Annual Report
and Prospectus
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
LARGE CAP EQUITY FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
JULY 31, 2008
(Prospectus also enclosed)
RIVERSOURCE LARGE CAP EQUITY FUND
SEEKS TO PROVIDE SHAREHOLDERS WITH
LONG-TERM GROWTH OF CAPITAL.
<Table>
This annual report includes a prospectus that
describes in detail the Fund's objective, investment
strategy, risks, sales charges, fees and other
matters of interest. Please read the prospectus
carefully before you invest or send money. (SINGLE STRATEGY FUND ICON)
</Table>
LETTER TO SHAREHOLDERS ---------------------------------------------------------
PHOTO - BANNIGAN -
LEWIS
Patrick T.
Bannigan (left)
Stephen R. Lewis,
Jr. (right)
Dear Fellow Shareholder,
The majority of today's workers are finding
themselves responsible for funding their own
retirement through 401(k)s, 403(b)s and IRAs, which
can be a positive development. However, today's
rising health care costs, inflation and dropping
retirement account values have hit many retirees
hard, and put retirement dreams on hold for
approximately 27% of workers age 45 and older,
according to an AARP survey released in May 2008.
Since retirement could last up to 20 years or more for many retirees, it's
important to take the long-term view. Unfortunately, many investors now realize
they may not have adequately factored in the havoc a bear market could wreak on
their retirement savings or the impact of rising gas and food prices on daily
living expenses. Unexpected economic events such as these make careful planning
for retirement all the more important, as retirees today and in the future are
likely to see a number of up and down markets and economic cycles in their
lifetimes.
KEEPING UP WITH THE COST OF LIVING
Company medical plans for retirees have gone the way of the B&W TV; there are
still a few around, but they're disappearing rapidly. A July 2008 study by
Hewitt Research Associates concludes employees actually will need to replace
126% of their salary once inflation and increased medical costs are included in
the calculations. The 2008 Tiburon Consumer Wealth Report reports that a couple
planning to retire in 2008 at the age of 65 will need $225,000 just to cover
their medical expenses during retirement.
PLAN FOR YOUR RETIREMENT BY WORKING WITH A FINANCIAL PROFESSIONAL
A financial professional can help you establish goals for retirement income and
develop a plan for saving and investing to achieve those goals.
Several retirement-focused RiverSource investment strategies, such as
RiverSource(R) Portfolio Builder Series, RiverSource(R) Income Builder Series
- --------------------------------------------------------------------------------
THIS PAGE IS NOT PART OF THE ANNUAL REPORT
- --------------------------------------------------------------------------------
and RiverSource Retirement Plus(R) Series, can help remove emotion from your
investing decisions through the application of
> built-in diversification and asset allocation,
> risk management,
> automatic rebalancing and
> professional portfolio management.
MORE INVESTMENT OPTIONS
RiverSource Investments also offers more than 50 single-strategy mutual funds
designed to help you fully diversify your portfolio, and our Advanced Alpha(SM)
Strategies funds, which are meant to potentially generate increased alpha (a
risk-adjusted measure of above-market returns).
Talk with your financial professional about which RiverSource funds or series of
funds might best meet your needs today and in the years to come.
Thank you for choosing RiverSource mutual funds and for your continued support.
<Table>
/s/ STEPHEN R. LEWIS, JR. /s/ PATRICK T. BANNIGAN
Stephen R. Lewis, Jr. Patrick T. Bannigan
President, RiverSource Funds
Chairman of the Boards
</Table>
DID YOU KNOW...
- --------------------------------------------------------------------------------
> Two-thirds of baby boomers are dependent on their homes as a retirement
asset.(1)
> Nearly one-quarter of adults between the ages of 65 and 74 are in the
workforce, up from 19% in 2000.(2)
> Twenty-seven percent of workers age 45 and older said they had put their
retirement plans on hold because of the slowing economy.(3)
1 Tiburon Strategic Advisors Consumer Wealth, Liquidation, & the Retirement
Income Challenge Report, May 23, 2008
2 Bureau of Labor Statistics
3 AARP survey, May 13, 2008
- --------------------------------------------------------------------------------
THIS PAGE IS NOT PART OF THE ANNUAL REPORT
LETTER TO SHAREHOLDERS (continued) ---------------------------------------------
For more information about any of our RiverSource Funds, go online to
RiverSource.com or call (888) 791-3380. Customer Service Representatives are
available to answer your questions Monday through Friday from 8 a.m. to 5 p.m.
Central time.
YOU SHOULD CONSIDER THE INVESTMENT OBJECTIVES,
RISKS, CHARGES AND EXPENSES OF A MUTUAL FUND
CAREFULLY BEFORE INVESTING. FOR A FREE PROSPECTUS,
WHICH CONTAINS THIS AND OTHER IMPORTANT INFORMATION
ABOUT THE FUNDS, CALL (888) 791-3380. READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
Neither diversification or asset allocation assure a
profit or protect against loss.
There is no guarantee that the strategies discussed
will be successful.
The RiverSource Retirement Plus, Income Builder, and
Portfolio Builder Series funds are "funds of funds"
comprised of holdings in several different
RiverSource Funds, which may include small-cap,
mid-cap, large-cap, money market, international,
bond, and/or sector funds. Each of the underlying
funds in which the portfolio invests has its own
investment risks, and those risks can affect the
value of each portfolio's shares and investments.
There are risks associated with fixed income
investments, including credit risk, interest rate
risk, and prepayment and extension risk. Non-
investment grade securities generally have more
volatile prices and carry more risk to principal and
income than investment grade securities.
International investing involves increased risk and
volatility due to potential political and economic
instability, currency fluctuations, and differences
in financial reporting and accounting standards and
oversight. Risks are particularly significant in
emerging markets. Investments in small- and mid-
capitalization companies often involve greater risks
and potential volatility than investments in larger,
more established companies. See the Funds'
prospectus for more information on these and other
risks that may be associated with the underlying
funds.
Alternative investments involve substantial risks
and may be more volatile than traditional
investments, making them more suitable for investors
with an above average tolerance for risk.
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.
Not all products and all shares classes are
available at all firms offering RiverSource funds.
- --------------------------------------------------------------------------------
THIS PAGE IS NOT PART OF THE ANNUAL REPORT
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance............... 2
Manager Commentary.................. 5
The Fund's Long-term Performance ... 10
Fund Expenses Example............... 12
Portfolio of Investments............ 15
Financial Statements................ 26
Notes to Financial Statements....... 32
Report of Independent Registered
Public Accounting Firm........... 55
Federal Income Tax Information...... 57
Board Members and Officers.......... 58
Approval of Investment Management
Services Agreement............... 62
Proxy Voting........................ 64
</Table>
(DALBAR LOGO)
The RiverSource mutual fund
shareholder reports have been
awarded the Communications Seal
from Dalbar Inc., an independent
financial services research firm.
The Seal recognizes communications
demonstrating a level of
excellence in the industry.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
FUND SUMMARY
- --------------------------------------------------------------------------------
> RiverSource Large Cap Equity Fund (the Fund) Class A shares declined 15.40%,
excluding sales charge, for the fiscal year ended July 31, 2008.
> The Fund underperformed its benchmarks, the Russell 1000(R) Index and the
Standard & Poor's 500 Index (S&P 500 Index), which fell 10.62% and 11.09%,
respectively, for the same 12-month period.
> The Fund's peer group, the Lipper Large-Cap Core Funds Index, declined 10.11%
during the same time period.
ANNUALIZED TOTAL RETURNS (for period ended July 31, 2008)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Since
1 year 3 years 5 years inception(a)
- --------------------------------------------------------------------------------
RiverSource Large Cap Equity
Fund Class A (excluding sales
charge) -15.40% +0.48% +4.39% +1.86%
- --------------------------------------------------------------------------------
Russell 1000 Index (unmanaged) -10.62% +3.08% +7.55% +4.00%
- --------------------------------------------------------------------------------
S&P 500 Index (unmanaged) -11.09% +2.85% +7.03% +3.47%
- --------------------------------------------------------------------------------
Lipper Large-Cap Core Funds
Index -10.11% +3.12% +6.31% +2.86%
- --------------------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for Index descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the 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.
(a) Fund data is from March 28, 2002. Russell 1000 Index, S&P 500 Index and
Lipper peer group data is from April 1, 2002.
- --------------------------------------------------------------------------------
2 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
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 Fund
Total Net (Underlying
Fund Expenses(a) Fund)(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 (affiliated and unaffiliated
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.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT JULY 31, 2008
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception 3/28/02) -15.40% +0.48% +4.39% +1.86%
- --------------------------------------------------------------------------------
Class B (inception 3/28/02) -15.97% -0.33% +3.58% +1.05%
- --------------------------------------------------------------------------------
Class C (inception 3/28/02) -16.11% -0.36% +3.55% +1.06%
- --------------------------------------------------------------------------------
Class I (inception 3/4/04) -15.02% +0.89% N/A +2.41%
- --------------------------------------------------------------------------------
Class R2 (inception 12/11/06) -15.45% N/A N/A -7.72%
- --------------------------------------------------------------------------------
Class R3 (inception 12/11/06) -15.19% N/A N/A -7.45%
- --------------------------------------------------------------------------------
Class R4 (inception 3/28/02) -15.40% +0.64% +4.55% +2.02%
- --------------------------------------------------------------------------------
Class R5 (inception 12/11/06) -15.38% N/A N/A -7.39%
- --------------------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 3/28/02) -20.30% -1.48% +3.14% +0.90%
- --------------------------------------------------------------------------------
Class B (inception 3/28/02) -19.70% -1.49% +3.24% +1.05%
- --------------------------------------------------------------------------------
Class C (inception 3/28/02) -16.85% -0.36% +3.55% +1.06%
- --------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
AT JUNE 30, 2008
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS INCEPTION
Class A (inception 3/28/02) -17.04% +1.76% +4.62% +2.06%
- --------------------------------------------------------------------------------
Class B (inception 3/28/02) -17.66% +0.90% +3.77% +1.24%
- --------------------------------------------------------------------------------
Class C (inception 3/28/02) -17.61% +0.94% +3.79% +1.29%
- --------------------------------------------------------------------------------
Class I (inception 3/4/04) -16.68% +2.17% N/A +2.72%
- --------------------------------------------------------------------------------
Class R2 (inception 12/11/06) -17.06% N/A N/A -7.35%
- --------------------------------------------------------------------------------
Class R3 (inception 12/11/06) -16.86% N/A N/A -7.19%
- --------------------------------------------------------------------------------
Class R4 (inception 3/28/02) -16.87% +1.92% +4.77% +2.26%
- --------------------------------------------------------------------------------
Class R5 (inception 12/11/06) -17.05% N/A N/A -7.13%
- --------------------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 3/28/02) -21.80% -0.22% +3.37% +1.09%
- --------------------------------------------------------------------------------
Class B (inception 3/28/02) -21.32% -0.27% +3.42% +1.24%
- --------------------------------------------------------------------------------
Class C (inception 3/28/02) -18.34% +0.94% +3.79% +1.29%
- --------------------------------------------------------------------------------
</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.
- --------------------------------------------------------------------------------
4 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
MANAGER COMMENTARY -------------------------------------------------------------
Dear Shareholder,
RiverSource Large Cap Equity Fund (the Fund) Class A shares declined 15.40%,
excluding sales charge, for the fiscal year ended July 31, 2008. The Fund
underperformed its benchmarks, the Russell 1000(R) Index (Russell Index) and the
Standard & Poor's 500 Index (S&P 500 Index), which declined 10.62% and 11.09%,
respectively. The Fund's peer group, the Lipper Large-Cap Core Funds Index, fell
10.11% during the same time frame.
SIGNIFICANT PERFORMANCE FACTORS
Through most of the fiscal year, valuation was not an effective characteristic
for choosing stocks that would outperform. Though the Fund includes a
value-oriented and a growth-oriented portfolio segment in its strategy,
consideration of stock valuations is a thread running through the entire
portfolio. Given the Fund's valuation sensitivity, the market's aversion to
value was an insurmountable headwind during this fiscal period.
Stock selection detracted from the Fund's return relative to the Russell Index.
Though stock selection in the consumer staples, information
SECTOR DIVERSIFICATION(1) (at July 31, 2008; % of portfolio assets)
- -----------------------------------------------------------------
<Table>
Consumer Discretionary 10.8%
- --------------------------------------------------------------
Consumer Staples 9.0%
- --------------------------------------------------------------
Energy 10.5%
- --------------------------------------------------------------
Financials 13.4%
- --------------------------------------------------------------
Health Care 13.8%
- --------------------------------------------------------------
Industrials 9.3%
- --------------------------------------------------------------
Information Technology 15.6%
- --------------------------------------------------------------
Materials 2.8%
- --------------------------------------------------------------
Options Purchased 0.3%
- --------------------------------------------------------------
Telecommunication Services 8.7%
- --------------------------------------------------------------
Utilities 2.7%
- --------------------------------------------------------------
Other(2) 3.1%
- --------------------------------------------------------------
</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 3.1%, 0.8% is due to security lending
activity and 2.3% 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.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 5
MANAGER COMMENTARY (continued) -------------------------------------------------
technology and utilities sectors was advantageous, the Fund holdings in the
consumer discretionary, financials, industrials and energy sectors significantly
underperformed the respective sectors of the Russell Index.
Sector allocations had a positive impact. The Fund's cash position was
beneficial, as would be expected in a declining equity market. Having a
substantially smaller financials position than the Russell Index was a
meaningful contributor to relative performance, as was a larger-than-Russell
Index health care weighting. However, the Fund had a smaller energy position
than the Russell Index and a larger telecommunications position, which were both
disadvantageous.
Individual contributors to return included QUALCOMM, GENENTECH, AVON PRODUCTS
and FLOWSERVE, all positions that were larger than those in the Russell Index.
We owned technology stock QUALCOMM because we believe the company can benefit
from a strong upcoming product cycle. The market has recently been gaining
conviction that the product cycle will be favorable, as the company has begun to
see traction with its third-generation cell phone chip. In July 2008, QUALCOMM
settled its protracted litigation with Nokia. Biotherapeutics company
GENENTECH'S minority owner Roche is trying to buy out GENENTECH and offered a
substantial premium. The stock price has also risen on a promising outlook for
growth in GENENTECH'S cancer treatments, fueled by favorable
TOP TEN HOLDINGS (at July 31, 2008; % of portfolio assets)
- -----------------------------------------------------------------
<Table>
Exxon Mobil 3.8%
- --------------------------------------------------------------
Virgin Media 2.5%
- --------------------------------------------------------------
Pfizer 2.3%
- --------------------------------------------------------------
Microsoft 2.3%
- --------------------------------------------------------------
Vodafone Group 1.9%
- --------------------------------------------------------------
Chevron 1.8%
- --------------------------------------------------------------
Boeing 1.7%
- --------------------------------------------------------------
Bristol-Myers Squibb 1.7%
- --------------------------------------------------------------
AT&T 1.6%
- --------------------------------------------------------------
Philip Morris Intl 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.
- --------------------------------------------------------------------------------
6 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
Given the Fund's valuation sensitivity, the market's aversion to value was an
insurmountable headwind during this fiscal period.
expectations for several upcoming studies. FLOWSERVE
makes valves and pumping machinery for industrial
companies, particularly oil, gas and chemical
companies, and has benefited from the high level of
activity in those end markets.
Individual detractors from return included VIRGIN
MEDIA, HARMAN INTERNATIONAL INDUSTRIES, COUNTRYWIDE
FINANCIAL and FEDERAL HOME LOAN MORTGAGE CORP.
(FREDDIE MAC). British telecommunications company
VIRGIN MEDIA received an attractive acquisition bid
in July 2007 and subsequently conducted an auction
where multiple suitors showed interest. However,
difficulties in the high-yield bond market prevented
the company from completing the auction. Since then,
the stock price has fallen sharply amid additional
concerns about the company's leverage levels and
susceptibility to economic weakness. We believe
VIRGIN MEDIA'S fundamentals are now better than they
were a year ago, while the stock stands at about
half the price. In our view, the stock's market
price has disconnected from the underlying value of
the company, creating an attractive opportunity.
HARMAN INTERNATIONAL'S main business is producing
car radios, and the company suffered as auto
production has come under intense pressure in the
difficult economic environment. Mortgage lender
COUNTRYWIDE FINANCIAL continued to suffer from
credit market difficulties, but BANK OF AMERICA
finally completed its takeover of the company and
the Fund's small remaining holdings of Countrywide
converted into BANK OF AMERICA stock. Though the
majority of government-sponsored FREDDIE MAC'S
business isn't directly connected to the subprime
mortgage breakdown,
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
continued weakness in the North American residential market has hurt the company
due to mortgage losses and performance of securities owned by the company.
CHANGES TO THE FUND'S PORTFOLIO
In the first half of the fiscal year, we decreased the Fund's health care
weighting relative to the Russell Index. We trimmed exposure to biotechnology
stocks and some large-cap pharmaceutical stocks because of valuation concerns
and, in the case of pharmaceuticals, worry that they might be negatively
affected by the change in presidential administrations.
Also in the first half, the Fund's weighting in materials stocks decreased, as
we reduced exposure to gold stocks. We increased exposure to the consumer
staples sector relative to the Russell Index, focusing on stocks with a consumer
cyclical dimension rather than food and consumer goods companies.
In the latter half of the Fund's fiscal year, the Fund's position in the
financials sector decreased. Market performance was partially responsible for
the reduction, as financial stocks generally declined in value. We also cut back
the Fund's holdings of lending-based financial companies, specifically banks and
savings and loans.
The Fund's energy position increased in the second half of the year, also due to
a combination of market results and active management. The energy sector's steep
appreciation boosted the Fund's energy weighting. Meanwhile, we increased the
Fund's holdings of energy services companies. Selected energy services stocks
became relatively inexpensive and we believe they will benefit from increased
exploration and production activity.
We increased the Fund's information technology position in the second half of
the year. Technology stocks, particularly some of the larger, more mature
companies, seem inexpensive to us. They appear to have relatively limited
downside risk due to attractive valuations, with the ability to capitalize on
any improvement in economic activity.
OUR FUTURE STRATEGY
We manage the Fund's portfolio in three segments - a growth-oriented strategy, a
value-oriented strategy and an analyst-driven segment. A
- --------------------------------------------------------------------------------
8 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
common theme across the three segments is our belief that valuation as a
selection criterion is likely to be more effective going forward. Differences in
valuations among stocks have become increasingly wide, reaching a historically
rare level. In the past, such extreme valuation spreads have foreshadowed a
period when valuation was more important to investors. Because each portfolio
segment takes value into consideration when selecting stocks, we believe we are
entering a period that could be more favorable for the Fund's strategy.
Large-cap companies still have roughly the same valuation as mid- and small-cap
companies. However, larger companies tend to have more stable business models,
which can better withstand a decelerating economic environment, and they tend to
have more international exposure, which may benefit from the tail end of the
current period of dollar depreciation.
<Table>
(PHOTO - BOB (PHOTO - NICK
EWING) THAKORE)
Bob Ewing, Nick Thakore
CFA(R) Portfolio Manager
Portfolio
Manager
</Table>
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource fund.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 9
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
The chart on the facing page illustrates the total value of an assumed $10,000
investment in RiverSource Large Cap Equity Fund Class A shares (from 4/1/02 to
7/31/08)* as compared to the performance of three widely cited performance
indices, the Russell 1000 Index, the Standard & Poor's 500 Index (S&P 500 Index)
and the Lipper Large-Cap Core Funds Index. In comparing the Fund's Class A
shares to these indices, you should take into account the fact that the Fund's
performance reflects the maximum sales charge of 5.75%, while such charges are
not reflected in the performance of the indices. Returns for the Fund include
the reinvestment of any distribution paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial institution or visiting riversource.com/funds. Also
see "Past Performance" in the Fund's current prospectus.
* Fund data is from March 28, 2002. Russell 1000 Index, S&P 500 Index and Lipper
peer group data is from April 1, 2002.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
Results at July 31, 2008 1 YEAR 3 YEARS 5 YEARS INCEPTION(4)
RIVERSOURCE LARGE CAP EQUITY FUND (INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $7,970 $9,563 $11,672 $10,590
- ---------------------------------------------------------------------------------------------------
Average annual total return -20.30% -1.48% +3.14% +0.90%
- ---------------------------------------------------------------------------------------------------
RUSSELL 1000 INDEX(1)
Cumulative value of $10,000 $8,938 $10,953 $14,390 $12,819
- ---------------------------------------------------------------------------------------------------
Average annual total return -10.62% +3.08% +7.55% +4.00%
- ---------------------------------------------------------------------------------------------------
S&P 500 INDEX(2)
Cumulative value of $10,000 $8,891 $10,880 $14,045 $12,409
- ---------------------------------------------------------------------------------------------------
Average annual total return -11.09% +2.85% +7.03% +3.47%
- ---------------------------------------------------------------------------------------------------
LIPPER LARGE-CAP CORE FUNDS INDEX(3)
Cumulative value of $10,000 $8,989 $10,966 $13,579 $11,958
- ---------------------------------------------------------------------------------------------------
Average annual total return -10.11% +3.12% +6.31% +2.86%
- ---------------------------------------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 4.
- --------------------------------------------------------------------------------
10 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN RIVERSOURCE LARGE CAP EQUITY FUND
LINE GRAPH)
<Table>
<Caption>
RIVERSOURCE LARGE
CAP EQUITY FUND
CLASS A (INCLUDES SALES LIPPER LARGE-CAP
CHARGE) RUSSELL 1000 INDEX(1) S&P 500 INDEX(2) CORE FUNDS INDEX(3)
----------------------- --------------------- ---------------- -------------------
4/1/02 $ 9,425 $10,000 $10,000 $10,000
7/02 7,766 8,014 7,985 8,108
7/03 8,546 8,911 8,835 8,808
7/04 9,160 10,072 9,999 9,690
7/05 10,441 11,704 11,404 10,907
7/06 10,807 12,316 12,018 11,452
7/07 12,493 14,342 13,957 13,303
7/08 10,590 12,819 12,409 11,958
</Table>
(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 92% 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.
(4) Fund data is from March 28, 2002. Russell 1000 Index, S&P 500 Index and
Lipper peer group data is from April 1, 2002.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 11
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the expenses of the funds in which it invests (also
referred to as "acquired funds"), including affiliated and non-affiliated pooled
investment vehicles (including mutual funds and exchange traded funds). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the 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 July 31, 2008.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Expenses paid during the period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
12 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
DIRECT AND
DIRECT INDIRECT
BEGINNING ENDING EXPENSES EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING PAID DURING
FEB. 1, 2008 JULY 31, 2008 THE PERIOD(A),(B) THE PERIOD(B),(C)
- -------------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------------
Actual(d) $1,000 $ 900.40 $4.35 $4.44
- -------------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,020.29 $4.62 $4.72
- -------------------------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------------------------
Actual(d) $1,000 $ 896.30 $7.87 $7.97
- -------------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,016.56 $8.37 $8.47
- -------------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------------
Actual(d) $1,000 $ 894.50 $7.87 $7.96
- -------------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,016.56 $8.37 $8.47
- -------------------------------------------------------------------------------------------------
Class I
- -------------------------------------------------------------------------------------------------
Actual(d) $1,000 $ 901.00 $2.46 $2.55
- -------------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,022.28 $2.61 $2.72
- -------------------------------------------------------------------------------------------------
Class R2
- -------------------------------------------------------------------------------------------------
Actual(d) $1,000 $ 897.40 $6.32 $6.42
- -------------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,018.20 $6.72 $6.82
- -------------------------------------------------------------------------------------------------
Class R3
- -------------------------------------------------------------------------------------------------
Actual(d) $1,000 $ 899.40 $5.15 $5.24
- -------------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,019.44 $5.47 $5.57
- -------------------------------------------------------------------------------------------------
Class R4
- -------------------------------------------------------------------------------------------------
Actual(d) $1,000 $ 898.00 $3.63 $3.73
- -------------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,021.03 $3.87 $3.97
- -------------------------------------------------------------------------------------------------
Class R5
- -------------------------------------------------------------------------------------------------
Actual(d) $1,000 $ 900.40 $2.79 $2.88
- -------------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,021.93 $2.97 $3.07
- -------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 13
FUND EXPENSES EXAMPLE (continued) ----------------------------------------------
ANNUALIZED EXPENSE RATIOS
<Table>
<Caption>
FUND'S ACQUIRED FUND
ANNUALIZED FEES AND NET FUND
EXPENSE RATIO EXPENSES EXPENSES
- -------------------------------------------------------------------------------------
Class A .92% .02% .94%
- -------------------------------------------------------------------------------------
Class B 1.67% .02% 1.69%
- -------------------------------------------------------------------------------------
Class C 1.67% .02% 1.69%
- -------------------------------------------------------------------------------------
Class I .52% .02% .54%
- -------------------------------------------------------------------------------------
Class R2 1.34% .02% 1.36%
- -------------------------------------------------------------------------------------
Class R3 1.09% .02% 1.11%
- -------------------------------------------------------------------------------------
Class R4 .77% .02% .79%
- -------------------------------------------------------------------------------------
Class R5 .59% .02% .61%
- -------------------------------------------------------------------------------------
</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
182/366 (to reflect the one-half year period).
(b) 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, such that
net expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment, 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.
Any amounts waived will not be reimbursed by the Fund. This change was
effective August 1, 2008. Had this change been in place for the entire six
month period ended July 31, 2008, the actual direct expenses paid would
have been: $4.30 for Class A, $8.53 for Class B, $7.82 for Class C, $2.27
for Class I, $6.09 for Class R2, $4.91 for Class R3, $3.63 for Class R4 and
$2.55 for Class R5; the hypothetical direct expenses paid would have been:
$4.57 for Class A, $9.07 for Class B, $8.32 for Class C, $2.41 for Class I,
$6.47 for Class R2, $5.22 for Class R3, $3.87 for Class R4 and $2.72 for
Class R5. Additionally, had this change been in place for the entire six
month period ended July 31, 2008, the actual direct and indirect expenses
paid would have been: $4.39 for Class A, $8.63 for Class B, $7.91 for Class
C, $2.36 for Class I, $6.18 for Class R2, $5.01 for Class R3, $3.73 for
Class R4 and $2.65 for Class R5; the hypothetical direct and indirect
expenses paid would have been: $4.67 for Class A, $9.17 for Class B, $8.42
for Class C, $2.51 for Class I, $6.57 for Class R2, $5.32 for Class R3,
$3.97 for Class R4 and $2.82 for Class R5.
(c) 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 182/366 (to reflect the one-half year
period).
(d) Based on the actual return for the six months ended July 31, 2008: -9.96%
for Class A, - 10.37% for Class B, -10.55% for Class C, -9.90% for Class I,
-10.26% for Class R2, -10.06% for Class R3, -10.20% for Class R4 and -9.96%
for Class R5.
- --------------------------------------------------------------------------------
14 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
JULY 31, 2008
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (97.1%)
ISSUER SHARES VALUE(A)
AEROSPACE & DEFENSE (4.1%)
Boeing 1,158,424 $70,791,290
General Dynamics 52,948 4,719,785
Goodrich 138,405 6,801,222
Honeywell Intl 531,950 27,044,338
L-3 Communications Holdings 118,424 11,687,265
Lockheed Martin 184,756 19,275,593
Spirit AeroSystems Holdings Cl A 241,611(b) 5,233,294
United Technologies 306,402 19,603,600
---------------
Total 165,156,387
- --------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS (0.1%)
United Parcel Service Cl B 32,815 2,069,970
- --------------------------------------------------------------------------------------
AIRLINES (0.1%)
Northwest Airlines 401,506(b) 3,677,795
UAL 173,328 1,440,356
---------------
Total 5,118,151
- --------------------------------------------------------------------------------------
AUTO COMPONENTS (0.1%)
Goodyear Tire & Rubber 28,780(b) 564,951
Johnson Controls 70,967 2,140,365
---------------
Total 2,705,316
- --------------------------------------------------------------------------------------
AUTOMOBILES (0.1%)
Ford Motor 526,712(b) 2,528,217
General Motors 67,728(f) 749,749
Harley-Davidson 28,277 1,070,002
---------------
Total 4,347,968
- --------------------------------------------------------------------------------------
BEVERAGES (2.5%)
Anheuser-Busch Companies 39,259 2,660,190
Coca-Cola 1,040,306 53,575,759
Molson Coors Brewing Cl B 302,505 16,326,195
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
BEVERAGES (CONT.)
Pepsi Bottling Group 14,745 $410,648
PepsiCo 443,504 29,519,626
---------------
Total 102,492,418
- --------------------------------------------------------------------------------------
BIOTECHNOLOGY (2.9%)
Amgen 714,833(b) 44,769,991
Genentech 377,556(b) 35,962,209
Genzyme 249,477(b) 19,122,412
ImClone Systems 262,974(b) 16,811,928
---------------
Total 116,666,540
- --------------------------------------------------------------------------------------
BUILDING PRODUCTS (0.1%)
Masco 250,330 4,127,942
- --------------------------------------------------------------------------------------
CAPITAL MARKETS (3.3%)
Bank of New York Mellon 281,459 9,991,795
BlackRock 9,386 2,034,040
Blackstone Group LP 139,163 2,584,257
Goldman Sachs Group 122,537 22,551,709
KKR Private Equity Investors LP Unit 2,752,976 36,339,938
Legg Mason 116,839 4,714,454
Lehman Brothers Holdings 1,142,970 19,819,100
Merrill Lynch & Co 163,870 4,367,136
Morgan Stanley 433,275 17,105,697
Oaktree Capital Group LLC Cl A Unit 331,941(d,h) 9,294,348
Och-Ziff Capital Management Group LLC Cl A 78,518 1,282,984
State Street 38,363 2,748,325
---------------
Total 132,833,783
- --------------------------------------------------------------------------------------
CHEMICALS (1.1%)
Air Products & Chemicals 25,197 2,399,006
Ashland 6,745 281,739
Dow Chemical 404,782 13,483,289
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 15
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CHEMICALS (CONT.)
Eastman Chemical 47,239 $2,832,450
Ecolab 20,992 938,342
EI du Pont de Nemours & Co 266,501 11,675,409
Hercules 13,504 270,755
Intl Flavors & Fragrances 9,639 387,681
Monsanto 65,630 7,817,189
PPG Inds 19,619 1,189,696
Praxair 37,441 3,509,345
Rohm & Haas 15,002 1,125,150
---------------
Total 45,910,051
- --------------------------------------------------------------------------------------
COMMERCIAL BANKS (1.5%)
BancorpSouth 57,883 1,232,908
BB&T 162,258(f) 4,546,469
Comerica 18,838 541,027
Fifth Third Bancorp 756,147 10,563,374
PNC Financial Services Group 99,353 7,082,875
Regions Financial 1 9
SunTrust Banks 102,054 4,190,337
Wachovia 1,178,853 20,358,792
Wells Fargo & Co 387,434 11,727,628
---------------
Total 60,243,419
- --------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (0.2%)
Allied Waste Inds 40,342(b) 488,138
Avery Dennison 12,748 561,039
Cintas 15,638 444,745
Equifax 15,374 539,474
Monster Worldwide 14,877(b) 263,918
Pitney Bowes 24,852 787,560
Robert Half Intl 18,984 480,105
RR Donnelley & Sons 25,417 678,634
Waste Management 58,668 2,085,061
---------------
Total 6,328,674
- --------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (4.0%)
Cisco Systems 1,131,946(b) 24,891,493
Corning 215,740 4,316,957
Motorola 610,279 5,272,811
Nokia 729,400(c,k) 19,905,194
Nokia ADR 1,879,494(c) 51,347,775
Nortel Networks 342(b,c) 2,613
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
COMMUNICATIONS EQUIPMENT (CONT.)
QUALCOMM 926,698 $51,283,467
Starent Networks 356,126(b,f) 4,665,251
---------------
Total 161,685,561
- --------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (3.1%)
Apple 187,048(b) 29,731,280
Dell 266,915(b) 6,558,102
EMC 645,118(b) 9,683,221
Hewlett-Packard 940,865 42,150,752
IBM 261,527 33,470,225
SanDisk 221,899(b) 3,128,776
---------------
Total 124,722,356
- --------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.3%)
Fluor 83,260 6,773,201
KBR 189,049 5,387,897
---------------
Total 12,161,098
- --------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS (--%)
Vulcan Materials 13,081 839,669
- --------------------------------------------------------------------------------------
CONSUMER FINANCE (0.3%)
American Express 180,325 6,693,664
Capital One Financial 82,648 3,459,645
SLM 55,909(b) 957,721
---------------
Total 11,111,030
- --------------------------------------------------------------------------------------
CONTAINERS & PACKAGING (--%)
Ball 11,691 521,186
Bemis 11,926 335,836
Pactiv 15,630(b) 376,839
Sealed Air 19,132 415,164
---------------
Total 1,649,025
- --------------------------------------------------------------------------------------
DISTRIBUTORS (--%)
Genuine Parts 19,592 785,835
- --------------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (--%)
Apollo Group Cl A 16,503(b) 1,027,972
H&R Block 38,956 947,799
---------------
Total 1,975,771
- --------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (4.4%)
Apollo Mgmt LP 1,426,700(d,h) 19,973,800
Bank of America 1,605,532 52,822,002
CIT Group 22,723 192,691
Citigroup 1,394,941 26,071,447
CME Group 6,127 2,206,517
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
16 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
DIVERSIFIED FINANCIAL SERVICES (CONT.)
Interactive Brokers Group Cl A 447,495(b) $12,556,710
IntercontinentalExchange 76,455(b) 7,630,209
iShares Dow Jones US Healthcare Sector Index
Fund 1 65
JPMorgan Chase & Co 1,177,978 47,861,246
KKR Financial Holdings LLC 580,995 5,966,819
Leucadia Natl 21,149 946,841
Materials Select Sector SPDR Fund 71,566(f) 2,889,835
NYSE Euronext 30,511 1,441,340
---------------
Total 180,559,522
- --------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (5.9%)
AT&T 2,177,373 67,084,863
Chunghwa Telecom ADR 1(c) 25
Deutsche Telekom 1,804,355(c) 31,231,566
Embarq 77,675 3,555,185
Frontier Communications 180,802 2,090,071
Qwest Communications Intl 4,256,424(f) 16,302,104
Telefonica 2,070,662(c) 53,723,568
Telefonica ADR 97,827(c) 7,613,875
Verizon Communications 1,646,345 56,041,584
Windstream 175,967 2,097,527
---------------
Total 239,740,368
- --------------------------------------------------------------------------------------
ELECTRIC UTILITIES (1.8%)
Allegheny Energy 20,100 972,840
American Electric Power 48,037 1,897,462
Duke Energy 151,259 2,659,133
Edison Intl 38,965 1,883,568
Entergy 132,929 14,212,769
Exelon 232,129 18,249,982
FirstEnergy 36,460 2,681,633
FPL Group 98,810 6,376,209
Pepco Holdings 24,087 600,730
Pinnacle West Capital 12,030 403,847
PPL 112,549 5,285,301
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
ELECTRIC UTILITIES (CONT.)
Progress Energy 31,715 $1,341,862
Southern 461,644 16,337,581
---------------
Total 72,902,917
- --------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (0.4%)
Emerson Electric 338,633 16,491,428
Gamesa Tecnologica 13,814(c) 656,736
---------------
Total 17,148,164
- --------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.1%)
Agilent Technologies 3,004(b) 108,324
Tyco Electronics 136,863(c) 4,535,640
---------------
Total 4,643,964
- --------------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (1.6%)
Baker Hughes 70,053 5,808,094
ENSCO Intl 15,095 1,043,668
Halliburton 207,050 9,279,981
Nabors Inds 30,012(b,c) 1,094,238
Natl Oilwell Varco 122,206(b) 9,609,058
Noble 29,594 1,535,041
Pride Intl 55,056(b) 2,133,971
Rowan Companies 12,564 500,047
Schlumberger 165,535 16,818,355
Transocean 80,630(b) 10,968,099
Weatherford Intl 129,293(b) 4,878,225
---------------
Total 63,668,777
- --------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (1.5%)
Costco Wholesale 56,905 3,566,805
CVS Caremark 268,637 9,805,251
Kroger 79,418 2,245,941
Safeway 132,565 3,542,137
SUPERVALU 23,305 597,074
SYSCO 69,319 1,965,887
Walgreen 169,526 5,821,523
Wal-Mart Stores 595,006 34,879,251
---------------
Total 62,423,869
- --------------------------------------------------------------------------------------
FOOD PRODUCTS (0.4%)
Archer-Daniels-Midland 73,221 2,096,317
Kellogg 144,371 7,660,325
Kraft Foods Cl A 92,141 2,931,927
Sara Lee 228,562 3,122,157
---------------
Total 15,810,726
- --------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 17
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
GAS UTILITIES (0.1%)
Nicor 5,402 $215,108
ONEOK 96,709 4,398,325
Questar 20,732 1,096,308
---------------
Total 5,709,741
- --------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (1.3%)
Becton Dickinson & Co 32,876 2,791,501
Boston Scientific 2,059,138(b) 24,483,151
China Medical Technologies ADR 110,635(c,f) 5,301,629
Covidien 198,175 9,758,137
Medtronic 216,057 11,414,291
---------------
Total 53,748,709
- --------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (2.6%)
Aetna 193,362 7,929,776
AmerisourceBergen 219,065 9,172,252
Cardinal Health 327,758 17,610,437
CIGNA 126,376 4,678,440
Coventry Health Care 18,160(b) 642,319
Express Scripts 73,371(b) 5,175,590
Humana 261,683(b) 11,490,501
Laboratory Corp of America Holdings 13,323(b) 900,368
McKesson 365,600 20,469,944
Medco Health Solutions 211,662(b) 10,494,202
Patterson Companies 14,526(b) 453,647
Quest Diagnostics 18,891 1,004,246
Tenet Healthcare 57,375(b) 332,201
UnitedHealth Group 356,181 10,001,562
WellPoint 62,989(b) 3,303,773
---------------
Total 103,659,258
- --------------------------------------------------------------------------------------
HEALTH CARE TECHNOLOGY (--%)
IMS Health 21,711 453,760
- --------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HOTELS, RESTAURANTS & LEISURE (0.6%)
Chipotle Mexican Grill Cl B 1(b) $64
Darden Restaurants 260,562 8,486,504
Intl Game Technology 252,174 5,474,698
Marriott Intl Cl A 173,799 4,503,132
Starbucks 290,004(b) 4,260,159
Starwood Hotels & Resorts Worldwide 24,972 856,290
---------------
Total 23,580,847
- --------------------------------------------------------------------------------------
HOUSEHOLD DURABLES (1.0%)
Black & Decker 7,305 438,446
Centex 251,388 3,690,376
DR Horton 427,706 4,756,091
Harman Intl Inds 226,936 9,342,954
Hovnanian Enterprises Cl A 314,091(b,f) 2,208,060
Jarden 22,309(b) 536,085
KB Home 372,092(f) 6,545,098
Leggett & Platt 19,887 387,797
Lennar Cl A 220,369 2,666,465
Meritage Homes 58,457(b) 1,055,149
Newell Rubbermaid 96,030 1,587,376
NVR 1,977(b) 1,091,937
Snap-On 6,903 388,570
Stanley Works 9,373 416,911
Whirlpool 54,642 4,136,399
---------------
Total 39,247,714
- --------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS (1.2%)
Clorox 71,006 3,869,827
Colgate-Palmolive 212,982 15,818,173
Procter & Gamble 449,018 29,401,699
---------------
Total 49,089,699
- --------------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.1%)
AES 80,357(b) 1,296,962
Constellation Energy Group 21,336 1,774,301
Dynegy Cl A 59,446(b) 400,072
---------------
Total 3,471,335
- --------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
18 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
INDUSTRIAL CONGLOMERATES (1.8%)
3M 36,650 $2,579,794
General Electric 2,016,361 57,042,852
Siemens 29,231(c) 3,552,897
Textron 98,300 4,273,101
Tyco Intl 105,559(c) 4,703,709
---------------
Total 72,152,353
- --------------------------------------------------------------------------------------
INSURANCE (3.3%)
ACE LTD 428,806(c) 21,740,464
AFLAC 442,260 24,594,080
Allstate 21,365 987,490
American Intl Group 661,931 17,243,303
Aon 7,738 354,400
Arch Capital Group 36,503(b,c) 2,545,354
Assurant 14,256 857,071
Assured Guaranty 126,640(c,f) 1,451,294
Chubb 146,361 7,031,182
Endurance Specialty Holdings 61,099(c) 1,869,629
Hartford Financial Services Group 254,581 16,137,890
Max Capital Group 143,701(c) 3,372,662
MetLife 140,630 7,139,785
Principal Financial Group 19,201 816,235
Prudential Financial 346,699 23,911,830
Validus Holdings 97,234(c) 2,217,908
XL Capital Cl A 67,497(c) 1,207,521
---------------
Total 133,478,098
- --------------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL (0.3%)
Amazon.com 37,016(b) 2,825,801
Expedia 537,369(b) 10,516,312
IAC/InterActiveCorp 21,698(b) 378,847
---------------
Total 13,720,960
- --------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (1.1%)
Akamai Technologies 20,111(b) 469,391
eBay 132,377(b) 3,331,929
Equinix 22,237(b) 1,809,202
Google Cl A 69,127(b) 32,748,916
VeriSign 23,302(b) 758,247
Yahoo! 197,291(b) 3,924,118
---------------
Total 43,041,803
- --------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
IT SERVICES (1.2%)
Affiliated Computer Services Cl A 11,529(b) $555,698
Automatic Data Processing 165,598 7,072,691
Broadridge Financial Solutions 1 21
Cognizant Technology Solutions Cl A 34,291(b) 962,548
Computer Sciences 17,942(b) 849,913
Convergys 14,670(b) 186,309
Electronic Data Systems 168,116 4,170,958
Fidelity Natl Information Services 20,379 386,182
Fiserv 19,460(b) 930,577
MasterCard Cl A 83,783(f) 20,455,618
Paychex 38,069 1,253,231
Redecard 254,120(c) 4,692,695
Total System Services 23,527 460,659
Unisys 42,291(b) 156,054
Visa Cl A 33,382(b) 2,438,889
Western Union 87,834 2,427,732
---------------
Total 46,999,775
- --------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.1%)
Eastman Kodak 34,500 505,080
Hasbro 27,327 1,058,102
Mattel 45,784 917,969
---------------
Total 2,481,151
- --------------------------------------------------------------------------------------
MACHINERY (1.5%)
Caterpillar 195,634 13,600,476
Danaher 33,928 2,702,365
Deere & Co 232,541 16,315,077
Flowserve 147,120 19,616,980
Ingersoll-Rand Cl A 37,369(c) 1,345,284
Navistar Intl 7,584(b) 427,624
Parker Hannifin 118,219 7,291,748
---------------
Total 61,299,554
- --------------------------------------------------------------------------------------
MEDIA (7.3%)
Comcast Cl A 1,441,247 29,718,513
Comcast Special Cl A 186,779 3,836,441
DIRECTV Group 195,760(b) 5,289,435
EW Scripps Cl A 3,689 25,530
Gannett 21,746 394,038
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 19
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MEDIA (CONT.)
Liberty Entertainment Series A 303,858(b,e) $7,480,984
Liberty Media - Capital Series A 32,687(b,e) 507,956
McGraw-Hill Companies 31,647 1,287,083
Meredith 3,593 91,837
New York Times Cl A 13,438 169,184
News Corp Cl A 1,737,878 24,556,216
Scripps Networks Interactive Cl A 11,068(b) 448,697
Sirius XM Radio 36,484,405(b,k) 58,375,048
Time Warner 2,278,213 32,624,010
Time Warner Cable Cl A 118,025(b) 3,355,451
Viacom Cl B 211,741(b) 5,913,926
Virgin Media 9,044,507(h) 101,479,370
Vivendi 232,631(c) 9,725,494
Walt Disney 349,839 10,617,614
Washington Post Cl B 553 341,892
WorldSpace Cl A 263,942(b,f) 348,403
---------------
Total 296,587,122
- --------------------------------------------------------------------------------------
METALS & MINING (1.3%)
Alcoa 280,794(i) 9,476,798
Allegheny Technologies 12,083 571,405
Coeur d'Alene Mines 4,505,183(b,f) 13,019,979
Freeport-McMoRan Copper & Gold 45,827 4,433,762
Lihir Gold 3,224,058(b,c) 8,377,633
Newmont Mining 207,694 9,960,985
Nucor 36,494 2,088,187
Timminco 265,292(b,c) 6,271,433
Titanium Metals 11,658 131,269
---------------
Total 54,331,451
- --------------------------------------------------------------------------------------
MULTILINE RETAIL (0.3%)
JC Penney 137,459 4,237,861
Kohl's 96,693(b) 4,052,404
Macy's 57,315 1,078,095
Target 79,614 3,600,941
---------------
Total 12,969,301
- --------------------------------------------------------------------------------------
MULTI-UTILITIES (0.7%)
Ameren 25,059 1,029,674
CenterPoint Energy 39,263 619,178
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MULTI-UTILITIES (CONT.)
CMS Energy 26,962 $363,987
Consolidated Edison 32,613 1,294,736
Dominion Resources 236,970 10,469,334
DTE Energy 19,512 799,602
Integrys Energy Group 9,142 466,791
NiSource 32,787 560,002
PG&E 42,734 1,646,541
Public Service Enterprise Group 60,818 2,542,192
Sempra Energy 29,947 1,681,824
TECO Energy 25,205 467,553
Xcel Energy 307,787 6,174,207
---------------
Total 28,115,621
- --------------------------------------------------------------------------------------
OFFICE ELECTRONICS (--%)
Xerox 106,725 1,455,729
- --------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (9.1%)
Anadarko Petroleum 57,901 3,353,047
Apache 20,018 2,245,419
BP ADR 141,792(c) 8,711,700
Chesapeake Energy 32,146 1,612,122
Chevron 886,464 74,959,396
ConocoPhillips 474,900 38,761,338
CONSOL Energy 24,334 1,810,206
Devon Energy 123,144 11,685,134
El Paso 85,556 1,534,019
EOG Resources 15,627 1,570,982
Exxon Mobil 1,915,009 154,024,174
Marathon Oil 139,671 6,909,524
Massey Energy 9,624 714,582
Occidental Petroleum 113,036 8,910,628
Patriot Coal 3,558(b) 448,842
Peabody Energy 34,016 2,301,182
Range Resources 2,370 115,087
Royal Dutch Shell ADR 68,458(c) 4,846,142
Ship Finance Intl 104,732(c) 3,114,730
Spectra Energy 78,605 2,135,698
Sunoco 62,954 2,556,562
Tesoro 17,661 272,686
Total 305,847(c) 23,416,154
Valero Energy 181,512 6,064,316
Williams Companies 75,121 2,407,628
XTO Energy 32,351 1,527,938
---------------
Total 366,009,236
- --------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
20 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
PAPER & FOREST PRODUCTS (0.3%)
Intl Paper 234,954 $6,512,925
MeadWestvaco 20,757 556,495
Weyerhaeuser 98,119 5,245,442
---------------
Total 12,314,862
- --------------------------------------------------------------------------------------
PERSONAL PRODUCTS (1.2%)
Avon Products 877,466 37,204,558
Herbalife 256,100(c) 11,060,959
---------------
Total 48,265,517
- --------------------------------------------------------------------------------------
PHARMACEUTICALS (7.1%)
Bristol-Myers Squibb 3,256,206 68,771,071
Elan ADR 58,998(b,c) 1,182,910
Eli Lilly & Co 102,634 4,835,088
Johnson & Johnson 311,557 21,332,308
Merck & Co 1,642,017 54,022,359
Pfizer 5,088,066 94,994,192
Schering-Plough 515,979 10,876,837
Shire ADR 29,747(c) 1,497,464
Wyeth 795,773 32,244,722
---------------
Total 289,756,951
- --------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (0.3%)
Apartment Investment & Management Cl A 80,423 2,748,054
AvalonBay Communities 4,673 465,945
Boston Properties 9,881 950,453
HCP 28,116 1,014,144
Kimco Realty 12,399 437,561
Plum Creek Timber 20,135 980,977
ProLogis 26,369 1,288,917
Public Storage 11,000 900,790
Simon Property Group 15,787 1,462,350
Vornado Realty Trust 11,357 1,079,710
---------------
Total 11,328,901
- --------------------------------------------------------------------------------------
ROAD & RAIL (0.8%)
CSX 31,756 2,146,070
Hertz Global Holdings 3,057,405(b) 26,079,665
Norfolk Southern 45,485 3,271,281
---------------
Total 31,497,016
- --------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (2.7%)
Advanced Micro Devices 1,585,279(b) $6,674,025
Applied Materials 149,554 2,590,275
Atmel 684,885(b) 2,417,644
Broadcom Cl A 48,957(b) 1,189,166
Cypress Semiconductor 47,876(b) 1,304,621
Himax Technologies ADR 742,532(c) 2,821,622
Infineon Technologies 766,243(b,c) 5,752,134
Infineon Technologies ADR 271,122(b,c) 2,038,837
Intel 2,050,731 45,505,720
LSI 2(b) 14
MEMC Electronic Materials 16,280(b) 752,299
Micron Technology 1,922,816(b) 9,287,201
Microsemi 28,004(b) 726,984
Natl Semiconductor 43,190 904,831
ON Semiconductor 362,514(b) 3,404,006
Skyworks Solutions 84,398(b) 798,405
Spansion Cl A 3,791,334(b) 8,682,155
Teradyne 574,117(b) 5,379,476
Texas Instruments 466,539 11,374,221
---------------
Total 111,603,636
- --------------------------------------------------------------------------------------
SOFTWARE (3.5%)
Adobe Systems 63,649(b) 2,631,886
Autodesk 26,806(b) 854,843
BMC Software 22,854(b) 751,668
CA 46,727 1,114,906
Citrix Systems 21,966(b) 585,174
Compuware 31,307(b) 344,377
Electronic Arts 111,588(b) 4,818,370
Intuit 38,420(b) 1,050,019
Microsoft 3,657,420 94,068,843
Nintendo ADR 363,822(c) 21,056,199
Oracle 664,725(b) 14,311,529
SAP 4,190(c) 243,499
Symantec 100,556(b) 2,118,715
---------------
Total 143,950,028
- --------------------------------------------------------------------------------------
SPECIALTY RETAIL (0.9%)
Abercrombie & Fitch Cl A 26,590 1,468,300
AutoNation 16,031(b) 165,440
AutoZone 5,144(b) 670,212
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 21
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SPECIALTY RETAIL (CONT.)
Bed Bath & Beyond 34,454(b) $958,855
Gap 112,983 1,821,286
Home Depot 481,084 11,464,231
Lowe's Companies 486,644(i) 9,888,605
Office Depot 30,952(b) 210,474
RadioShack 15,719 262,193
Sherwin-Williams 11,888 633,036
Staples 88,968 2,001,780
Tiffany & Co 17,789 672,246
TJX Companies 191,512 6,455,870
---------------
Total 36,672,528
- --------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (0.1%)
Nike Cl B 48,509 2,846,508
VF 21,966 1,572,326
---------------
Total 4,418,834
- --------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.4%)
Freddie Mac 2,057,347 16,808,526
Hudson City Bancorp 48,993 894,607
Washington Federal 12,857 239,140
---------------
Total 17,942,273
- --------------------------------------------------------------------------------------
TOBACCO (2.2%)
Altria Group 1,150,407 23,410,782
Lorillard 17,965(b) 1,205,631
Philip Morris Intl 1,183,814 61,143,994
UST 67,961 3,575,428
---------------
Total 89,335,835
- --------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (--%)
WW Grainger 7,786 696,925
- --------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (2.8%)
American Tower Cl A 21,603(b) 905,166
Sprint Nextel 619,353 5,041,533
Turkcell ADR 106,276(c) 2,051,127
Vodafone Group 28,897,564(c) 77,409,489
Vodafone Group ADR 1,110,412(c) 29,792,354
---------------
Total 115,199,669
- --------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $4,277,268,678) $3,944,415,463
- --------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
OPTIONS PURCHASED (0.3%)
EXERCISE EXPIRATION
ISSUER CONTRACTS PRICE DATE VALUE(A)
CALLS
Altria Group(j)
Virgin Media(j)
Vodafone Group ADR(j) 240,674 $100.00 Jan. 2009 $283,995
AmeriSourceBergen(j)
Bristol-Myers Squibb(j)
Nokia ADR(j) 224,040 100.00 Jan. 2009 495,128
Hertz Global Holdings(j)
Telefonica(j)
Vodafone Group ADR(j) 194,617 100.00 Jan. 2009 136,388
Hong Kong Dollar 1,012,421 7.73 March 2009 225,365
Nokia 5,033 15.00 Dec. 2008 2,708,239
Nokia 7,559 18.00 Dec. 2008 1,868,679
Nokia ADR 2,180 25.00 Jan. 2009 926,500
Sirius XM Radio 8,852 9.00 Aug. 2008 44,260
Sirius XM Radio(j)
Virgin Media(j)
Vodafone Group ADR(j) 213,932 100.00 Jan. 2009 53,483
- --------------------------------------------------------------------------------------------------------------------------
PUTS
Goldman Sachs Group 239,727 446.25 Aug. 2008 1,080,474
NASDAQ 100 Index 28,351 43.00 Aug. 2008 708,775
Research in Motion 1,123 115.00 Dec. 2008 1,344,792
S&P 500 Index 1,072 1,240.00 Aug. 2008 1,420,400
S&P 500 Index 1,232 1,260.00 Aug. 2008 2,470,160
- --------------------------------------------------------------------------------------------------------------------------
TOTAL OPTIONS PURCHASED
(Cost: $22,945,180) $13,766,638
- --------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (3.1%)(g)
SHARES VALUE(A)
RiverSource Short-Term
Cash Fund, 2.54% 124,337,493(l) $124,337,493
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $124,337,493) $124,337,493
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $4,424,551,351)(m) $4,082,519,594
===================================================================================
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
22 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
INVESTMENTS IN DERIVATIVES
FUTURES CONTRACTS OUTSTANDING AT JULY 31, 2008
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION
CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION)
- ----------------------------------------------------------------------------------------------------
S&P 500 Index 60 $19,006,500 Sept. 2008 $365,881
</Table>
OPEN OPTIONS CONTRACTS WRITTEN AT JULY 31, 2008
<Table>
<Caption>
NUMBER OF EXERCISE PREMIUM EXPIRATION
ISSUER PUTS/CALLS CONTRACTS PRICE RECEIVED DATE VALUE(A)
- --------------------------------------------------------------------------------------------------------------
Nokia Call 7,559 18 $934,566 Dec. 2008 $1,868,679
Research in Motion Put 1,123 100 856,227 Dec. 2008 735,565
S&P 500 Index Put 1,072 1,200 801,663 Aug. 2008 584,240
S&P 500 Index Put 1,232 1,220 797,104 Aug. 2008 1,065,680
Sirius XM Radio Call 8,852 10 394,191 Aug. 2008 22,130
- --------------------------------------------------------------------------------------------------------------
Total $4,276,294
- --------------------------------------------------------------------------------------------------------------
</Table>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JULY 31, 2008
<Table>
<Caption>
CURRENCY TO BE CURRENCY TO BE UNREALIZED UNREALIZED
EXCHANGE DATE DELIVERED RECEIVED APPRECIATION DEPRECIATION
- ---------------------------------------------------------------------------------------------------------------
Aug. 1, 2008 805,674 1,255,519 $-- $(1,902)
European Monetary Unit U.S. Dollar
- ---------------------------------------------------------------------------------------------------------------
Aug. 5, 2008 662,546 425,003 331 --
U.S. Dollar European Monetary Unit
- ---------------------------------------------------------------------------------------------------------------
Sept. 4, 2008 22,571,000 45,016,280 381,074 --
British Pound U.S. Dollar
- ---------------------------------------------------------------------------------------------------------------
Sept. 5, 2008 6,683,000 6,361,013 94,766 --
Australian Dollar U.S. Dollar
- ---------------------------------------------------------------------------------------------------------------
Sept. 5, 2008 17,493,000 34,893,987 303,505 --
British Pound U.S. Dollar
- ---------------------------------------------------------------------------------------------------------------
Sept. 11, 2008 44,722,000 69,847,267 197,246 --
European Monetary Unit U.S. Dollar
- ---------------------------------------------------------------------------------------------------------------
Sept. 12, 2008 36,981,000 57,690,360 96,168 --
European Monetary Unit U.S. Dollar
- ---------------------------------------------------------------------------------------------------------------
Total $1,073,090 $(1,092)
- ---------------------------------------------------------------------------------------------------------------
</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 July 31, 2008, the
value of foreign securities represented 10.9% of net assets.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 23
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
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 July 31,
2008, the value of these securities amounted to $29,268,148 or 0.7% of net
assets.
(e) Shareholders of tracking stocks have a financial interest only in a unit or
division of the company. Unlike the common stock of the company itself, a
tracking stock usually has limited or no voting rights. In the event of a
company's liquidation, tracking stock shareholders typically do not have a
legal claim on the company's assets.
(f) At July 31, 2008, security was partially or fully on loan. See Note 5 to
the financial statements.
(g) Cash collateral received from security lending activity is invested in an
affiliated money market fund and represents 0.8% of net assets. See Note 5
to the financial statements. The Fund's cash equivalent position is 2.3% of
net assets.
(h) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). These securities may be valued at fair
value according to procedures approved, in good faith, by the Fund's Board
of Directors. Information concerning such security holdings at July 31,
2008, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ----------------------------------------------------------------------------------
Apollo Mgmt LP* 08-02-07 thru 07-10-08 $31,700,520
Oaktree Capital Group LLC Cl A
Unit* 05-21-07 thru 03-14-08 12,205,136
Virgin Media 11-15-06 thru 04-15-08 182,208,894
</Table>
* Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended.
(i) At July 31, 2008, investments in securities included securities valued at
$4,835,700 that were partially pledged as collateral to cover initial
margin deposits on open stock index futures contracts.
(j) Represents a worst-of-call-option that is a bundle of long forwards. All
mature on the option's expiration date but have different underliers. At
expiration, only one settles and this is chosen in the issuer's favor.
(k) At July 31, 2008, securities valued at $22,044,694 were held to cover open
call options written. See Note 6 to the financial statements.
(l) Affiliated Money Market Fund - See Note 7 to the financial statements. The
rate shown is the seven-day current annualized yield at July 31, 2008.
(m) At July 31, 2008, the cost of securities for federal income tax purposes
was $4,609,836,302 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $300,203,674
Unrealized depreciation (827,520,382)
- ------------------------------------------------------------------------------
Net unrealized depreciation $(527,316,708)
- ------------------------------------------------------------------------------
</Table>
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.
- --------------------------------------------------------------------------------
24 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 25
FINANCIAL STATEMENTS -----------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2008
<Table>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $4,300,213,858) $3,958,182,101
Affiliated money market fund (identified cost
$124,337,493) 124,337,493
- ------------------------------------------------------------------------------
Total investments in securities (identified cost
$4,424,551,351) 4,082,519,594
Cash 1,338,804
Foreign currency holdings (identified cost $1) 1
Capital shares receivable 376,695
Dividends and accrued interest receivable 9,079,663
Receivable for investment securities sold 84,128,464
Unrealized appreciation on forward foreign currency
contracts 1,073,090
- ------------------------------------------------------------------------------
Total assets 4,178,516,311
- ------------------------------------------------------------------------------
LIABILITIES
Options contracts written, at value (premiums received
$3,783,751) 4,276,294
Capital shares payable 15,079,716
Payable for investment securities purchased 64,094,744
Payable upon return of securities loaned 32,299,100
Variation margin payable 308,000
Unrealized depreciation on forward foreign currency
contracts 1,092
Accrued investment management services fees 63,204
Accrued distribution fees 35,986
Accrued transfer agency fees 12,123
Accrued administrative services fees 5,528
Accrued plan administration services fees 1,300
Other accrued expenses 681,310
Collateral and deposits payable 1,175,000
- ------------------------------------------------------------------------------
Total liabilities 118,033,397
- ------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $4,060,482,914
==============================================================================
REPRESENTED BY
Capital stock -- $.01 par value $ 9,010,201
Additional paid-in capital 4,751,328,658
Undistributed net investment income 47,429,271
Accumulated net realized gain (loss) (406,243,610)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (341,041,606)
- ------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $4,060,482,914
==============================================================================
*Including securities on loan, at value $ 28,188,444
- ------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
26 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
JULY 31, 2008
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $3,388,815,212 750,529,476 $4.52(1)
Class B $ 432,695,950 98,119,285 $4.41
Class C $ 20,752,067 4,701,508 $4.41
Class I $ 38,943,788 8,562,931 $4.55
Class R2 $ 3,743 822 $4.55
Class R3 $ 3,749 822 $4.56
Class R4 $ 179,264,616 39,104,432 $4.58
Class R5 $ 3,789 822 $4.61
- -------------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $4.80. 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.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 27
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 2008
<Table>
INVESTMENT INCOME
Income:
Dividends $ 113,500,028
Interest 4,306
Income distributions from affiliated money market fund 8,770,462
Fee income from securities lending 1,125,485
Less foreign taxes withheld (1,262,602)
- -----------------------------------------------------------------------------
Total income 122,137,679
- -----------------------------------------------------------------------------
Expenses:
Investment management services fees 25,467,893
Distribution fees
Class A 10,775,702
Class B 7,098,566
Class C 270,367
Class R2 22
Class R3 11
Transfer agency fees
Class A 9,066,345
Class B 1,605,617
Class C 59,194
Class R2 3
Class R3 3
Class R4 128,910
Class R5 3,535
Administrative services fees 2,524,199
Plan administration services fees
Class R2 11
Class R3 11
Class R4 644,550
Compensation of board members 99,527
Custodian fees 589,410
Printing and postage 1,398,700
Registration fees 91,517
Professional fees 119,264
Other 186,595
- -----------------------------------------------------------------------------
Total expenses 60,129,952
Expenses waived/reimbursed by the Investment Manager and
its affiliates (3,079,363)
Earnings and bank fee credits on cash balances (400,856)
- -----------------------------------------------------------------------------
Total net expenses 56,649,733
- -----------------------------------------------------------------------------
Investment income (loss) -- net 65,487,946
- -----------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
28 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
STATEMENT OF OPERATIONS (CONTINUED)
YEAR ENDED JULY 31, 2008
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $ 10,407,715
Foreign currency transactions (14,523,705)
Futures contracts (11,520,899)
Options contracts written (2,376,453)
Swap transactions (2,348,917)
- -----------------------------------------------------------------------------
Net realized gain (loss) on investments (20,362,259)
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies (865,038,637)
- -----------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (885,400,896)
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $(819,912,950)
=============================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 29
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
YEAR ENDED JULY 31, 2008 2007
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 65,487,946 $ 63,564,209
Net realized gain (loss) on investments (20,362,259) 703,349,838
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies (865,038,637) 323,820,329
- ----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (819,912,950) 1,090,734,376
- ----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (36,389,921) (51,279,745)
Class B -- (2,969,618)
Class C -- (121,537)
Class I (866,696) (1,522,653)
Class R2 (32) (65)
Class R3 (44) (66)
Class R4 (2,588,075) (5,679,767)
Class R5 -- (322,641)
Net realized gain
Class A (503,800,045) (125,265,857)
Class B (85,854,373) (27,693,216)
Class C (3,230,993) (831,229)
Class I (7,554,314) (2,640,713)
Class R2 (539) (115)
Class R3 (539) (115)
Class R4 (31,125,821) (13,607,896)
Class R5 (539) (560,037)
- ----------------------------------------------------------------------------------------
Total distributions (671,411,931) (232,495,270)
- ----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
30 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
YEAR ENDED JULY 31, 2008 2007
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 211,484,181 $ 370,676,879
Class B shares 33,647,160 57,068,487
Class C shares 2,226,679 2,755,399
Class I shares 10,561,864 15,570,677
Class R2 shares -- 5,000
Class R3 shares -- 5,000
Class R4 shares 34,516,064 28,329,694
Class R5 shares -- 26,931,801
Reinvestment of distributions at net asset value
Class A shares 523,659,899 171,429,375
Class B shares 85,230,086 30,416,192
Class C shares 3,174,765 939,571
Class I shares 8,419,823 4,163,008
Class R4 shares 33,713,417 19,287,529
Class R5 shares -- 882,497
Payments for redemptions
Class A shares (1,190,365,828) (1,564,111,579)
Class B shares (315,875,480) (569,109,428)
Class C shares (8,714,618) (10,923,150)
Class I shares (30,081,251) (69,035,113)
Class R4 shares (150,506,498) (882,819,499)
Class R5 shares (26,533,250) (2,629,011)
- ----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (775,442,987) (2,370,166,671)
- ----------------------------------------------------------------------------------------
Total increase (decrease) in net assets (2,266,767,868) (1,511,927,565)
Net assets at beginning of year 6,327,250,782 7,839,178,347
- ----------------------------------------------------------------------------------------
Net assets at end of year $ 4,060,482,914 $ 6,327,250,782
========================================================================================
Undistributed net investment income $ 47,429,271 $ 40,157,282
- ----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 31
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
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 July 31, 2008, 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,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by
- --------------------------------------------------------------------------------
32 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
dealers in these securities or by an independent pricing service. Foreign
securities are valued based on quotations from the principal market in which
such securities are normally traded. The procedures adopted by the Board
generally contemplate the use of fair valuation in the event that price
quotations or valuations are not readily available, price quotations or
valuations from other sources are not reflective of market value and thus deemed
unreliable, or a significant event has occurred in relation to a security or
class of securities (such as foreign securities) that is not reflected in price
quotations or valuations from other sources. A fair value price is a good faith
estimate of the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the New York Stock Exchange and therefore the closing prices for securities
in such markets or on such exchanges may not fully reflect events that occur
after such close but before the close of the New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial, Inc. (Ameriprise
Financial), parent company of the Investment Manager, as administrator to the
Fund, will fair value foreign securities pursuant to procedures adopted by the
Board, including utilizing a third party pricing service to determine these fair
values. These procedures take into account multiple factors, including movements
in the U.S. securities markets, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the New
York Stock Exchange. Swap transactions are valued through an authorized pricing
service, broker, or an internal model.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates; those maturing in 60 days or less are valued at amortized cost.
ILLIQUID SECURITIES
At July 31, 2008, investments in securities included issues that are illiquid
which the Fund currently limits to 15% of net assets, at market value, at the
time of purchase. The aggregate value of such securities at July 31, 2008 was
$130,747,518 representing 3.22% of net assets. These securities may be valued at
fair value according to procedures approved, in good faith, by the Board.
According to Board guidelines, certain unregistered securities are determined to
be liquid and are not included within the 15% limitation specified above. Assets
are liquid if they can be sold or disposed of in the ordinary course of business
within seven days at approximately the value at which the asset is valued by the
Fund.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains, and facilitate buying and
selling of securities for investments, the Fund may buy and write options traded
on any U.S. or foreign exchange or in the over-the-counter market where
completing the
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 33
obligation depends upon the credit standing of the other party. Cash collateral
may be collected by the Fund to secure certain over-the-counter options trades.
Cash collateral held by the Fund for such option trades must be returned to the
counterparty upon closure, exercise or expiration of the contract. The Fund also
may buy and sell put and call options and write covered call options on
portfolio securities as well as write cash-secured put options. The risk in
writing a call option is that the Fund gives up the opportunity for profit if
the market price of the security increases. The risk in writing a put option is
that the Fund may incur a loss if the market price of the security decreases and
the option is exercised. The risk in buying an option is that the Fund pays a
premium whether or not the option is exercised. The Fund also has the additional
risk of being unable to enter into a closing transaction if a liquid secondary
market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Fund will
realize a gain or loss when the option transaction expires or closes. When an
option is exercised, the proceeds on sales for a written call option, the
purchase cost for a written put option or the cost of a security for a purchased
put or call option is adjusted by the amount of premium received or paid.
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund also may buy and write put and call options on these futures contracts.
Risks of entering into futures contracts and related options include the
possibility of an illiquid market and that a change in the value of the contract
or option may not correlate with changes in the value of the underlying
securities.
Futures are valued daily based upon the last sale price at the close of market
on the principal exchange on which they are traded. Upon entering into a futures
contract, the Fund is required to deposit either cash or securities in an amount
(initial margin) equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by the Fund each day. The
variation margin payments are equal to the daily changes in the contract value
and are recorded as unrealized gains and losses. The Fund recognizes a realized
gain or loss when the contract is closed or expires.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed
- --------------------------------------------------------------------------------
34 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
forward contracts, exchange gains or losses realized between the trade date and
settlement date on securities transactions, and other translation gains or
losses on dividends, interest income and foreign withholding taxes. At July 31,
2008, foreign currency holdings were entirely comprised of Taiwan dollars.
The Fund may enter into forward foreign currency contracts for operational
purposes. The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency exchange
rates from an independent pricing service. The Fund is subject to the credit
risk that the other party will not complete its contract obligations.
TOTAL RETURN EQUITY SWAP TRANSACTIONS
The Fund may enter into swap agreements to 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.
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 LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 35
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 prescribes a two-step process to recognize
and measure a tax position taken or expected to be taken in a tax return. The
first step is to determine whether a tax position has met the more-likely-than-
not recognition threshold and the second step is to measure a tax position that
meets the threshold to determine the amount of benefit to recognize. 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.
On the Statement of Assets and Liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been decreased by
$18,371,189 and accumulated net realized loss has been decreased by $18,360,779
resulting in a net reclassification adjustment to increase paid-in capital by
$10,410.
The tax character of distributions paid for the years indicated is as follows:
<Table>
<Caption>
YEAR ENDED JULY 31, 2008 2007*
- -----------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income....................... $211,882,459 $ 114,060,835
Long-term capital gain................ 328,307,507 62,484,767
CLASS B
Distributions paid from:
Ordinary income....................... 29,908,842 16,848,997
Long-term capital gain................ 55,945,531 13,813,837
</Table>
- --------------------------------------------------------------------------------
36 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
<Table>
<Caption>
YEAR ENDED JULY 31, 2008 2007*
- -----------------------------------------------------------------------------
CLASS C
Distributions paid from:
Ordinary income....................... $ 1,125,566 $ 538,139
Long-term capital gain................ 2,105,427 414,627
CLASS I
Distributions paid from:
Ordinary income....................... 3,498,173 2,846,125
Long-term capital gain................ 4,922,837 1,317,241
CLASS R2
Distributions paid from:
Ordinary income....................... 220 123
Long-term capital gain................ 351 57
CLASS R3
Distributions paid from:
Ordinary income....................... 232 124
Long-term capital gain................ 351 57
CLASS R4
Distributions paid from:
Ordinary income....................... 13,430,477 12,499,767
Long-term capital gain................ 20,283,419 6,787,896
CLASS R5
Distributions paid from:
Ordinary income....................... 188 603,320
Long-term capital gain................ 351 279,358
</Table>
* Class R2, Class R3 and Class R5 are for the period from Dec. 11, 2006
(inception date) to July 31, 2007.
At July 31, 2008, the components of distributable earnings on a tax basis are as
follows:
<Table>
Undistributed ordinary income............................ $ 64,131,416
Undistributed accumulated long-term gain................. $ --
Accumulated realized loss................................ $(235,009,471)
Unrealized appreciation (depreciation)................... $(528,977,890)
</Table>
RECENT ACCOUNTING PRONOUNCEMENTS
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. 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, and (c) how
derivative instruments and related hedged items affect a fund's financial
position,
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 37
financial performance, and cash flows. SFAS 161 is effective for financial
statements issued for fiscal years and interim periods beginning after Nov. 15,
2008. As of July 31, 2008, 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.
On Sept. 20, 2006, the FASB released Statement of Financial Accounting Standards
No. 157 "Fair Value Measurements" (SFAS 157). SFAS 157 establishes an
authoritative definition of fair value, sets out a hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported in
the Statement of Operations for a fiscal period. The application of SFAS 157
will be effective for the Fund's fiscal year beginning Aug. 1, 2008. The
adoption of SFAS 157 is not anticipated to have a material impact on the Fund's
financial statements; however, additional disclosures will be required 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.
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 $4,214,418 for the year
- --------------------------------------------------------------------------------
38 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
ended July 31, 2008. The management fee for the year ended July 31, 2008 was
0.47% 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 year ended July 31, 2008 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 Funds and the Board. For the year ended July 31,
2008 other expenses paid to this company were $27,518.
COMPENSATION OF BOARD MEMBERS
Compensation of board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
Under a Deferred Compensation Plan (the Plan), non-interested board members may
defer receipt of their compensation. Deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of the Fund or other
RiverSource funds. The Fund's liability for these amounts is adjusted for market
value changes and remains in the Fund until distributed in accordance with the
Plan.
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
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 39
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
DISTRIBUTION FEES
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Prior to Oct. 1, 2007, Ameriprise
Financial Services, Inc. also served as a principal underwriter and distributor
to the Fund. Under a Plan and Agreement of Distribution pursuant to Rule 12b-1,
the Fund pays a fee at an annual rate of up to 0.25% of the Fund's average daily
net assets attributable to Class A and Class R3 shares, a fee at an annual rate
of up to 0.50% of the Fund's average daily net assets attributable to Class R2
shares and a fee at an annual rate of up to 1.00% of the Fund's average daily
net assets attributable to Class B and Class C shares. 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 $13,585,000 and $175,000
for Class B and Class C shares, respectively. These amounts are based on the
most recent information available as of July 31, 2008, 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
$2,642,943 for Class A, $697,051 for Class B and $2,614 for Class C for the year
ended July 31, 2008.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the year ended July 31, 2008, the Investment Manager and its affiliates
waived/reimbursed certain fees and expenses such that net expenses (excluding
fees and expenses of acquired funds*) were as follows:
<Table>
Class A..................................................... 0.97%
Class B..................................................... 1.73
Class C..................................................... 1.73
Class R2.................................................... 1.14
Class R3.................................................... 0.89
Class R4.................................................... 0.82
</Table>
The waived/reimbursed fees and expenses for the transfer agency fees at the
class level were as follows:
<Table>
Class A..................................................... $2,485,731
Class B..................................................... 451,611
Class C..................................................... 15,549
Class R4.................................................... 118,737
</Table>
- --------------------------------------------------------------------------------
40 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
The waived/reimbursed fees and expenses for the plan administration services
fees at the class level were as follows:
<Table>
Class R2.................................................... $ 11
Class R3.................................................... 11
Class R4.................................................... 7,713
</Table>
Under an agreement which was effective until July 31, 2008, the Investment
Manager and its affiliates contractually agreed to waive certain fees and
expenses such that net expenses (excluding fees and expenses of acquired
funds*), before giving effect to any performance incentive adjustment, would 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..................................................... 0.67
Class R2.................................................... 1.47
Class R3.................................................... 1.22
Class R4.................................................... 0.90
Class R5.................................................... 0.72
</Table>
Effective Aug. 1, 2008, 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.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 41
EARNINGS AND BANK FEE CREDITS
During the year ended July 31, 2008, the Fund's custodian and transfer agency
fees were reduced by $400,856 as a result of earnings and bank fee credits from
overnight cash balances. The Fund pays custodian fees to Ameriprise Trust
Company, a subsidiary of Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $3,532,920,686 and $4,856,373,311, respectively, for the
year ended July 31, 2008. Realized gains and losses are determined on an
identified cost basis.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
<Table>
<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>
<Table>
<Caption>
YEAR ENDED JULY 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 59,268,105 29,154,657 (265,432,267) (177,009,505)
Class B 9,841,913 5,262,317 (95,077,518) (79,973,288)
Class C 475,544 162,555 (1,886,761) (1,248,662)
Class I 2,660,792 705,595 (11,591,197) (8,224,810)
Class R2 822 -- -- 822
Class R3 822 -- -- 822
Class R4 4,699,528 3,241,602 (149,629,106) (141,687,976)
Class R5 4,421,287 149,070 (417,304) 4,153,053
- ----------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
42 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
5. LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, the Fund may lend securities
representing up to one-third of the value of its total assets (which includes
collateral for securities on loan) to broker-dealers, banks, or other
institutional borrowers of securities. The Fund receives collateral in the form
of cash and U.S. government securities, equal to at least 100% of the value of
securities loaned, which is marked to the market value of the loaned securities
daily until the securities are returned, e.g., if the value of the securities on
loan increases, additional cash collateral is provided by the borrower. The
Investment Manager serves as securities lending agent for the Fund under the
Investment Management Services Agreement pursuant to which the Fund has agreed
to reimburse the Investment Manager for expenses incurred by it in connection
with the lending program, and pursuant to guidelines adopted by and under the
oversight of the Board. At July 31, 2008, securities valued at $28,188,444 were
on loan to brokers. For collateral, the Fund received $32,299,100 in cash. Cash
collateral received is invested in an affiliated money market fund and
short-term securities, including U.S. government securities or other high-grade
debt obligations, which are included in the Portfolio of Investments. Income
from securities lending amounted to $1,125,485 for the year ended July 31, 2008.
Expenses paid to the Investment Manager as securities lending agent were $25,365
for the year ended July 31, 2008, which are included in other expenses on the
Statement of Operations. The risks to the Fund of securities lending are that
the borrower may not provide additional collateral when required or return the
securities when due.
6. OPTIONS CONTRACTS WRITTEN
Contracts and premiums associated with options contracts written during the year
ended July 31, 2008, are as follows:
<Table>
<Caption>
PUTS CALLS
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- ------------------------------------------------------------------------------------------
Balance July 31, 2007 20,639 $ 2,621,153 27,883 $ 3,953,892
Opened 67,904 13,043,749 189,456 7,088,685
Closed (84,243) (12,702,678) (147,275) (8,353,184)
Expired (873) (507,230) (53,653) (1,360,636)
- ------------------------------------------------------------------------------------------
Balance July 31, 2008 3,427 $ 2,454,994 16,411 $ 1,328,757
- ------------------------------------------------------------------------------------------
</Table>
See "Summary of Significant Accounting Policies."
7. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. The cost of the
Fund's purchases and proceeds from sales of shares of the RiverSource Short-Term
Cash
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 43
fund aggregated $3,280,001,945 and $3,389,054,584, respectively, for the year
ended July 31, 2008. 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 July 31, 2008, 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
headed by JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the
temporary funding of shareholder redemptions or for other temporary or emergency
purposes. The credit facility became effective on Oct. 18, 2007, replacing a
prior credit facility. The credit facility agreement, which is a collective
agreement between the Fund and certain other RiverSource funds, severally and
not jointly, permits collective borrowings up to $500 million. Interest is
charged to each Fund based on its borrowings at a rate equal to the federal
funds rate plus 0.30%. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.06% per annum. Under the prior credit facility, a Fund paid interest on its
outstanding borrowings at a rate equal to either the higher of the federal funds
effective rate plus 0.40% or the JPMCB Prime Commercial Lending Rate. The Fund
had no borrowings during the year ended July 31, 2008.
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.
- --------------------------------------------------------------------------------
44 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL 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.
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
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 45
and, as necessary, 8-K filings with the Securities and Exchange Commission on
legal and regulatory matters that relate to Ameriprise Financial and its
affiliates. Copies of these filings may be obtained by accessing the SEC website
at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
46 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
11. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008 2007 2006 2005 2004
Net asset value, beginning of period $6.05 $5.40 $5.26 $4.64 $4.53
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .07(b) .06(b) .06 .04 .01
Net gains (losses) (both realized and
unrealized) (.90) .79 .12 .61 .32
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.83) .85 .18 .65 .33
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.06) (.04) (.02) --
Distributions from realized gains (.65) (.14) -- (.01) (.22)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.70) (.20) (.04) (.03) (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.52 $6.05 $5.40 $5.26 $4.64
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $3,389 $5,039 $5,461 $1,030 $1,248
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.03% 1.09% 1.06% 1.16% 1.23%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(f) .97% 1.09% 1.06% 1.11% 1.20%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.31% .99% 1.08% .79% .36%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 66% 116% 128% 99%
- -----------------------------------------------------------------------------------------------------------
Total return(g) (15.40%) 15.79% 3.51% 13.99% 7.19%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, 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) 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.
(f) 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 year
ended July 31, 2008.
(g) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 47
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008 2007 2006 2005 2004
Net asset value, beginning of period $5.91 $5.29 $5.15 $4.56 $4.48
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(b) .01(b) .02 -- (.01)
Net gains (losses) (both realized and
unrealized) (.88) .76 .12 .60 .31
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.85) .77 .14 .60 .30
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.01) -- -- --
Distributions from realized gains (.65) (.14) -- (.01) (.22)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.65) (.15) -- (.01) (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.41 $5.91 $5.29 $5.15 $4.56
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $433 $833 $1,169 $472 $572
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.79% 1.86% 1.84% 1.93% 1.98%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(f) 1.73% 1.86% 1.84% 1.88% 1.95%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .56% .23% .28% .02% (.46%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 66% 116% 128% 99%
- -----------------------------------------------------------------------------------------------------------
Total return(g) (15.97%) 14.71% 2.72% 13.09% 6.48%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, 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) 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.
(f) 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 1.72% for the year
ended July 31, 2008.
(g) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
48 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008 2007 2006 2005 2004
Net asset value, beginning of period $5.92 $5.30 $5.16 $4.57 $4.49
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03(b) .01(b) .02 -- (.01)
Net gains (losses) (both realized and
unrealized) (.89) .77 .12 .60 .31
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.86) .78 .14 .60 .30
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.02) -- -- --
Distributions from realized gains (.65) (.14) -- (.01) (.22)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.65) (.16) -- (.01) (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.41 $5.92 $5.30 $5.16 $4.57
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $21 $32 $35 $9 $11
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.79% 1.86% 1.84% 1.93% 2.01%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(f) 1.73% 1.86% 1.84% 1.88% 1.98%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .55% .23% .28% .02% (.43%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 66% 116% 128% 99%
- -----------------------------------------------------------------------------------------------------------
Total return(g) (16.11%) 14.80% 2.71% 13.06% 6.46%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, 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) 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.
(f) 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 1.72% for the year
ended July 31, 2008.
(g) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 49
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008 2007 2006 2005 2004(B)
Net asset value, beginning of period $6.09 $5.44 $5.31 $4.67 $5.08
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .09(c) .09(c) .10 .05 --
Net gains (losses) (both realized and
unrealized) (.90) .78 .12 .63 (.28)
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.81) .87 .22 .68 (.28)
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08) (.08) (.09) (.03) --
Distributions from realized gains (.65) (.14) -- (.01) (.13)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.73) (.22) (.09) (.04) (.13)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.55 $6.09 $5.44 $5.31 $4.67
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $39 $68 $105 $43 $14
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (d),(e) .57% .63% .59% .70% .72%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .57% .63% .59% .65% .71%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.74% 1.44% 1.53% 1.24% .74%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 66% 116% 128% 99%
- -----------------------------------------------------------------------------------------------------------
Total return (15.02%) 16.13% 4.06% 14.64% (5.65%)(i)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from March 4, 2004 (inception date) to July 31, 2004.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment, 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 0.56% for the year
ended July 31, 2008.
(i) Not annualized.
- --------------------------------------------------------------------------------
50 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008 2007(B)
Net asset value, beginning of period $6.08 $6.08
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .06 .03
Net gains (losses) (both realized and
unrealized) (.90) .19
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.84) .22
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.08)
Distributions from realized gains (.65) (.14)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.69) (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $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) 1.39% 1.44%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.14% 1.44%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.15% .67%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 66%
- -----------------------------------------------------------------------------------------------------------
Total return (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. Earnings and bank fee credits for the year ended July 31, 2008
were less than 0.01% of average net assets.
(i) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 51
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008 2007(B)
Net asset value, beginning of period $6.09 $6.08
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .08 .04
Net gains (losses) (both realized and
unrealized) (.90) .19
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.82) .23
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.06) (.08)
Distributions from realized gains (.65) (.14)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.71) (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $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) 1.14% 1.19%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .89% 1.19%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.40% .92%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 66%
- -----------------------------------------------------------------------------------------------------------
Total return (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. Earnings and bank fee credits for the year ended July 31, 2008
were less than 0.01% of average net assets.
(i) Not annualized.
- --------------------------------------------------------------------------------
52 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008 2007 2006 2005 2004
Net asset value, beginning of period $6.13 $5.47 $5.28 $4.66 $4.54
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .08(b) .07(b) .09 .04 .01
Net gains (losses) (both realized and
unrealized) (.92) .79 .12 .61 .34
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.84) .86 .21 .65 .35
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.06) (.06) (.02) (.02) (.01)
Distributions from realized gains (.65) (.14) -- (.01) (.22)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.71) (.20) (.02) (.03) (.23)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.58 $6.13 $5.47 $5.28 $4.66
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $179 $330 $1,069 $-- $8
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) .87% .90% .81% .95% 1.03%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(f) .82% .89% .81% .90% 1.00%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.46% 1.14% 1.41% 1.08% .50%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 66% 116% 128% 99%
- -----------------------------------------------------------------------------------------------------------
Total return (15.40%) 15.80% 4.03% 14.06% 7.44%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, 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) 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.
(f) 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 0.81% for the year
ended July 31, 2008.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 53
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED JULY 31, 2008 2007(B)
Net asset value, beginning of period $6.11 $6.08
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .08 .06
Net gains (losses) (both realized and
unrealized) (.93) .19
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.85) .25
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.08)
Distributions from realized gains (.65) (.14)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.65) (.22)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.61 $6.11
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $25
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) .67% .70%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .67% .70%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.21% 1.44%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 68% 66%
- -----------------------------------------------------------------------------------------------------------
Total return (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. 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.
- --------------------------------------------------------------------------------
54 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM ------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
RIVERSOURCE LARGE CAP EQUITY FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of RiverSource Large Cap Equity Fund (the Fund)
(one of the portfolios constituting the RiverSource Large Cap Series, Inc.) as
of July 31, 2008, and the related statement of operations for the year then
ended, the statement of changes in net assets and the financial highlights for
the each of the two years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights of the Fund
for the periods presented through July 31, 2006, were audited by other auditors
whose report dated September 20, 2006, expressed an unqualified opinion on those
financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of July 31, 2008, by correspondence with the custodian and
brokers, or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audits provide a reasonable basis for our
opinion.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 55
In our opinion, the financial statements and financial highlights audited by us
as referred to above present fairly, in all material respects, the financial
position of RiverSource Large Cap Equity Fund of the RiverSource Large Cap
Series, Inc. at July 31, 2008, the results of its operations for the year then
ended, and changes in its net assets and the financial highlights for each of
the two years in the period then ended in conformity with U.S. generally
accepted accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
September 22, 2008
- --------------------------------------------------------------------------------
56 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
FEDERAL INCOME TAX INFORMATION -------------------------------------------------
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended July 31, 2008
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Qualified Dividend Income for individuals............. 100.00%
Dividends Received Deduction for corporations......... 100.00%
U.S. Government Obligations........................... 0.00%
CAPITAL GAIN DISTRIBUTION - the Fund designates $411,565,774 to be taxed as
long-term capital gain.
</Table>
The Fund also designates as distributions of long-term gains, to the extent
necessary to fully distribute such capital gains, earnings and profits
distributed to shareholders on the redemption of shares.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 57
BOARD MEMBERS AND OFFICERS -----------------------------------------------------
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board.
The following is a list of the Fund's Board members. Each member oversees 104
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme None
901 S. Marquette Ave. since 2006 Court, 1998-2006; Attorney
Minneapolis, MN 55402
Age 54
- -----------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, RiverSource Funds, None
901 S. Marquette Ave. since 1999 1999-2006; former Governor of
Minneapolis, MN 55402 Minnesota
Age 73
- -----------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member President, Springboard -- Partners None
901 S. Marquette Ave. since 2007 in Cross Cultural Leadership
Minneapolis, MN 55402 (consulting company)
Age 53
- -----------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and None
901 S. Marquette Ave. since 2004 Management, Bentley College; former
Minneapolis, MN 55402 Dean, McCallum Graduate School of
Age 57 Business, Bentley College
- -----------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant None
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 73
- -----------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member Former Managing Director, Shikiar American Progressive
901 S. Marquette Ave. since 2005 Asset Management Insurance
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Professor of Valmont Industries,
901 S. Marquette Ave. since 2002 and Economics, Carleton College Inc. (manufactures
Minneapolis, MN 55402 Chair of the irrigation systems)
Age 69 Board since 2007
- -----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
58 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset None
901 S. Marquette Ave. since 2004 Management, Inc. (private real
Minneapolis, MN 55402 estate and asset management
Age 55 company)
- -----------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer and Idera
901 S. Marquette Ave. since 2002 Director, RiboNovix, Inc. since Pharmaceutical, Inc.
Minneapolis, MN 55402 2003 (biotechnology); former (biotechnology);
Age 64 President, Forester Biotech Healthways, Inc.
(health management
programs)
- -----------------------------------------------------------------------------------------------------
</Table>
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
William F. Truscott Board member President -- U.S. Asset Management None
53600 Ameriprise since 2001, and Chief Investment Officer,
Financial Center Vice President Ameriprise Financial, Inc. and
Minneapolis, MN 55474 since 2002 President, Chairman of the Board
Age 47 and Chief Investment Officer,
RiverSource Investments, LLC since
2005; Director, President, and
Chief Executive Officer, Ameriprise
Certificate Company since 2006;
Chairman of the Board, Chief
Executive Officer and President,
RiverSource Distributors, Inc.
since 2006; Senior Vice
President -- Chief Investment
Officer, Ameriprise Financial, Inc.
and Chairman of the Board and Chief
Investment Officer, RiverSource
Investments, LLC, 2001-2005
- -----------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 59
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Patrick T. Bannigan President since Director and Senior Vice President, Asset
172 Ameriprise 2006 Management, Products and Marketing,
Financial Center RiverSource Investments, LLC since 2006;
Minneapolis, MN 55474 Director and Vice President -- Asset
Age 42 Management, Products and Marketing,
RiverSource Distributors, Inc. since 2006;
Managing Director and Global Head of Product,
Morgan Stanley Investment Management,
2004-2006; President, Touchstone Investments,
2002-2004
- ------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President -- Equity and Fixed
172 Ameriprise since 2004 Income, Ameriprise Financial, Inc. and
Financial Center RiverSource Investments, LLC since 2006; Vice
Minneapolis, MN 55474 President -- Investments, Ameriprise
Age 44 Certificate Company since 2003; Senior Vice
President -- Fixed Income, Ameriprise
Financial, Inc., 2002-2006 and RiverSource
Investments, LLC, 2004-2006
- ------------------------------------------------------------------------------------------
Amy K. Johnson Vice President Vice President -- Asset Management and Trust
5228 Ameriprise since 2006 Company Services, RiverSource Investments, LLC
Financial Center since 2006; Vice President -- Operations and
Minneapolis, MN 55474 Compliance, RiverSource Investments, LLC,
Age 42 2004-2006; Director of Product
Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- ------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Vice President -- Investment Accounting,
105 Ameriprise 2002 Ameriprise Financial, Inc. since 2002; Chief
Financial Center Financial Officer, RiverSource Distributors,
Minneapolis, MN 55474 Inc. since 2006
Age 53
- ------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset
5228 Ameriprise General Counsel Management, Ameriprise Financial, Inc. since
Financial Center and Secretary 2005; Chief Counsel, RiverSource Distributors,
Minneapolis, MN 55474 since 2006 Inc. since 2006; Vice President, General
Age 49 Counsel and Secretary, Ameriprise Certificate
Company since 2005; Vice President -- Asset
Management Compliance, Ameriprise Financial,
Inc., 2004-2005; Senior Vice President and
Chief Compliance Officer, USBancorp Asset
Management, 2002-2004
- ------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance
172 Ameriprise Officer since Officer, RiverSource Investments, LLC since
Financial Center 2006 2006; Director -- Mutual Funds, Voyageur Asset
Minneapolis, MN 55474 Management, 2003-2006; Director of Finance,
Age 47 Voyageur Asset Management, 2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
60 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Compliance Director and Anti-Money Laundering
2934 Ameriprise Prevention Officer, Ameriprise Financial, Inc. since
Financial Center Officer since 2004; Manager Anti-Money Laundering,
Minneapolis, MN 55474 2004 Ameriprise Financial, Inc., 2003-2004;
Age 44 Compliance Director and Bank Secrecy Act
Officer, American Express Centurion Bank,
2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 61
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT ----------------------------------------------------------------------
RiverSource Investments, LLC ("RiverSource Investments" or the "investment
manager"), a wholly-owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise
Financial"), serves as the investment manager to the Fund. Under an investment
management services agreement (the "IMS Agreement") RiverSource Investments
provides investment advice and other services to the Fund and all RiverSource
funds (collectively, the "Funds").
On an annual basis, the Fund's Board of Directors (the "Board"), including the
independent Board members (the "Independent Directors"), considers renewal of
the IMS Agreement. RiverSource Investments prepared detailed reports for the
Board and its Contracts Committee in March and April 2008, including reports
based on data provided by independent organizations to assist the Board in
making this determination. In addition, throughout the year, the Board (or its
committees) reviews information prepared by RiverSource Investments addressing
the services RiverSource Investments provides and Fund performance. The Board
accords particular weight to the work, deliberations and conclusions of the
Contracts, Investment Review and Compliance Committees in determining whether to
continue the IMS Agreement. At the April 9-10, 2008 in-person Board meeting,
independent legal counsel to the Independent Directors reviewed with the
Independent Directors various factors relevant to the Board's consideration of
advisory agreements and the Board's legal responsibilities related to such
consideration. Following an analysis and discussion of the factors identified
below, the Board, including all of the Independent Directors, approved renewal
of the IMS Agreement.
Nature, Extent and Quality of Services Provided by RiverSource Investments: The
Board analyzed various reports and presentations it had received detailing the
services performed by RiverSource Investments, as well as its expertise,
resources and capabilities. The Board specifically considered many developments
during the past year concerning the services provided by RiverSource
Investments, including, in particular, the continued investment in, and
resources dedicated to, the Fund's operations, particularly in the areas of
trading systems, new product initiatives, legal and compliance. Further, in
connection with the Board's evaluation of the overall package of services
provided by RiverSource Investments, the Board considered the quality of the
administrative and transfer agency services provided by RiverSource Investments'
affiliates to the Fund. The Board also reviewed the financial condition of
RiverSource Investments (and its affiliates) and each entity's ability to carry
out its responsibilities under the IMS Agreement. The Board also discussed the
acceptability of the terms of the IMS Agreement (including the relatively broad
scope of services required to be performed by RiverSource Investments). The
Board concluded that the services being performed under the IMS Agreement were
of a reasonably high quality, particularly in light of recent market conditions.
- --------------------------------------------------------------------------------
62 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
Based on the foregoing, and based on other information received (both oral and
written, including the information on investment performance referenced below)
and other considerations, the Board concluded that RiverSource Investments and
its affiliates were in a position to continue to provide a high quality and
level of services to the Fund.
Investment Performance: For purposes of evaluating the nature, extent and
quality of services provided under the IMS Agreement, the Board carefully
reviewed the investment performance of the Fund. In this regard, the Board
considered: (i) detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index, the percentage ranking of the Fund among its
comparison group and the net assets of the Fund; and (ii) a report detailing the
Fund's performance over various periods (including since inception), recent Fund
inflows (and outflows) and a comparison of the Fund's net assets from December
2006 to December 2007. The Board observed that the Fund's investment
performance, although somewhat weaker than previous years, reflected the
interrelationship of particularly volatile market conditions with the investment
strategies employed by the portfolio management team. Further, the Board noted
that measures had been taken to enhance risk management oversight.
Comparative Fees, Costs of Services Provided and the Profits Realized By
RiverSource Investments and its Affiliates from their Relationships with the
Fund: The Board reviewed comparative fees and the costs of services to be
provided under the IMS Agreement. The Board members considered detailed
comparative information set forth in an annual report on fees and expenses,
including, among other things, data (prepared by an independent organization)
showing a comparison of the Fund's expenses with median expenses paid by funds
in its peer group, as well as data showing the Fund's contribution to
RiverSource Investments' profitability.
The Board accorded particular weight to the notion that the level of fees should
reflect a rational pricing model applied consistently across the various product
lines in the Funds' family, while assuring that the overall fees for each fund
are generally in line with the "pricing philosophy" (i.e., that the total
expense ratio of each fund, with few exceptions, is at or below the median
expense ratio of funds in the same comparison group). The Board observed that
the Fund's expense ratio (after considering proposed expense caps/waivers)
approximated the peer group's median expense ratio. The Board also considered
the Fund's performance incentive adjustment and noted its continued
appropriateness. Based on its review, the Board concluded that the Fund's
management fee was fair and reasonable in light of the extent and quality of
services that the Fund receives.
- --------------------------------------------------------------------------------
RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT 63
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT (continued) ----------------------------------------------------------
The Board also considered the expected profitability of RiverSource Investments
and its affiliates in connection with RiverSource Investments providing
investment management services to the Fund. In this regard, the Board referred
to a detailed profitability report, discussing the profitability to RiverSource
Investments and Ameriprise Financial from managing and operating the Fund,
including data showing comparative profitability over the past two years. The
Board also considered the services acquired by the investment manager through
the use of commission dollars paid by the Funds on portfolio transactions. The
Board noted that the fees paid by the Fund should permit the investment manager
to offer competitive compensation to its personnel, make necessary investments
in its business and earn an appropriate profit. The Board concluded that
profitability levels were reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by RiverSource Investments as the Fund grows and
took note of the extent to which Fund shareholders might also benefit from such
growth. The Board considered that the IMS Agreement provides for lower fees as
assets increase at pre-established breakpoints and concluded that the IMS
Agreement satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees were fair and reasonable
in light of the extent and quality of services provided. In reaching this
conclusion, no single factor was determinative. On April 10, 2008, the Board,
including all of the Independent Directors, approved the renewal of the IMS
Agreement.
PROXY
VOTING ----------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling RiverSource Funds at (888) 791-3380; contacting your financial
institution; visiting riversource.com/funds; or searching the website of the
Securities and Exchange Commission (SEC) at http://www.sec.gov. Information
regarding how the Fund voted proxies relating to portfolio securities is filed
with the SEC by August 31 for the most recent 12-month period ending June 30 of
that year, and is available without charge by visiting riversource.com/funds; or
searching the website of the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
64 RIVERSOURCE LARGE CAP EQUITY FUND -- 2008 ANNUAL REPORT
NOTES --------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THIS PAGE IS NOT PART OF THE ANNUAL REPORT
THROUGH THE RIVERSOURCE INVESTMENTS FAMILY OF FUNDS, YOU CAN BUILD A DIVERSIFIED
PORTFOLIO THAT IS DESIGNED TO HELP YOU REACH YOUR GOALS.
<Table>
ADVANCED ALPHA(SM) STRATEGIES
RiverSource 120/20 Contrarian
Equity Fund
RiverSource 130/30 U.S. Equity Fund
RiverSource Absolute Return
Currency and Income Fund
Threadneedle Global Extended Alpha
Fund
ADVICE-BUILT(SM) SOLUTIONS
RIVERSOURCE INCOME BUILDER SERIES
RiverSource Income Builder Basic
Income Fund
RiverSource Income Builder Enhanced
Income Fund
RiverSource Income Builder Moderate
Income Fund
RIVERSOURCE PORTFOLIO BUILDER
SERIES
RiverSource Portfolio Builder
Aggressive Fund
RiverSource Portfolio Builder
Conservative Fund
RiverSource Portfolio Builder
Moderate Fund
RiverSource Portfolio Builder
Moderate Aggressive Fund
RiverSource Portfolio Builder
Moderate Conservative Fund
RiverSource Portfolio Builder Total
Equity Fund
RIVERSOURCE RETIREMENT PLUS(R)
SERIES
RiverSource Retirement Plus 2010
Fund
RiverSource Retirement Plus 2015
Fund
RiverSource Retirement Plus 2020
Fund
RiverSource Retirement Plus 2025
Fund
RiverSource Retirement Plus 2030
Fund
RiverSource Retirement Plus 2035
Fund
RiverSource Retirement Plus 2040
Fund
RiverSource Retirement Plus 2045
Fund
RIVERSOURCE STRATEGIC ALLOCATION
FUND
RIVERSOURCE BALANCED FUND
SINGLE-STRATEGY FUNDS
GROWTH FUNDS
RiverSource Partners Aggressive
Growth Fund
RiverSource Disciplined Large Cap
Growth Fund
RiverSource Global Technology Fund
RiverSource Growth Fund
RiverSource Mid Cap Growth Fund
RiverSource Partners Small Cap
Growth Fund
BLEND FUNDS
RiverSource Disciplined Equity Fund
RiverSource Disciplined Small and
Mid Cap Equity Fund
RiverSource Large Cap Equity Fund
RiverSource Precious Metals and
Mining Fund
RiverSource S&P 500 Index Fund*
RiverSource Small Cap Advantage
Fund
RiverSource Partners Small Cap
Equity Fund
RiverSource Small Company Index
Fund
VALUE FUNDS
Disciplined Large Cap Value Fund
RiverSource Disciplined Small Cap
Value Fund
RiverSource Diversified Equity
Income Fund
RiverSource Dividend Opportunity
Fund
RiverSource Equity Value Fund
RiverSource Partners Fundamental
Value Fund
RiverSource Large Cap Value Fund
RiverSource Mid Cap Value Fund
RiverSource Real Estate Fund
RiverSource Partners Select Value
Fund
RiverSource Partners Small Cap
Value Fund
GLOBAL/INTERNATIONAL FUNDS
RiverSource Disciplined
International Equity Fund
Threadneedle Emerging Markets Fund
Threadneedle European Equity Fund
Threadneedle Global Equity Fund
Threadneedle Global Equity Income
Fund
RiverSource Partners International
Select Growth Fund
Threadneedle International
Opportunity Fund
RiverSource Partners International
Select Value Fund
RiverSource Partners International
Small Cap Fund
</Table>
- --------------------------------------------------------------------------------
THIS PAGE IS NOT PART OF THE ANNUAL REPORT
<Table>
TAXABLE INCOME FUNDS
RiverSource Cash Management Fund**
RiverSource Diversified Bond Fund
RiverSource Emerging Markets Bond
Fund
RiverSource Floating Rate Fund
RiverSource Global Bond Fund
RiverSource High Yield Bond Fund
RiverSource Income Opportunities
Fund
RiverSource Inflation Protected
Securities Fund
RiverSource Limited Duration Bond
Fund
RiverSource Short Duration U.S.
Government Fund
RiverSource Strategic Income
Allocation Fund
RiverSource U.S. Government
Mortgage Fund
TAX-EXEMPT FUNDS
RiverSource California Tax-Exempt
Fund
RiverSource Intermediate Tax-Exempt
Fund
RiverSource Minnesota Tax-Exempt
Fund
RiverSource New York Tax-Exempt
Fund
RiverSource Tax-Exempt Bond Fund
RiverSource Tax-Exempt High Income
Fund
RiverSource Tax-Exempt Money Market
Fund**
</Table>
You should consider the investment objectives, risks, charges and expenses of a
mutual fund carefully before investing. For a free prospectus of any of the
funds listed above, which contains this and other important information about
the funds, contact your financial institution or visit riversource.com/funds.
Read the prospectus carefully before investing.
Investment products, including shares of mutual funds, involve risks including
possible loss of principal and fluctuation in value. Investing in certain funds
involves special risks, such as those related to investments in foreign
securities, small- and mid-capitalization stocks, fixed income securities
(especially high-yield securities), and funds which focus their investments in a
particular sector, such as real estate, technology and precious metals. See each
fund's prospectus for specific risks associated with the fund.
* "Standard & Poors(R)," "S&P," "S&P 500(R)," and "Standard & Poor's 500(R)"
are trademarks of the McGraw-Hill Companies, Inc. These trademarks have been
licensed for use by Ameriprise Financial, Inc. The fund is not sponsored,
endorsed, sold or promoted by Standard & Poor's or any of their subsidiaries
or affiliates (the "Licensors") and the Licensors make no representation
regarding the advisability of investing in the fund.
** AN INVESTMENT IN MONEY MARKET FUNDS IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
ALTHOUGH THE FUND SEEKS TO MAINTAIN THE VALUE OF YOUR INVESTMENT AT $1.00 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
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THIS PAGE IS NOT PART OF THE ANNUAL REPORT
RIVERSOURCE LARGE CAP EQUITY FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
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This report must be accompanied or preceded by
the Fund's current prospectus. RiverSource(R)
mutual funds are distributed by RiverSource
Distributors, Inc., Member FINRA, and managed by
RiverSource Investments, LLC. These companies are
part of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2008 RiverSource Distributors, Inc. S-6244 J (9/08)
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