,766
Nike Cl B 79,319 3,589,185
Polo Ralph Lauren 27,092(f) 1,111,585
Skechers USA Cl A 24,247(b,f) 241,500
Steven Madden 16,880(b) 293,374
VF 65,686(f) 3,679,730
---------------
Total 15,103,541
- -------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.2%)
Capitol Federal Financial 2,312 95,717
First Niagara Financial Group 42,786 558,785
Freddie Mac 112,515 66,946
Hudson City Bancorp 224,552 2,604,804
NewAlliance Bancshares 12,085(f) 132,814
Ocwen Financial 34,121(b) 303,677
People's United Financial 22,442 367,151
Trustco Bank NY 23,917 160,244
United Financial Bancorp 17,441 239,116
---------------
Total 4,529,254
- -------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (0.3%)
Beacon Roofing Supply 27,278(b) 347,249
Fastenal 74,300(f) 2,539,574
GATX 3,343(f) 80,566
Rush Enterprises Cl A 27,585(b,f) 251,024
Watsco 12,534 414,249
WESCO Intl 16,458(b) 303,156
WW Grainger 37,197(f) 2,713,521
---------------
Total 6,649,339
- -------------------------------------------------------------------------------------
WATER UTILITIES (--%)
Aqua America 5,838 121,080
California Water Service Group 4,243 184,571
---------------
Total 305,651
- -------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.2%)
Sprint Nextel 1,283,585(b) 3,119,112
USA Mobility 37,213(b) 393,341
---------------
Total 3,512,453
- -------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $2,692,173,898) $2,059,825,946
- -------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (3.1%)
SHARES VALUE(a)
RiverSource Short-Term Cash Fund, 0.47% 65,890,575(h) $65,890,575
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $65,890,575) $65,890,575
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
20 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(9.6%)
SHARES VALUE(a)
CASH COLLATERAL REINVESTMENT FUND
JPMorgan Prime Money Market
Fund 203,391,339 $203,391,339
- -----------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON
LOAN
(Cost: $203,391,339) $203,391,339
- -----------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $2,961,455,812)(i) $2,329,107,860
=================================================================
</Table>
INVESTMENTS IN DERIVATIVES
FUTURES CONTRACTS OUTSTANDING AT JAN. 31, 2009
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION
CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION)
- ------------------------------------------------------------------------------------
Russell 2000 Mini Index 234 $10,356,840 March 2009 $(124,593)
S&P 500 Index 285 58,603,125 March 2009 (7,248,513)
- ------------------------------------------------------------------------------------
Total $(7,373,106)
- ------------------------------------------------------------------------------------
</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, 2009, the
value of foreign securities represented 1.9% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
may be determined to be liquid under guidelines established by the Fund's
Board of Directors. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At Jan. 31,
2009, the value of these securities amounted to $2,109,750 or 0.1% of net
assets.
(e) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Jan. 31, 2008, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
----------------------------------------------------------------------------
Apollo Management LP* 08-02-07 thru 09-30-08 $30,730,942
Virgin Media 07-26-07 thru 08-06-08 101,975,398
</Table>
* Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 21
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(f) At Jan. 31, 2009, security was partially or fully on loan. See Note 5 to
the financial statements.
(g) At Jan. 31, 2009, investments in securities included securities valued at
$11,992,828 that were partially pledged as collateral to cover initial
margin deposits on open stock index futures contracts.
(h) Affiliated Money Market Fund -- See Note 7 to the financial statements. The
rate shown is the seven-day current annualized yield at Jan. 31, 2009.
(i) At Jan. 31, 2009, the cost of securities for federal income tax purposes
was approximately $2,961,456,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $44,376,000
Unrealized depreciation (676,724,000)
------------------------------------------------------------
Net unrealized depreciation $(632,348,000)
------------------------------------------------------------
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
- --------------------------------------------------------------------------------
22 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
FAIR VALUE MEASUREMENTS
Statement of Financial Accounting Standards No. 157 (SFAS 157) seeks to
implement more uniform reporting relating to the fair valuation of securities
for financial statement purposes. Mutual funds are required to implement the
requirements of this standard for fiscal years beginning after Nov. 15, 2007.
While uniformity of presentation is the objective of the standard, it is likely
that there may be a range of practices utilized and it may be some period of
time before industry practices become more uniform. For this reason care should
be exercised in interpreting this information and/or using it for comparison
with other mutual funds.
Various inputs are used in determining the value of the Fund's investments.
These inputs are summarized in the three broad levels listed below:
- Level 1 -- quoted prices in active markets for identical securities
- Level 2 -- other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit risks,
etc.)
- Level 3 -- significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
Observable inputs are those based on market data obtained from sources
independent of the fund, and unobservable inputs reflect the fund's own
assumptions based on the best information available. The input levels are not
necessarily an indication of the risk or liquidity associated with investments
at that level.
The following table is a summary of the inputs used to value the Fund's
investments as of Jan. 31, 2009:
<Table>
<Caption>
FAIR VALUE AT JAN. 31, 2009
-----------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- ------------------------------------------------------------------------------------
Investments in
securities $2,329,107,860 $-- $-- $2,329,107,860
Other financial
instruments* (7,373,106) -- -- (7,373,106)
- ------------------------------------------------------------------------------------
Total $2,321,734,754 $-- $-- $2,321,734,754
- ------------------------------------------------------------------------------------
</Table>
* Other financial instruments are derivative instruments, such as futures, which
are valued at the unrealized appreciation/depreciation on the instrument.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 23
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
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.
- --------------------------------------------------------------------------------
24 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES -------------------------------------------
JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $2,692,173,898) $ 2,059,825,946
Affiliated money market fund (identified cost $65,890,575) 65,890,575
Investments of cash collateral received for securities on loan
(identified cost $203,391,339) 203,391,339
- ----------------------------------------------------------------------------------
Total investments in securities (identified cost $2,961,455,812) 2,329,107,860
Cash 22,382
Foreign currency holdings (identified cost $652) 637
Capital shares receivable 437,979
Dividends receivable 3,595,532
Receivable for investment securities sold 130,663,058
- ----------------------------------------------------------------------------------
Total assets 2,463,827,448
- ----------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 2,380,003
Payable for investment securities purchased 128,505,375
Payable upon return of securities loaned 203,391,339
Variation margin payable on futures contracts 1,729,515
Accrued investment management services fees 34,994
Accrued distribution fees 19,269
Accrued transfer agency fees 23,709
Accrued administrative services fees 3,200
Accrued plan administration services fees 495
Other accrued expenses 656,515
- ----------------------------------------------------------------------------------
Total liabilities 336,744,414
- ----------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 2,127,083,034
- ----------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 8,112,130
Additional paid-in capital 4,419,558,829
Excess of distributions over net investment income (11,741,239)
Accumulated net realized gain (loss) (1,649,118,429)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (639,728,257)
- ----------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $ 2,127,083,034
- ----------------------------------------------------------------------------------
*Including securities on loan, at value $ 190,109,786
- ----------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 25
STATEMENT OF ASSETS AND LIABILITIES (continued) -------------------------------
JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $1,767,428,770 673,576,511 $2.62(1)
Class B $ 231,221,979 89,152,064 $2.59
Class C $ 11,202,974 4,332,812 $2.59
Class I $ 28,634,991 10,885,950 $2.63
Class R2 $ 2,177 822 $2.65
Class R3 $ 2,175 822 $2.65
Class R4 $ 70,551,113 26,500,389 $2.66
Class R5 $ 18,038,855 6,763,671 $2.67
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $2.78. 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.
- --------------------------------------------------------------------------------
26 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS -------------------------------------------------------
JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $ 38,823,381
Income distributions from affiliated money market fund 736,103
Fee income from securities lending 180,077
Less foreign taxes withheld (17,909)
- ----------------------------------------------------------------------------------
Total income 39,721,652
- ----------------------------------------------------------------------------------
Expenses:
Investment management services fees 5,880,940
Distribution fees
Class A 3,118,876
Class B 1,601,985
Class C 77,364
Class R2 7
Class R3 4
Transfer agency fees
Class A 3,943,510
Class B 546,009
Class C 25,521
Class R2 1
Class R3 1
Class R4 32,997
Class R5 737
Administrative services fees 771,189
Plan administration services fees
Class R2 4
Class R3 4
Class R4 164,984
Compensation of board members 47,231
Custodian fees 199,560
Printing and postage 580,700
Registration fees 17,240
Professional fees 42,299
Other 30,173
- ----------------------------------------------------------------------------------
Total expenses 17,081,336
Expenses waived/reimbursed by the Investment Manager and its
affiliates (3,023,996)
Earnings and bank fee credits on cash balances (27,696)
- ----------------------------------------------------------------------------------
Total net expenses 14,029,644
- ----------------------------------------------------------------------------------
Investment income (loss) -- net 25,692,008
- ----------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 27
STATEMENT OF OPERATIONS (continued) -------------------------------------------
JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $(1,237,189,207)
Foreign currency transactions 38,078,697
Futures contracts (24,847,973)
Options contracts written (4,792,289)
- ----------------------------------------------------------------------------------
Net realized gain (loss) on investments (1,228,750,772)
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities in
foreign currencies (298,686,651)
- ----------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (1,527,437,423)
- ----------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $(1,501,745,415)
- ----------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
28 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS -------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2009 JULY 31, 2008
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 25,692,008 $ 65,487,946
Net realized gain (loss) on investments (1,228,750,772) (20,362,259)
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities in
foreign currencies (298,686,651) (865,038,637)
- ----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (1,501,745,415) (819,912,950)
- ----------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (73,410,953) (36,389,921)
Class B (5,489,205) --
Class C (317,848) --
Class I (1,247,239) (866,696)
Class R2 (88) (32)
Class R3 (97) (44)
Class R4 (4,396,983) (2,588,075)
Class R5 (105) --
Net realized gain
Class A (11,674,647) (503,800,045)
Class B (1,552,503) (85,854,373)
Class C (75,828) (3,230,993)
Class I (166,927) (7,554,314)
Class R2 (14) (539)
Class R3 (14) (539)
Class R4 (654,100) (31,125,821)
Class R5 (14) (539)
- ----------------------------------------------------------------------------------------------------
Total distributions (98,986,565) (671,411,931)
- ----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 29
STATEMENTS OF CHANGES IN NET ASSETS (continued) -------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2009 JULY 31, 2008
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 38,712,056 $ 211,484,181
Class B shares 8,833,689 33,647,160
Class C shares 1,029,455 2,226,679
Class I shares 6,815,859 10,561,864
Class R4 shares 11,759,682 34,516,064
Class R5 shares 20,568,962 --
Reinvestment of distributions at net asset value
Class A shares 82,326,997 523,659,899
Class B shares 6,986,555 85,230,086
Class C shares 385,379 3,174,765
Class I shares 1,413,924 8,419,823
Class R4 shares 5,050,991 33,713,417
Payments for redemptions
Class A shares (407,989,877) (1,190,365,828)
Class B shares (48,792,757) (315,875,480)
Class C shares (2,783,016) (8,714,618)
Class I shares (848,883) (30,081,251)
Class R4 shares (55,775,946) (150,506,498)
Class R5 shares (360,970) (26,533,250)
- ----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions (332,667,900) (775,442,987)
- ----------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (1,933,399,880) (2,266,767,868)
Net assets at beginning of period 4,060,482,914 6,327,250,782
- ----------------------------------------------------------------------------------------------------
Net assets at end of period $ 2,127,083,034 $ 4,060,482,914
- ----------------------------------------------------------------------------------------------------
Undistributed (excess of distributions over) net investment
income $ (11,741,239) $ 47,429,271
- ----------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
30 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007 2006 2005
Net asset value, beginning of period $4.52 $6.05 $5.40 $5.26 $4.64
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(b) .07(b) .06(b) .06 .04
Net gains (losses) (both realized and
unrealized) (1.80) (.90) .79 .12 .61
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.77) (.83) .85 .18 .65
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.11) (.05) (.06) (.04) (.02)
Distributions from realized gains (.02) (.65) (.14) -- (.01)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.13) (.70) (.20) (.04) (.03)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.62 $4.52 $6.05 $5.40 $5.26
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1,767 $3,389 $5,039 $5,461 $1,030
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.07%(e) 1.03% 1.09% 1.06% 1.16%
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) .86%(e) .97% 1.09% 1.06% 1.11%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.78%(e) 1.31% .99% 1.08% .79%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 80% 68% 66% 116% 128%
- --------------------------------------------------------------------------------------------------------------
Total return(h) (39.47%)(i) (15.40%) 15.79% 3.51% 13.99%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2009 were less than 0.01% of average net assets. The ratio of net expenses
after expense waiver/reimbursement and after reduction for earnings and bank
fee credits was 0.96% for the year ended July 31, 2008.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 31
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007 2006 2005
Net asset value, beginning of period $4.41 $5.91 $5.29 $5.15 $4.56
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02(b) .03(b) .01(b) .02 --
Net gains (losses) (both realized and
unrealized) (1.76) (.88) .76 .12 .60
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.74) (.85) .77 .14 .60
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.06) -- (.01) -- --
Distributions from realized gains (.02) (.65) (.14) -- (.01)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.08) (.65) (.15) -- (.01)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.59 $4.41 $5.91 $5.29 $5.15
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $231 $433 $833 $1,169 $472
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.84%(e) 1.79% 1.86% 1.84% 1.93%
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 1.63%(e) 1.73% 1.86% 1.84% 1.88%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.01%(e) .56% .23% .28% .02%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 80% 68% 66% 116% 128%
- --------------------------------------------------------------------------------------------------------------
Total return(h) (39.64%)(i) (15.97%) 14.71% 2.72% 13.09%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2009 were less than 0.01% of average net assets. The ratio of net expenses
after expense waiver/reimbursement and after reduction for earnings and bank
fee credits was 1.72% for the year ended July 31, 2008.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
32 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007 2006 2005
Net asset value, beginning of period $4.41 $5.92 $5.30 $5.16 $4.57
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02(b) .03(b) .01(b) .02 --
Net gains (losses) (both realized and
unrealized) (1.75) (.89) .77 .12 .60
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.73) (.86) .78 .14 .60
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.07) -- (.02) -- --
Distributions from realized gains (.02) (.65) (.14) -- (.01)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.09) (.65) (.16) -- (.01)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.59 $4.41 $5.92 $5.30 $5.16
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $11 $21 $32 $35 $9
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.83%(e) 1.79% 1.86% 1.84% 1.93%
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 1.62%(e) 1.73% 1.86% 1.84% 1.88%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.03%(e) .55% .23% .28% .02%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 80% 68% 66% 116% 128%
- --------------------------------------------------------------------------------------------------------------
Total return(h) (39.39%)(i) (16.11%) 14.80% 2.71% 13.06%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2009 were less than 0.01% of average net assets. The ratio of net expenses
after expense waiver/reimbursement and after reduction for earnings and bank
fee credits was 1.72% for the year ended July 31, 2008.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 33
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(i) 2008 2007 2006 2005
Net asset value, beginning of period $4.55 $6.09 $5.44 $5.31 $4.67
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04(b) .09(b) .09(b) .10 .05
Net gains (losses) (both realized and
unrealized) (1.81) (.90) .78 .12 .63
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.77) (.81) .87 .22 .68
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.13) (.08) (.08) (.09) (.03)
Distributions from realized gains (.02) (.65) (.14) -- (.01)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.15) (.73) (.22) (.09) (.04)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.63 $4.55 $6.09 $5.44 $5.31
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $29 $39 $68 $105 $43
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) .51%(e) .57% .63% .59% .70%
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) .44%(e) .57% .63% .59% .65%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.21%(e) 1.74% 1.44% 1.53% 1.24%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 80% 68% 66% 116% 128%
- --------------------------------------------------------------------------------------------------------------
Total return (39.23%)(h) (15.02%) 16.13% 4.06% 14.64%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2009 were less than 0.01% of average net assets. The ratio of net expenses
after expense waiver/reimbursement and after reduction for earnings and bank
fee credits was 0.56% for the year ended July 31, 2008.
(h) Not annualized.
(i) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
34 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007(b)
Net asset value, beginning of period $4.55 $6.08 $6.08
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .03 .06 .03
Net gains (losses) (both realized and
unrealized) (1.81) (.90) .19
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.78) (.84) .22
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.10) (.04) (.08)
Distributions from realized gains (.02) (.65) (.14)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.12) (.69) (.22)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.65 $4.55 $6.08
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.28%(f) 1.39% 1.44%(f)
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .98%(f) 1.14% 1.44%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.70%(f) 1.15% .67%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 80% 68% 66%
- --------------------------------------------------------------------------------------------------------------
Total return (39.26%)(i) (15.45%) 3.71%(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, if any. Expense
ratio is before reduction for 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/reimburse
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, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. The ratio of net expenses after expense waiver/reimbursement and
after reduction for earnings and bank fee credits was 0.96% for the six
months ended Jan. 31, 2009. Earnings and bank fee credits for the year ended
July 31, 2008 were less than 0.01% of average net assets.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 35
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007(b)
Net asset value, beginning of period $4.56 $6.09 $6.08
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .03 .08 .04
Net gains (losses) (both realized and
unrealized) (1.80) (.90) .19
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.77) (.82) .23
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.12) (.06) (.08)
Distributions from realized gains (.02) (.65) (.14)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.14) (.71) (.22)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.65 $4.56 $6.09
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.05%(f) 1.14% 1.19%(f)
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .73%(f) .89% 1.19%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.94%(f) 1.40% .92%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 80% 68% 66%
- --------------------------------------------------------------------------------------------------------------
Total return (39.17%)(i) (15.19%) 3.88%(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, if any. Expense
ratio is before reduction for 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/reimburse
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, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. The ratio of net expenses after expense waiver/reimbursement and
after reduction for earnings and bank fee credits was 0.71% for the six
months ended Jan. 31, 2009. Earnings and bank fee credits for the year ended
July 31, 2008 were less than 0.01% of average net assets.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
36 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(i) 2008 2007 2006 2005
Net asset value, beginning of period $4.58 $6.13 $5.47 $5.28 $4.66
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04(b) .08(b) .07(b) .09 .04
Net gains (losses) (both realized and
unrealized) (1.82) (.92) .79 .12 .61
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.78) (.84) .86 .21 .65
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.12) (.06) (.06) (.02) (.02)
Distributions from realized gains (.02) (.65) (.14) -- (.01)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.14) (.71) (.20) (.02) (.03)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.66 $4.58 $6.13 $5.47 $5.28
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $71 $179 $330 $1,069 $--
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) .80%(e) .87% .90% .81% .95%
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) .72%(e) .82% .89% .81% .90%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.97%(e) 1.46% 1.14% 1.41% 1.08%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 80% 68% 66% 116% 128%
- --------------------------------------------------------------------------------------------------------------
Total return (39.24%)(h) (15.40%) 15.80% 4.03% 14.06%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2009 were less than 0.01% of average net assets. The ratio of net expenses
after expense waiver/reimbursement and after reduction for earnings and bank
fee credits was 0.81% for the year ended July 31, 2008.
(h) Not annualized.
(i) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 37
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007(b)
Net asset value, beginning of period $4.61 $6.11 $6.08
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .01 .08 .06
Net gains (losses) (both realized and
unrealized) (1.80) (.93) .19
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.79) (.85) .25
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.13) -- (.08)
Distributions from realized gains (.02) (.65) (.14)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.15) (.65) (.22)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.67 $4.61 $6.11
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $18 $-- $25
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) .58%(f) .67% .70%(f)
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .45%(f) .67% .70%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.09%(f) 1.21% 1.44%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 80% 68% 66%
- --------------------------------------------------------------------------------------------------------------
Total return (39.21%)(i) (15.38%) 4.24%(i)
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to July 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for 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/reimburse
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, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended Jan. 31,
2009 were less than 0.01% of average net assets. The ratio of net expenses
after expense waiver/reimbursement and after reduction for earnings and bank
fee credits was 0.66% for the year ended July 31, 2008.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
38 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS TO JAN. 31, 2009)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Large Cap Equity Fund (the Fund) is a series of RiverSource Large
Cap Series, Inc. and is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company. RiverSource
Large Cap Series, Inc. has 10 billion authorized shares of capital stock that
can be allocated among the separate series as designated by the Board of
Directors (the Board). The Fund invests primarily in equity securities of
companies with a market capitalization greater than $5 billion at the time of
purchase.
The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4
and Class R5 shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I, Class R2, Class R3, Class R4 and Class R5 shares are sold without a
front-end sales charge or CDSC and are offered to qualifying institutional
investors.
At Jan. 31, 2009, RiverSource Investments, LLC (RiverSource Investments or the
Investment Manager) and the RiverSource affiliated funds-of-funds, owned 100% of
Class I shares and the Investment Manager owned 100% of Class R2 and Class R3
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 LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 39
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
VALUATION OF SECURITIES
Effective Aug. 1, 2008, the Fund adopted 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. There was no impact to the
Fund's net assets or results of operations upon adoption. The fair valuation
measurements disclosure can be found following the Notes to Portfolio of
Investments.
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.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities (such as foreign securities)
that is not reflected in price quotations or valuations from other sources. A
fair value price is a good faith estimate of the value of a security at a given
point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the 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
- --------------------------------------------------------------------------------
40 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
Exchange. Swap transactions are valued through an authorized pricing service,
broker, or an internal model.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates; those maturing in 60 days or less are valued at amortized cost, which
approximates fair value.
ILLIQUID SECURITIES
At Jan. 31, 2009, investments in securities included issues that are illiquid
which the Fund currently limits to 15% of net assets, at market value, at the
time of purchase. The aggregate value of such securities at Jan. 31, 2009 was
$29,291,575 representing 1.38% of net assets. Certain illiquid securities may be
valued by management at fair value according to procedures approved, in good
faith, by the Board. According to Board guidelines, certain unregistered
securities are determined to be liquid and are not included within the 15%
limitation specified above. Assets are liquid if they can be sold or disposed of
in the ordinary course of business within seven days at approximately the value
at which the asset is valued by the Fund.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains, and facilitate buying and
selling of securities for investments, the Fund may buy and write options traded
on any U.S. or foreign exchange or in the over-the-counter market where
completing the obligation depends upon the credit standing of the other party.
Cash collateral may be collected by the Fund to secure certain over-the-counter
options (OTC options) trades. Cash collateral held by the Fund for such option
trades must be returned to the counterparty upon closure, exercise or expiration
of the contract. The Fund also may buy and sell put and call options and write
covered call options on portfolio securities as well as write cash-secured put
options. The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases. The risk
in writing a put option is that the Fund may incur a loss if the market price of
the security decreases and the option is exercised. The risk in buying an option
is that the Fund pays a premium whether or not the option is exercised. The Fund
also has the additional risk of being unable to enter into a closing transaction
if a liquid secondary market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. Option
contracts, including OTC option contracts, with no readily available market
value are valued using quotations obtained from independent brokers as of the
close of the New York Stock Exchange. The Fund will realize a gain or loss when
the option
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
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. At Jan. 31, 2009, 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 and options on futures are valued daily based upon the last sale price
at the close of the market on the principal exchange on which they are traded.
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the contract is closed
or expires.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes. At Jan. 31, 2009, foreign currency holdings were entirely
comprised of European monetary units.
The Fund may enter into forward foreign currency contracts for operational
purposes. The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency exchange
rates from an independent pricing service. The Fund is subject to the credit
risk that the
- --------------------------------------------------------------------------------
42 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
counterparty will not complete its contract obligations. At Jan. 31, 2009, the
Fund had no outstanding forward foreign currency contracts.
TOTAL RETURN EQUITY SWAP TRANSACTIONS
The Fund may enter into swap agreements to gain exposure to the total return on
a specified security, basket of securities or security indexes during the
specified period, in return for periodic payments based on a fixed or variable
interest rate. Total return swap agreements may be used to obtain exposure to a
security or market without owning or taking physical custody of such security or
market. Under the terms of a total return equity swap agreement, payments made
by the Fund or the counterparty are based on the total return of a particular
reference asset or assets (such as an equity security, a combination of such
securities, or an index). That is, one party agrees to pay another party the
return on a stock, basket of stocks, or stock index in return for a specified
interest rate.
The notional amounts of swap contracts are not recorded in the financial
statements. Swap contracts are valued daily, and the change in value is recorded
as unrealized appreciation (depreciation) until the termination of the swap, at
which time realized gain (loss) is recorded. Payments received or made are
recorded as realized gains (losses).
Swap agreements may be subject to liquidity risk, which exists when a particular
swap is difficult to purchase or sell. It may not be possible for the Fund to
initiate a transaction or liquidate a position at an advantageous time or price,
which may result in significant losses. Total return swaps are subject to the
risk associated with the investment in the underlying securities and also the
risk of the counterparty not fulfilling its obligations under the agreement. At
Jan. 31, 2009, the Fund had no outstanding total return equity swap 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.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
Financial Accounting Standards Board (FASB) Interpretation 48 (FIN 48),
"Accounting for Uncertainty in Income Taxes," clarifies the accounting for
uncertainty in income taxes recognized in accordance with FASB Statement 109,
"Accounting for Income Taxes." FIN 48 provides guidance for how uncertain tax
positions should be recognized, measured, presented and disclosed in the
financial statements. 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 futures and options
contracts, foreign currency transactions, recognition of unrealized appreciation
(depreciation) for certain derivative investments, re-characterization of REIT
distributions, investments in partnerships, post-October losses and losses
deferred due to wash sales. The character of distributions made during the year
from net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
RECENT ACCOUNTING PRONOUNCEMENTS
The Fund has adopted FASB Staff Position No. 133-1 and FIN No. 45-4 (FSP FAS
133-1 and FIN 45-4), "Disclosures about Credit Derivatives and Certain
Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No.
45". The amendments to FSP FAS 133-1 and FIN 45-4 require enhanced disclosures
about a fund's derivatives and guarantees. Funds are required to provide
enhanced disclosures about (a) how and why a fund uses derivative instruments,
(b) how derivative instruments and related hedged items are accounted for under
SFAS 133 and its related interpretations, (c) how derivative instruments and
related hedged items affect a fund's financial position, financial performance,
and cash flows and (d) the current status of the payment/performance risk of the
credit derivative. The amendments to FSP FAS 133-1 and FIN 45-4 also require
additional disclosures about the current status of the payment/performance risk
of a guarantee. At Jan. 31, 2009, the Fund did not own nor was it a party to any
credit derivative contracts within the scope of these amendments.
In March 2008, the FASB issued Statement of Financial Accounting Standards No.
161 (SFAS 161), "Disclosures about Derivative Instruments and Hedging
Activities -- an amendment of FASB Statement No. 133," which requires enhanced
disclosures about a fund's derivative and hedging activities. SFAS 161
- --------------------------------------------------------------------------------
44 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
is effective for financial statements issued for fiscal years and interim
periods beginning after Nov. 15, 2008. As of Jan. 31, 2009, management does not
believe the adoption of SFAS 161 will impact the financial statement amounts;
however, additional footnote disclosures may be required about the use of
derivative instruments and hedging items.
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.
SECURITY LITIGATION SETTLEMENTS
Litigation proceeds from Enron Corp. related to portfolio securities no longer
included in the portfolio are recorded as realized gains. Proceeds received
during the six months ended Jan. 31, 2009 were $589,084.
2. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.60%
to 0.375% annually as the Fund's assets increase. The fee may be adjusted upward
or downward by a performance incentive adjustment determined monthly by
measuring the percentage difference over a rolling 12-month period between the
annualized performance of one Class A share of the Fund and the annualized
performance of the Lipper Large-Cap Core Funds Index. In certain circumstances,
the Board may approve a change in the index. The maximum adjustment is 0.12% per
year. If the performance difference is less than 0.50%, the adjustment will be
zero. The adjustment decreased the management fee by $2,700,703 for the six
months ended Jan. 31, 2009. The management fee for the six months ended Jan. 31,
2009 was 0.39% of the Fund's average daily net assets, including the adjustment
under the terms of the performance incentive arrangement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 45
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.06% to 0.03% annually as the
Fund's assets increase. The fee for the six months ended Jan. 31, 2009 was 0.05%
of the Fund's average daily net assets.
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended Jan.
31, 2009, other expenses paid to this company were $14,607.
COMPENSATION OF BOARD MEMBERS
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.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual account-based fee at a rate equal to $19.50 for Class A, $20.50
for Class B and $20.00 for Class C for this service. The Fund also pays the
Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's
average daily net assets attributable to Class R2, Class R3, Class R4 and Class
R5 shares.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the Statement of Operations.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
- --------------------------------------------------------------------------------
46 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
DISTRIBUTION FEES
The Fund has an agreement with RiverSource Distributors, Inc. and RiverSource
Fund Distributors, Inc. (collectively, the Distributor) for distribution and
shareholder services. Under a Plan and Agreement of Distribution pursuant to
Rule 12b-1, the Fund pays a fee at an annual rate of up to 0.25% of the Fund's
average daily net assets attributable to Class A and Class R3 shares, a fee at
an annual rate of up to 0.50% of the Fund's average daily net assets
attributable to Class R2 shares and a fee at an annual rate of up to 1.00% of
the Fund's average daily net assets attributable to Class B and Class C shares.
For Class B and Class C shares, up to 0.75% of the fee is reimbursed for
distribution expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed expense") was approximately $11,663,000 and $169,000
for Class B and Class C shares, respectively. These amounts are based on the
most recent information available as of Jan. 31, 2009, and may be recovered from
future payments under the distribution plan or CDSC. To the extent the
unreimbursed expense has been fully recovered, the distribution fee is reduced.
SALES CHARGES
Sales charges received by the Distributor for distributing Fund shares were
$970,964 for Class A, $188,560 for Class B and $799 for Class C for the six
months ended Jan. 31, 2009.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the six months ended Jan. 31, 2009, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds*), including the adjustment under
the terms of a performance incentive arrangement, were as follows:
<Table>
Class A............................................. 0.86%
Class B............................................. 1.63
Class C............................................. 1.62
Class I............................................. 0.44
Class R2............................................ 0.98
Class R3............................................ 0.73
Class R4............................................ 0.72
Class R5............................................ 0.45
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 47
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
The waived/reimbursed fees and expenses for the transfer agency fees at the
class level were as follows:
<Table>
Class A......................................... $1,810,132
Class B......................................... 237,081
Class C......................................... 11,378
Class R4........................................ 12,742
</Table>
The waived/reimbursed fees and expenses for the plan administration services
fees at the class level were as follows:
<Table>
Class R2........................................... $ 4
Class R3........................................... 4
Class R4........................................... 917
</Table>
The management fees waived/reimbursed at the Fund level were $951,738.
The Investment Manager and its affiliates have contractually agreed to waive
certain fees and expenses until July 31, 2009, unless sooner terminated at the
discretion of the Board, such that net expenses (excluding fees and expenses of
acquired funds*), before giving effect to any performance incentive adjustment,
will not exceed the following percentage of the Fund's average daily net assets:
<Table>
Class A............................................. 1.04%
Class B............................................. 1.81
Class C............................................. 1.80
Class I............................................. 0.62
Class R2............................................ 1.42
Class R3............................................ 1.17
Class R4............................................ 0.90
Class R5............................................ 0.67
</Table>
* In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in
which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and the Fund may own different proportions of
acquired funds at different times, the amount of fees and expenses incurred
indirectly by the Fund will vary.
BANK FEE CREDITS
During the six months ended Jan. 31, 2009, the Fund's transfer agency fees were
reduced by $27,696 as a result of bank fee credits from overnight cash balances.
CUSTODIAN FEES
Effective Dec. 15, 2008, the fund pays custodian fees to JPMorgan Chase Bank,
N.A. Prior to Dec. 15, 2008, the Fund paid custodian fees amounting to $160,746
to Ameriprise Trust Company, a subsidiary of Ameriprise Financial.
- --------------------------------------------------------------------------------
48 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $2,374,454,240 and $2,722,612,153, respectively, for the
six months ended Jan. 31, 2009. Realized gains and losses are determined on an
identified cost basis.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED JAN. 31, 2009
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------
Class A 11,615,736 28,486,839 (117,055,540) (76,952,965)
Class B 2,675,934 2,442,851 (14,086,006) (8,967,221)
Class C 304,494 135,221 (808,411) (368,696)
Class I 2,085,809 489,247 (252,037) 2,323,019
Class R4 3,446,396 1,723,888 (17,774,327) (12,604,043)
Class R5 6,886,248 -- (123,399) 6,762,849
- ----------------------------------------------------------------------------------
<Caption>
YEAR ENDED JULY 31, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------
Class A 43,972,212 98,990,509 (225,955,886) (82,993,165)
Class B 6,351,542 16,421,985 (65,543,343) (42,769,816)
Class C 430,927 611,708 (1,682,294) (639,659)
Class I 2,016,152 1,585,654 (6,198,548) (2,596,742)
Class R4 6,389,837 6,289,817 (27,462,232) (14,782,578)
Class R5 -- -- (4,152,231) (4,152,231)
- ----------------------------------------------------------------------------------
</Table>
5. LENDING OF PORTFOLIO SECURITIES
Effective Dec. 1, 2008, the Fund has entered into a Master Securities Lending
Agreement ("the Agreement") with JPMorgan Chase Bank, National Association
("JPMorgan"). The Agreement authorizes JPMorgan as lending agent to lend
securities to authorized borrowers on behalf of the Fund. Pursuant to the
Agreement, all loaned securities are initially collateralized in an amount
equivalent to 102% (for securities denominated in U.S. dollars) or 105% (for all
other securities) of the value of the loaned securities, including accrued
interest in the case of fixed income securities. Collateral is maintained over
the life of the loan thereafter in an amount not less than 100% of the market
value of loaned
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 49
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
securities, as determined at the close of each business day, except to the
extent that a collateral shortfall is due to a diminution in the market value of
authorized investments in which cash collateral is invested. Any additional
collateral required to maintain those levels due to market fluctuations of the
loaned securities is delivered the following business day. Collateral is either
in the form of cash or U.S. government securities. Cash collateral received is
invested by the lending agent on behalf of the Fund into authorized investments
pursuant to the Agreement. The investments made with the cash collateral are
listed on the Portfolio of Investments and the value of cash collateral received
at period end is disclosed on the Statement of Assets and Liabilities along with
the related obligation to return the collateral upon return of the securities
loaned. At Jan. 31, 2009, securities valued at $190,109,786 were on loan secured
by cash collateral of $203,391,339 invested in short-term securities or cash
equivalents.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Income of
$98,787 earned from securities lending from Dec. 1, 2008 through Jan. 31, 2009
is included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Funds or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Prior to Dec. 1, 2008, RiverSource Investments, LLC served as securities lending
agent for the Fund under the Securities Lending Agency Agreement pursuant to
which the Fund agreed to reimburse RiverSource Investments, LLC for expenses
incurred by it in connection with the lending program. Expenses paid to
RiverSource Investments, LLC as securities lending agent were $8,577 through
Nov. 30, 2008 and are included in other expenses on the Statement of Operations.
Cash collateral received on loaned securities had been invested in an affiliated
money market fund. Income of $81,290 earned from securities lending from Aug. 1,
2008 through Nov. 30, 2008 is included in the Statement of Operations.
- --------------------------------------------------------------------------------
50 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
6. OPTIONS CONTRACTS WRITTEN
Contracts and premiums associated with options contracts written during the six
months ended Jan. 31, 2009, are as follows:
<Table>
<Caption>
PUTS CALLS
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- ---------------------------------------------------------------------------
Balance July 31, 2008 3,427 $ 2,454,994 16,411 $ 1,328,757
Opened 21,362 4,207,566 75,902 6,191,236
Closed (24,789) (6,662,560) (44,412) (5,545,057)
Expired -- -- (47,901) (1,974,936)
- ---------------------------------------------------------------------------
Balance Jan. 31, 2009 -- $ -- -- $ --
- ---------------------------------------------------------------------------
</Table>
7. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. The cost of the
Fund's purchases and proceeds from sales of shares of the RiverSource Short-Term
Cash fund aggregated $869,988,866 and $928,435,784, respectively, for the six
months ended Jan. 31, 2009. The income distributions received with respect to
the Fund's investment in RiverSource Short-Term Cash Fund can be found in the
Statement of Operations and the Fund's invested balance in RiverSource Short-
Term Cash Fund at Jan. 31, 2009, can be found in the Portfolio of Investments.
8. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
16, 2008, 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 $475
million. The borrowers shall have the right, upon written notice to the
Administrative Agent to request an increase of up to $175 million in the
aggregate amount of the credit facility from new or existing lenders, provided
that the aggregate amount of the credit facility shall at no time exceed $650
million. Participation in such increase by any existing lender shall be at such
lender's sole discretion. Interest is charged to each Fund based on its
borrowings at a rate equal to the federal funds rate plus 0.75%. Each borrowing
under the credit facility matures no later than 60 days after the date of
borrowing. The Fund also pays a
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 51
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
commitment fee equal to its pro rata share of the amount of the credit facility
at a rate of 0.06% per annum, in addition to an upfront fee equal to its pro
rata share of 0.02% of the amount of the credit facility. The Fund had no
borrowings during the six months ended Jan. 31, 2009.
Under the prior credit facility which was effective until Oct. 15, 2008, the
Fund had entered into a revolving credit facility with a syndicate of banks
headed by JPMorgan Chase Bank, N.A., whereby the Fund was permitted to borrow
for the temporary funding of shareholder redemptions or for other temporary or
emergency purposes. The credit facility agreement, which was a collective
agreement between the Fund and certain other RiverSource funds, severally and
not jointly, permitted collective borrowings up to $500 million. Interest was
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 matured no later
than 60 days after the date of borrowing. The Fund also paid a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.06% per annum.
9. CAPITAL LOSS CARRY-OVER AND POST-OCTOBER LOSS
For federal income tax purposes, the Fund had a capital loss carry-over of
$91,172,850 at July 31, 2008, that if not offset by capital gains will expire as
follows:
<Table>
<Caption>
2009 2010 2011
$60,717,128 $20,982,455 $9,473,267
</Table>
Because the measurement periods for a regulated investment company's income are
different for excise tax purposes versus income tax purposes, special rules are
in place to protect the amount of earnings and profits needed to support excise
tax distributions. As a result, the Fund is permitted to treat net capital
losses realized between Nov. 1, 2007 and its fiscal year end ("post-October
loss") as occurring on the first day of the following tax year. At July 31,
2008, the Fund had a post-October loss of $143,836,621 that is treated for
income tax purposes as occurring on Aug. 1, 2008.
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.
- --------------------------------------------------------------------------------
52 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
10. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc., was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company mutual funds and
they purport to bring the action derivatively on behalf of those funds under the
Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid
to the defendants by the funds for investment advisory and administrative
services are excessive. The plaintiffs seek remedies including restitution and
rescission of investment advisory and distribution agreements. The plaintiffs
voluntarily agreed to transfer this case to the United States District Court for
the District of Minnesota. In response to defendants' motion to dismiss the
complaint, the Court dismissed one of plaintiffs' four claims and granted
plaintiffs limited discovery. Defendants moved for summary judgment in April
2007. Summary judgment was granted in the defendants' favor on July 9, 2007. The
plaintiffs filed a notice of appeal with the Eighth Circuit Court of Appeals on
August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise
Financial, Inc., acquired J. & W. Seligman & Co., Inc. (Seligman). In late 2003,
Seligman conducted an extensive internal review concerning mutual fund trading
practices. Seligman's review, which covered the period 2001-2003, noted one
arrangement that permitted frequent trading in certain open-end registered
investment companies managed by Seligman (the Seligman Funds);
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 53
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
this arrangement was in the process of being closed down by Seligman before
September 2003. Seligman identified three other arrangements that permitted
frequent trading, all of which had been terminated by September 2002. In January
2004, Seligman, on a voluntary basis, publicly disclosed these four arrangements
to its clients and to shareholders of the Seligman Funds. Seligman also provided
information concerning mutual fund trading practices to the SEC and the Office
of the Attorney General of the State of New York (NYAG). In September 2005, the
New York staff of the SEC indicated that it was considering recommending to the
Commissioners of the SEC the instituting of a formal action against Seligman and
the distributor of the Seligman Funds, Seligman Advisors, Inc. (which is now
know as RiverSource Fund Distributors, Inc.), relating to frequent trading in
the Seligman Funds. Seligman responded to the staff in October 2005 that it
believed that any action would be both inappropriate and unnecessary, especially
in light of the fact that Seligman had previously resolved the underlying issue
with the Independent Directors of the Seligman Funds and made recompense to the
affected Seligman Funds.
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc., Seligman Data Corp. and Brian
T. Zino (collectively, the Seligman Parties), alleging, in substance, that the
Seligman Parties permitted various persons to engage in frequent trading and, as
a result, the prospectus disclosure used by the registered investment companies
then managed by Seligman is and has been misleading. The NYAG included other
related claims and also claimed that the fees charged by Seligman to the
Seligman Funds were excessive. On March 13, 2009, without admitting or denying
any violations of law or wrongdoing, the Seligman Parties entered into a
stipulation of settlement with the NYAG and settled the claims made by the NYAG.
Under the terms of the settlement, Seligman will pay $11.3 million to four
Seligman Funds. This settlement resolved all outstanding matters between the
Seligman Parties and the NYAG. In addition to the foregoing matter, the New York
staff of the SEC indicated in September 2005 that it was considering
recommending to the Commissioners of the SEC the instituting of a formal action
against Seligman and Seligman Advisors, Inc. relating to frequent trading in the
Seligman Funds. Seligman responded to the staff in October 2005 that it believed
that any action would be both inappropriate and unnecessary, especially in light
of the fact that Seligman had previously resolved the underlying issue with the
Independent Directors of the Seligman Funds and made recompense to the affected
Seligman Funds. There have been no further developments with the SEC on this
matter.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine
- --------------------------------------------------------------------------------
54 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
litigation, class actions, and governmental actions, concerning matters arising
in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT 55
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.
- --------------------------------------------------------------------------------
56 RIVERSOURCE LARGE CAP EQUITY FUND -- 2009 SEMIANNUAL REPORT
RIVERSOURCE LARGE CAP EQUITY FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. RiverSource(R) mutual funds are
distributed by RiverSource Distributors, Inc., and
RiverSource Fund Distributors, Inc., Members FINRA, and
managed by RiverSource Investments, LLC. RiverSource is part
of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2009 RiverSource Investments, LLC. S-6255 H (4/09)
</Table>
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
LARGE CAP VALUE FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JANUARY 31, 2009
RIVERSOURCE LARGE CAP VALUE FUND SEEKS TO PROVIDE
SHAREHOLDERS WITH LONG-TERM GROWTH OF CAPITAL.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 2
Fund Expenses Example.............. 8
Portfolio of Investments........... 10
Statement of Assets and
Liabilities...................... 16
Statement of Operations............ 17
Statements of Changes in Net
Assets........................... 19
Financial Highlights............... 21
Notes to Financial Statements...... 29
Proxy Voting....................... 44
</Table>
(DALBAR LOGO)
The RiverSource mutual fund shareholder reports have
been awarded the Communications Seal from Dalbar Inc.,
an independent financial services research firm. The
Seal recognizes communications demonstrating a level
of excellence in the industry.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> RiverSource Large Cap Value Fund (the Fund) Class A shares declined 36.97%
(excluding sales charge) for the semiannual period ended Jan. 31, 2009.
> The Fund underperformed its benchmark, the Russell 1000(R) Value Index, which
fell 35.10% during the same time frame.
> The Fund's peer group, the Lipper Large-Cap Value Funds Index, declined 33.41%
during the same six-month period.
ANNUALIZED TOTAL RETURNS (for period ended Jan. 31, 2009)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Since
inception
6 months* 1 year 3 years 5 years 6/27/02
- -----------------------------------------------------------------------------
RiverSource Large Cap Value
Fund Class A (excluding
sales charge) -36.97% -44.77% -15.45% -6.59% -2.78%
- -----------------------------------------------------------------------------
Russell 1000 Value Index
(unmanaged)(1) -35.10% -41.78% -13.09% -3.52% -0.17%
- -----------------------------------------------------------------------------
Lipper Large-Cap Value Funds
Index(2) -33.41% -39.54% -12.24% -4.00% -0.89%
- -----------------------------------------------------------------------------
</Table>
* Not annualized.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses. See the Average Annual Total Returns table for performance of other
share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
2 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
(1) The Russell 1000 Value Index, an unmanaged index, measures the performance
of those stocks in the Russell 1000 Index with lower price-to-book ratios
and lower forecasted growth values. The index reflects reinvestment of all
distributions and changes in market prices.
(2) The Lipper Large-Cap Value Funds Index includes the 30 largest large-cap
value funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT JAN. 31, 2009
SINCE
Without sales charge 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception
6/27/02) -36.97% -44.77% -15.45% -6.59% -2.78%
- ---------------------------------------------------------------------------
Class B (inception
6/27/02) -37.17% -45.22% -16.10% -7.29% -3.50%
- ---------------------------------------------------------------------------
Class C (inception
6/27/02) -37.30% -45.37% -16.18% -7.34% -3.54%
- ---------------------------------------------------------------------------
Class I (inception
3/4/04) -36.71% -44.51% -15.05% N/A -6.75%
- ---------------------------------------------------------------------------
Class R2 (inception
12/11/06) -37.02% -44.81% N/A N/A -25.79%
- ---------------------------------------------------------------------------
Class R3 (inception
12/11/06) -36.82% -44.64% N/A N/A -25.59%
- ---------------------------------------------------------------------------
Class R4 (inception
6/27/02) -36.78% -44.42% -15.09% -6.30% -2.48%
- ---------------------------------------------------------------------------
Class R5 (inception
12/11/06) -36.70% -44.51% N/A N/A -25.41%
- ---------------------------------------------------------------------------
With sales charge
Class A (inception
6/27/02) -40.66% -47.93% -17.11% -7.69% -3.65%
- ---------------------------------------------------------------------------
Class B (inception
6/27/02) -40.28% -47.93% -16.97% -7.55% -3.50%
- ---------------------------------------------------------------------------
Class C (inception
6/27/02) -37.91% -45.90% -16.18% -7.34% -3.54%
- ---------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
4 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT DEC. 31, 2008
SINCE
Without sales charge 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception
6/27/02) -30.61% -41.39% -11.44% -4.22% -1.15%
- ---------------------------------------------------------------------------
Class B (inception
6/27/02) -30.63% -41.70% -12.03% -4.88% -1.85%
- ---------------------------------------------------------------------------
Class C (inception
6/27/02) -30.68% -41.68% -12.08% -4.91% -1.87%
- ---------------------------------------------------------------------------
Class I (inception
3/4/04) -30.32% -41.10% -11.03% N/A -4.71%
- ---------------------------------------------------------------------------
Class R2 (inception
12/11/06) -30.47% -41.30% N/A N/A -22.64%
- ---------------------------------------------------------------------------
Class R3 (inception
12/11/06) -30.42% -41.11% N/A N/A -22.42%
- ---------------------------------------------------------------------------
Class R4 (inception
6/27/02) -30.23% -40.89% -11.07% -3.88% -0.84%
- ---------------------------------------------------------------------------
Class R5 (inception
12/11/06) -30.40% -41.16% N/A N/A -22.30%
- ---------------------------------------------------------------------------
With sales charge
Class A (inception
6/27/02) -34.62% -44.80% -13.18% -5.36% -2.05%
- ---------------------------------------------------------------------------
Class B (inception
6/27/02) -34.06% -44.59% -12.94% -5.15% -1.85%
- ---------------------------------------------------------------------------
Class C (inception
6/27/02) -31.36% -42.25% -12.08% -4.91% -1.87%
- ---------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum sales charge of 5.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I, Class R2, Class R3, Class R4 and Class R5 shares. Class I,
Class R2, Class R3, Class R4 and Class R5 are available to institutional
investors only.
*Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 5
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
STYLE MATRIX
- --------------------------------------------------------------------------------
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund is designed to
generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
ANNUAL OPERATING EXPENSE RATIO
(as of the current prospectus)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Total Net
fund fund
expenses expenses
- --------------------------------------
Class A 1.31% 1.31%
- --------------------------------------
Class B 2.07% 2.07%
- --------------------------------------
Class C 2.08% 2.08%
- --------------------------------------
Class I 0.86% 0.86%
- --------------------------------------
Class R2 1.65% 1.65%
- --------------------------------------
Class R3 1.39% 1.39%
- --------------------------------------
Class R4 1.15% 1.06%(a)
- --------------------------------------
Class R5 0.92% 0.92%
- --------------------------------------
</Table>
(a) The Investment Manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until July 31, 2009, 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 0.07%
for the year ended July 31, 2008), will not exceed 1.13% for Class R4.
- --------------------------------------------------------------------------------
6 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
SECTOR DIVERSIFICATION(1) (at Jan. 31, 2009; % of portfolio assets)
- ---------------------------------------------------------------------
<Table>
<Caption>
Consumer Discretionary 4.7%
- ------------------------------------------------
Consumer Staples 6.7%
- ------------------------------------------------
Energy 17.8%
- ------------------------------------------------
Financials 12.6%
- ------------------------------------------------
Health Care 9.2%
- ------------------------------------------------
Industrials 12.2%
- ------------------------------------------------
Information Technology 10.7%
- ------------------------------------------------
Materials 2.5%
- ------------------------------------------------
Telecommunication Services 7.1%
- ------------------------------------------------
Utilities 2.6%
- ------------------------------------------------
Other(2) 13.9%
- ------------------------------------------------
</Table>
(1) Sectors can be comprised of several industries. Please refer to the section
entitled "Portfolio of Investments" for a complete listing. No single
industry exceeds 25% of portfolio assets.
(2) Cash & Cash Equivalents. Of the 13.9%, 11.7% is due to security lending
activity and 2.2% is the Fund's cash equivalent position.
The sectors identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
TOP TEN HOLDINGS (at Jan. 31, 2009; % of portfolio assets)
- ---------------------------------------------------------------------
<Table>
<Caption>
Chevron 3.6%
- ------------------------------------------------
Verizon Communications 3.2%
- ------------------------------------------------
AT&T 3.1%
- ------------------------------------------------
Intel 2.8%
- ------------------------------------------------
ConocoPhillips 2.6%
- ------------------------------------------------
Exxon Mobil 2.5%
- ------------------------------------------------
Lorillard 2.1%
- ------------------------------------------------
Wal-Mart Stores 2.0%
- ------------------------------------------------
Caterpillar 1.9%
- ------------------------------------------------
Transocean 1.8%
- ------------------------------------------------
</Table>
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 7
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 expense ratio of each of the acquired funds as of the acquired fund's
most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended Jan. 31, 2009.
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.
- --------------------------------------------------------------------------------
8 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
AUG. 1, 2008 JAN. 31, 2009 THE PERIOD(A) EXPENSE RATIO
- ------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 630.30 $ 6.05 1.48%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.65 $ 7.49 1.48%
- ------------------------------------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 628.30 $ 9.18 2.25%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,013.79 $11.36 2.25%
- ------------------------------------------------------------------------------------------
Class C
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 627.00 $ 9.14 2.24%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,013.84 $11.31 2.24%
- ------------------------------------------------------------------------------------------
Class I
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 632.90 $ 3.68 .90%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.56 $ 4.56 .90%
- ------------------------------------------------------------------------------------------
Class R2
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 629.80 $ 6.74 1.65%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.80 $ 8.34 1.65%
- ------------------------------------------------------------------------------------------
Class R3
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 631.80 $ 5.85 1.43%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.90 $ 7.23 1.43%
- ------------------------------------------------------------------------------------------
Class R4
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 632.20 $ 3.97 .97%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.21 $ 4.91 .97%
- ------------------------------------------------------------------------------------------
Class R5
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 633.00 $ 3.77 .92%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.46 $ 4.66 .92%
- ------------------------------------------------------------------------------------------
</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 183/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Jan. 31, 2009: -36.97%
for Class A, -37.17% for Class B, -37.30% for Class C, -36.71% for Class I,
-37.02% for Class R2, -36.82% for Class R3, -36.78% for Class R4 and -36.70%
for Class R5.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 9
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
JAN. 31, 2009 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (95.9%)
ISSUER SHARES VALUE(a)
AEROSPACE & DEFENSE (5.0%)
Boeing 9,121 $385,910
General Dynamics 2,080(f) 117,998
Goodrich 4,131 159,704
Honeywell Intl 13,608 446,479
L-3 Communications Holdings 1,452 114,737
Lockheed Martin 3,207 263,102
United Technologies 5,998(f) 287,844
---------------
Total 1,775,774
- -------------------------------------------------------------------------------------
AIRLINES (0.4%)
Delta Air Lines 20,226(b) 139,559
- -------------------------------------------------------------------------------------
BEVERAGES (0.5%)
Coca-Cola 4,428 189,164
- -------------------------------------------------------------------------------------
BIOTECHNOLOGY (0.9%)
Amgen 3,485(b) 191,152
Genzyme 1,729(b,f) 119,163
---------------
Total 310,315
- -------------------------------------------------------------------------------------
CAPITAL MARKETS (0.6%)
Bank of New York Mellon 6,833 175,881
Blackstone Group LP 5,468 24,661
State Street 1,007(f) 23,433
---------------
Total 223,975
- -------------------------------------------------------------------------------------
CHEMICALS (2.0%)
Dow Chemical 17,693 205,062
Eastman Chemical 1,606(f) 41,676
EI du Pont de Nemours & Co 17,002(f) 390,366
Rohm & Haas 1,295 71,471
---------------
Total 708,575
- -------------------------------------------------------------------------------------
COMMERCIAL BANKS (0.8%)
SunTrust Banks 2,854(f) 34,990
Wells Fargo & Co 13,293(f) 251,238
---------------
Total 286,228
- -------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (2.0%)
Cisco Systems 21,917(b,f) 328,097
Motorola 15,155(f) 67,137
Nokia ADR 11,988(c) 147,093
QUALCOMM 4,816(f) 166,393
---------------
Total 708,720
- -------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (2.8%)
Hewlett-Packard 15,194 527,991
IBM 5,038(f) 461,733
---------------
Total 989,724
- -------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.6%)
Fluor 2,017(f) 78,461
KBR 10,095(f) 142,946
---------------
Total 221,407
- -------------------------------------------------------------------------------------
CONSUMER FINANCE (0.2%)
American Express 4,591 76,807
- -------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (2.5%)
Apollo Management LP 10,900(d,e) 16,350
Bank of America 33,567 220,871
JPMorgan Chase & Co 25,930 661,474
---------------
Total 898,695
- -------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (7.5%)
AT&T 49,315 1,214,135
Deutsche Telekom 9,148(c) 111,076
Verizon Communications 42,857 1,280,139
---------------
Total 2,605,350
- -------------------------------------------------------------------------------------
ELECTRIC UTILITIES (1.6%)
Entergy 1,999(f) 152,644
Exelon 3,163(f) 171,497
FPL Group 1,963(f) 101,193
Southern 4,611 154,238
---------------
Total 579,572
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
10 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
ELECTRICAL EQUIPMENT (1.0%)
ABB ADR 18,399(c) $240,107
Emerson Electric 3,887 127,105
---------------
Total 367,212
- -------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (0.2%)
Tyco Electronics 4,188(c,f) 59,302
- -------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (5.7%)
Baker Hughes 9,864(f) 328,668
Halliburton 24,350 420,038
Schlumberger 7,208 294,158
Transocean 13,160(b) 718,799
Weatherford Intl 23,825(b) 262,790
---------------
Total 2,024,453
- -------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (2.9%)
CVS Caremark 9,026 242,619
Wal-Mart Stores 16,491 777,056
---------------
Total 1,019,675
- -------------------------------------------------------------------------------------
GAS UTILITIES (0.3%)
ONEOK 3,799 111,007
- -------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.5%)
Boston Scientific 19,746(b) 175,147
- -------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (2.3%)
Aetna 5,318(f) 164,858
Cardinal Health 3,570 134,411
CIGNA 3,623 62,895
Humana 2,612(b) 99,073
McKesson 1,684 74,433
UnitedHealth Group 9,846 278,937
---------------
Total 814,607
- -------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (0.9%)
Carnival Unit 18,033 328,020
- -------------------------------------------------------------------------------------
HOUSEHOLD DURABLES (2.0%)
Centex 21,881 186,208
DR Horton 20,964 124,945
KB Home 15,170(f) 161,864
Lennar Cl A 15,105 116,157
Whirlpool 3,334(f) 111,456
---------------
Total 700,630
- -------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (0.5%)
3M 1,438 77,350
Tyco Intl 5,563(c) 116,934
---------------
Total 194,284
- -------------------------------------------------------------------------------------
INSURANCE (9.9%)
ACE 15,951(c) 696,420
AFLAC 9,475 219,915
Allstate 8,006 173,490
Arch Capital Group 1,432(b,c) 86,135
Chubb 4,404(f) 187,522
Endurance Specialty Holdings 2,399(c,f) 65,397
Everest Re Group 10,622(c) 669,186
Marsh & McLennan Companies 18,757 362,573
Prudential Financial 9,691(f) 249,543
RenaissanceRe Holdings 2,284(c) 102,072
Travelers Companies 12,462 481,532
XL Capital Cl A 63,256(c) 183,442
---------------
Total 3,477,227
- -------------------------------------------------------------------------------------
MACHINERY (5.9%)
Caterpillar 24,904 768,288
Deere & Co 5,228(f) 181,621
Eaton 7,452 328,037
Flowserve 1,566 83,483
Illinois Tool Works 15,719 513,383
Ingersoll-Rand Cl A 1,962(c) 31,804
Parker Hannifin 4,594 175,537
---------------
Total 2,082,153
- -------------------------------------------------------------------------------------
MEDIA (0.2%)
Sirius XM Radio 100,832(b) 12,100
Virgin Media 9,080(e) 41,223
---------------
Total 53,323
- -------------------------------------------------------------------------------------
METALS & MINING (0.2%)
Alcoa 9,637 75,072
- -------------------------------------------------------------------------------------
MULTILINE RETAIL (1.0%)
JC Penney 5,344(f) 89,512
Kohl's 3,025(b,f) 111,048
Macy's 6,310 56,475
Target 3,127(f) 97,562
---------------
Total 354,597
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 11
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
MULTI-UTILITIES (1.0%)
Dominion Resources 4,654 $163,728
Xcel Energy 10,071 185,910
---------------
Total 349,638
- -------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (14.2%)
Anadarko Petroleum 9,681 355,680
Apache 4,949 371,175
BP ADR 5,528(c,f) 234,774
Chevron 20,286 1,430,569
ConocoPhillips 21,226 1,008,872
Devon Energy 4,654 286,686
Exxon Mobil 13,068 999,441
Marathon Oil 3,402 92,636
Petroleo Brasileiro ADR 3,559(c) 93,246
Royal Dutch Shell ADR 2,687(c) 132,281
---------------
Total 5,005,360
- -------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.5%)
Intl Paper 9,667 88,163
Weyerhaeuser 3,828(f) 104,658
---------------
Total 192,821
- -------------------------------------------------------------------------------------
PHARMACEUTICALS (6.5%)
Bristol-Myers Squibb 22,703 486,071
Johnson & Johnson 5,916 341,294
Merck & Co 17,614 502,880
Pfizer 23,449 341,886
Schering-Plough 17,328(f) 304,280
Wyeth 7,934 340,924
---------------
Total 2,317,335
- -------------------------------------------------------------------------------------
ROAD & RAIL (0.1%)
Hertz Global Holdings 6,300(b,f) 31,878
- -------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (5.2%)
Atmel 26,921(b) 89,916
Fairchild Semiconductor Intl 11,070(b) 50,369
Infineon Technologies 6,717(b,c,f) 5,986
Infineon Technologies ADR 11,529(b,c) 9,915
Intel 84,589 1,091,197
Micron Technology 36,831(b,f) 137,011
ON Semiconductor 5,917(b) 24,674
Spansion Cl A 13,060(b) 875
STMicroelectronics 28,452(c) 147,097
Taiwan Semiconductor Mfg ADR 25,479(c) 192,112
Teradyne 18,028(b) 86,715
---------------
Total 1,835,867
- -------------------------------------------------------------------------------------
SOFTWARE (1.7%)
Microsoft 22,878 391,213
Oracle 13,550(b) 228,047
---------------
Total 619,260
- -------------------------------------------------------------------------------------
SPECIALTY RETAIL (1.1%)
Home Depot 11,945 257,176
Lowe's Companies 8,016(f) 146,452
---------------
Total 403,628
- -------------------------------------------------------------------------------------
TOBACCO (4.1%)
Lorillard 13,841 822,986
Philip Morris Intl 16,843 625,717
---------------
Total 1,448,703
- -------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.6%)
Vodafone Group ADR 10,960(c,f) 203,746
- -------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $45,491,369) $33,958,810
- -------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (2.5%)
SHARES VALUE(a)
RiverSource Short-Term
Cash Fund, 0.47% 869,154(g) $869,154
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $869,154) $869,154
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL
RECEIVED FOR SECURITIES ON LOAN
(13.0%)
SHARES VALUE(a)
CASH COLLATERAL REINVESTMENT FUND
JPMorgan Prime Money Market Fund 4,592,388 $4,592,388
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $4,592,388) $4,592,388
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $50,952,911)(h) $39,420,352
=====================================================================================
</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, 2009, the
value of foreign securities represented 10.0% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
may be determined to be liquid under guidelines established by the Fund's
Board of Directors. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At Jan. 31,
2009, the value of these securities amounted to $16,350 or 0.05% of net
assets.
(e) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Jan. 31, 2009, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
-------------------------------------------------------------------------
Apollo Management LP* 08-02-07 thru 01-16-08 $240,576
Virgin Media 03-14-08 thru 04-10-08 122,462
</Table>
* Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended.
(f) At Jan. 31, 2009, security was partially or fully on loan. See Note 5 to
the financial statements.
(g) Affiliated Money Market Fund -- See Note 6 to the financial statements. The
rate shown is the seven-day current annualized yield at Jan. 31, 2009.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 13
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(h) At Jan. 31, 2009, the cost of securities for federal income tax purposes
was approximately $50,953,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $505,000
Unrealized depreciation (12,038,000)
-----------------------------------------------------------
Net unrealized depreciation $(11,533,000)
-----------------------------------------------------------
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
- --------------------------------------------------------------------------------
14 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS
Statement of Financial Accounting Standards No. 157 (SFAS 157) seeks to
implement more uniform reporting relating to the fair valuation of securities
for financial statement purposes. Mutual funds are required to implement the
requirements of this standard for fiscal years beginning after Nov. 15, 2007.
While uniformity of presentation is the objective of the standard, it is likely
that there may be a range of practices utilized and it may be some period of
time before industry practices become more uniform. For this reason care should
be exercised in interpreting this information and/or using it for comparison
with other mutual funds.
Various inputs are used in determining the value of the Fund's investments.
These inputs are summarized in the three broad levels listed below:
- Level 1 -- quoted prices in active markets for identical securities
- Level 2 -- other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit risks,
etc.)
- Level 3 -- significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
Observable inputs are those based on market data obtained from sources
independent of the fund, and unobservable inputs reflect the fund's own
assumptions based on the best information available. The input levels are not
necessarily an indication of the risk or liquidity associated with investments
at that level.
The following table is a summary of the inputs used to value the Fund's
investments as of Jan. 31, 2009:
<Table>
<Caption>
FAIR VALUE AT JAN. 31, 2009
--------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
- -----------------------------------------------------------------------------------
Investments in securities $39,303,291 $117,061 $-- $39,420,352
</Table>
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 15
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $45,491,369) $ 33,958,810
Affiliated money market fund (identified cost $869,154) 869,154
Investments of cash collateral received for securities on loan
(identified cost $4,592,388) 4,592,388
- -------------------------------------------------------------------------------
Total investments in securities (identified cost $50,952,911) 39,420,352
Capital shares receivable 9,805
Dividends and accrued interest receivable 96,545
Receivable for investment securities sold 618,127
- -------------------------------------------------------------------------------
Total assets 40,144,829
- -------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 53,545
Payable upon return of securities loaned 4,592,388
Accrued investment management services fees 596
Accrued distribution fees 259
Accrued transfer agency fees 278
Accrued administrative services fees 60
Other accrued expenses 99,848
- -------------------------------------------------------------------------------
Total liabilities 4,746,974
- -------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 35,397,855
- -------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 137,783
Additional paid-in capital 60,739,768
Undistributed net investment income 234,117
Accumulated net realized gain (loss) (14,181,130)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (11,532,683)
- -------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $ 35,397,855
- -------------------------------------------------------------------------------
*Including securities on loan, at value $ 4,335,396
- -------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $18,489,196 7,199,253 $2.57(1)
Class B $ 4,168,470 1,617,161 $2.58
Class C $ 424,860 166,354 $2.55
Class I $12,295,611 4,787,853 $2.57
Class R2 $ 2,320 906 $2.56
Class R3 $ 1,954 763 $2.56
Class R4 $ 13,454 5,233 $2.57
Class R5 $ 1,990 763 $2.61
- ----------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $2.73. 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.
- --------------------------------------------------------------------------------
16 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS --------------------------------------------------------
SIX MONTHS ENDED JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $ 641,446
Interest 135
Income distributions from affiliated money market fund 6,316
Fee income from securities lending 782
- -------------------------------------------------------------------------------
Total income 648,679
- -------------------------------------------------------------------------------
Expenses:
Investment management services fees 93,755
Distribution fees
Class A 31,958
Class B 27,897
Class C 2,647
Class R2 7
Class R3 3
Transfer agency fees
Class A 42,506
Class B 9,900
Class C 921
Class R4 4
Administrative services fees 12,669
Plan administration services fees
Class R2 3
Class R3 3
Class R4 22
Compensation of board members 686
Custodian fees 15,100
Printing and postage 19,335
Registration fees 31,825
Professional fees 14,529
Other 1,988
- -------------------------------------------------------------------------------
Total expenses 305,758
Expenses waived/reimbursed by the Investment Manager and its
affiliates (32)
Earnings and bank fee credits on cash balances (29)
- -------------------------------------------------------------------------------
Total net expenses 305,697
- -------------------------------------------------------------------------------
Investment income (loss) -- net 342,982
- -------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 17
STATEMENT OF OPERATIONS (continued) --------------------------------------------
SIX MONTHS ENDED JAN. 31, 2009 (UNAUDITED)
<Table>
<Caption>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $(12,770,451)
Foreign currency transactions (319)
- -------------------------------------------------------------------------------
Net realized gain (loss) on investments (12,770,770)
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies (6,826,944)
- -------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (19,597,714)
- -------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $(19,254,732)
- -------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
18 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2009 JULY 31, 2008
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 342,982 $ 1,045,750
Net realized gain (loss) on investments (12,770,770) 927,507
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities in
foreign currencies (6,826,944) (16,296,453)
- --------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (19,254,732) (14,323,196)
- --------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (355,895) (682,628)
Class B (13,356) (32,633)
Class C (3,634) (4,493)
Class I (226,632) (311,395)
Class R2 (51) (49)
Class R3 (51) (60)
Class R4 (437) (623)
Class R5 (56) --
Net realized gain
Class A (159,185) (4,625,594)
Class B (35,901) (1,148,253)
Class C (3,687) (84,730)
Class I (66,705) (1,493,181)
Class R2 (19) (369)
Class R3 (17) (369)
Class R4 (112) (3,183)
Class R5 (17) (369)
- --------------------------------------------------------------------------------------------------
Total distributions (865,755) (8,387,929)
- --------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 19
STATEMENTS OF CHANGES IN NET ASSETS (continued) --------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JAN. 31, 2009 JULY 31, 2008
(UNAUDITED)
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 2,846,794 $ 4,629,689
Class B shares 477,414 701,838
Class C shares 90,238 135,278
Class I shares 6,040,859 2,612,695
Class R2 shares 424 --
Class R4 shares -- 1,000
Reinvestment of distributions at net asset value
Class A shares 501,092 5,196,120
Class B shares 48,538 1,166,160
Class C shares 7,274 87,581
Class I shares 293,251 1,804,061
Class R2 shares 9 --
Class R4 shares 335 2,650
Payments for redemptions
Class A shares (7,743,560) (22,746,329)
Class B shares (1,041,821) (6,130,946)
Class C shares (81,094) (340,594)
Class I shares (255,576) (5,559,082)
Class R4 shares -- (10,330)
- --------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions 1,184,177 (18,450,209)
- --------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (18,936,310) (41,161,334)
Net assets at beginning of period 54,334,165 95,495,499
- --------------------------------------------------------------------------------------------------
Net assets at end of period $ 35,397,855 $ 54,334,165
- --------------------------------------------------------------------------------------------------
Undistributed net investment income $ 234,117 $ 491,247
- --------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
20 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(h) 2008 2007 2006 2005
Net asset value, beginning of period $4.18 $5.71 $5.88 $5.83 $5.34
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(b) .07(b) .06(b) .09 .06
Net gains (losses) (both realized and
unrealized) (1.57) (1.05) .77 .32 .70
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.54) (.98) .83 .41 .76
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.07) (.07) (.07) (.04)
Distributions from realized gains (.02) (.48) (.93) (.29) (.23)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.07) (.55) (1.00) (.36) (.27)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.57 $4.18 $5.71 $5.88 $5.83
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $18 $35 $62 $63 $74
- --------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 1.48%(e) 1.31% 1.28% 1.21% 1.29%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.59%(e) 1.41% .99% 1.35% 1.07%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 24% 35% 46% 57%
- --------------------------------------------------------------------------------------------------------------
Total return(f) (36.97%)(g) (18.65%) 14.47% 7.39% 14.52%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 21
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(h) 2008 2007 2006 2005
Net asset value, beginning of period $4.15 $5.66 $5.82 $5.77 $5.29
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(b) .03(b) .01(b) .04 .01
Net gains (losses) (both realized and
unrealized) (1.55) (1.04) .78 .32 .70
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.54) (1.01) .79 .36 .71
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.01) (.02) (.02) (.02) --
Distributions from realized gains (.02) (.48) (.93) (.29) (.23)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.03) (.50) (.95) (.31) (.23)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.58 $4.15 $5.66 $5.82 $5.77
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $4 $7 $15 $19 $28
- --------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 2.25%(e) 2.07% 2.05% 1.97% 2.05%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) .83%(e) .65% .23% .59% .30%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 24% 35% 46% 57%
- --------------------------------------------------------------------------------------------------------------
Total return(f) (37.17%)(g) (19.35%) 13.75% 6.51% 13.66%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
22 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(h) 2008 2007 2006 2005
Net asset value, beginning of period $4.13 $5.64 $5.82 $5.77 $5.29
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(b) .03(b) .01(b) .04 .01
Net gains (losses) (both realized and
unrealized) (1.55) (1.03) .76 .32 .70
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.54) (1.00) .77 .36 .71
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) (.03) (.02) (.02) --
Distributions from realized gains (.02) (.48) (.93) (.29) (.23)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.04) (.51) (.95) (.31) (.23)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.55 $4.13 $5.64 $5.82 $5.77
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $1 $1 $1 $1
- --------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 2.24%(e) 2.08% 2.04% 1.98% 2.06%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) .82%(e) .65% .23% .58% .30%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 24% 35% 46% 57%
- --------------------------------------------------------------------------------------------------------------
Total return(f) (37.30%)(g) (19.25%) 13.50% 6.56% 13.62%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 23
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(g) 2008 2007 2006 2005
Net asset value, beginning of period $4.20 $5.75 $5.91 $5.86 $5.36
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04(b) .10(b) .08(b) .12 .07
Net gains (losses) (both realized and
unrealized) (1.57) (1.07) .79 .32 .72
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.53) (.97) .87 .44 .79
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08) (.10) (.10) (.10) (.06)
Distributions from realized gains (.02) (.48) (.93) (.29) (.23)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.10) (.58) (1.03) (.39) (.29)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.57 $4.20 $5.75 $5.91 $5.86
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $12 $11 $17 $13 $38
- --------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) .90%(e) .86% .85% .75% .86%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.16%(e) 1.87% 1.41% 1.85% 1.50%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 24% 35% 46% 57%
- --------------------------------------------------------------------------------------------------------------
Total return (36.71%)(f) (18.41%) 15.10% 7.86% 14.97%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Not annualized.
(g) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
24 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007(b)
Net asset value, beginning of period $4.18 $5.69 $6.55
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .03 .07 .02
Net gains (losses) (both realized and
unrealized) (1.57) (1.03) .15
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.54) (.96) .17
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.06) (.07) (.10)
Distributions from realized gains (.02) (.48) (.93)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.08) (.55) (1.03)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.56 $4.18 $5.69
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.65%(f) 1.65% 1.63%(f)
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.39%(f) 1.41% 1.63%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.66%(f) 1.32% .55%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 24% 35%
- --------------------------------------------------------------------------------------------------------------
Total return (37.02%)(i) (18.44%) 2.84%(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, if any. Expense
ratio is before reduction for 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/reimburse
certain fees and expenses (excluding fees of acquired funds), before giving
effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 25
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(j) 2008 2007(b)
Net asset value, beginning of period $4.18 $5.70 $6.55
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .03 .08 .03
Net gains (losses) (both realized and
unrealized) (1.56) (1.04) .15
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.53) (.96) .18
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.07) (.08) (.10)
Distributions from realized gains (.02) (.48) (.93)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.09) (.56) (1.03)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.56 $4.18 $5.70
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.43%(f) 1.39% 1.38%(f)
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.18%(f) 1.15% 1.38%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.87%(f) 1.58% .80%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 24% 35%
- --------------------------------------------------------------------------------------------------------------
Total return (36.82%)(i) (18.38%) 3.03%(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, if any. Expense
ratio is before reduction for 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/reimburse
certain fees and expenses (excluding fees of acquired funds), before giving
effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(i) Not annualized.
(j) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
26 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(i) 2008 2007 2006 2005
Net asset value, beginning of period $4.22 $5.74 $5.90 $5.85 $5.36
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04(b) .10(b) .07(b) .10 .07
Net gains (losses) (both realized and
unrealized) (1.58) (1.04) .78 .32 .70
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.54) (.94) .85 .42 .77
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.09) (.10) (.08) (.08) (.05)
Distributions from realized gains (.02) (.48) (.93) (.29) (.23)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.11) (.58) (1.01) (.37) (.28)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.57 $4.22 $5.74 $5.90 $5.85
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $-- $--
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.20%(e) 1.15% 1.13% 1.00% 1.11%
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) .90%(e) .81% 1.12% 1.00% 1.11%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.17%(e) 1.90% 1.14% 1.69% 1.25%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 24% 35% 46% 57%
- --------------------------------------------------------------------------------------------------------------
Total return (36.78%)(h) (17.99%) 14.67% 7.55% 14.67%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees of acquired funds), before giving
effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(h) Not annualized.
(i) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 27
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended July 31, 2009(h) 2008 2007(b)
Net asset value, beginning of period $4.26 $5.72 $6.55
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .04 .09 .05
Net gains (losses) (both realized and
unrealized) (1.59) (1.07) .15
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (1.55) (.98) .20
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08) -- (.10)
Distributions from realized gains (.02) (.48) (.93)
- --------------------------------------------------------------------------------------------------------------
Total distributions (.10) (.48) (1.03)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.61 $4.26 $5.72
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- --------------------------------------------------------------------------------------------------------------
Total expenses(d),(e) .92%(f) .92% .83%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.13%(f) 1.81% 1.45%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 43% 24% 35%
- --------------------------------------------------------------------------------------------------------------
Total return (36.70%)(g) (18.41%) 3.40%(g)
- --------------------------------------------------------------------------------------------------------------
</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, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits were less than 0.01% of average net
assets for the six months ended Jan. 31, 2009 and for the year ended July
31, 2008.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Not annualized.
(h) Six months ended Jan. 31, 2009 (Unaudited).
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
28 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS TO JAN. 31, 2009)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Large Cap Value Fund (the Fund) is a series of RiverSource Large Cap
Series, Inc. and is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company. RiverSource
Large Cap Series, Inc. has 10 billion authorized shares of capital stock that
can be allocated among the separate series as designated by the Board of
Directors (the Board). The Fund invests primarily in equity securities of
companies with a market capitalization greater than $5 billion.
The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4
and Class R5 shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I, Class R2, Class R3, Class R4 and Class R5 shares are sold without a
front-end sales charge or CDSC and are offered to qualifying institutional
investors.
At Jan. 31, 2009, RiverSource Investments, LLC (RiverSource Investments or the
Investment Manager) and the RiverSource affiliated funds-of-funds owned 100% of
Class I shares and the Investment Manager owned 100% of Class R3 and Class R5
shares. At Jan. 31, 2009, the Investment Manager and the RiverSource 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 LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 29
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
VALUATION OF SECURITIES
Effective Aug. 1, 2008, the Fund adopted 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. There was no impact to the
Fund's net assets or results of operations upon adoption. The fair valuation
measurements disclosure can be found following the Notes to Portfolio of
Investments.
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.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities (such as foreign securities)
that is not reflected in price quotations or valuations from other sources. A
fair value price is a good faith estimate of the value of a security at a given
point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the 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
- --------------------------------------------------------------------------------
30 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
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, which
approximates fair value.
ILLIQUID SECURITIES
At Jan. 31, 2009, investments in securities included issues that are illiquid
which the Fund currently limits to 15% of net assets, at market value, at the
time of purchase. The aggregate value of such securities at Jan. 31, 2009 was
$57,573 representing 0.16% of net assets. Certain illiquid securities may be
valued by management at fair value according to procedures approved, in good
faith, by the Board. According to Board guidelines, certain unregistered
securities are determined to be liquid and are not included within the 15%
limitation specified above. Assets are liquid if they can be sold or disposed of
in the ordinary course of business within seven days at approximately the value
at which the asset is valued by the Fund.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains, and facilitate buying and
selling of securities for investments, the Fund may buy and write options traded
on any U.S. or foreign exchange or in the over-the-counter market where
completing the obligation depends upon the credit standing of the other party.
Cash collateral may be collected by the Fund to secure certain over-the-counter
options (OTC options) trades. Cash collateral held by the Fund for such option
trades must be returned to the counterparty upon closure, exercise or expiration
of the contract. The Fund also may buy and sell put and call options and write
covered call options on portfolio securities as well as write cash-secured put
options. The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases. The risk
in writing a put option is that the Fund may incur a loss if the market price of
the security decreases and the option is exercised. The risk in buying an option
is that the Fund pays a premium whether or not the option is exercised. The Fund
also has the additional risk of being unable to enter into a closing transaction
if a liquid secondary market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. Option
contracts, including OTC option contracts, with no readily available market
value are valued using quotations obtained from independent brokers as of the
close of the New York Stock Exchange. The Fund will realize a gain or loss when
the option
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 31
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
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. At Jan. 31, 2009, and for the six months
then ended, 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 and options on futures are valued daily based upon the last sale price
at the close of the market on the principal exchange on which they are traded.
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the contract is closed
or expires. At Jan. 31, 2009, the Fund had no outstanding futures contracts.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes.
The Fund may enter into forward foreign currency contracts for operational
purposes and to protect against adverse exchange rate fluctuation. The net U.S.
dollar value of foreign currency underlying all contractual commitments held by
the Fund and the resulting unrealized appreciation or depreciation are
determined using foreign currency exchange rates from an independent pricing
service. The Fund is subject to the credit risk that the counterparty will not
complete its
- --------------------------------------------------------------------------------
32 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
contract obligations. At Jan. 31, 2009, 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.
Financial Accounting Standards Board (FASB) Interpretation 48 (FIN 48),
"Accounting for Uncertainty in Income Taxes," clarifies the accounting for
uncertainty in income taxes recognized in accordance with FASB Statement 109,
"Accounting for Income Taxes." FIN 48 provides guidance for how uncertain tax
positions should be recognized, measured, presented and disclosed in the
financial statements. 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 futures contracts, re-
characterization of REIT distributions, investments in partnerships and losses
deferred due to wash sales. The character of distributions made during the year
from net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
RECENT ACCOUNTING PRONOUNCEMENTS
The Fund has adopted FASB Staff Position No. 133-1 and FIN No. 45-4 (FSP FAS
133-1 and FIN 45-4), "Disclosures about Credit Derivatives and Certain
Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No.
45". The amendments to FSP FAS 133-1 and FIN 45-4 require
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 33
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
enhanced disclosures about a fund's derivatives and guarantees. Funds are
required to provide enhanced disclosures about (a) how and why a fund uses
derivative instruments, (b) how derivative instruments and related hedged items
are accounted for under SFAS 133 and its related interpretations, (c) how
derivative instruments and related hedged items affect a fund's financial
position, financial performance, and cash flows and (d) the current status of
the payment/performance risk of the credit derivative. The amendments to FSP FAS
133-1 and FIN 45-4 also require additional disclosures about the current status
of the payment/performance risk of a guarantee. At Jan. 31, 2009, the Fund did
not own nor was it a party to any credit derivative contracts within the scope
of these amendments.
In March 2008, the FASB issued Statement of Financial Accounting Standards No.
161 (SFAS 161), "Disclosures about Derivative Instruments and Hedging
Activities -- an amendment of FASB Statement No. 133," which requires enhanced
disclosures about a fund's derivative and hedging activities. SFAS 161 is
effective for financial statements issued for fiscal years and interim periods
beginning after Nov. 15, 2008. As of Jan. 31, 2009, management does not believe
the adoption of SFAS 161 will impact the financial statement amounts; however,
additional footnote disclosures may be required about the use of derivative
instruments and hedging items.
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
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.60%
to 0.375% annually as the Fund's assets increase. The fee may be adjusted upward
or downward by a performance incentive adjustment determined monthly by
measuring the percentage difference over a rolling 12-month period between the
- --------------------------------------------------------------------------------
34 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
annualized performance of one Class A share of the Fund and the annualized
performance of the Lipper Large-Cap Value Funds Index. In certain circumstances,
the Board may approve a change in the index. The maximum adjustment is 0.12% per
year. If the performance difference is less than 0.50%, the adjustment will be
zero. The adjustment decreased the management fee by $32,938 for the six months
ended Jan. 31, 2009. The management fee for the six months ended Jan. 31, 2009
was 0.44% of the Fund's average daily net assets, including the adjustment under
the terms of the performance incentive arrangement.
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.06% to 0.03% annually as the
Fund's assets increase. The fee for the six months ended Jan. 31, 2009 was 0.06%
of the Fund's average daily net assets.
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended Jan.
31, 2009, other expenses paid to this company were $143.
COMPENSATION OF BOARD MEMBERS
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.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual account-based fee at a rate equal to $19.50 for Class A, $20.50
for Class B and $20.00 for Class C for this service. The Fund also pays the
Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's
average daily net assets attributable to Class R2, Class R3, Class R4 and Class
R5 shares.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 35
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
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.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
DISTRIBUTION FEES
The Fund has agreements with RiverSource Distributors, Inc. and RiverSource Fund
Distributors, Inc. (collectively, the Distributor) for distribution and
shareholder services. Under a Plan and Agreement of Distribution pursuant to
Rule 12b-1, the Fund pays a fee at an annual rate of up to 0.25% of the Fund's
average daily net assets attributable to Class A and Class R3 shares, a fee at
an annual rate of up to 0.50% of the Fund's average daily net assets
attributable to Class R2 shares and a fee at an annual rate of up to 1.00% of
the Fund's average daily net assets attributable to Class B and Class C shares.
For Class B and Class C shares, up to 0.75% of the fee is reimbursed for
distribution expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed expense") was approximately $204,000 and $5,000 for
Class B and Class C shares, respectively. These amounts are based on the most
recent information available as of Jan. 31, 2009, and may be recovered from
future payments under the distribution plan or CDSC. To the extent the
unreimbursed expense has been fully recovered, the distribution fee is reduced.
SALES CHARGES
Sales charges received by the Distributor for distributing Fund shares were
$14,025 for Class A, $1,739 for Class B and $14 for Class C for the six months
ended Jan. 31, 2009.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the six months ended Jan. 31, 2009, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds*), including the adjustment under
the terms of a performance incentive arrangement, were as follows:
<Table>
Class R2............................................ 1.39%
Class R3............................................ 1.18
Class R4............................................ 0.90
</Table>
- --------------------------------------------------------------------------------
36 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
The waived/reimbursed fees and expenses for the transfer agency fees at the
class level were as follows:
<Table>
Class R4............................................. $4
</Table>
The waived/reimbursed fees and expenses for the plan administration services
fees at the class level were as follows:
<Table>
Class R2............................................. $3
Class R3............................................. 3
Class R4............................................. 22
</Table>
The Investment Manager and its affiliates have contractually agreed to waive
certain fees and expenses until July 31, 2009, unless sooner terminated at the
discretion of the Board, such that net expenses (excluding fees and expenses of
acquired funds*), before giving effect to any performance incentive adjustment,
will not exceed the following percentage of the Fund's average daily net assets:
<Table>
Class R4............................................ 1.13%
</Table>
* In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in
which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and the Fund may own different proportions of
acquired funds at different times, the amount of fees and expenses incurred
indirectly by the Fund will vary.
EARNINGS AND BANK FEE CREDITS
During the six months ended Jan. 31, 2009, the Fund's transfer agency fees were
reduced by $29 as a result of bank fee credits from overnight cash balances.
CUSTODIAN FEES
Effective Dec. 15, 2008, the Fund pays custodian fees to JPMorgan Chase Bank,
N.A. Prior to Dec. 15, 2008, the Fund paid custodian fees amounting to $11,773
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 $18,213,016 and $18,141,271, respectively, for the six
months ended Jan. 31, 2009. Realized gains and losses are determined on an
identified cost basis.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 37
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED JAN. 31, 2009
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------
Class A 953,615 177,065 (2,328,848) (1,198,168)
Class B 156,605 17,091 (322,381) (148,685)
Class C 30,003 2,589 (25,800) 6,792
Class I 2,093,468 103,990 (81,445) 2,116,013
Class R2 140 3 -- 143
Class R4 -- 118 -- 118
- ----------------------------------------------------------------------------------
<Caption>
YEAR ENDED JULY 31, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------
Class A 972,781 1,043,398 (4,547,178) (2,530,999)
Class B 144,597 234,640 (1,285,647) (906,410)
Class C 26,989 17,693 (69,667) (24,985)
Class I 513,889 361,535 (1,138,246) (262,822)
Class R4 213 530 (2,217) (1,474)
- ----------------------------------------------------------------------------------
</Table>
5. LENDING OF PORTFOLIO SECURITIES
Effective Dec. 1, 2008, the Fund has entered into a Master Securities Lending
Agreement ("the Agreement") with JPMorgan Chase Bank, National Association
("JPMorgan"). The Agreement authorizes JPMorgan as lending agent to lend
securities to authorized borrowers on behalf of the Fund. Pursuant to the
Agreement, all loaned securities are initially collateralized in an amount
equivalent to 102% (for securities denominated in U.S. dollars) or 105% (for all
other securities) of the value of the loaned securities, including accrued
interest in the case of fixed income securities. Collateral is maintained over
the life of the loan thereafter in an amount not less than 100% of the market
value of loaned securities, as determined at the close of each business day,
except to the extent that a collateral shortfall is due to a diminution in the
market value of authorized investments in which cash collateral is invested. Any
additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Collateral is either in the form of cash or U.S. government securities. Cash
collateral received is invested by the lending agent on behalf of the Fund into
authorized investments pursuant to the Agreement. The investments made with the
cash
- --------------------------------------------------------------------------------
38 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
collateral are listed on the Portfolio of Investments and the value of cash
collateral received at period end is disclosed on the Statement of Assets and
Liabilities along with the related obligation to return the collateral upon
return of the securities loaned. At Jan. 31, 2009, securities valued at
$4,335,396 were on loan secured by cash collateral of $4,592,388 invested in
short-term or cash equivalents.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Income of $782
earned from securities lending from Dec. 1, 2008 through Jan. 31, 2009 is
included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Funds or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Prior to Dec. 1, 2008, RiverSource Investments, LLC served as securities lending
agent for the Fund under the Securities Lending Agency Agreement. For the period
from Aug. 1, 2008 to Nov. 30, 2008, the Fund had no securities on loan.
6. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. The cost of the
Fund's purchases and proceeds from sales of shares of the RiverSource Short-Term
Cash Fund aggregated $12,375,731 and $12,186,062, respectively, for the six
months ended Jan. 31, 2009. The income distributions received with respect to
the Fund's investment in RiverSource Short-Term Cash Fund can be found on the
Statement of Operations and the Fund's invested balance in RiverSource Short-
Term Cash Fund at Jan. 31, 2009, can be found in the Portfolio of Investments.
7. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 39
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
Fund may borrow for the temporary funding of shareholder redemptions or for
other temporary or emergency purposes. The credit facility became effective on
Oct. 16, 2008, 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 $475
million. The borrowers shall have the right, upon written notice to the
Administrative Agent to request an increase of up to $175 million in the
aggregate amount of the credit facility from new or existing lenders, provided
that the aggregate amount of the credit facility shall at no time exceed $650
million. Participation in such increase by any existing lender shall be at such
lender's sole discretion. Interest is charged to each Fund based on its
borrowings at a rate equal to the federal funds rate plus 0.75%. 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, in addition to
an upfront fee equal to its pro rata share of 0.02% of the amount of the credit
facility. The Fund had no borrowings during the six months ended Jan. 31, 2009.
Under the prior credit facility which was effective until Oct. 15, 2008, the
Fund had entered into a revolving credit facility with a syndicate of banks
headed by JPMorgan Chase Bank, N.A., whereby the Fund was permitted to borrow
for the temporary funding of shareholder redemptions or for other temporary or
emergency purposes. The credit facility agreement, which was a collective
agreement between the Fund and certain other RiverSource funds, severally and
not jointly, permitted collective borrowings up to $500 million. Interest was
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 matured no later
than 60 days after the date of borrowing. The Fund also paid a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.06% per annum.
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
- --------------------------------------------------------------------------------
40 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
to transfer this case to the United States District Court for the District of
Minnesota. In response to defendants' motion to dismiss the complaint, the Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals on August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise
Financial, Inc., acquired J. & W. Seligman & Co., Inc. (Seligman). In late 2003,
Seligman conducted an extensive internal review concerning mutual fund trading
practices. Seligman's review, which covered the period 2001-2003, noted one
arrangement that permitted frequent trading in certain open-end registered
investment companies managed by Seligman (the Seligman Funds); this arrangement
was in the process of being closed down by Seligman before September 2003.
Seligman identified three other arrangements that permitted frequent trading,
all of which had been terminated by September 2002. In January 2004, Seligman,
on a voluntary basis, publicly disclosed these four arrangements to its clients
and to shareholders of the Seligman Funds. Seligman also provided information
concerning mutual fund trading practices to the SEC and the Office of the
Attorney General of the State of New York (NYAG). In September 2005, the New
York staff of the SEC indicated that it was considering recommending to the
Commissioners of the SEC the instituting of a formal action against Seligman and
the distributor of the Seligman Funds, Seligman Advisors, Inc. (which is now
known as RiverSource Fund Distributors, Inc.), relating to frequent trading in
the Seligman Funds. Seligman responded to the staff in October 2005 that it
believed that any action would be both inappropriate
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
and unnecessary, especially in light of the fact that Seligman had previously
resolved the underlying issue with the Independent Directors of the Seligman
Funds and made recompense to the affected Seligman Funds.
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc., Seligman Data Corp. and Brian
T. Zino (collectively, the Seligman Parties), alleging, in substance, that the
Seligman Parties permitted various persons to engage in frequent trading and, as
a result, the prospectus disclosure used by the registered investment companies
then managed by Seligman is and has been misleading. The NYAG included other
related claims and also claimed that the fees charged by Seligman to the
Seligman Funds were excessive. On March 13, 2009, without admitting or denying
any violations of law or wrongdoing, the Seligman Parties entered into a
stipulation of settlement with the NYAG and settled the claims made by the NYAG.
Under the terms of the settlement, Seligman will pay $11.3 million to four
Seligman Funds. This settlement resolved all outstanding matters between the
Seligman Parties and the NYAG. In addition to the foregoing matter, the New York
staff of the SEC indicated in September 2005 that it was considering
recommending to the Commissioners of the SEC the instituting of a formal action
against Seligman and Seligman Advisors, Inc. relating to frequent trading in the
Seligman Funds. Seligman responded to the staff in October 2005 that it believed
that any action would be both inappropriate and unnecessary, especially in light
of the fact that Seligman had previously resolved the underlying issue with the
Independent Directors of the Seligman Funds and made recompense to the affected
Seligman Funds. There have been no further developments with the SEC on this
matter.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material 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.
- --------------------------------------------------------------------------------
42 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT 43
PROXY VOTING -------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling RiverSource Funds at (888) 791-3380; contacting your financial
institution; visiting riversource.com/funds; or searching the website of the
Securities and Exchange Commission (SEC) at http://www.sec.gov. Information
regarding how the Fund voted proxies relating to portfolio securities is filed
with the SEC by August 31 for the most recent 12-month period ending June 30 of
that year, and is available without charge by visiting riversource.com/funds; or
searching the website of the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
44 RIVERSOURCE LARGE CAP VALUE FUND -- 2009 SEMIANNUAL REPORT
RIVERSOURCE LARGE CAP VALUE FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. RiverSource(R) mutual funds are
distributed by RiverSource Distributors, Inc., and
RiverSource Fund Distributors, Inc., Members FINRA, and
managed by RiverSource Investments, LLC. RiverSource is part
of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2009 RiverSource Investments, LLC. S-6257 H (4/09)
</Table>
Item 2. Code of Ethics. Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert. Not applicable for semi-annual
reports.
Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual
reports.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. The complete schedule of investments is included in Item 1 of this Form
N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not
applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. Not applicable.
Item 10. Submission of matters to a vote of security holders. Not applicable.
Item 11. Controls and Procedures.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form N-CSR,
the registrant's Principal Financial Officer and Principal Executive Officer
have concluded that those disclosure controls and procedures provide reasonable
assurance that the material information required to be disclosed by the
registrant on this report is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's last fiscal half-year (the
registrant's second fiscal half-year in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable for semi-annual reports.
(a)(2) Separate certification for the Registrant's principal executive officer
and principal financial officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of
1940, are attached as EX.99.CERT.
(a)(3) Not applicable.
(b) A certification by the Registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940, is attached
as EX.99.906 CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) RiverSource Large Cap Series, Inc.
By /s/ Patrick T. Bannigan
-----------------------------------------
Patrick T. Bannigan
President and Principal Executive Officer
Date April 1, 2009
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 1, 2009
By /s/ Jeffrey P. Fox
-----------------------------------------
Jeffrey P. Fox
Treasurer and Principal Financial Officer
Date April 1, 2009