-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mjz4MHWCcgzmEbqYJtJFuP3zDxuzNEleCUDiBiOU85tj98HH062ZfOhe6q9oQUdD XanPMy8mk+S6/OVTar68QA== 0000820027-97-000015.txt : 19970108 0000820027-97-000015.hdr.sgml : 19970108 ACCESSION NUMBER: 0000820027-97-000015 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19970107 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDS GLOBAL SERIES INC CENTRAL INDEX KEY: 0000842918 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MN FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05696 FILM NUMBER: 97501817 BUSINESS ADDRESS: STREET 1: IDS TOWER 10 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6126712772 FORMER COMPANY: FORMER CONFORMED NAME: IDS GLOBAL BOND FUND INC DATE OF NAME CHANGE: 19901011 N-30D 1 IDS GLOBAL BOND FUND PAGE 1 1996 Annual Report IDS Global Bond Fund (prospectus enclosed) (Icon of) a globe The goal of IDS Global Bond Fund, a part of IDS Global Series, Inc., is a high total return through income and growth of capital. The Fund invests in a Portfolio comprised primarily of debt securities of U.S. and foreign issuers. (This annual report includes a prospectus that describes in detail the Fund's objective, investment policies, risks, sales charges, fees and other matters of interest. Please read the prospectus carefully before you invest or send money.) American Express Financial Advisors Distributed by American Express Financial Advisors PAGE 2 (Icon of) a globe A bounty of bonds In today's global economy, investment opportunities don't stop at the water's edge. While bonds issued by the U.S. government and corporations once made up almost all of the bond market, today more than half of the world's debt securities are issued from outside the United States. This means expanded opportunity for investors. Global Bond Fund's aim is to take advantage of opportunities in bond markets at any time and in any place, providing investors with greater portfolio diversification. PAGE 3 Contents (Icon of) One open book inside of another. The purpose of this annual report is to tell investors how the Fund performed. The prospectus, which is bound into the middle of this annual report, describes the Fund in detail. 1996 annual report From the president 4 From the portfolio manager 4 Ten largest holdings 6 Making the most of your Fund 7 Long-term performance 8 Independent auditors' report (Fund) 9 Financial statements (Fund) 10 Notes to financial statements (Fund) 13 Independent auditors' report (Portfolio) 19 Financial statements (Portfolio) 20 Notes to financial statements (Portfolio) 23 Investments in securities 28 IDS mutual funds 34 Federal income tax information 38 1996 prospectus The Fund in brief 3p Goal 3p Investment policies and risks 3p Structure of the Fund 4p Manager and distributor 4p Portfolio manager 4p Alternative purchase arrangements 4p Sales charge and Fund expenses 5p Performance 8p Financial highlights 8p Total returns 10p Yield 12p Investment Policies and Risks 13p Facts about investements and their risks 13p Valuing Fund shares 20p How to purchase, exchange or redeem shares 21p Alternative purchase arrangements 21p How to purchase shares 24p How to exchange shares 26p How to redeem shares 26p Reductions and waivers of the sales charge 32p PAGE 4 Special shareholder services 37p Services 37p Quick telephone reference 37p Distributions and taxes 38p Dividend and capital gain distributions 38p Reinvestments 39p Taxes 39p How to determine the correct TIN 42p How the Fund and Portfolio are organized 43p Shares 43p Voting rights 43p Shareholder meeting 43p Special considerations regarding master/feeder structure 44p Board members and officers 45p Investment manager 47p Administrator and transfer agent 47p Distributor 48p About American Express Financial Corporation 50p General information 50p Appendices 51p Description of corporate bond ratings 51p Descriptions of derivative instruments 53p PAGE 5 (Picture of) William R. Pearce President of the Fund (Picture of) Ray Goodner Portfolio manager To our shareholders From the president If you're an experienced investor, you know that the past two years have been unusually strong ones in many world wide financial markets. Perhaps just as important, you also know that history shows that bull markets don't last forever. Though they're often unpredictable, declines--whether they're brief or long-lasting, moderate or substantial--are always a possibility. That fact reinforces the need for investors to periodically review their long-term goals and examine whether their investment program remains on track to achieving them. Your quarterly investment statements are one part of that monitoring process. The other is a meeting with your American Express financial advisor. That becomes even more important if there's a major change in your financial situation or in the financial markets. On May 13, 1996, the Fund began investing its assets in Equity Income Portfolio instead of directly in Securities of Individual Companies. Following the Portfolio Manager's letter are the financial statements of both the Fund and Portfolio. The notes to the financial and prospectus go into more detail of how the new structure works. William R. Pearce President of the Fund From the portfolio manager Despite a sharp downturn in worldwide bond markets early in 1996, IDS Global Bond Fund recorded a clearly positive performance in the past fiscal year. For the 12 months (November 1995 through October 1996), Class A shareholders realized a total return of 8.9%. A largely favorable bond environment, characterized by generally declining long-term interest rates, dominated the first three months of the fiscal period. As rates fell in many global markets, they boosted the value of existing bonds and, therefore, the Fund's net asset value. The rate trend was especially beneficial to our portfolio because of its longer-than-average maturity level, which makes a portfolio more price-sensitive to swings in interest rates. Inflation scare prompts sell-off By February, though, the investment environment had changed, particularly in the U.S. Amid signs of a possible pick-up in economic growth and resultant concern about a rise in the inflation PAGE 6 rate, long-term interest rates began heading higher and, in the process, sending bond prices lower. In sympathy with the U.S., the bond markets in Japan, the United Kingdom and Germany also performed poorly, all of which negatively affected the Fund's results. In the spring, the U.S. market stabilized, then essentially marked time until fall, when it rebounded sharply. While the Fund enjoyed the good gains from a number of major markets, the standout performers were the so-called "emerging" markets, especially those in Latin America, including Brazil, Argentina, Mexico and Venezuela. Although emerging markets comprised only about 10-15% of the portfolio (I increased the percentage as the fiscal year progressed), their strong gains provided a substantial boost to the Fund's performance. Other notable winners included the high-yield markets of Italy, Spain and Sweden, which experienced rising bond prices and stronger currencies during the period. Protective measures As for the other portfolio changes, they included a reduciton in exposure to the U.S. (from about 40% of assets to under 30%) and Japanese markets. Last spring, I also raised the level of cash reserves and reduced the average maturity of U.S. holdings to protect the Fund against the negative effect of a potentially ongoing rise in U.S. interest rates. Late in the period, when the threat of a rate rise lessened, I brought the cash level down. In this new fiscal year that began in November, I think the best opportunities for gain lie in the emerging markets and Europe. Therefore, I'm maintaining substantial exposure to those regions. I also expect the Japanese yen to appreciate against the dollar, so I plan to increase investment in that market. Ray Goodner Portfolio manager Class A 12-month perfomance (All figures per share) Net asset value (NAV) __________________________ Oct. 31, 1996 $6.28 __________________________ Oct. 31, 1995 $6.11 __________________________ Increase $0.17 __________________________ PAGE 7 Distributions Nov. 1, 1995-Oct. 31, 1996 __________________________ From income $0.36 __________________________ From capital gains $ -- __________________________ Total distributions $0.36 __________________________ Total return* +8.9%** __________________________ Class B 12-month performance (All figures per share) Net asset value (NAV) __________________________ Oct. 31, 1996 $6.28 __________________________ Oct. 31, 1995 $6.11 __________________________ Increase $0.17 __________________________ Distributions Nov. 1, 1995-Oct. 31, 1996 __________________________ From income $0.31 __________________________ From capital gains $ -- __________________________ Total distributions $0.31 __________________________ Total return +8.1%** __________________________ *The prospectus discusses the effect of sales charges, if any, on the various classes. **The total return is a hypothetical investment in the Fund with all distributions reinvested. PAGE 8
World Income Portfolio The Portfolio's ten largest holdings The ten holdings listed here make up 38.41% of the Portfolio's net assets Percent Value (of Portfolio's net assets) (as of Oct. 31, 1996) Govt of Italy 6.26% $52,260,544 8.50% Bond 1999-2004 Federal Republic of Germany 5.51 46,006,647 8% 2002 Govt of Sweden 4.92 41,031,719 8% Bond 2007 U.S. Treasury 3.70 30,919,880 7.25% Bond 2004 United Kingdom Treasury 3.68 30,713,993 8% Bond 2003 U.S. Treasury 3.03 25,283,995 7.50% Bond 2016 Govt of Canada 3.01 25,109,956 10.50% Bond 2001 BNCE 2.82 23,550,796 7.25% Bond 2004 Federal Republic of Germany 2.78 23,201,133 7.50% Bond 2004 Federal Republic of Germany 2.70 22,509,139 6% Bond 2016 Note: Certain foreign investment risks include: changes in currency exchange rates, adverse political or economic order, and lack of similar regulatory requirements followed by U.S. companies. /TABLE PAGE 9 Class A 12-month performance (All figures per share) Net asset value (NAV) ____________________________ Oct. 31, 1996 $ 6.28 ____________________________ Oct. 31, 1995 $ 6.11 ____________________________ Increase $ 0.17 ____________________________ Distributions Nov. 1, 1995 - Oct. 31, 1996 ____________________________ From income $ 0.36 ____________________________ From capital gains $ -- ____________________________ Total distributions $ 0.36 ____________________________ Total return* +8.9%** ____________________________ Class B 12-month performance (All figures per share) Net asset value (NAV) ____________________________ Oct. 31, 1996 $ 6.28 ____________________________ Oct. 31, 1995 $ 6.11 ____________________________ Increase $ 0.17 ____________________________ Distributions Nov. 1, 1995 - Oct. 31, 1996 ____________________________ From income $ 0.31 ____________________________ From capital gains $ -- ____________________________ Total distributions $ 0.31 ____________________________ Total return* +8.1%** ____________________________ *The prospectus discusses the effect of sales charges, if any, on the various classes. **The total return is a hypothetical investment in the Fund with all distributions reinvested. PAGE 10 Making the most of the Fund Average annual total return (as of Oct. 31, 1996) __________________________________________________________________ 1 year 5 years Since Inception Class A* +3.50% +9.00% +10.09% Class B** +4.14% --% +9.75% Class Y** +9.20% --% +13.24% *Inception date was March 20, 1989. **Inception date was March 20, 1995. The performance of Class B and Class Y will vary from the performance of Class A based on differences in sales charges and fees. Your investment and return values fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Figures for Class A reflect the effect of the maximum 5% sales charge and figures for Class B reflect the applicable contingent deferred sales charge. This was a period of widely fluctuating secuity prices. Past performance is no guarantee of future results. Build your assets systematically One of the best ways to invest in the Fund is by dollar-cost averaging--a time-tested strategy that can make market fluctuations work for you. To dollar-cost average, simply invest a fixed amount of money regularly. You'll automatically buy more shares when the Fund's share price is low, fewer shares when it is high. This does not ensure a profit or avoid a loss if the market declines. But, if you can continue to invest regularly through changing market conditions, it can be an effective way to accumulate shares to meet your long-term goals. How dollar-cost averaging works Month Amount Per-share Number of shares purchased invested market price ___________________________________________________________________ Jan $100 $20 5.00 Feb 100 18 5.56 March 100 17 5.88 April 100 15 6.67 May 100 16 6.25 June 100 18 5.56 July 100 17 5.88 Aug 100 19 5.26 Sept 100 21 4.76 Oct 100 20 5.00 PAGE 11 By investing an equal number of dollars each month you automatically buy more shares when the per share market price is low and fewer shares when the per share market price is high. You have paid an average price of only $17.91 per share over the ten months, while the average market price actually was $18.10. PAGE 12 The Fund's long-term perfomance Three ways to benefit from a mutual fund: o your shares increase in value when the Fund's investments do well o you receive capital gains when the gains on investments sold by the Fund exceed losses o you receive income when the Fund's stock dividends, interest and short-term gains exceed its expenses. All three make up your total return. And you potentially can increase your investment if, like most investors, you reinvest your dividends and capital gain distributions to buy additional shares of the Fund or another fund. How your $10,000 has grown in IDS Global Bond Fund (graph illustrating the growth of $10,000 in the Fund) Assumes: o Holding period from 4/1/89 to 10/31/96 o Returns do not reflect taxes payable on distributions o Reinvestment of all income and capital gain distributions for the Fund, with a value of $8,862. Also see "Performance" in the Fund's current prospectus. Saloman Brothers Global Government Bond Composite Index, an unmanaged index, is a representative list of government bonds of 17 countries throughout the world. The index is a general measure of government bond performance. Performance is expressed in the U.S. dollar as well as the currencies of governments making up the index. The bonds included in the index may not be in Global Bond Fund. Lipper Global Income Fund Index, an unmanaged index published by Lipper Analytical Services, Inc., includes 30 funds that are generally similar to the Fund, although some funds in the index may have somewhat different investment policies or objectives. Average annual total return (as of Oct. 31, 1996) __________________________________________________________________ 1 year 5 years Since Inception Class A* +3.50% +9.00% +10.09% Class B** +4.14% --% +9.75% Class Y** +9.20% --% +13.24% __________________________________________________________________ *Inception date was March 20, 1989. **Inception date was March 20, 1995. PAGE 13 On the graph above you can see how the Fund's total return compared to two widely cited performance indexes, Salomon Brothers Global Government Bond Composite Index and the Lipper Global Income Fund Index. In comparing Global Bond Fund to the two idexes, you should take account of the fact that the Fund's perfomance reflects the maximum sales charge of 5%, while no such charges are reflected in the performance of the index. If you were actually to buy either individual bonds or bond mutual funds, any sales charges that you pay would reduce your total return as well. Your investment and return values fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. PAGE 14 IDS mutual funds Global/International funds Funds in this group seek capital growth and/or income by investing primarily in foreign securities. Foreign investments may be subject to currency fluctuations and political and economic risks of the countries in which the investments are made. They are high risk mutual funds with a potential for high reward. IDS Emerging Markets Fund Invests in a Portfolio comprised primarily of stocks of companies in developing countries throughout the world that are believed to offer growth potential. Seeks to provide long-term growth of capital. (icon of) world with countries IDS Global Growth Fund Invests in a Portfolio comprised primarily of stocks of companies throughout the world that are positioned to meet market needs in a changing world economy. These companies offer above-average potential for long-term growth. (icon of) world IDS International Fund Invests primarily in common stocks of foreign companies that offer potential for superior growth. The Fund may invest up to 20% of its assets in the U.S. market. (icon of) three flags IDS Global Balanced Fund Invests in stocks and bonds in, for the most part, major markets throughout the world, including the U.S. Seeks to provide a balance of growth of capital and current income. (icon of) scale holding two worlds IDS Global Bond Fund Invests in a Portfolio comprised primarily of debt securities of U.S. and foreign issuers to seek high total return through income and growth of capital. (icon of) globe Growth funds Funds in this group seek capital growth, primarily from common stocks. They are high risk mutual funds with a potential for high reward. PAGE 15 IDS Precious Metals Fund Invests primarily in the securities of foreign or domestic companies that explore for, mine and process or distribute gold and other precious metals. A highly aggressive and speculative fund that seeks long-term growth of capital. (icon of) cart of precious gems IDS Discovery Fund Invests in small- and medium-size, growth-oriented companies emphasizing technological innovation and productivity enhancement. Buys and holds larger growth-oriented stocks. (icon of) ship IDS Small Company Index Fund Invests in all or a representative group of the equity securities comprising the S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation. (icon of) office building IDS Strategy Aggressive Fund Invests primarily in common stocks of companies that are selected for their potential for above-average growth. Above-average means that their growth potential is better, in the opinion of the portfolio's investment manager, than the Standard & Poor's Corporation (S&P) 500 Stock Index. (icon of) chess piece IDS Research Opportunities Fund Invests in a Portfolio comprised primarily of equity securities of companies included in the S&P 500 Index that are believed to have strong growth potential. The Portfolio is managed using a research methodology by the Research Department of AEFC. Goal is long-term appreciation. (icon of) magnifying glass IDS Growth Fund Invests in a Portfolio comprised primarily of companies that have above-average potential for long-term growth as a result of new management, marketing opportunities or technological superiority. (icon of) trees PAGE 16 IDS New Dimensions Fund Invests in a Portfolio comprised primarily of companies with significant growth potential due to superiority in technology, marketing or management. The Fund frequently changes its industry mix. (icon of) dimension IDS Progressive Fund Invests primarily in undervalued common stocks. The Fund holds stocks for the long term with the goal of capital growth. (icon of) shooting star Growth & income funds These funds focus on securities of medium to large, well- established companies that offer long-term growth of capital and reasonable income from dividends and interest. IDS Equity Select Fund Invests primarily in a combination of moderate growth stocks, higher-yielding equities and bonds. Seeks growth of capital and income. (icon of) three pine trees IDS Blue Chip Advantage Fund Invests in selected stocks from a major market index. Securities purchased are those recommended by our research analysts as the best from each industry represented on the index. Offers potential for long-term growth as well as dividend income. (icon of) ribbon IDS Managed Allocation Fund Invests in a Portfolio comprised primarily of U.S. equity securities, U.S. and foreign debt securities, foreign equity securities and money market instruments. The Fund provides diversification among these major investment categories and has a target mix that represents the way the Fund's investments will be allocated over the long term. Seeks maximum total return. (icon of) gyroscope IDS Stock Fund Invests in a Portfolio comprised primarily of common stock of companies representing many sectors of the economy. Seeks current income and growth of capital. (icon of) building with columns PAGE 17 IDS Equity Value Fund Invests primarily in undervalued common stocks that offer potential for growth of capital and income. (icon of) three growing flowers IDS Utilities Income Fund Invests primarily in the stocks of public utility companies to seek high current income and growth of income and capital with reduced volatility. (icon of) light bulb IDS Diversified Equity Income Fund Invests in a Portfolio comprised primarily of high-yielding common stocks to seek high current income and, secondarily, to benefit from the growth potential offered by stock investments. (icon of) two puzzle pieces IDS Mutual Invests in a Portfolio which seeks to balance between common stocks and senior securities (preferred stocks and bonds). Seeks a balance of growth of capital and current income. (icon of) scale of justice Income funds The funds in this group invest their assets primarily in corporate bonds or government securities to seek interest income. Secondary objective is capital growth. Risk varies by bond quality. IDS Extra Income Fund Invests in a Portfolio comprised mainly of long-term, high-yielding corporate fixed-income securities in the lower rated, higher risk bond categories to seek high current income. Secondary objective is capital growth. (icon of) coins IDS Bond Fund Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk bond categories, or the equivalent, and in government bonds. (icon of) greek column PAGE 18 IDS Selective Fund Invests in a Portfolio comprised primarily of high-quality corporate bonds and other highly rated debt instruments including government securities and short-term investments. Seeks current income and preservation of capital. (icon of) skyline IDS Federal Income Fund Invests in a Portfolio comprised primarily of securities issued or guaranteed as to the timely payment of principal and interest by the U.S. government, its agencies and instrumentalities. Seeks a high level of current income and safety of principal consistent with its type of investments. (icon of) shield with eagle head enclosed Tax-exempt income funds These funds provide tax-free income by investing in municipal bonds. The income is generally free from federal income tax, but a portion of the income may be subject to state and local taxes. Risk varies by bond quality. IDS Tax-Exempt Bond Fund Invests mainly in bonds and notes of state or local government units, with at least 75% in the four highest rated, lowest risk bond categories. (icon of) shield with Greek column enclosed IDS Insured Tax-Exempt Fund Invests primarily in municipal securities that are insured as to the timely payment of principal and interest. The insurance feature minimizes credit risk of the Fund but does not guarantee the market value of the Fund's shares. (icon of) shield with star enclosed IDS State Tax-Exempt Funds (CA, MA, MI, MN, NY, OH) Invests primarily in high- and medium-grade municipal securities to provide income to residents of each respective state that is exempt from federal, state and local income taxes. (New York is the only state that is exempt at the local level.) (icon of) shield with U.S. enclosed PAGE 19 IDS High Yield Tax-Exempt Fund Invests in a Portfolio comprised primarily of medium- and lower- quality municipal bonds and notes. Lower-quality securities generally involve greater risk of principal and income. (icon of) shield with basket of apples enclosed IDS Intermediate Tax-Exempt Fund Invests in mainly investment-grade bonds and other debt securities with intermediate-term maturities issued by state and local government units. Goal is to seek a high level of current income exempt from federal taxes. (icon of) shield with a tree enclosed Money market funds These money market funds have three main goals: conservation of capital, constant liquidity and the highest possible current income consistent with these objectives. An investment in these funds is neither insured nor guaranteed by the U.S. government, and there can be no assurance that these funds will be able to maintain a stable net asset value of $1.00 per share. Very limited risk. IDS Cash Management Fund Invests in such money market securities as high quality commercial paper, bankers' acceptances, certificates of deposit (CDs) and other bank securities. (icon of) piggy bank IDS Tax-Free Money Fund Invests primarily in short-term bonds and notes issued by state and local governments to seek high current income exempt from federal income taxes. (icon of) shield with piggy bank enclosed PAGE 20 Federal income tax information IDS Global Bond Fund 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. Some of the dividends listed below were reported to you on a Form 1099-DIV, Dividends and Distributions, last January. Dividend paid to you since the end of last year will be reported to you on a tax statement sent next January. Shareholders should consult a tax advisor on how to report distributions for state and local purposes. IDS Global Bond Fund Fiscal year ended Oct. 31, 1996 Class A Income distribution taxable as dividend income, none qualifying for deduction by corporations. Payable date Per share Dec. 28, 1995 $0.11661 March 28, 1996 0.07973 June 27, 1996 0.07973 Sept. 26, 1996 0.08459 Total distributions $0.36066 Class B Income distribution taxable as dividend income, none qualifying for deduction by corporations. Payable date Per share Dec. 28, 1995 $0.10499 March 28, 1996 0.06813 June 27, 1996 0.06838 Sept. 26, 1996 0.07306 Total distributions $0.31456 PAGE 21 Quick telephone reference American Express Telephone Transaction Service Redemptions and exchanges, dividend payments or reinvestments and automatic payment arrangements National/Minnesota: 800-437-3133 Mpls./St. Paul area: 671-3800 American Express Shareholder Service Fund performance, objectives and account inquiries 612-671-3733 TTY Service For the hearing impaired 800-846-4852 American Express Infoline Automated account information (TouchToneR phones only), including current fund prices and performance, account values and recent account transactions National/Minnesota: 800-272-4445 Mpls./St. Paul area: 671-1630 AMERICAN EXPRESS Financial Advisors IDS Mutual IDS Tower 10 Minneapolis, MN 55440-0010 PAGE 22 STATEMENT OF DIFFERENCES Difference Description 1) The layout is different 1) Some of the layout in the throughout the annual report. annual report to shareholders is in two columns. 2) Headings. 2) The headings in the annual report are placed in a blue strip at the top of the page. 3) There are pictures, icons 3) Each picture, icon and and graphs throughout the graph is described in annual report. parentheses. 4) Footnotes for charts and 4) The footnotes for each graphs are described at chart or graph are typed the left margin. below the description of the chart or graph. -----END PRIVACY-ENHANCED MESSAGE-----