-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, oe+f7XSQ70Rlpgu7fck5TFfkhgLGQFgWGrgScCbIrOE34cXNSCCJJPTkdmkpTFlK yI+d8rgrprbT2zI5wup3Nw== 0000820027-95-000006.txt : 19950109 0000820027-95-000006.hdr.sgml : 19950109 ACCESSION NUMBER: 0000820027-95-000006 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941031 FILED AS OF DATE: 19950105 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: 95500315 BUSINESS ADDRESS: STREET 1: 80 SOUTH 8TH STREET CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6123722772 FORMER COMPANY: FORMER CONFORMED NAME: IDS GLOBAL BOND FUND INC DATE OF NAME CHANGE: 19901011 N-30D 1 IDS GLOBAL BOND FUND, INC. PAGE 1 IDS Global Bond Fund 1994 annual report (prospectus enclosed) (icon of) 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. (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.) Distributed by IDS An American Express Company AMERICAN EXPRESS PAGE 2 (icon of) 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 book inside of another and their both being opened togther. 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. 1994 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 9 Financial statements 10 Notes to financial statements 13 Investments in securities 23 IDS mutual funds 28 Federal income tax information 31 1994 prospectus The fund in brief Goal 3p Types of fund investments 3p Manager and distributor 3p Portfolio manager 3p Sales charge and fund expenses Sales charge 4p Operating expenses 4p Performance Financial highlights 5p Total returns 6p Yield 7p Key terms 8p Investment policies and risks Facts about investments and their risks 9p Fund structure 14p Valuing assets 15p How to buy, exchange or sell shares How to buy shares 16p How to exchange shares 18p How to sell shares 18p Reductions of the sales charge 22p Waivers of the sales charge 24p Special shareholder services Services 25p Quick telephone reference 25p Distributions and taxes Dividend and capital gain distributions 26p Reinvestments 27p Taxes 28p How the fund is organized Shares 31p Voting rights 31p Shareholder meetings 32p PAGE 4 Directors and officers 32p Investment manager and transfer agent 34p Distributor 35p About IDS General information 37p Appendix Description of corporate bond ratings 38p To our shareholders (Photo of) William R. Pearce President of the fund (Photo of) Ray Goodner Portfolio manager From the president All of the funds in the ids mutual fund group held shareholder meetings on Nov. 9, 1994. The meetings, which were well-attended, approved all of the proposals advanced by management. Among the proposals were: o The election of directors and the selection of KPMG Peat Marwick LLP as independent auditors for each of the funds in the group. o A new investment management agreement that will become effective for each fund when it begins offering multiple classes of shares, now planned to occur in early March, 1995. o A change in investment policy that will permit the fund to adopt a master/feeder structure if and when the board of each fund determines that it is in the best interest of shareholders. o And, finally, a change in the rules with respect to the number of "fundamental investment polices" that allows the board to modify them should they deem appropriate. No other business was presented at the meeting, which was concluded by a report to shareholders from the IDS Investment Department. Thanks to all of you for your effort in reviewing the proxy material and voting your proxies. William R. Pearce From the portfolio manager The positive environment that bonds enjoyed for several years reversed during the past fiscal year, resulting in a downturn in bond markets worldwide. But while this reduced IDS Global Bond Fund's net asset value, it did not materially affect its regular dividend payments to shareholders. As a result, on a total return basis, there was only a small decline for the 12 months. The primary influence on bond prices and, thus, on bond markets, is the direction of long-term interest rates. Falling interest rates boost bond prices, while rising rates depress them. Long-term interest rates began rising in the United States in October 1993, reflecting investors' concern that the strengthening economy would PAGE 5 ignite inflation. (Interest rates usually move in tandem with inflation expectations.) Fortunately, at that point the rate rise came to a temporary halt, and the fund, after losing some ground in November, was able to sustain a moderate advance in December and January. Rate rise takes hold The first sign of a major interest-rate increase surfaced in Europe shortly after the start of 1994. That was followed in early February by the Federal Reserve's decision to begin raising short- term interest rates in the U.S. to head off a potential rise in the rate of inflation. The Fed's action set in motion a trend of higher interest rates that continued through the rest of the fiscal year. The greatest impact, however, was felt during February and March. The U.S. bond market was among the most severely affected, but it had plenty of company around the world, with the United Kingdom, continental Europe, Canada and the emerging markets of Latin America all experiencing sharply declining bond prices. The market that held up best was Japan, where bonds were supported by appreciation in the yen, the local currency. Appreciating foreign currencies enhance returns for U.S.-based investors, and the strength of the yen as well as other currencies helped mitigate the erosion in the bond markets themselves. Defensive measures Also to the fund's benefit, we reduced the average maturity of the portfolio's securities and added investments in currency-forward contracts. This had a positive effect on the fund's net asset value. Although the potential reward is more long-term in nature, we also took advantage of market declines to add attractive bonds at bargain prices in several emerging markets. As difficult as the past period was at times, we find it encouraging that the last several months were better than the previous ones. That suggests to us that the worst probably has passed for worldwide bond markets. Should that prove true, it does not, however, preclude ongoing market volatility and, perhaps, additional declines. Of course, much of the fund's performance also depends on foreign exchange movements. In recent years, the U.S. dollar has generally weakened, which has benefitted fund performance. While the dollar may be poised to rise in value against some currencies, that could well be offset by weakness against others, particularly in Asian countries and other "dollar bloc currencies" including Canada, Australia and New Zealand. The fund's flexibility to shift investments across global bond markets allows us to take advantage of such opportunities. We continue to position the portfolio for such an environment while we hold to our positive long-term outlook for global bond investing. Ray Goodner PAGE 6 12-month performance (All figures per share) Net asset value (NAV) Oct. 31, 1994 $ 5.76 Oct. 31, 1993 $ 6.27 Decrease $(0.51) Distributions Nov. 1, 1993 - Oct. 31, 1994 From income $ 0.40 From capital gains $ 0.02 Total distributions $ 0.42 Total return* (1.5%) * If you purchased shares in the fund during this period, your return also would have been affected by the sales charge, as described in the prospectus. PAGE 7
IDS Global Bond Fund Your fund's ten largest holdings (Pie chart) The ten holdings listed here make up 38.85% of the funds net assets. _____________________________________________________________________________________________________________ Percent Value (of fund's net assets) (as of Oct. 31, 1994) ____________________________________________________________________________________ Government of Canada 5.94% $27,713,128 10.50% Bond 2001 Government of Australia 4.85 22,615,362 7.50% Bond 2005 Federal Republic of Germany 4.49 20,947,388 6.375% Bond 1998 Government of Japan 4.44 20,704,950 4.10% Bond 2004 Federal Republic of Germany 3.74 17,447,335 6% Bond 1997 Federal Republic of Germany 3.74 17,429,186 8.75% Bond 2001 U.K. Treasury 3.14 14,621,606 8% Bond 2003 Government of Italy 2.94 13,688,000 8.50% Bond 1999 U.K. Treasury 2.92 13,589,696 9% Bond 2000 U.S. Treasury 2.65 12,374,179 7.625% Bond 2022 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.
PAGE 8 Making the most of your fund Average annual total return (as of Oct. 31, 1994) 1 year 5 years Since 3/20/89 - -6.37% +9.53% +9.70% Your investment and return values fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Figures reflect the deduction of the maximum 5% sales charge. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. Build your assets systematically To keep your assets growing steadily, one of the best ways to use 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 16 6.25 Mar 100 9 11.11 Apr 100 5 20.00 May 100 7 14.29 June 100 10 10.00 July 100 15 6.67 Aug 100 20 5.00 Sept 100 17 5.88 Oct 100 12 8.33 (footnotes to table) By investing an equal number of dollars each month... (arrow in table pointing to April) you automatically buy more shares when the per share market price is low (arrow in table pointing to September) 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 10 months, while the average market price actually was $18.10. PAGE 9 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. Your fund's long-term performance How your $10,000 has grown in IDS Global Bond Fund $16,790 Global Bond Fund SBH Global Govt. Bond Composite Index $9,500 4/1/89 '89 '90 '91 '92 '93 '94 Assumes: o Holding period from 4/1/89 to 10/31/94. o Returns do not reflect taxes payable on distributions. o Also see "Performance" in the fund's current prospectus. o Reinvestment of all income and capital gain distributions for the fund, with a value of $5,864. Salomon Brother Global Government Bond Composite 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. On the chart above you can see how the fund's total return compared to a widely cited performance index, Salomon Brothers Global Government Bond Composite Index. In comparing Global Bond Fund to the index, you should take account of the fact that the fund's performance 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. Average annual total return (as of Oct. 31, 1994) 1 year 5 years Since 3/20/89 - -6.37% +9.53% +9.70% PAGE 10 Your investment and return values fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Average annual total return figures reflect the deduction of the maximum 5% sales charge. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. PAGE 11 Independent auditors' report ___________________________________________________________________ The board of directors and shareholders IDS Global Series, Inc.: We have audited the accompanying statement of assets and liabilities, including the schedule of investments in securities, of IDS Global Bond Fund (a series of IDS Global Series, Inc.) as of October 31, 1994, and the related statement of operations for the year then ended and the statements of changes in net assets for each of the years in the two-year period ended October 31, 1994, and the financial highlights for each of the years in the five-year period ended October 31, 1994, and for the period from March 20, 1989 (commencement of operations), to October 31, 1989. These financial statements and the financial highlights are the responsibility of fund management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Investment securities held in custody are confirmed to us by the custodian. As to securities purchased and sold but not received or delivered, and securities on loan, we request confirmations from brokers, and where replies are not received, we carry out other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of IDS Global Bond Fund at October 31, 1994, and the results of its operations for the year then ended and the changes in its net assets for each of the years in the two-year period ended October 31, 1994, and the financial highlights for the periods stated in the first paragraph above, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Minneapolis, Minnesota December 2, 1994 PAGE 12
Financial statements Statement of assets and liabilities IDS Global Bond Fund Oct. 31, 1994 _____________________________________________________________________________________________________________ Assets _____________________________________________________________________________________________________________ Investments in securities, at value (Note 1) (identified cost $483,229,999) $464,862,579 Receivable for investment securities sold 884,294 Dividends and accrued interest receivable 12,052,891 Receivable for foreign currency contracts held, at value (Notes 1 and 6) 56,534,730 U.S. government securities held as collateral (Note 4) 2,524,369 _____________________________________________________________________________________________________________ Total assets 536,858,863 _____________________________________________________________________________________________________________ Liabilities _____________________________________________________________________________________________________________ Disbursements in excess of cash on demand deposit 1,103,824 Dividends payable to shareholders 1,631,841 Payable for investment securities purchased 8,180,904 Payable upon return of securities loaned (Note 4) 2,524,369 Payable for foreign currency contracts held, at value (Notes 1 and 6) 56,134,944 Accrued investment management and services fee 341,088 Accrued distribution fee 25,855 Accrued transfer agency fee 66,540 Other accrued expenses 205,546 Open option contracts written, at value (premium received $232,038)(Note 5) 375,000 _____________________________________________________________________________________________________________ Total liabilities 70,589,911 _____________________________________________________________________________________________________________ Net assets applicable to outstanding capital stock $466,268,952 _____________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________ Capital stock -- $.01 par value; outstanding 80,942,386 shares (Note 1) $ 809,424 Additional paid-in capital 482,245,878 Undistributed net investment income (Note 1) 1,129,458 Accumulated net realized gain 194,788 Unrealized depreciation (Note 6) (18,110,596) _____________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding capital stock $466,268,952 _____________________________________________________________________________________________________________ Net asset value per share of outstanding capital stock $ 5.76 _____________________________________________________________________________________________________________ See accompanying notes to financial statements. /TABLE PAGE 13
Financial statements Statement of operations IDS Global Bond Fund Year ended Oct. 31, 1994 _____________________________________________________________________________________________________________ Investment income _____________________________________________________________________________________________________________ Income: Dividends (net of foreign taxes withheld of $22,286) $ 347,513 Interest (net of foreign taxes withheld of $87,621) 26,716,446 _____________________________________________________________________________________________________________ Total income 27,063,959 _____________________________________________________________________________________________________________ Expenses (Note 2): Investment management and services fee 3,414,109 Distribution fee 263,661 Transfer agency fee 678,819 Compensation of directors 8,581 Compensation of officers 4,835 Custodian fees 222,818 Postage 104,673 Registration fees 211,485 Reports to shareholders 40,179 Audit fees 21,500 Administrative 4,576 Other 23,317 _____________________________________________________________________________________________________________ Total expenses 4,998,553 _____________________________________________________________________________________________________________ Investment income -- net 22,065,406 _____________________________________________________________________________________________________________ Realized and unrealized gain (loss) -- net _____________________________________________________________________________________________________________ Net realized gain on security and foreign currency transactions (including gain of $625,817 from foreign currency transactions) (Note 3) 2,523,387 Net realized loss on financial futures contracts (5,397,695) Net realized gain on closed or expired currency option contracts written (Note 5) 396,419 _____________________________________________________________________________________________________________ Net realized loss on investments and foreign currency (2,477,889) Net change in unrealized appreciation or depreciation (27,808,371) _____________________________________________________________________________________________________________ Net loss on investments and foreign currency (30,286,260) _____________________________________________________________________________________________________________ Net decrease in net assets resulting from operations $(8,220,854) _____________________________________________________________________________________________________________ See accompanying notes to financial statements. /TABLE PAGE 14
Financial statements Statements of changes in net assets IDS Global Bond Fund Year ended Oct. 31, _____________________________________________________________________________________________________________ Operations and distributions 1994 1993 _____________________________________________________________________________________________________________ Investment income -- net $ 22,065,406 $ 7,576,379 Net realized gain (loss) on investments and foreign currency (2,477,889) 6,725,141 Net change in unrealized appreciation or depreciation (27,808,371) 7,250,626 _____________________________________________________________________________________________________________ Net increase (decrease) in net assets resulting from operations (8,220,854) 21,552,146 _____________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income (19,649,029) (6,528,494) Net realized gains (3,556,158) (1,816,626) Excess distribution of realized gains (Note 1) -- (3,667,505) _____________________________________________________________________________________________________________ Total distributions (23,205,187) (12,012,625) _____________________________________________________________________________________________________________ Capital share transactions _____________________________________________________________________________________________________________ Proceeds from sales of 55,715,517 and 28,253,223 shares (Note 2) 332,640,161 172,510,247 Net asset value of 3,701,527 and 1,634,909 shares issued in reinvestment of distributions 21,996,385 9,715,652 Payments for redemptions of 19,204,423 and 4,559,132 shares (112,115,501) (27,552,609) _____________________________________________________________________________________________________________ Increase in net assets from capital share transactions representing net addition of 40,212,621 and 25,329,000 shares 242,521,045 154,673,290 _____________________________________________________________________________________________________________ Total increase in net assets 211,095,004 164,212,811 Net assets at beginning of year 255,173,948 90,961,137 _____________________________________________________________________________________________________________ Net assets at end of year (including undistributed net investment income of $1,129,458 and $1,860,201) $466,268,952 $255,173,948 _____________________________________________________________________________________________________________ See accompanying notes to financial statements.
PAGE 15 Notes to financial statements IDS Global Bond Fund Year ended Oct. 31, 1994 ___________________________________________________________________ 1. Summary of significant accounting policies IDS Global Bond Fund is a series of IDS Global Series, Inc. and is registered under the Investment Company Act of 1940 (as amended) as a non-diversified, open-end management investment company. IDS Global Series, Inc. has 10 billion authorized shares of capital stock which can be freely allocated among the separate series as designated by the board of directors. Significant accounting policies followed by the fund are summarized below: 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; securities for which market quotations are not readily available, are valued at fair value according to methods selected in good faith by the board of directors. Determination of fair value involves, among other things, reference to market indexes, matrixes and data from independent brokers. 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. Options transactions In order to produce incremental earnings, protect gains, and facilitate buying and selling of securities for investment purposes, the fund may buy or write options traded on any U.S or foreign exchange or in the over-the-counter market where the completion of the obligation is dependent upon the credit standing of the other party. The fund may also buy and sell put and call options and write covered call options on portfolio securities and may write cash-secured put options. The risk in writing a call option is that the fund gives up the opportunity of 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 not being able 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 upon expiration or closing of the option transaction. When options on debt securities or futures are exercised, the fund will realize a gain or loss. When other options are 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. PAGE 16 Futures transactions In order to gain exposure to or protect itself from changes in the market, the fund may buy and sell stock index or interest rate futures contracts traded on any U.S. or foreign exchange. The fund also may buy or write put and call contracts on these futures contracts. Risks of entering into futures contracts and related options include the possibility that there may be 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. 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 foreign currency contracts Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars at the closing rate of exchange. 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 may arise from sales of foreign currency, closed forward contracts, exchange gains or losses realized between the trade date and settlement dates on securities transactions, and other translation gains or losses on dividend, interest income and foreign withholding taxes. The fund may enter into forward foreign currency exchange contracts for operational purposes and to protect against adverse exchange rate fluctuation. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates from an independent pricing service. The fund is subject to the credit risk that the other party will not complete the obligations of the contract. Federal taxes Since the fund's policy is to comply with all sections of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders, no provision for income or excise taxes is required. Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of the deferral of losses on certain futures contracts, the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes, and losses deferred due to "wash PAGE 17 sale" transactions. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. The effect on dividend distributions of certain book-to- tax differences is presented as "excess distributions" in the statement of changes in net assets. 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 $3,147,120, and accumulated net realized gain has been increased by $3,149,913 resulting in a net reclassification adjustment to decrease paid-in-capital by $2,793. Dividends to shareholders Dividends from net investment income, declared daily and paid each calendar quarter, are reinvested in additional shares of the fund at net asset value or payable in cash. Capital gains, when available, are distributed along with the last income dividend of the calendar year. Other Security transactions are accounted for on the date securities are purchased or sold. Dividend income is recognized on the ex-dividend date or upon receipt of ex-dividend notification in the case of certain foreign securities. For U.S. dollar denominated bonds, interest income includes level-yield amortization of premium and discount. For foreign bonds, except for original issue discount, the fund does not amortize premium and discount. ___________________________________________________________________ 2. Expenses and sales charges Under terms of an agreement dated Nov. 14, 1991, the fund pays IDS Financial Corporation (IDS) a fee for managing its investments, recordkeeping and other specified services. The fee is a percentage of the fund's average daily net assets consisting of a group asset charge in reducing percentages from 0.46% to 0.32% annually on the combined net assets of all non-money market funds in the IDS MUTUAL FUND GROUP and an individual annual asset charge of 0.46% of average daily net assets. The fund also pays IDS a distribution fee at an annual rate of $6 per shareholder account and a transfer agency fee at an annual rate of $15.50 per shareholder account. The transfer agency fee is reduced by earnings on monies pending shareholder redemptions. IDS will assume and pay any expenses (except taxes and brokerage commissions) that exceed the most restrictive applicable state expense limitation. Sales charges by IDS Financial Services Inc. for distributing fund shares were $8,125,263 for the year ended Oct. 31, 1994. The fund also pays custodian fees to IDS Trust Company, an affiliate of IDS. PAGE 18 The fund has a retirement plan for its independent directors. Upon retirement, directors receive monthly payments equal to one-half of the retainer fee for as many months as they served as directors up to 120 months. There are no death benefits. The plan is not funded but the fund recognizes the cost of payments during the time the directors serve on the board. The retirement plan expense amounted to $2,426 for the year ended Oct. 31, 1994. ___________________________________________________________________ 3. Securities transactions Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $421,564,053 and $194,628,622, respectively, for the year ended Oct. 31, 1994. Realized gains and losses are determined on an identified cost basis. Brokerage commissions paid to brokers affiliated with IDS were $7,825 for the year ended Oct. 31, 1994. ___________________________________________________________________ 4. Lending of portfolio securities At Oct. 31, 1994, securities valued at $2,138,000 were on loan to brokers. For collateral, the fund received U.S. government securities valued at $2,524,369. Income from securities lending amounted to $9,170 for the year ended Oct. 31, 1994. 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. ___________________________________________________________________ 5. Option contracts written The number of contracts and premium amounts associated with option contracts written is as follows:
Year ended Oct. 31, 1994 ______________________________________________________ Puts Calls Contracts Premium Contracts Premium _____________________________________________________________________________ Balance Oct. 31, 1993 60 $ 82,455 -- $ -- Opened 450 377,632 628 801,542 Closed (168) (196,249) (478) (622,592) Expired (242) (153,600) (50) (57,150) ______________________________________________________________________________ Balance Oct. 31, 1994 100 $110,238 100 $121,800
___________________________________________________________________ 6. Foreign currency contracts At Oct. 31, 1994, the fund had entered into 11 foreign currency exchange contracts that obligate the fund to deliver currencies at specified future dates. The net unrealized appreciation of $399,786 on these contracts is included in the accompanying financial statements. The terms of the open contracts are as follows: PAGE 19
U.S. Dollar value U.S. Dollar value Currency to be as of Currency to be as of Exchange date delivered Oct. 31, 1994 received Oct. 31, 1994 _____________________________________________________________________________________________ Nov. 2, 1994 4,963,583 $ 4,963,583 25,433,400 $ 4,942,363 U.S. Dollar French Franc Nov. 4, 1994 5,992,030 5,992,030 3,800,000 6,219,638 U.S. Dollar British Pound Nov. 7, 1994 7,300,000 5,419,666 5,399,226 5,399,226 Australian Dollar U.S. Dollar Nov. 14, 1994 5,980,595 5,980,595 9,400,000,000 6,107,813 U.S. Dollar Italian Lira Nov. 18, 1994 6,053,970 6,053,970 9,400,000,000 6,105,631 U.S. Dollar Italian Lira Nov. 18, 1994 5,001,389 5,001,389 6,300,000 5,026,609 U.S. Dollar Swiss Franc Nov. 25, 1994 5,014,692 5,014,692 12,800,000 5,014,676 U.S. Dollar Malaysian Dollar Nov. 28, 1994 5,001,765 5,001,765 12,750,000 4,995,723 U.S. Dollar Malaysian Dollar Nov. 28, 1994 4,135,120 4,135,120 2,540,000 4,155,712 U.S. Dollar British Pound Nov. 30, 1994 17,850,000 4,414,662 4,411,765 4,411,765 South African Rand U.S. Dollar Nov. 30, 1994 4,157,472 4,157,472 2,540,000 4,155,574 U.S. Dollar British Pound ___________ ___________ $56,134,944 $56,534,730
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Investments in securities IDS Global Bond Fund (Percentages represent value of Oct. 31, 1994 investments compared to net assets) _____________________________________________________________________________________________________________________________ Bonds (82.7.%)(b) _____________________________________________________________________________________________________________________________ Issuer Coupon Maturity Principal Value(a) rate year amount _____________________________________________________________________________________________________________________________ Argentina (4.7%) Argentina Euro (U.S. Dollar) 6.50 % 2005 12,000,000 (c) $ 8,677,500 Argentina Republic (U.S. Dollar) 4.25 2023 24,500,000 11,392,500 Telecom Argentina (U.S. Dollar) 8.375 2000 2,000,000 (d) 1,760,000 ____________ Total 21,830,000 _____________________________________________________________________________________________________________________________ Australia (4.9%) Government of Australia (Australian Dollar) 7.50 2005 37,800,000 22,615,362 _____________________________________________________________________________________________________________________________ Austria (1.2%) Republic of Austria Euro (Japanese Yen) 5.25 1998 540,000,000 5,761,800 _____________________________________________________________________________________________________________________________ Brazil (2.5%) Brazil C Bonds (U.S. Dollar) 4.00 2014 3,060,000 1,545,300 Brazil IDU Euro (U.S. Dollar) 8.75 2001 12,250,000 10,014,375 ______________ Total 11,559,675 _____________________________________________________________________________________________________________________________ Canada (10.1%) Government of Canada (Canadian Dollar) 7.25 2003 11,400,000 7,557,798 9.75 2021 7,200,000 5,577,661 10.50 2001 34,600,000 27,713,128 Hydro Quebec (U.S. Dollar) 9.375 2030 4,000,000 4,105,000 Province of Quebec (U.S. Dollar) 11.00 2015 800,000 918,000 Rogers Cable System (Canadian Dollar) 9.65 2014 2,000,000 1,238,401 ______________ Total 47,109,988 _____________________________________________________________________________________________________________________________ See accompanying notes to financial statements. PAGE 21 China (1.0%) Guang Dong Province Enterprises (U.S. Dollar) 8.75 2003 5,000,000 (d) 4,512,500 _____________________________________________________________________________________________________________________________ Columbia (0.7%) Republic of Columbia (U.S. Dollar) 7.25 2004 4,100,000 3,485,000 _____________________________________________________________________________________________________________________________ Denmark (0.9%) Government of Denmark (Danish Krone) 9.00 1998 23,000,000 3,958,990 _____________________________________________________________________________________________________________________________ France (2.6%) Government of France (French Franc) 5.50 2004 60,000,000 9,593,400 8.50 2023 12,500,000 2,367,250 _______________ Total 11,960,650 _____________________________________________________________________________________________________________________________ Germany (13.9%) Federal Republic of Germany (Deutsche Mark) 6.00 1997 26,500,000 17,447,335 6.00 2016 9,000,000 4,783,230 6.375 1998 32,200,000 (g) 20,947,388 8.25 1997 6,000,000 4,144,740 8.75 2001 24,675,000 17,429,186 _______________ Total 64,751,879 _____________________________________________________________________________________________________________________________ Indonesia (0.9%) Pt Indah Kiat Euro (U.S. Dollar) 8.875 2000 2,500,000 2,184,375 Tjiwi Kimia (U.S. Dollar) 13.25 2001 2,000,000 2,075,000 _______________ Total 4,259,375 _____________________________________________________________________________________________________________________________ Italy (3.9%) Government of Italy (Italian Lira) 8.50 1999 23,600,000,000 13,688,000 Republic of Italy (U.S. Dollar) 6.875 2023 6,000,000 4,687,500 __________ Total 18,375,500 ______________________________________________________________________________________________________________________________ PAGE 22 Japan (8.1%) Euro Investment Bank (Japanese Yen) 5.875 1999 380,000,000 4,172,400 Government of Japan (Japanese Yen) 4.10 2004 2,100,000,000 20,704,950 5.70 2013 600,000,000 6,696,000 Japan Development Bank (Japanese Yen) 6.50 2001 550,000,000 6,231,500 ____________ Total 37,804,850 _____________________________________________________________________________________________________________________________ Korea (0.5%) Korea Electric Power (U.S. Dollar) 6.375 2003 3,000,000 2,546,250 _____________________________________________________________________________________________________________________________ Mexico (2.9%) Banco Nacional de Comercia (U.S. Dollar) 7.25 2004 2,000,000 1,635,000 Petroleos Mexicanos (U.S. Dollar) 8.625 2023 3,000,000 2,370,000 United Mexican States Euro (U.S. Dollar) 6.25 2019 7,000,000 4,418,750 United States of Mexico Euro (U.S. Dollar) 5.437 2019 6,000,000 (c) 5,111,250 ____________ Total 13,535,000 ______________________________________________________________________________________________________________________________ Philippines (0.3%) Philippines Long Distance Telephone (U.S. Dollar) 10.625 2004 1,500,000 1,477,500 ______________________________________________________________________________________________________________________________ Poland (0.2%) Poland Discount (U.S. Dollar) 6.812 2024 1,500,000 (d) 1,111,875 ______________________________________________________________________________________________________________________________ South Africa (2.1%) Escom (South African Rand) 11.00 2008 57,500,000 9,990,625 _____________________________________________________________________________________________________________________________ Spain (1.3%) Government of Spain (Spanish Peso) 10.50 2003 770,000,000 5,875,100 _____________________________________________________________________________________________________________________________ Sweden (2.7%) Government of Sweden (Swedish Krona) 10.25 2003 42,000,000 5,684,738 11.00 1999 47,000,000 6,674,160 ___________ Total 12,358,898 _____________________________________________________________________________________________________________________________ PAGE 23 United Kingdom (6.4%) United Kingdom Treasury (British Pound) 8.00 2003 9,400,000 14,621,606 9.00 1994 1,000,000 1,639,370 9.00 2000 8,200,000 13,589,696 _____________ Total 29,850,672 _____________________________________________________________________________________________________________________________ United States (10.4%) AMR (U.S. Dollar) 9.75 2021 500,000 475,000 10.00 2021 1,000,000 972,500 Chesapeake (U.S. Dollar) 9.875 2003 1,000,000 1,073,750 Delta Airlines (U.S. Dollar) 9.875 2000 1,500,000 1,546,875 Fairchild Inds (U.S. Dollar) Sr Sec Nts 12.25 1999 1,000,000 980,000 General Motors (U.S. Dollar) 9.125 2001 2,000,000 2,080,000 Georgia-Pacific (U.S. Dollar) Credit Sensitive Nts 9.85 1997 500,000 517,500 Government Natl Mtge Assn (U.S. Dollar) 8.00 2024 5,029,007 4,827,847 Kearny Real Estate LP (U.S. Dollar) 6.55 2000 2,500,000 2,482,822 PDV Amer (U.S. Dollar) 7.875 2003 3,500,000 2,913,750 Phillips Pertoleum (U.S. Dollar) 7.92 2023 3,115,000 2,710,050 Questar Pipeline (U.S. Dollar) 9.375 2021 1,000,000 1,032,500 Resolution Funding Corp (U.S. Dollar) Zero Coupon 7.50 2017 2,000,000 (e) 309,120 8.00 2016 3,259,000 (e) 547,381 Southern California Gas (U.S. Dollar) 7.375 2023 900,000 761,625 Texas Utilities (U.S. Dollar) 1st Mtge 9.75 2021 500,000 512,500 U.S. Treasury (U.S. Dollar) 7.625 2022 13,000,000 12,374,179 8.875 2019 8,595,000 9,286,296 USX (U.S. Dollar) 9.125 2013 3,000,000 2,902,500 ____________ Total 48,306,195 _____________________________________________________________________________________________________________________________ Venezuela (0.5%) Venezuela (U.S. Dollar) 6.75 2020 5,000,000 2,378,125 _____________________________________________________________________________________________________________________________ Total bonds (Cost: $403,636,587) $385,415,809 _____________________________________________________________________________________________________________________________ PAGE 24 Common stocks (1.4%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Hanson Trust 583,005 (b) $ 2,204,342 Newmont Gold 21,200 (b) 842,700 SCE 30,000 416,250 Vaalreefs Exploration & Mining ADR 75,000 (b) 759,375 Woolworth's LTD 1,020,792 (b,f) 2,182,453 _____________________________________________________________________________________________________________________________ Total common stocks (Cost: $6,625,593) $ 6,405,120 _____________________________________________________________________________________________________________________________ Other (0.3%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Celcaribe 17,000 (d,h) $ 1,436,500 _____________________________________________________________________________________________________________________________ Total other (Cost: $1,362,217) $ 1,436,500 _____________________________________________________________________________________________________________________________ Short-term securities (15.3%) _____________________________________________________________________________________________________________________________ Issuer Annualized Amount Value(a) yield on payable date of at purchase maturity _____________________________________________________________________________________________________________________________ U.S. government agency (1.0%) Federal Natl Mtge Assn Disc Note 11-18-94 4.97% $4,700,000 $ 4,689,036 _____________________________________________________________________________________________________________________________ Commercial paper (14.3%) AIG Funding 11-03-94 5.12 2,600,000 2,599,263 Ameritech 11-15-94 5.03 1,050,000 1,047,958 Banc One Diversified Services 11-17-94 4.92 2,200,000 2,195,209 Cafco 11-21-94 4.87 3,000,000 2,991,917 Cargill 11-21-94 4.86 4,500,000 4,487,900 Ciesco LP 11-30-94 4.92 4,000,000 3,984,211 PAGE 25 Colgate Palmolive 11-17-94 5.05 3,800,000 (i) 3,791,522 Eiger Capital 11-18-94 4.90 600,000 (i) 598,617 Gillette 11-02-94 4.75 4,500,000 (i) 4,499,406 Goldman Sachs 11-09-94 4.84 2,200,000 2,197,202 11-23-94 5.01 900,000 897,261 Norfolk Southern 11-03-94 4.87 1,100,000 (i) 1,099,704 11-14-94 5.08 3,300,000 (i) 3,293,982 PACCAR 11-28-94 4.92 3,500,000 3,487,138 Penney (JC) 11-10-94 4.95 1,400,000 1,398,278 11-16-94 5.05 5,100,000 5,089,332 PepsiCo 11-14-94 5.01 6,200,000 6,188,850 Quaker Oats 11-14-94 4.90 2,200,000 2,196,123 St. Paul Companies 11-14-94 5.01 4,000,000 (i) 3,992,807 11-21-94 4.85 5,000,000 (i) 4,986,583 Sandoz 11-04-94 5.00 500,000 499,793 Toyota Motor Credit 11-01-94 4.93 2,000,000 2,000,000 USAA Capital 11-16-94 4.92 3,400,000 3,393,058 ____________ Total 66,916,114 _____________________________________________________________________________________________________________________________ Total short-term securities (Cost: $71,605,602) $ 71,605,150 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $483,229,999)(j) $464,862,579 _____________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. (b) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in the currency indicated. (c) Interest rate varies, rate shown is the effective rate on Oct. 31, 1994. (d) Represents a security sold under Rule 144A which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the board of directors. (e) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition. (f) Security is partially or fully on loan. See Note 4 to the financial statements. (g) At Oct. 31, 1994, securities valued at $20,947,388 were held to cover open currency call options written as follows: Issuer Number Exercise Expiration Value(a) of contracts price date ____________________________________________________________________________________ Dec. Deutsch Mark Futures 100 $64.5 Nov. 1994 $250,000 (h) Each Celcaribe unit represents note trust certificates and common stock certificates. On or before Dec. 31, 1994, the units will be split into a separately valued bond and common stock. (i) Commercial paper sold within terms of a private placement memorandum, exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "accredited investors." This security has been determined to be liquid under guidelines established by the board of directors. (j) At Oct. 31, 1994, the cost of securities for federal income tax purposes was $483,241,768 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $ 6,183,563 Unrealized depreciation (24,562,752) _____________________________________________________________________________ Net unrealized depreciation $(18,379,189) _____________________________________________________________________________ /TABLE PAGE 26 IDS mutual funds Cash equivalent investments These money market funds have three main goals: conservation of capital, constant liquidity and the highest possible current income consistent with these objectives. Very limited risk. IDS Cash Management Fund Invests in such money market securities as high quality commercial paper, bankers' acceptances, certificates of deposits (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 Income investments 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 Global Bond Fund Invests primarily in debt securities of U.S. and foreign issuers to seek high total return through income and growth of capital. (icon of) globe IDS Extra Income Fund Invests mainly in 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) cornucopia 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 27 IDS Strategy, Income Fund Invests primarily in corporate and government bonds to seek high current income while conserving capital. Also may seek capital appreciation when consistent with its primary goals. (icon of) chess piece IDS Selective Fund Invests in 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 primarily in 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) federal building IDS Strategy, Short-Term Income Fund Invests primarily in short-term and intermediate-term bonds and notes to seek a high level of current income. (icon of) chess piece Tax-exempt income investments These funds provide tax-free income by investing in municipal bonds. The income is generally free from federal income tax. Risk varies by bond quality. IDS High Yield Tax-Exempt Fund Invests primarily in 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 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 28 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 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 eagle head Growth and income investments 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. Moderate risk. 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 Strategy, Worldwide Growth Fund Invests primarily in common stocks of companies throughout the world that offer potential for superior growth. Holdings may range from small- to large-capitalization stocks, including those of companies involved in areas of rapid economic growth. (icon of) chess piece IDS Managed Retirement Fund Invests in a combination of common stocks, fixed-income investments and money market securities to seek a maximum total return through a combination of growth of capital and current income. (icon of) bird in a nest IDS Equity Plus Fund Invests primarily in a combination of moderate growth stocks, higher-yielding equities and bonds. Seeks growth of capital and income. (icon of) three apple trees PAGE 29 IDS Blue Chip Advantage Fund Invests in selected stocks from a major market index. Securities purchased are those recommended by IDS 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 Stock Fund Invests in common stock of companies representing many sectors of the economy. Seeks current income and growth of capital. (icon of) building with columns IDS Strategy, Equity Fund Invests primarily in undervalued common stocks that offer potential for growth of capital and income. (icon of) chess piece 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) electrical cord IDS Diversified Equity Income Fund Invests primarily in high-yielding common stocks to seek high current income and, secondarily, to benefit from the growth potential offered by stock investments. (icon of) four puzzle pieces IDS Mutual Invests in a 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 Growth investments Funds in this group seek capital growth, primarily from common stocks. They are high risk mutual funds with a potential for high reward. PAGE 30 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 Strategy, Aggressive Equity 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 Growth Fund Invests primarily in companies that have above-average potential for long-term growth as a result of new management, marketing opportunities or technological superiority. (icon of) flower IDS Global Growth Fund Invests in 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 New Dimensions Fund Invests primarily in 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 Specialty growth investment This fund aggressively seeks capital growth as a hedge against inflation. PAGE 31 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. This is the most aggressive and most speculative IDS mutual fund. (icon of) cart of precious gems For more complete information about any of these funds, including charges and expenses, you can obtain a prospectus by contacting your financial planner or writing to IDS Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534. Read it carefully before you invest or send money. PAGE 32 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. Dividends 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 adviser on how to report distributions for state and local purposes. IDS Global Bond Fund Fiscal year ended Oct. 31, 1994 Income distributions taxable as dividend income, 0.63% qualifying for deduction by corporations. Payable date Per share Dec. 29, 1993 $0.2026 March 28, 1994 0.0704 June 28, 1994 0.0675 Sept. 28, 1994 0.0592 Total $0.3997 Capital gain distribution taxable as long-term capital gain. Payable date Per share Dec. 29, 1993 $0.0205 Total distributions $0.4202 The distribution of $0.2231 per share, payable Dec. 29, 1993, consisted of $0.1515 derived from net investment income, $0.0511 from net short-term capital gains (a total of $0.2026 taxable as dividend income) and $0.0205 from net long-term capital gains. PAGE 33 Quick telephone reference IDS 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 IDS Shareholder Service Fund performance, objectives and account inquiries 612-671-3733 TTY Service For the hearing impaired 800-846-4852 IDS 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 Your IDS financial planner: IDS An American Express company AMERICAN EXPRESS IDS Global Bond Fund IDS Tower 10 Minneapolis, MN 55440-0010 PAGE 34 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 and prospectus are placed in 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 and prospectus. 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-----