-----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, PHz3QUJ8yDM98pfwkKwZSnpdsLS61DndDJpoADpGRsIjPFKwQe6DgkL3+Idrpb/7 iXpWKK7QylPJuaPsfmGpog== 0000820027-95-000007.txt : 19950109 0000820027-95-000007.hdr.sgml : 19950109 ACCESSION NUMBER: 0000820027-95-000007 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: 95500316 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 GROWTH FUND, INC. PAGE 1 IDS Global Growth Fund 1994 annual report (prospectus enclosed) (icon of) globe The goal of IDS Global Growth Fund is long-term growth of capital. The fund invests primarily in common stocks and securities convertible into common stocks of companies throughout the world. (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 It's a big world after all No one needs to be told that the world is changing rapidly. For example, some years ago U.S. stocks accounted for about two-thirds of the total value of stocks worldwide. Today, that figure is down to about one-third, as many foreign stock markets have enjoyed explosive growth. Global Growth Fund seeks to take advantage of that trend by investing in companies throughout the world, not just the United States. For the most part, these are fast-growing foreign companies involved in essential businesses such as infrastructure creation, finance and environmental clean-up. As they prosper, Global Growth offers investors the potential to prosper along with them. PAGE 3 Contents (Icon of) One book inside of another and their both being opened together. 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 19 IDS mutual funds 24 Federal income tax information 27 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 Key terms 7p Investment policies and risks Facts about investments and their risks 8p Fund structure 11p Valuing assets 11p How to buy, exchange or sell shares How to buy shares 12p How to exchange shares 14p How to sell shares 14p Reductions of the sales charge 18p Waivers of the sales charge 19p Special shareholder services Services 20p Quick telephone reference 20p Distributions and taxes Dividend and capital gain distributions 21p Reinvestments 22p Taxes 23p How the fund is organized Shares 26p Voting rights 27p Shareholder meetings 27p PAGE 4 Directors and officers 27p Investment manager and transfer agent 29p Distributor 30p About IDS General information 31p To our shareholders (Photo of) William R. Pearce President of the fund (Photo of) Edward F. Korff 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 True to their nature, foreign stock markets fluctuated considerably during the past fiscal year. The ups clearly exceeded the downs, however, as evidenced by the double-digit total return that IDS Global Growth Fund generated for shareholders during the fiscal year ended Oct. 31, 1994. The year got off to an exceptionally strong start, as the fund continued to ride a wave created by investors pouring money into top-performing markets such as Southeast Asia, Latin America (including Mexico) and Hong Kong at a remarkable rate. The cash influx had a profound effect; in November and December alone (the first two months of the fund's fiscal year), some markets were up a stunning 20% and more, propelling many stocks to unrealistically high levels. PAGE 5 Winter slide That fact became evident within days of the new year, as prices began to fall nearly as fast as they had risen. The retreat began in Mexico, where social unrest and a weakening currency quickly prompted large investors to take profits (sell stocks that had registered sizable gains). This activity drove down stock prices. The negative psychology soon spread to other Latin American markets, such as Argentina and Chile, where investors also had realized great gains. The story was the same in Hong Kong and Southeast Asia, although the sell-offs resulted more from rising interest rates - usually a negative influence on stocks. Similar to the situation in the Latin American markets, the declines in Hong Kong and Southeast Asia continued into summer. The biggest exception to the trend was Japan, whose slumping stock market rebounded quite strongly during much of 1994. Many European markets also held up reasonably well, as the economies there began to work their way out of recession. Our exposure to those markets provided positive results that helped temper the downturns in other parts of the world. Summer surge By July, Latin America and Southeast Asia began to heat up again, giving rise to a rally that lasted for several weeks. Rising interest rates quickly reversed the trend, though, and pushed most foreign markets into negative territory during the fall. We kept the portfolio well-diversified throughout the year, as we held stocks in nearly two dozen countries. As it has been since the fund's inception, the main investment focus remains on companies involved in infrastructure (construction of roads, telecommunications systems, etc.), finance or protecting the environment. While we will continue to hold stocks from around the world, over the near term we're planning to increase our exposure to Southeast Asia, The Philippines and Indonesia. At the moment, the key concern for foreign markets continues to be the possibility of higher interest rates. But, taking a longer perspective, what's more important is that the opportunities around the globe are as abundant as ever. Many economies continue to grow at impressive rates, while inflation, in most cases, remains subdued. That's a climate conducive to healthy profits for companies and, ultimately, advancing stock prices. Edward F. Korff PAGE 6 12-month performance (All figures per share) Net asset value (NAV) Oct. 31, 1994 $ 6.96 Oct. 31, 1993 $ 6.30 Increase $ 0.66 Distributions Nov. 1, 1993 - Oct. 31, 1994 From income $ 0.08 From capital gains $ 0.03 Total distributions $ 0.11 Total return* +12.1% * 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 Growth Fund Your fund's ten largest holdings
Percent Value (of fund's net assets) (as of Oct. 31, 1994) Bankgesellshchaft Berlin (Germany) 1.79% $11,973,250 Dominant mortage bank in Berlin area. Friedrich Grohe (Germany) 1.78 11,920,040 Largest manufacturer of faucets and fixtures in Europe Castorama Dubois (France) 1.76 11,790,252 A fast growing "do-it-yourself" retailer in France (currently expanding into Italy). SAP (Germany) 1.73 11,574,140 Leading computer software producer. SAGA (France) 1.70 11,397,190 Leading computer software producer Reliance Inds Euro (India) 1.70 11,362,500 Largest petrochemical company in India. AMMB Holdings (Singapore/Malaysia) 1.63 10,958,000 Rapidly growing commercial/merchant bank. Sulzer Gebruder (Switzerland) 1.58 10,597,650 Leading Swiss producer of specialized machinery and medical technology. Veba (Germany) 1.50 10,057,530 Conglomerate with interests in energy, chemicals and telecommunications. Renong (Malaysia) 1.50 10,050,000 2.50% Cv Bond 2005 Engaged in the engineering, construction and operation of major infrastruction projects in Malaysia. (Pie chart) The ten holdings listed here make up 16.67% of the fund's net assets 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 Since 5/29/90 +6.51% +7.84% 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 Growth Fund $13,959 Global Growth Fund Lipper International Fund Index EAFE Index $9,500 5/29/90 '90 '91 '92 '93 '94 Assumes: o Holding period from 6/01/90 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 $743. The Morgan Stanley Capital International EAFE Index (EAFE Index), compiled from a composite of securities markets of Europe, Australia and the Far East, is widely recognized by investors in foreign markets as the measurement index for portfolios of non- North American securities. Lipper International Fund Index, published by Lipper Analytical Services, Inc., includes 10 funds that are generally similar to the fund, although some funds in the index may have somewhat different investment policies or objectives. On the chart above you can see how the fund's total return compared to two widely cited performance indexes, the EAFE and the Lipper International Fund Index. Incomparing Global Growth Fund to the two indexes, you should take into account the fact that the fund's performance reflects the maximum sales charge of 5%, while such charges are not reflected in the performance of the indexes. If you were actually to buy either individual stocks or growth mutual funds, any sales charges that you pay would reduce your total return as well. PAGE 10 Average annual total return (as of Oct. 31, 1994) 1 year Since 5/29/90 +6.51% +7.84% 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 Growth 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 four-year period ended October 31, 1994, and for the period from May 29, 1990 (commencement of operations), to October 31, 1990. 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 Growth 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 Growth Fund Oct. 31, 1994 Assets _____________________________________________________________________________________________________________ Investments in securities, at value (Note 1): Investments in securities of unaffiliated issuers (identified cost $609,170,787) $670,769,813 Investments in securities of affiliated issuer (identified cost $2,652,041) 1,950,000 Cash in bank on demand deposit 1,309,861 Receivable for investment securities sold 336,571 Receivable for foreign currency contracts held, at value (Notes 1 and 4) 571,978 Dividends and accrued interest receivable 1,863,402 U.S. government securities held as collateral (Note 5) 23,108,486 _____________________________________________________________________________________________________________ Total assets 699,910,111 _____________________________________________________________________________________________________________ Liabilities _____________________________________________________________________________________________________________ Payable for investment securities purchased 394,122 Payable for foreign currency contracts held, at value (Notes 1 and 4) 570,234 Payable upon return of securities loaned (Note 5) 28,011,486 Accrued investment management and services fee 469,589 Accrued distribution fee 50,278 Accrued transfer agency fee 125,433 Other accrued expenses 309,938 _____________________________________________________________________________________________________________ Total liabilities 29,931,080 _____________________________________________________________________________________________________________ Net assets applicable to outstanding capital stock $669,979,031 _____________________________________________________________________________________________________________ Represented by _____________________________________________________________________________________________________________ Capital stock -- $.01 par value; outstanding 96,297,457 shares (Note 1) $ 962,975 Additional paid-in capital 598,901,376 Undistributed net investment income (Note 1) 3,950,178 Accumulated net realized gain 5,265,773 Unrealized appreciation (Note 4) 60,898,729 _____________________________________________________________________________________________________________ Total -- representing net assets applicable to outstanding capital stock $669,979,031 _____________________________________________________________________________________________________________ Net asset value per share of outstanding capital stock $ 6.96 _____________________________________________________________________________________________________________ See accompanying notes to financial statements. /TABLE PAGE 13
Statement of operations IDS Global Growth Fund Year ended Oct. 31, 1994 Investment income _____________________________________________________________________________________________________________ Income: Dividends (net of foreign taxes withheld of $629,294) $ 6,363,601 Interest 4,203,540 _____________________________________________________________________________________________________________ Total income 10,567,141 _____________________________________________________________________________________________________________ Expenses (Note 2): Investment management and services fee 4,068,528 Distribution fee 446,687 Transfer agency fee 1,114,454 Compensation of directors 8,658 Compensation of officers 5,438 Custodian fees 316,510 Postage 178,290 Registration fees 284,798 Reports to shareholders 70,098 Audit fees 20,000 Administrative 5,951 Other 23,899 _____________________________________________________________________________________________________________ Total expenses 6,543,311 _____________________________________________________________________________________________________________ Investment income -- net 4,023,830 _____________________________________________________________________________________________________________ Realized and unrealized gain -- net _____________________________________________________________________________________________________________ Net realized gain on security and foreign currency transactions (including gain of $17,913 from foreign currency transactions) (Note 3) 5,188,698 Net change in unrealized appreciation or depreciation 33,656,723 _____________________________________________________________________________________________________________ Net gain on investments and foreign currency 38,845,421 _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations $42,869,251 _____________________________________________________________________________________________________________ See accompanying notes to financial statements. /TABLE PAGE 14
Financial statements Statements of changes in net assets IDS Global Growth Fund Year ended Oct. 31, Operations and distributions 1994 1993 _____________________________________________________________________________________________________________ Investment income -- net $ 4,023,830 $ 988,544 Net realized gain on investments and foreign currency 5,188,698 3,967,337 Net change in unrealized appreciation or depreciation 33,656,723 29,879,290 _____________________________________________________________________________________________________________ Net increase in net assets resulting from operations 42,869,251 34,835,171 _____________________________________________________________________________________________________________ Distributions to shareholders from: Net investment income (1,094,030) (494,216) Net realized gains (3,909,791) (512,166) Excess distribution of realized gains (Note 1) -- (59,927) _____________________________________________________________________________________________________________ Total distributions (5,003,821) (1,066,309) _____________________________________________________________________________________________________________ Capital share transactions _____________________________________________________________________________________________________________ Proceeds from sales of 72,265,905 and 27,423,494 shares (Note 2) 487,713,822 156,463,473 Net asset value of 741,509 and 215,463 shares issued in reinvestment of distributions 4,980,642 1,060,945 Payments for redemptions of 15,415,895 and 2,934,518 shares (104,574,827) (16,190,471) _____________________________________________________________________________________________________________ Increase in net assets from capital share transactions representing net addition of 57,591,519 and 24,704,439 shares 388,119,637 141,333,947 _____________________________________________________________________________________________________________ Total increase in net assets 425,985,067 175,102,809 Net assets at beginning of year 243,993,964 68,891,155 _____________________________________________________________________________________________________________ Net assets at end of year (including undistributed net investment income of $3,950,178 and $1,092,150) $669,979,031 $243,993,964 _____________________________________________________________________________________________________________ See accompanying notes to financial statements.
PAGE 15 Notes to financial statements IDS Global Growth Fund ___________________________________________________________________ 1. Summary of significant accounting policies IDS Global Growth Fund is a series of IDS Global Series, Inc. and is registered under the Investment Company Act of 1940 (as amended) as a diversified, open-end management investment company. IDS Global Series, Inc. has 10 billion authorized shares of capital stock that 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 also may 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 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. 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 futures contracts traded on any U.S. or foreign exchange. The fund also may buy or write put and call options on these 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, other translation gains or losses on dividends, 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 PAGE 17 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 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 $71,772 and accumulated net realized gain has been increased by $79,588, resulting in a net reclassification adjustment to decrease paid-in-capital by $7,816. Dividends to shareholders An annual dividend declared and paid by the end of the calendar year from net investment income 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 or upon receipt of ex-dividend notification in the case of certain foreign securities. Interest income, including level-yield amortization of premium and discount is accrued daily. ___________________________________________________________________ 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 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 $8,345,042 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 $2,624 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 $445,984,705 and $107,240,218, 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 $122,877 for the year ended Oct. 31, 1994. 4. Foreign currency contracts At Oct. 31, 1994, the fund had entered into five foreign currency exchange contracts that obligate the fund to deliver currencies at specified future dates. The net unrealized appreciation of $1,744 on these contracts is included in the accompanying financial statements. The terms of the open contracts are as follows:
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. 1, 1994 134,763 $134,763 83,583 $136,809 U.S. Dollar British Pound Nov. 1, 1994 209,982,888 96,716 96,500 96,500 Indonesia Rupiah U.S. Dollar Nov. 3, 1994 86,998,560 40,071 40,046 40,046 Indonesia Rupiah U.S. Dollar Nov. 4, 1994 433,757,025 199,785 199,726 199,726 Indonesia Rupiah U.S. Dollar Nov. 10, 1994 98,899 98,899 60,421 98,897 U.S. Dollar British Pound ________ ________ $570,234 $571,978
___________________________________________________________________ 5. Lending of portfolio securities At Oct. 31, 1994, securities valued at $25,189,419 were on loan to brokers. For collateral, the fund received $4,903,000 in cash and U.S. government securities valued at $23,108,486. Income from securities lending amounted to $250,313 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. PAGE 19 __________________________________________________________________ 6. Financial highlights "Financial highlights" showing per share data and selected information is presented on page 5 of the prospectus.
Investments in securities IDS Global Growth Fund (Percentages represent value of Oct. 31, 1994 investments compared to net assets) Investments in securities of unaffiliated issuers _____________________________________________________________________________________________________________________________ Common stocks (76.5%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ Argentina (6.6%) Banks and savings & loans (2.1%) Banco de Galicia ADR 250,000 (d) $ 6,750,000 Banco Frances ADR 275,000 7,046,875 ____________ Total 13,796,875 _____________________________________________________________________________________________________________________________ Beverages & tobacco (1.2%) Baesa ADR 215,000 (c) 8,250,625 _____________________________________________________________________________________________________________________________ Building materials & construction (0.7%) IRSA 150,000 (b,c) 4,950,000 _____________________________________________________________________________________________________________________________ Multi-industry conglomerates (1.7%) Commercial Del Plata 1,050,000 3,538,500 Comp Naviera Perez ADR 750,000 8,130,000 ____________ 11,668,500 _____________________________________________________________________________________________________________________________ Utilities-electric (0.9%) Capex GDR 300,000 (c) 5,775,000 _____________________________________________________________________________________________________________________________ Australia (1.0%) Retail Woolworth's LTD 1,000,000 2,138,000 Woolworth's LTD 200,000 (b) 4,277,090 ____________ 6,415,090 _____________________________________________________________________________________________________________________________ Canada (3.3%) Energy (2.7%) Renaissance Energy 14,300 (b,c) 331,716 Renaissance Energy 385,700 (c) 8,947,044 Sceptre 1,000,000 (c) 8,872,100 ___________ Total 18,150,860 _____________________________________________________________________________________________________________________________ Utilities-gas (0.6%) Archer Resource 300,000 (c) 3,659,760 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. PAGE 20 Chile (2.4%) Banks and savings & loans (0.7%) Banco O'Higgins 250,000 (c,d) 5,000,000 _____________________________________________________________________________________________________________________________ Financial services (0.5%) GT Chile Growth Euro 100,000 3,400,000 _____________________________________________________________________________________________________________________________ Industrial equipment & services (1.2%) Madeco ADR 250,000 7,812,500 _____________________________________________________________________________________________________________________________ France (11.0%) Banks and savings & loans (0.5%) Sovac 45,000 3,659,625 _____________________________________________________________________________________________________________________________ Chemicals (1.3%) Air Liquide 60,873 8,587,963 _____________________________________________________________________________________________________________________________ Communications equipment (1.3%) Alcatel Cable 75,000 8,744,625 _____________________________________________________________________________________________________________________________ Computers & office equipment (1.5%) Sligos 125,000 9,786,625 _____________________________________________________________________________________________________________________________ Food (0.9%) IDIA 200,000 6,296,000 _____________________________________________________________________________________________________________________________ Industrial equipment & services (0.6%) CNIM 24,026 4,057,247 _____________________________________________________________________________________________________________________________ Industrial transportation (1.7%) SAGA 115,000 11,397,190 _____________________________________________________________________________________________________________________________ Retail (1.8%) Castorama Dubois 80,897 11,790,252 _____________________________________________________________________________________________________________________________ Utilities-electric (1.4%) Lyonnaise Des Eaux & De L'Eclairage 101,356 9,217,720 _____________________________________________________________________________________________________________________________ PAGE 21 Germany (9.5%) Banks and savings & loans (1.8%) Bankgesell Berlin 50,000 11,973,250 _____________________________________________________________________________________________________________________________ Building materials & construction (2.8%) CHA Holdings 25,000 5,587,500 Pfleiderer 20,000 7,503,240 Weru 10,000 5,654,030 ____________ Total 18,744,770 _____________________________________________________________________________________________________________________________ Industrial equipment & services (1.1%) Jungheinrich 30,000 7,144,020 _____________________________________________________________________________________________________________________________ Retail (2.3%) AVA 20,000 7,503,240 Douglas Holdings 25,000 8,098,575 ____________ Total 15,601,815 _____________________________________________________________________________________________________________________________ Utilities-electric (1.5%) Veba 30,000 10,057,530 _____________________________________________________________________________________________________________________________ Hong Kong (4.7%) Building materials & construction (1.8%) Henderson Investment 6,000,000 5,508,000 Hysan Development 2,500,000 6,662,500 _____________ Total 12,170,500 _____________________________________________________________________________________________________________________________ Multi-industry conglomerates (2.1%) Hutchison Whampoa 1,700,000 7,852,300 Shun Tak Enterprise 7,000,000 6,153,000 ____________ Total 14,005,300 _____________________________________________________________________________________________________________________________ Utilities-telephone (0.8%) Hong Kong Telecom 2,596,200 (d) 5,558,464 _____________________________________________________________________________________________________________________________ India (1.7%) Miscellaneous Reliance Inds Euro GDR 450,000 (b) 11,362,500 _____________________________________________________________________________________________________________________________ PAGE 22 Indonesia (2.6%) Chemicals (1.3%) PT Tri Polyta ADR 300,000 (c) 8,925,000 _____________________________________________________________________________________________________________________________ Real estate (1.3%) PT Jaya Real Properties 2,166,000 (c) 8,754,285 _____________________________________________________________________________________________________________________________ Italy (1.2%) Furniture & appliances Natuzzi ADR 250,000 8,062,500 _____________________________________________________________________________________________________________________________ Japan (6.4%) Electronics (2.7%) Alpine Electronics 450,000 (d) 9,199,350 Chudenko 97,450 (c) 3,581,970 Japan Radio 300,000 (d) 5,637,300 ____________ Total 18,418,620 _____________________________________________________________________________________________________________________________ Furniture & appliances (1.4%) Sony 150,000 9,153,300 _____________________________________________________________________________________________________________________________ Retail (2.3%) Canon Sales 200,000 6,752,600 York Benimaru 200,000 (d) 8,425,400 ____________ Total 15,178,000 _____________________________________________________________________________________________________________________________ Mexico (5.4%) Banks and savings & loans (1.5%) Grupo Finance Banamex 1,000,000 6,648,200 Grupo Financiero Banorte 750,000 (c) 3,661,650 ____________ Total 10,309,850 _____________________________________________________________________________________________________________________________ Beverages & tobacco (0.5%) Formento Economico 750,000 3,295,050 _____________________________________________________________________________________________________________________________ Building materials & construction (1.2%) Bufete Inds ADR 200,000 8,100,000 _____________________________________________________________________________________________________________________________ Metals (1.2%) Grupo Simec ADR 325,000 (c) 8,043,750 _____________________________________________________________________________________________________________________________ Multi-industry conglomerates (1.0%) Grupo Carso ADR 300,000 (c) 6,600,000 _____________________________________________________________________________________________________________________________ PAGE 23 Netherlands (3.5%) Building materials & construction (2.5%) IHC Caland 300,000 7,621,500 Volker Stevin 177,400 9,076,848 _____________ Total 16,698,348 _____________________________________________________________________________________________________________________________ Industrial equipment & services (1.0%) Boskalis 300,000 (d) 6,820,200 _____________________________________________________________________________________________________________________________ Norway (0.9%) Energy Saga Petro Cl B 500,000 5,699,500 _____________________________________________________________________________________________________________________________ Peru (0.2%) Banks and savings & loans Banco Wiese ADR 70,000 (c,d) 1,487,500 _____________________________________________________________________________________________________________________________ Phillipines (0.5%) Multi-industry conglomerates Universal Robina 3,930,500 (c) 3,435,257 _____________________________________________________________________________________________________________________________ Singapore/Malaysia (7.5%) Banks and savings & loans (4.1%) AMMB Holdings 1,000,000 10,958,000 Commerce Asset 1,250,000 5,576,250 Development Bank of Singapore 500,000 5,311,500 United Overseas Bank 519,375 5,693,908 ____________ Total 27,539,658 _____________________________________________________________________________________________________________________________ Electronics (1.3%) Technology Resource Cl A 2,250,000 (c) 8,761,500 _____________________________________________________________________________________________________________________________ Leisure time & entertainment (0.7%) Resorts World 750,000 4,755,000 _____________________________________________________________________________________________________________________________ Multi-industry conglomerates (1.4%) Keppel 1,000,000 9,193,000 _____________________________________________________________________________________________________________________________ PAGE 24 Spain (1.0%) Food Pryca Centros Comer 400,000 6,578,400 _____________________________________________________________________________________________________________________________ Switzerland (1.6%) Industrial equipment & services Sulzer Gebruder 15,000 10,597,650 _____________________________________________________________________________________________________________________________ United Kingdom (2.8%) Electronics (0.8%) Electrocomponents 700,000 5,270,300 _____________________________________________________________________________________________________________________________ Health care (0.7%) Medeva 1,538,311 4,430,336 _____________________________________________________________________________________________________________________________ Media (0.7%) Blenheim Group 1,200,000 4,969,200 _____________________________________________________________________________________________________________________________ Restaurants & lodging (0.6%) JD Wetherspoon 665,000 4,386,340 _____________________________________________________________________________________________________________________________ United States (2.7%) Building materials & construction (0.7%) Foamex Intl 500,000 (c) 4,500,000 _____________________________________________________________________________________________________________________________ Communications equipment (0.4%) Geotek Communications 300,000 (c) 2,568,750 _____________________________________________________________________________________________________________________________ Industrial equipment & services (0.7%) Calgon Carbon 400,000 4,500,000 _____________________________________________________________________________________________________________________________ Industrial transportation (0.9%) Fritz 165,000 (c) 6,435,000 _____________________________________________________________________________________________________________________________ Total common stocks of unaffiliated issuers (Cost: $466,557,776) $512,500,900 _____________________________________________________________________________________________________________________________ Bonds (4.9%) _____________________________________________________________________________________________________________________________ Issuer and Principal Value(a) coupon rate Amount _____________________________________________________________________________________________________________________________ Indonesia (1.3%) Global Mark Intl Euro (U.S. Dollar) 3.50% Cv 1997 $ 8,000,000 (b) $ 8,800,000 _____________________________________________________________________________________________________________________________ Malaysia (1.5%) Renong (U.S. Dollar) 2.50% Cv 2005 10,000,000 (b) 10,050,000 _____________________________________________________________________________________________________________________________ Mexico (0.8%) Mexican Cetes (Mexican Peso) Zero Coupon 13.94% Treasury Bill 1995 19,250,000 (g) 5,363,479 _____________________________________________________________________________________________________________________________ South Africa (1.3%) Escom (South African Rand) 11% 2008 17,500,000 3,040,625 Liberty Life Inds Euro (U.S. Dollar) 6.50% 2004 6,000,000 (b,d) 5,880,000 PAGE 25 ____________ Total 8,920,625 _____________________________________________________________________________________________________________________________ Total bonds (Cost: $32,069,316) $ 33,134,104 _____________________________________________________________________________________________________________________________ Preferred stocks & other (5.1%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ France (0.1%) Air Liquide Rights 60,873 $ 842,178 _____________________________________________________________________________________________________________________________ Germany (5.0%) Friedrich Grohe 40,000 11,920,040 Hornbach 9,000 9,578,601 SAP 20,000 11,574,140 _____________ Total 33,072,781 _____________________________________________________________________________________________________________________________ Switzerland (--%) Credit Suisse Holdings Warrants 7,500 11,064 _____________________________________________________________________________________________________________________________ Total preferred stocks & other (Cost: $19,334,509) $ 33,926,023 _____________________________________________________________________________________________________________________________ Short-term securities (13.6%) _____________________________________________________________________________________________________________________________ Issuer Annualized Amount Value(a) yield on payable date of at purchase maturity _____________________________________________________________________________________________________________________________ U.S. government agency (0.5%) Federal Natl Mtge Assn Disc Note 11-28-94 4.81% $3,200,000 $ 3,188,504 _____________________________________________________________________________________________________________________________ Commercial paper (11.4%) AIG Funding 11-03-94 5.12 1,500,000 1,499,575 Amgen 11-18-94 4.88 5,600,000 5,587,148 Aon 11-17-94 5.03 3,000,000 2,993,333 11-18-94 4.90 5,000,000 4,988,478 Avco Financial Services 11-23-94 4.88 4,000,000 3,988,120 Commercial paper (cont'd) Cafco 11-16-94 4.84 3,800,000 3,792,000 Ciesco LP 11-28-94 4.88 2,200,000 2,191,998 Gannett 11-22-94 4.87 2,600,000 (e) 2,592,644 Goldman Sachs 11-22-94 4.92 4,300,000 4,287,709 11-23-94 5.01 5,100,000 5,084,479 Merrill Lynch 12-05-94 5.03 3,600,000 3,583,000 Mobil Australia Finance (Delaware) 11-22-94 4.85 1,800,000 (e) 1,794,929 11-29-94 4.90 5,500,000 (e) 5,479,124 12-01-94 4.92 1,800,000 (e) 1,792,650 Penney (JC) Funding 11-15-94 5.11 2,400,000 2,395,259 11-30-94 4.90 5,000,000 4,980,344 PAGE 26 Quaker Oats 11-14-94 4.90 4,100,000 4,092,775 St. Paul Companies 12-05-94 4.94 3,100,000 (e) 3,085,595 USAA Capital 12-01-94 4.92 6,700,000 6,672,642 12-02-94 4.93 5,500,000 5,476,793 ____________ Total 76,358,595 _____________________________________________________________________________________________________________________________ Letters of credit (1.7%) Bank of Amer- Hyundai Motor Finance 11-07-94 5.07 2,200,000 2,198,148 12-08-94 5.20 3,900,000 3,879,317 Credit Suisse - Pemex Capital 11-22-94 4.85 5,600,000 5,584,222 ____________ Total 11,661,687 _____________________________________________________________________________________________________________________________ Total short-term securities (Cost: $91,209,186) $ 91,208,786 _____________________________________________________________________________________________________________________________ Total investments in securities of unaffiliated issuers (Cost: $609,170,787) $670,769,813 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. Investments in securities of affiliated issuer (f) _____________________________________________________________________________________________________________________________ Common stock (0.3%) _____________________________________________________________________________________________________________________________ Issuer Shares Value(a) _____________________________________________________________________________________________________________________________ United States Chemicals GNI Group 400,000 (c) $ 1,950,000 _____________________________________________________________________________________________________________________________ Total investments in securities of affiliated issuer (Cost: $2,652,041) $ 1,950,000 _____________________________________________________________________________________________________________________________ Total investments in securities (Cost: $611,822,828)(h) $672,719,813 _____________________________________________________________________________________________________________________________ See accompanying notes to investments in securities. ______________________________________________________________________________________________________________________________ Notes to investments in securities _____________________________________________________________________________________________________________________________ (a) Securities are valued by procedures described in Note 1 to the financial statements. Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated in the currency indicated. (b) 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. (c) Presently non-income producing. (d) Security is partially or fully on loan. See Note 5 to the financial statements. (e) 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. (f) Investments representing 5% or more of the outstanding voting securities of the issuer. (g) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on the date of acquisition. (h) At Oct. 31, 1994, the cost of securities for federal income tax purposes was $611,821,880 and the aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $82,975,611 Unrealized depreciation (22,077,678) ____________________________________________________________________________________________ Net unrealized appreciation $60,897,933 ____________________________________________________________________________________________ /TABLE PAGE 27 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 28 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 29 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 30 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 31 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 32 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 33 Federal income tax information IDS Global Growth 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. The dividends listed below were reported to you on a Form 1099-DIV, Dividends and Distributions, last January. Shareholders should consult a tax adviser on how to report distributions for state and local purposes. IDS Global Growth Fund Fiscal year ended Oct. 31, 1994 Income distribution taxable as dividend income 7.51% qualifying for deduction by corporations. Payable date Per share Dec. 30, 1993 $0.0812 Capital gain distribution taxable as long-term capital gain. Payable date Per share Dec. 30, 1993 $0.0255 Total distributions $0.1067 The distribution of $0.1067 per share, payable Dec. 30, 1993 consisted of $0.0233 derived from net investment income, $0.0579 from net short-term capital gains (a total of $0.0812 taxable as dividend income) and $0.0255 from net long-term capital gains. PAGE 34 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 Growth Fund IDS Tower 10 Minneapolis, MN 55440-0010 PAGE 35 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-----