-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VvYdfYecDTwxuZVhOqjS0t8UtobCVIJ61cFQoIWLi8mdaxJQ0wySVtYi8eGzj4qJ Q9G7Q+kRpEflz1xpyFvC+w== 0000820027-98-000002.txt : 19980106 0000820027-98-000002.hdr.sgml : 19980106 ACCESSION NUMBER: 0000820027-98-000002 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971031 FILED AS OF DATE: 19980105 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: SEC FILE NUMBER: 811-05696 FILM NUMBER: 98500588 BUSINESS ADDRESS: STREET 1: IDS TOWER 10 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 BUSINESS PHONE: 6126712772 FORMER COMPANY: FORMER CONFORMED NAME: IDS GLOBAL BOND FUND INC DATE OF NAME CHANGE: 19901011 N-30D 1 IDS EMERGING MARKETS FUND 1997 ANNUAL REPORT IDS Emerging Markets Fund (prospectus enclosed) (icon of) world globe The goal of IDS Emerging Markets Fund, a part of IDS Global Series, Inc., is long-term 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.) American Express Financial Advisors Distributed by American Express Financial Advisors Inc. (icon of) world globe Expanding your opportunities As free enterprise expands around the world, so do investment opportunities. Some of the most exciting ones can be found in the so-called "emerging markets" - -- smaller economies located largely in Asia, Latin America and Eastern Europe. Attracted by their rapid growth potential, many aggressive investors have made these markets, which have a higher-than-average risk level, an integral part of their portfolios. (Icon of) One open book inside of another. The purpose of this annual report is to tell investors how the Fund performed. The prospectus, which is bound into the middle of this annual report, describes the Fund in detail. Contents 1997 annual report From the chairman 4 From the portfolio manager 4 The Portfolio's ten largest holdings 6 Making the most of the Fund 7 The Fund's long-term performance 8 Independent auditors' report (Fund) 9 Financial statements (Fund) 10 Notes to financial statements (Fund) 13 Independent auditors' report (Portfolio) 21 Financial statements (Portfolio) 22 Notes to financial statements (Portfolio) 25 Investments in securities 31 IDS mutual funds 35 Federal income tax information 39 1997 prospectus The Fund in brief 3p Goal 3p Investment policies and risks 3p Structure of the Fund 4p Manager and distributor 4p Portfolio manager 4p Alternative purchase arrangements 4p Sales charge and Fund expenses 5p Performance 7p Financial highlights 7p Total returns 8p Investment policies and risks 10p Facts about investments and their risks 11p Valuing Fund shares 17p How to purchase, exchange or redeem shares 18p Alternative purchase arrangements 18p How to purchase shares 21p How to exchange shares 23p How to redeem shares 23p Reductions and waivers of the sales charge 28p Special shareholder services 33p Services 33p Quick telephone reference 33p Distributions and taxes 34p Dividend and capital gain distributions 34p Reinvestments 35p Taxes 35p How to determine the correct TIN 37p How the Fund and Portfolio are organized 38p Shares 38p Voting rights 38p Shareholder meetings 38p Special considerations regarding master/feeder structure 38p Board members and officers 40p Investment manager 42p Administrator and transfer agent 42p Distributor 43p About American Express Financial Corporation 44p General information 44p Appendices 45p Description of corporate bond ratings 45p Descriptions of derivative instruments 47p (This annual report is not part of the prospectus.) To our shareholders (Picture of) William R. Pearce Chairman of the board (Picture of) Ian King Portfolio manager From the chairman If you're an experienced investor, you know that the past few years have been unusually strong ones in many financial markets. Perhaps just as important, history shows that bull markets don't last forever. Though they're often unpredictable, declines -- whether they're brief or long-lasting, moderate or substantial -- are always a possibility. We saw evidence of that in late October, when declines in several foreign stock markets spawned a sharp drop in the U.S. market. That fact reinforces the need for investors to review periodically their long-term goals and examine whether their investment program remains on track to achieving them. Your quarterly investment statements are one part of that monitoring process. The other is a meeting with your American Express financial advisor. That becomes even more important if there's a major change in your financial situation or in the financial markets. /s/ W. R. Pearce William R. Pearce From the portfolio manager The volatility that characterizes financial markets in emerging economies was never more evident than in the past 12 months. Nevertheless, and despite a dramatic downturn near the end of the period, IDS Emerging Markets Fund's Class A shares produced a positive return of 6.8% for the fiscal year, which ran from Nov. 13, 1996 (the Fund's inception date) through Oct. 1997. The gain exceeded that of the Morgan Stanley Capital International Emerging Markets Free Index, an unmanaged index that is commonly used as a benchmark for evaluating the performance of mutual funds such as this one. The first several weeks of the period were largely devoted to putting investors' money to work by purchasing shares of stocks in a wide range of countries, including Hong Kong/China, Brazil, Argentina, Russia, Mexico, Turkey, Taiwan and Malaysia. Later in the period, I also established a position in Israel. A focus on robust economies For the most part, I concentrated on stocks of companies involved in infrastructure (construction of roads, bridges, utilities, sewage (This annual report is not part of the prospectus.) systems, etc.) and industrial development, which are in their early stages in many emerging markets. My investment approach is to focus first on countries with the fastest-growing economies, then try to identify the stocks in those countries that appear to have the best long-term appreciation potential. In many cases, this has led to companies that are especially benefiting from the trend toward privatization and deregulation in many developing countries. During the first several months of the period, the investment environment in most emerging markets was relatively calm and quite productive. Leading the way were Brazil, Argentina, Mexico, Russia and Hong Kong/China, which constituted the largest investment exposures for the Fund. Despite a downturn in August, the Fund was ahead more than 24% by early October. Market meltdown All the while, though, trouble had been brewing in Southeast Asia, where declining currency values had dragged down those markets for many months. Things came to a head in late October as the Hong Kong market crumbled, sending shock waves throughout emerging markets worldwide. Although its exposure to Asia was relatively minor (I had substantially reduced investments there over the summer), the Fund couldn't avoid the effect of the consequent declines in other markets. In the end, the global downturn erased most of the previous 11 months' gain. While such events test the patience of any investor, it's important to keep in mind that sharp swings are nothing new in emerging markets and, perhaps more important, the case for investing in emerging markets is, in my view at least, as sound as ever. Inflation remains under control around the globe, economies in many developing countries are still vibrant, and the worldwide trend toward free markets and capitalism is unbowed. Over the long run, I'm confident that combination will again prove rewarding. /s/ Ian King Ian King Class A Nov. 13, 1996* - Oct. 31, 1997 (All figures per share) Net asset value (NAV) Oct. 31, 1997 $ 5.33 Nov. 13, 1996* $ 5.00 Increase $ 0.33 Distributions Nov. 13, 1996* - Oct. 31, 1997 From income $ 0.01 From capital gains $ -- Total distributions $ 0.01 Total return** +6.8%*** Class B Nov. 13, 1996* - Oct. 31, 1997 (All figures per share) Net asset value (NAV) Oct. 31, 1997 $ 5.29 Nov. 13, 1996* $ 5.00 Increase $ 0.29 Distributions Nov. 13, 1996* - Oct. 31, 1997 From income $ -- From capital gains $ -- Total distributions $ -- Total return** +6.1%*** Class Y Nov. 13, 1996* - Oct. 31, 1997 (All figures per share) Net asset value (NAV) Oct. 31 1997 $ 5.33 Nov. 13, 1996* $ 5.00 Increase $ 0.33 Distributions Nov. 13, 1996* - Oct. 31, 1997 From income $ 0.01 From capital gains $ -- Total distributions $ 0.01 Total return** +6.9%*** * Inception date. ** The prospectus discusses the effect of sales charges, if any, on the various classes. *** The total return is a hypothetical investment in the Fund with all distributions reinvested. (This annual report is not part of the prospectus.) The Portfolio's ten largest holdings (icon of) pie chart The ten holdings listed here make up 23.29% of the Portfolio's net assets Percent Value (of Portfolio's net assets) (as of Oct. 31, 1997) Telecommunicacoes Brasileiras- 3.12% $11,165,000 Telebras ADR (Brazil) Cia. de Telecommunicaciones 2.44 8,741,250 de Chile ADR (Chile) AO Tatneft ADR (Russia) 2.40 8,580,000 Grupo Carso SA de CV (Mexico) 2.39 8,577,194 Yapi ve Kredi Bankasi (Turkey) 2.32 8,318,750 Telefonos de Mexico 2.29 8,217,500 ADR Cl L (Mexico) Centrais Electricas Brasileiras 2.24 8,035,021 ADR (Brazil) Kimberly-Clark de Mexico 2.06 7,395,764 ADR (Mexico) Israel Chemicals (Israel) 2.03 7,276,790 Compania de Minas Buenaventura 2.00 7,175,000 ADR (Peru) 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. (This annual report is not part of the prospectus.) Making the most of the Fund Build your assets systematically One of the best ways to invest in the Fund is by dollar-cost averaging -- a time-tested strategy that can make market fluctuations work for you. To dollar-cost average, simply invest a fixed amount of money regularly. You'll automatically buy more shares when the Fund's share price is low, fewer shares when it is high. Using this strategy does not ensure a profit or avoid a loss if the market declines, and requires that you be able to keep on investing on a regular basis, even when the price of your shares falls or the market declines. Investing in this manner 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 XXXXX Feb 100 18 5.56 XXXXXx March 100 17 5.88 XXXXXx April 100 15 6.67 XXXXXXx May 100 16 6.25 XXXXXXx June 100 18 5.56 XXXXXx July 100 17 5.88 XXXXXx Aug 100 19 5.26 XXXXXx Sept 100 21 4.76 XXXXx Oct 100 20 5.00 XXXXX (footnote 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 pointing to Sept) 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. 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. (This annual report is not part of the prospectus.) The Fund's long-term performance How $10,000 has grown in IDS Emerging Markets Fund MSCI Emerging MArkets Free Index $9,500 Lipper Emerging Markets Fund Index $10,066 Emerging Markets Fund Class A 11/96 12/96 1/97 2/97 3/97 4/97 5/97 6/97 7/97 8/97 9/97 10/97 Average annual total return (as of Oct. 31, 1997) Since inception* Class A +1.50% Class B +2.07% Class Y +6.86% *Inception date was Nov. 13, 1996. For purposes of the graph above, start date was Nov. 30, 1996. Assumes: oHolding period from 11/13/96 to 10/31/97. oReturns do not reflect taxes payable on distributions. oReinvestment of all income and capital gain distributions for the Fund, with a value of $14. Also see "Performance" in the Fund's current prospectus. Morgan Stanley Capital International (MSCI) Emerging Markets Free Index, an unmanaged market capitalization-weighted index compiled from a composite of securities markets of 26 emerging market countries, is widely recognized by investors as a measurement index for portfolios of emerging market securities. Lipper Emerging Markets Fund Index, an unmanaged index published by Lipper Analytical Services, Inc., includes 31 funds that are generally similar to the Fund, although some funds in the index may have somewhat different investment policies or objectives. On the graph above you can see how the Fund's total return compared to two widely cited performance indexes, the MSCI Emerging Markets Free Index and the Lipper Emerging Markets Fund Index. In comparing IDS Emerging Markets Fund (Class A) 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. 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 impact of the applicable sales charge, up to a maximum of 5%. This was a period of widely fluctuating security prices. Past performance is no guarantee of future results. (This annual report is not part of the prospectus.) The financial statements contained in Post-Effective Amendment #28 to Registration statement No. 33-25824 filed on or about Dec. 24, 1997, are incorporated herein by reference. IDS mutual funds Global/International funds Funds in this group seek capital growth and/or income by investing primarily in foreign securities. Foreign investments may be subject to currency fluctuations and political and economic risks of the countries in which the investments are made. They are high risk mutual funds with a potential for high reward. IDS Emerging Markets Fund Invests in a Portfolio comprised primarily of stocks of companies in developing countries throughout the world that are believed to offer growth potential. Seeks to provide long-term growth of capital. (icon of) world with countries IDS Global Growth Fund Invests in a Portfolio comprised primarily of stocks of companies throughout the world that are positioned to meet market needs in a changing world economy. These companies offer above-average potential for long-term growth. (icon of) world IDS International Fund Invests primarily in common stocks of foreign companies that offer potential for superior growth. The Fund may invest up to 20% of its assets in the U.S. market. (icon of) three flags IDS Global Balanced Fund Invests in stocks and bonds in, for the most part, major markets throughout the world, including the U.S. Seeks to provide a balance of growth of capital and current income. (icon of) scale of globes IDS Global Bond Fund Invests in a Portfolio comprised primarily of debt securities of U.S. and foreign issuers to seek high total return through income and growth of capital. (icon of) globe Growth funds Funds in this group seek capital growth, primarily from common stocks. They are high risk mutual funds with a potential for high reward. IDS Precious Metals Fund Invests primarily in the securities of foreign or domestic companies that explore for, mine and process or distribute gold and other precious metals. A highly aggressive and speculative fund that seeks long-term growth of capital. (icon of) cart of precious gems IDS Discovery Fund Invests in small- and medium-size, growth-oriented companies emphasizing technological innovation and productivity enhancement. Buys and holds larger growth-oriented stocks. (icon of) ship IDS Small Company Index Fund Invests in all or a representative group of the equity securities comprising the S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation. (icon of) building IDS Strategy Aggressive Fund Invests primarily in common stocks of companies that are selected for their potential for above-average growth. Above-average means that their growth potential is better, in the opinion of the portfolio's investment manager, than the Standard & Poor's Corporation (S&P) 500 Stock Index. (icon of) chess piece IDS Research Opportunities Fund Invests in a Portfolio comprised primarily of equity securities of companies included in the S&P 500 Index that are believed to have strong growth potential. The Portfolio is managed using a research methodology by the Research Department of AEFC. Goal is long-term appreciation. (icon of) magnifying glass (This annual report is not part of the prospectus.) IDS mutual funds IDS Growth Fund Invests in a Portfolio comprised primarily of companies that have above-average potential for long-term growth as a result of new management, marketing opportunities or technological superiority. (icon of) trees IDS New Dimensions Fund Invests in a Portfolio comprised primarily of companies with significant growth potential due to superiority in technology, marketing or management. The Fund frequently changes its industry mix. (icon of) dimension IDS Progressive Fund Invests primarily in undervalued common stocks. The Fund holds stocks for the long term with the goal of capital growth. (icon of) shooting star Growth & income funds These funds focus on securities of medium to large, well-established companies that offer long-term growth of capital and reasonable income from dividends and interest. Foreign investments may be subject to currency fluctuations and political and economic risks of the countries in which the investments are made. IDS Equity Select Fund Invests primarily in a combination of moderate growth stocks, higher-yielding equities and bonds. Seeks growth of capital and income. (icon of) three pine trees IDS Blue Chip Advantage Fund Invests in selected stocks from a major market index. Securities purchased are those recommended by our research analysts as the best from each industry represented on the index. Offers potential for long-term growth as well as dividend income. (icon of) ribbon IDS Managed Allocation Fund Invests in a Portfolio comprised primarily of U.S. equity securities, U.S. and foreign debt securities, foreign equity securities and money market instruments. The Fund provides diversification among these major investment categories and has a target mix that represents the way the Fund's investments will be allocated over the long term. Seeks maximum total return. (icon of) gyroscope IDS Stock Fund Invests in a Portfolio comprised primarily of common stock of companies representing many sectors of the economy. Seeks current income and growth of capital. (icon of) building with columns IDS Equity Value Fund Invests primarily in undervalued common stocks that offer potential for growth of capital and income. (icon of) three growing flowers IDS Utilities Income Fund Invests primarily in the stocks of public utility companies to seek high current income and growth of income and capital with reduced volatility. (icon of) light bulb IDS Diversified Equity Income Fund Invests in a Portfolio comprised primarily in high-yielding common stocks to seek high current income and, secondarily, to benefit from the growth potential offered by stock investments. (icon of) two puzzle pieces IDS Mutual Invests in a Portfolio which seeks to balance between common stocks and senior securities (preferred stocks and bonds). Seeks a balance of growth of capital and current income. (icon of) scale of justice (This annual report is not part of the prospectus.) Income funds The funds in this group invest their assets primarily in corporate bonds or government securities to seek interest income. Secondary objective is capital growth. Risk varies by bond quality. IDS Extra Income Fund Invests in a Portfolio comprised mainly of long-term, high-yielding corporate fixed-income securities in the lower rated, higher risk bond categories to seek high current income. Secondary objective is capital growth. (icon of) two coins IDS Bond Fund Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk bond categories, or the equivalent, and in government bonds. (icon of) Greek column IDS Selective Fund Invests in a Portfolio comprised primarily of high-quality corporate bonds and other highly rated debt instruments including government securities and short-term investments. Seeks current income and preservation of capital. (icon of) skyline IDS Federal Income Fund Invests in a Portfolio comprised primarily of securities issued or guaranteed as to the timely payment of principal and interest by the U.S. government, its agencies and instrumentalities. Seeks a high level of current income and safety of principal consistent with its type of investments. (icon of) shield with eagle head Tax-exempt income funds These funds provide tax-free income by investing in municipal bonds. The income is generally free from federal income tax, but a portion of the income may be subject to state and local taxes. Risk varies by bond quality. IDS Tax-Exempt Bond Fund Invests mainly in bonds and notes of state or local government units, with at least 75% in the four highest rated, lowest risk bond categories. (icon of) shield with Greek column IDS Insured Tax-Exempt Fund Invests primarily in municipal securities that are insured as to the timely payment of principal and interest. The insurance feature minimizes credit risk of the Fund but does not guarantee the market value of the Fund's shares. (icon of) shield with star 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 IDS High Yield Tax-Exempt Fund Invests in a Portfolio comprised primarily of medium- and lower-quality municipal bonds and notes. Lower-quality securities generally involve greater risk of principal and income. (icon of) shield with basket of apples enclosed IDS Intermediate Tax-Exempt Fund Invests in mainly investment-grade bonds and other debt securities with intermediate-term maturities issued by state and local government units. Goal is to seek a high level of current income exempt from federal taxes. (icon of) shield with tree enclosed (This annual report is not part of the prospectus.) IDS mutual funds Money market funds These money market funds have three main goals: conservation of capital, constant liquidity and the highest possible current income consistent with these objectives. An investment in these funds is neither insured nor guaranteed by the U.S. government, and there can be no assurance that these funds will be able to maintain a stable net asset value of $1.00 per share. Very limited risk. IDS Cash Management Fund Invests in such money market securities as high quality commercial paper, bankers' acceptances, certificates of deposit (CDs) and other bank securities. (icon of) piggy bank IDS Tax-Free Money Fund Invests primarily in short-term bonds and notes issued by state and local governments to seek high current income exempt from federal income taxes. (icon of) shield with piggy bank enclosed For more complete information about any of these funds, including charges and expenses, you can obtain a prospectus by contacting your financial advisor or writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN 55440-0534. Read it carefully before you invest or send money. (This annual report is not part of the prospectus.) Federal income tax information IDS Emerging Markets 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 advisor on how to report distributions for state and local purposes. IDS Emerging Markets Fund Fiscal year ended Oct. 31, 1997 Class A Income distribution taxable as dividend income, 0.00% qualifying for deduction by corporations. Payable date Per share Dec. 30, 1996 $0.00684 Class B Income distribution taxable as dividend income, 0.00% qualifying for deduction by corporations. Payable date Per share Dec. 30, 1996 $0.00449 Class Y Income distribution taxable as dividend income, 0.00% qualifying for deduction by corporations. Payable date Per share Dec. 30, 1996 $0.00748 (This annual report is not part of the prospectus.) Quick telephone reference American Express Redemptions and exchanges, National/Minnesota Financial Advisors dividend payments or 800-437-3133 Telephone Transaction reinvestments and automatic Service payment arrangements Mpls./St. Paul area: 671-3800 TTY Service For the hearing impaired 800-846-4852 American Express Automated account information 800-862-7919 Financial Advisors (TouchTone(R) phones only), Easy Access Line including current fund prices and performance, account values and recent account transactions AMERICAN EXPRESS Financial Advisors IDS Emerging Markets Fund IDS Tower 10 Minneapolis, MN 55440-0010 STATEMENT OF DIFFERENCES Difference Description 1) The layout is different 1) Some of the layout in the throughout the annual report. annual report to shareholders is in two columns. 2) Headings. 2) The headings in the annual report are placed in a blue strip at the top of the page. 3) There are pictures, icons 3) Each picture, icon and and graphs throughout the graph is described in annual report. parentheses. 4) Footnotes for charts and 4) The footnotes for each graphs are described at chart or graph are typed the left margin. below the description of the chart or graph. -----END PRIVACY-ENHANCED MESSAGE-----