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IDS
Global Bond
Fund
1995 annual report
(prospectus enclosed)
(icon of) globe
The goal of IDS Global Bond Fund, a part of IDS Global Series,
Inc., is a high total return through income and growth of capital.
The Fund invests primarily in debt securities of U.S. and foreign
issuers.
(This annual report includes a prospectus that describes in detail
the Fund's objective, investment policies, risks, sales charges,
fees and other matters of interest. Please read the prospectus
carefully before you invest or send money.)
Distributed by
American Express
Financial Advisors Inc.
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(icon of) globe
A bounty of bonds
In today's global economy, investment opportunities don't stop at
the water's edge. While bonds issued by the U.S. government and
corporations once made up almost all of the bond market, today more
than half of the world's debt securities are issued from outside
the United States. This means expanded opportunity for investors.
Global Bond Fund's aim is to take advantage of opportunities in
bond markets at any time and in any place, providing investors with
greater portfolio diversification.
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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.
1995 annual report
From the president 4
From the portfolio manager 4
Ten largest holdings 6
Making the most of your fund 7
Long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 23
IDS mutual funds 28
Federal income tax information 31
1995 prospectus
The fund in brief
Goal 3p
Types of Fund investments and their risks 3p
Proposed conversion to master/feeder structure 3p
Manager and distributor 4p
Portfolio manager 4p
Sales charge and fund expenses 5p
Performance
Financial highlights 7p
Total returns 9p
Yield 11p
Investment policies and risks 12p
Facts about investments and their risks 13p
Valuing assets 18p
How to purchase, exchange or redeem shares
Alternative purchase arrangements 19p
How to purchase shares 22p
How to exchange shares 24p
How to redeem shares 24p
Reductions and waivers of the sales charge 29p
Special shareholder services
Services 35p
Quick telephone reference 35p
Distributions and taxes
Dividend and capital gain distributions 36p
Reinvestments 37p
Taxes 38p
How the fund is organized
Shares 41p
Voting rights 42p
Shareholder meetings 42p
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Special considerations regarding
master/feeder structure 43p
Directors and officers 46p
Investment manager and transfer agent 48p
Distributor 49p
About American Express Financial Corporation
General information 51p
Appendices
Description of corporate bond ratings 52p
Description of derivative instruments 54p
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To our shareholders
(Photo of) William R. Pearce
President of the fund
(Photo of) Ray Goodner
Portfolio manager
From the president
If you're an experienced investor, you know that 1995 was an
unusually strong year for the U.S. and some foreign financial
markets. Perhaps just as important, you also know that history
shows that bull markets don't last forever. Though they're often
unpredictable, declines -- whether they're brief or longlasting,
moderate or substantial -- are always a possibility.
That fact reinforces the need for investors to review periodically
their long-term goals and assess 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.
William R. Pearce
From the portfolio manager
The past fiscal year provided a noteworthy example of the
opportunities presented by global fixed-income investing. Not only
did bond markets in many countries advance in response to falling
interest rates, in several cases appreciating local currencies
sweetened the returns enjoyed by U.S. investors. Most important,
IDS Global Bond Fund took advantage of largely favorable investment
environments around the world to provide shareholders with a return
well into double digits for the November 1994 through October 1995
period.
A worldwide trend toward generally declining interest rates
provided the spark for bonds' strong performance during the past 12
months. (Falling rates boost bond values, while rising rates
depress them.) The trend was set in motion by low rates of
inflation in most countries and governments' desire to get their
financial houses in order.
Currency translation boosts total return
Among the major bond markets, returns (including price appreciation
and interest) fell roughly in the 12% to 15% range. But after
currency translations, the range was expanded from 9% to more than
25% for U.S. based investors. (When a foreign currency appreciates
against the U.S. dollar, returns for domestic investors are
automatically enhanced. A depreciating foreign currency has the
opposite effect on returns.)
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PAGE 6
Germany -- where both the bond market and local currency, the
deutsche mark, advanced -- proved to be the most productive market
for the Fund. To the Fund's benefit, we kept the greatest
percentage of the portfolio's foreign assets in that market. In
the U.S., our largest investment exposure, we also enjoyed
excellent returns, as the bond market rallied strongly. Returns
from Japan, third in our investment - exposure ranking, also were
positive but at the low end of the major-market performance list --
a result of a sharp decline in the yen (Japan's currency) late in
the fiscal year.
Emerging markets rebound
As we have for some time, we maintained a modest portion of the
portfolio in the smaller, so-called "emerging" markets, such as
Mexico, Brazil, Argentina and Indonesia -- nearly all of it
denominated in U.S. currency. While these markets provided overall
favorable results, they experienced considerable volatility, as
economic distress in Mexico late in 1994 fostered concerns about
the outlook for smaller markets as a whole. We added to our
holdings in those markets during the fiscal year, and were rewarded
when they rebounded last summer. Portfolio structure shifted
moderately in favor of the U.S. bond market over the 12 months,
coinciding with a reduction in our Japanese investments.
Looking to the current fiscal year, at this writing (mid-November)
the environment for global fixed-income investing remains largely
positive. Most important, inflation continues to be subdued
throughout most of the world. That should help interest rates stay
on a stable-to-declining path, and, as always, that would be
favorable for bonds. While it seems unlikely that returns would be
as generous as we've recently enjoyed, they should prove to be more
than satisfactory.
Ray Goodner
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1995 $ 6.11
Oct. 31, 1994 $ 5.76
Increase $(0.35)
Distributions
Nov. 1, 1994 - Oct. 31, 1995
From income $ 0.41
From capital gains $ ---
Total distributions $ 0.41
Total return** (+13.6%)***
Class B
March 20, 1995 - Oct. 31, 1995
(All figures per share)
Net asset value (NAV)
Oct. 31, 1995 $ 6.11
March 20, 1995* $ 5.74
Increase $(0.37)<PAGE>
PAGE 7
Distributions
March 20, 1995* - Oct. 31, 1995
From income $ 0.28
From capital gains $ ---
Total distributions $ 0.28
Total return** (+11.5%)***
Class C
March 20, 1995 - Oct. 31, 1995
(All figures per share)
Net asset value (NAV)
Oct. 31, 1995 $ 6.11
March 20, 1995* $ 5.74
Increase $(0.37)
Distributions
March 20, 1995* - Oct. 31, 1995
From income $ 0.31
From capital gains $ ---
Total distributions $ 0.31
Total return** (+12.0%)***
* 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.
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<TABLE><CAPTION>
IDS Global Bond Fund
Your fund's ten largest holdings
Picture of pie chart: The ten holdings listed here make up 36.94%
of the fund's net assets
_______________________________________________________________________
Percent Value
(of fund's net assets) (as of Oct. 31, 1995)
_______________________________________________________________________
<S> <C> <C>
U.K. Treasury 5.08% $ 29,856,039
8% Bond 2003
Federal Republic of Germany 4.64 27,247,116
8.75% Bond 2001
Government of Canada 4.51 26,473,317
10.50% Bond 2001
Federal Republic of Germany 4.11 24,138,338
7.50% Bond 2004
U.S. Treasury 3.70 21,734,888
7.50% Bond 2016
Government of Denmark 3.61 21,185,380
8% Bond 2003
Government of Italy 3.08 18,096,000
8.50% Bond 1999
U.K. Treasury 3.05 17,922,179
9% Bond 2000
Intl Bank Reconstruction & Development 2.59 15,235,200
4.50% Bond 1997
U.K. Treasury 2.57 15,091,588
8.50% Bond 2005
Note: Certain foreign investment risks include: changes in currency
exchange rates, adverse political or economic order, and lack of similar
regulatory requirements followed by U.S. companies.
</TABLE>
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Making the most of your fund
Average annual total return
(as of Oct. 31, 1995)
1 year 5 years Since inception*
+7.90% +9.59% +10.27%
*March 20, 1989
Total returns for Class A, Class B and Class Y for the period from
March 20, 1995 to Oct. 31, 1995 were +4.75%, +6.52% and +12.02%,
respectively. March 20, 1995 was the inception date for Class B
and Class Y. Total return for Class A is shown for comparative
purposes. The performance of Class B and Class Y will vary from
the performance of Class A based on differences in sales charges
and fees.
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures for Class A and Class B reflect the effect 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
One of the best ways to invest the fund is by dollar-cost averaging
- -- a time-tested strategy that can make market fluctuations work
for you. To dollar-cost average, simply invest a fixed amount of
money regularly. You'll automatically buy more shares when the
fund's share price is low, fewer shares when it is high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00
Feb 100 18 5.56
Mar 100 17 5.88
Apr 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
(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.
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PAGE 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.
Your fund's long-term performance
How your $10,000 has grown in IDS Global Bond Fund
SBH Global
Govt. Bond
Composite Index
$19,070
Global Bond
Fund
Lipper General
World Income Fund
Index
$9,500
4/1/89 '89 '90 '91 '92 '93 '94 '95
Assumes: o Holding period from 4/1/89 to 10/31/95. o Returns do
not reflect taxes payable on distributions. o Reinvestment of all
income and capital gain distributions for the fund, with a value of
$7,476. o Also see "Performance" in the Fund's current
prospectus.
Salomon Brother Global Government Bond Composite Index is a
representative list of government bonds of 17 countries throughout
the world. The index is a general measure of government bond
performance. Performance is expressed in the U.S. dollar as well
as the currencies of governments making up the index. The bonds
included in the index may not be in Global Bond Fund.
Lipper General World Income Fund Index, published by Lipper
Analytical Services, Inc., includes 30 funds that are generally
similar to the Fund, although some funds in the index may have
somewhat different investment policies or objectives.
*The graph is for Class A only. Class B and Class Y are not shown.
Total returns for Class A, Class B and Class Y for the period from
March 20, 1995 to Oct. 31, 1995 were +4.75%, +6.52% and +12.02%,
respectively. March 20, 1995 was the inception date for Class B
and Class Y will vary from the performance of Class A based on
differences in sales charges and fees.
On the graph above you can see how the fund's total return compared
to two widely cited performance indexes, Salomon Brothers Global
Government Bond Composite Index and the Lipper General World Income
Fund Index. In comparing Global Bond Fund to the two indexes, you
should take account of the fact that the fund's performance
reflects the maximum sales charge of 5%, while no such charges are
reflected in the performance of the index. If you were actually to
buy either individual bonds or bond mutual funds, any sales charges
that you pay would reduce your total return as well.
Average annual total return
(as of Oct. 31, 1995)
1 year 5 years Since 3/20/89
+7.90% +9.59% +10.27%
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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.
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Independent auditors' report
___________________________________________________________________
The board of directors and shareholders
IDS Global Series, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments in securities,
of IDS Global Bond Fund (a series of IDS Global Series, Inc.) as
of October 31, 1995, 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,
1995, and the financial highlights for each of the years in the
six-year period ended October 31, 1995, and for the period from
March 20, 1989 (commencement of operations), to October 31, 1989.
These financial statements and the financial highlights are the
responsibility of fund management. Our responsibility is to express
an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and the financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Investment securities held in custody are
confirmed to us by the custodian. As to securities sold but not
delivered, we request confirmations from brokers, and where replies
are not received, we carry out other appropriate auditing
procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS
Global Bond Fund at October 31, 1995, 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, 1995, 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 1, 1995
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PAGE 13
<TABLE>
<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Global Bond Fund
Oct. 31, 1995
_____________________________________________________________________________________________________________
Assets
_____________________________________________________________________________________________________________
<S> <C>
Investments in securities, at value (Note 1)
(identified cost $554,970,434) $568,967,717
Receivable for investment securities sold 8,342,800
Dividends and accrued interest receivable 14,035,784
_____________________________________________________________________________________________________________
Total assets 591,346,301
_____________________________________________________________________________________________________________
Liabilities
_____________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 284,655
Dividends payable to shareholders 2,917,974
Unrealized depreciation on foreign currency contracts held, at value (Notes 1 and 6) 459,505
Accrued investment management services fee 48,104
Accrued distribution fee 2,970
Accrued service fee 11,156
Accrued transfer agency fee 8,847
Accrued administrative services fee 3,609
Other accrued expenses 145,432
_____________________________________________________________________________________________________________
Total liabilities 3,882,252
_____________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $587,464,049
_____________________________________________________________________________________________________________
Represented by
_____________________________________________________________________________________________________________
Capital stock -- $.01 par value (Note 1) $ 961,150
Additional paid-in capital 574,421,992
Undistributed net investment income (Note 1) 2,104,995
Accumulated net realized loss (Note 1 and 8) (3,715,086)
Unrealized appreciation of investments and on translation
of assets and liabilities in foreign currencies (Note 4 and 6) 13,690,998
_____________________________________________________________________________________________________________
Total -- representing net assets applicable to outstanding capital stock $587,464,049
_____________________________________________________________________________________________________________
Net asset applicable to outstanding shares: Class A $548,361,335
Class B $ 37,031,477
Class Y $ 2,071,237
Net asset value per share of outstanding capital stock: Class A shares 89,717,714 $ 6.11
Class B shares 6,058,371 $ 6.11
Class Y shares 338,876 $ 6.11
See accompanying notes to financial statements.
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Financial statements
Statement of operations
IDS Global Bond Fund
Year ended Oct. 31, 1995
_____________________________________________________________________________________________________________
Investment income
_____________________________________________________________________________________________________________
Income:
Dividends (net of foreign taxes withheld of $15,779) $ 147,287
Interest (net of foreign taxes withheld of $145,528) 36,727,429
_____________________________________________________________________________________________________________
Total income 36,874,716
_____________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 3,930,646
Distribution fee
Class A 112,362
Class B 70,489
Transfer agency fee 780,747
Incremental transfer agency fee - Class B 1,214
Service fee
Class A 552,980
Class B 16,447
Administrative services fee 186,326
Compensation of directors 13,699
Compensation of officers 4,567
Custodian fees 285,135
Postage 83,984
Registration fees 108,046
Reports to shareholders 101,060
Audit fees 24,500
Administrative 6,533
Other 18,728
_____________________________________________________________________________________________________________
Total expenses 6,297,463
Earnings credits on cash balances (Note 2) (14,136)
_____________________________________________________________________________________________________________
Total net expenses 6,283,327
_____________________________________________________________________________________________________________
Investment income -- net 30,591,389
_____________________________________________________________________________________________________________
Realized and unrealized gain (loss) -- net
_____________________________________________________________________________________________________________
Net realized gain on security and foreign currency transactions
(including loss of $1,603,883 from foreign currency transactions) (Note 3) 1,969,977
Net realized loss on futures contracts (707,281)
Net realized gain on closed or expired option contracts written (Note 5) 414,669
_____________________________________________________________________________________________________________
Net realized gain on investments and foreign currency 1,677,365
Net change in unrealized appreciation or depreciation of investments and on
translation of assets and liabilities in foreign currencies 31,801,594
_____________________________________________________________________________________________________________
Net gain on investments and foreign currency 33,478,959
_____________________________________________________________________________________________________________
Net increase in net assets resulting from operations $64,070,348
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
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<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Global Bond Fund
Year ended Oct. 31,
_____________________________________________________________________________________________________________
Operations and distributions 1995 1994
_____________________________________________________________________________________________________________
<S> <C> <C>
Investment income -- net $ 30,591,389 $ 22,065,406
Net realized gain (loss) on investments and foreign currency 1,677,365 (2,477,889)
Net change in unrealized appreciation or depreciation of investments
and on translation of assets and liabilities in foreign currencies 31,801,594 (27,808,371)
_____________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting from operations 64,070,348 (8,220,854)
_____________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income
Class A (27,871,717) (19,649,029)
Class B (547,216) --
Class Y (63,386) --
Net realized gain
Class A (1,590,719) (3,556,158)
Excess distribution of realized gains (Note 1)
Class A (5,020,075) --
Class B (98,561) --
Class Y (11,417) --
_____________________________________________________________________________________________________________
Total distributions (35,203,091) (23,205,187)
_____________________________________________________________________________________________________________
Capital share transactions (Note 7)
_____________________________________________________________________________________________________________
Proceeds from sales
Class A shares (Note 2) 167,962,972 332,640,161
Class B shares 36,899,954 --
Class Y shares 1,971,042 --
Reinvestment of distributions at net asset value
Class A shares 30,567,749 21,996,385
Class B shares 467,515 --
Class Y shares 64,234 --
Payments for redemptions
Class A shares (145,031,336) (112,115,501)
Class B shares (Note 2) (574,270) --
Class Y shares (20) --
_____________________________________________________________________________________________________________
Increase in net assets from capital share transactions 92,327,840 242,521,045
_____________________________________________________________________________________________________________
Total increase in net assets 121,195,097 211,095,004
Net assets at beginning of year 466,268,952 255,173,948
_____________________________________________________________________________________________________________
Net assets at end of year
(including undistributed net investment income of
$2,104,995 and $1,129,458) $587,464,049 $466,268,952
_____________________________________________________________________________________________________________
See accompanying notes to financial statements.
/TABLE
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PAGE 16
Notes to financial statements
IDS Global Bond Fund
___________________________________________________________________
1. Summary of significant accounting policies
IDS Global Bond Fund is a series of IDS Global Series, Inc. and is
registered under the Investment Company Act of 1940 (as amended) as
a non-diversified, open-end management investment company. IDS
Global Series, Inc. has 10 billion authorized shares of capital
stock which can be freely allocated among the separate series as
designated by the board of directors. The Fund offers Class A,
Class B and Class Y shares. Class A shares are sold with a
front-end sales charge. Class B shares, which the Fund began
offering on March 20, 1995, may be subject to a contingent deferred
sales charge. Class B shares automatically convert to Class A after
eight years. Class Y shares, which the Fund also began offering on
March 20, 1995, have no sales charge and are offered only to
qualifying institutional investors.
All classes of shares have identical voting, dividend, liquidation
and other rights, the same terms and conditions, except that the
level of distribution fee, transfer agency fee and service fee
(class specific expenses) differs among classes. Income, expenses
(other than class specific expenses) and realized and unrealized
gains or losses on investments are allocated to each class of
shares based upon its relative net assets.
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.
Option 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<PAGE>
PAGE 17
option is that the Fund may incur a loss if the market price of the
security decreases and the option is exercised. The risk in buying
an option is that the Fund pays a premium whether or not the option
is exercised. The Fund also has the additional risk of not being
able to enter into a closing transaction if a liquid secondary
market does not exist.
Option contracts are valued daily at the closing prices on their
primary exchanges and unrealized appreciation or depreciation is
recorded. The Fund will realize a gain or loss upon expiration or
closing of the option transaction. When options on debt securities
or futures are exercised, the Fund will realize a gain or loss.
When other options are exercised, the proceeds on sales for a
written call option, the purchase cost for a written put option or
the cost of a security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Futures transactions
In order to gain exposure to or protect itself from changes in the
market, the Fund may buy and sell futures contracts traded on any
U.S. or foreign exchange. The Fund also may buy or write put and
call contracts on these futures contracts. Risks of entering into
futures contracts and related options include the possibility that
there may be an illiquid market and that a change in the value of
the contract or option may not correlate with changes in the value
of the underlying securities.
Upon entering into a futures contract, the Fund is required to
deposit either cash or securities in an amount (initial margin)
equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by the Fund each
day. The variation margin payments are equal to the daily changes
in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the
contract is closed or expires.
Foreign currency translations and
foreign currency contracts
Securities and other assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the closing
rate of exchange. Foreign currency amounts related to the purchase
or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in
foreign exchange rates on realized and unrealized security gains or
losses is reflected as a component of such gains or losses. In the
statement of operations, net realized gains or losses from foreign
currency transactions may arise from sales of foreign currency,
closed forward contracts, exchange gains or losses realized between
the trade date and settlement dates on securities transactions, and
other translation gains or losses on dividend, interest income and
foreign withholding taxes.
The Fund may enter into forward foreign currency exchange contracts
for operational purposes and to protect against adverse exchange
rate fluctuation. The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the Fund and the <PAGE>
PAGE 18
resulting unrealized appreciation or depreciation are determined
using foreign currency exchange rates from an independent pricing
service. The Fund is subject to the credit risk that the other
party will not complete the obligations of the contract.
Federal taxes
Since the Fund's policy is to comply with all sections of the
Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to shareholders, no
provision for income or excise taxes is required.
Net investment income (loss) and net realized gains (losses) may
differ for financial statement and tax purposes primarily because
of the deferral of losses on certain futures contracts, the
recognition of certain foreign currency gains (losses) as ordinary
income (loss) for tax purposes, and losses deferred due to "wash
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 $1,133,533 and accumulated net
realized loss has been decreased by $1,133,533.
Dividends to shareholders
Dividends from net investment income, declared daily and paid each
calendar quarter, are reinvested in additional shares of the Fund
at net asset value or payable in cash. Capital gains, when
available, are distributed along with the last income dividend of
the calendar year.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Dividend income is recognized on the ex-dividend
date or upon receipt of ex-dividend notification in the case of
certain foreign securities. For U.S. dollar denominated bonds,
interest income includes level-yield amortization of premium and
discount. For foreign bonds, except for original issue discount,
the Fund does not amortize premium and discount.
___________________________________________________________________
2. Expenses and sales charges
Under terms of a prior agreement that ended March 19, 1995, the
Fund paid AEFC a fee for managing its investments, recordkeeping
and other specified services. The fee was 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 <PAGE>
PAGE 19
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.
Also under terms of a prior agreement, the Fund paid AEFC a
distribution fee at an annual rate of $6 per shareholder account
and a transfer agency fee at an annual rate of $15.50 per
shareholder account.
Effective March 20, 1995, when the Fund began offering multiple
classes of shares, the Fund entered into agreements with AEFC for
managing its portfolio, providing administrative services and
serving as transfer agent as follows:
Under its Investment Management Services Agreement, AEFC determines
which securities will be purchased, held or sold. The management
fee is a percentage of the Fund's average daily net assets in
reducing percentages from 0.77% to 0.67% annually.
Under an Administrative Services Agreement, the Fund pays AEFC for
administration and accounting services at a percentage of the
Fund's average daily net assets in reducing percentages from 0.06%
to 0.04% annually.
Under a separate Transfer Agency Agreement, AEFC maintains
shareholder accounts and records. The Fund pays AEFC an annual fee
per shareholder account for this service as follows:
o Class A $15.50
o Class B $16.50
o Class Y $15.50
Also effective March 20, 1995, the Fund entered into agreements
with American Express Financial Advisors Inc. for distribution and
shareholder servicing-related services as follows: Under a Plan and
Agreement of Distribution, the Fund pays a distribution fee at an
annual rate of 0.75% of the Fund's average daily net assets
attributable to Class B shares for distribution-related services.
Under a Shareholder Service Agreement, the Fund pays a fee for
service provided to shareholders by financial advisors and other
servicing agents. The fee is calculated at a rate of 0.175% of the
Fund's average daily net assets attributable to Class A and Class B
shares.
AEFC will assume and pay any expenses (except taxes and brokerage
commissions) that exceed the most restrictive applicable state
expense limitation.
Sales charges received by American Express Financial Advisors Inc.
for distributing Fund shares were $2,842,816 for Class A and $1,209
for Class B for the year ended Oct. 31, 1995. The Fund also pays
custodian fees to American Express Trust Company, an affiliate of
AEFC.
During the year ended Oct. 31, 1995, the Fund's custodian and
transfer agency fees were reduced by $14,136 as a result of
earnings credits from overnight cash balances.
<PAGE>
PAGE 20
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 $4,740 for the year ended Oct. 31, 1995.
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $471,464,989 and $405,405,222,
respectively, for the year ended Oct. 31, 1995. Realized gains and
losses are determined on an identified cost basis.
Income from securities lending amounted to $19,089 for the year
ended Oct. 31, 1995. The risk to the Fund of securities lending are
that the borrower may not provide additional collateral when
required or return the securities when due.
___________________________________________________________________
4. Interest rate futures contracts
At Oct. 31, 1995, investments in securities included securities
valued at $1,939,470 that were pledged as collateral to cover
initial margin deposits on 100 purchased contracts. The market
value of the open contracts on Oct. 31, 1995 was $6,407,242 with a
net unrealized gain of $72,767.
___________________________________________________________________
5. Option contracts written
<TABLE>
<CAPTION>
The number of contracts and premium amounts associated with option contracts written is as follows:
Year ended Oct. 31, 1995
______________________________________________________
Puts Calls
Contracts Premium Contracts Premium
______________________________________________________________________________
<S> <C> <C> <C> <C>
Balance Oct. 31, 1994 100 $110,238 100 $ 121,800
Opened 450 702,125 975 1,632,625
Closed (450) (690,363) (925) (1,437,050)
Exercised (100) (122,000) -- --
Expired -- -- (150) (317,375)
______________________________________________________________________________
Balance Oct. 31, 1995 -- $ -- -- $ --
______________________________________________________________________________
<PAGE>
PAGE 21
___________________________________________________________________
6. Foreign currency contracts
At Oct. 31, 1995, the Fund had entered into five foreign currency
exchange contracts that obligate the Fund to deliver currency at
specified future dates. The unrealized appreciation and/or
depreciation on these contracts is included in the accompanying
financial statements. The terms of the open contracts are as
follows:
Exchange date Currency to be Currency to be Unrealized
delivered received depreciation
____________________________________________________________________________________________________
Nov. 2, 1995 3,322,053 $ 2,442,614 $ 36,993
Canadian Dollar U.S. Dollar
Nov. 13, 1995 5,020,354 497,000,000 149,765
U.S. Dollar Japanese Yen
Nov. 24, 1995 6,010,398 600,000,000 120,659
U.S. Dollar Japanese Yen
Nov. 27, 1995 5,146,836 510,000,000 138,293
U.S. Dollar Japanese Yen
Dec. 4, 1995 3,435,001 348,000,000 13,795
U.S. Dollar Japanese Yen
____________
$459,505
7. Capital share transactions
Transactions in shares of capital stock for the years indicated are as
follows:
________________________________________________________________________________________
Year ended Oct. 31, 1995 Year ended
10/31/94
Class A Class B* Class Y* Class A
________________________________________________________________________________________
Sold 28,365,320 6,075,865 328,333 55,715,517
Issued for reinvested 5,162,365 77,021 10,547 3,701,527
distributions
Redeemed (24,752,357) (94,515) (4) (19,204,423)
_______________________________________________________________________________________
Net increase 8,775,328 6,058,371 338,876 40,212,621
_______________________________________________________________________________________
*Inception date was March 20, 1995.
_________________________________________________________________________________________
</TABLE>
8. Capital loss carryover
For federal income tax purposes, the Fund had a capital loss
carryover of $3,589,371 at Oct. 31, 1995, that will expire in 2002
and 2003 if not offset by subsequent capital gains. It is unlikely
the board of directors will authorize a distribution of any net
realized capital gains until the available capital loss carryover
has been offset or expires.
___________________________________________________________________
9. Financial highlights
"Financial highlights" showing per share data and selected
information is presented on pages 6 and 7 of the prospectus.
<PAGE>
PAGE 22
<TABLE>
<CAPTION>
Investments in securities
IDS Global Bond Fund (Percentages represent value of
Oct. 31, 1995 investments compared to net assets)
_____________________________________________________________________________________________________________________________
Bonds (84.2%)(b)
_____________________________________________________________________________________________________________________________
Issuer Coupon Maturity Principal Value(a)
rate year amount
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Argentina (2.6%)
Argentina Euro
(U.S. Dollar) 6.50 % 2005 $12,000,000 (c) $ 7,147,500
Argentina Republic
(U.S. Dollar) 4.25 2023 16,500,000 7,889,062
____________
Total 15,036,562
_____________________________________________________________________________________________________________________________
Austria (4.9%)
Asian Development Bank
(Japanese Yen) 5.00 2003 213,000,000 2,387,730
Autobahn Schnell
(Japanese Yen) 6.00 2000 397,000,000 4,565,500
IADB
(Japanese Yen) 6.00 2001 59,000,000 693,250
Intl Bank Reconstruction & Development
(Japanese Yen) 4.50 1997 1,440,000,000 15,235,200
Republic of Austria Euro
(Japanese Yen) 5.25 1998 540,000,000 5,810,400
______________
Total 28,692,080
_____________________________________________________________________________________________________________________________
Brazil (3.0%)
Brazil C Bonds
(U.S. Dollar) 4.00 2014 5,040,748 2,567,631
Brazil DCB Bonds
(U.S. Dollar) 6.875 2012 20,600,000 11,317,125
Brazil ZL Bonds
(U.S. Dollar) 4.00 2024 4,000,000 1,942,500
Brazil ZL Bonds
(U.S. Dollar) 5.187 2024 3,250,000 (c) 1,937,813
______________
Total 17,765,069
_____________________________________________________________________________________________________________________________
Canada (4.7%)
Government of Canada
(Canadian Dollar) 10.50 2001 31,000,000 26,473,317
Rogers Cable System
(Canadian Dollar) 9.65 2014 2,000,000 1,298,740
______________
Total 27,772,057
_____________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 23
China (1.6%)
Bank of China
(U.S. Dollar) 8.25 2014 5,000,000 4,847,950
Guang Dong Province Enterprises
(U.S. Dollar) 8.75 2003 5,000,000 (d) 4,667,550
_____________
Total 9,515,500
_____________________________________________________________________________________________________________________________
Colombia (0.7%)
Republic of Colombia
(U.S. Dollar) 7.25 2004 4,100,000 3,903,364
_____________________________________________________________________________________________________________________________
Denmark (5.0%)
Government of Denmark
(Danish Krone) 8.00 2003 113,200,000 21,185,380
9.00 2000 40,000,000 7,931,600
______________
Total 29,116,980
_____________________________________________________________________________________________________________________________
Finland (0.3%)
City of Helsinki
(U.S. Dollar) 7.90 2006 2,000,000 (d) 1,891,800
_____________________________________________________________________________________________________________________________
France (1.0%)
Government of France
(French Franc) 7.75 2005 28,100,000 5,941,183
_____________________________________________________________________________________________________________________________
Germany (13.6%)
Federal Republic of Germany
(Deutsche Mark) 6.00 2016 23,700,000 14,731,446
6.375 1998 12,200,000 9,020,192
7.50 2004 31,870,000 24,138,338
8.25 1997 6,000,000 4,535,880
8.75 2001 33,675,000 27,247,116
_______________
Total 79,672,972
_____________________________________________________________________________________________________________________________
Indonesia (1.2%)
Asian Pulp & Paper Intl Finance
(U.S. Dollar) 11.75 2005 2,500,000 2,556,250
Pt Indah Kiat Euro
(U.S. Dollar) 8.875 2000 2,500,000 2,314,625
Tjiwi Kimia
(U.S. Dollar) 13.25 2001 2,000,000 2,190,000
_______________
Total 7,060,875
_____________________________________________________________________________________________________________________________
Italy (5.0%)
Government of Italy
(Italian Lira) 8.50 1999 31,200,000,000 18,096,000
8.50 2004 11,450,000,000 5,954,000
Republic of Italy
(U.S. Dollar) 6.875 2023 6,000,000 5,543,820
__________
Total 29,593,820
______________________________________________________________________________________________________________________________
<PAGE>
PAGE 24
Japan (1.9%)
Euro Investment Bank
(Japanese Yen) 5.875 1999 380,000,000 4,347,200
Japan Development Bank
(Japanese Yen) 6.50 2001 550,000,000 6,600,000
____________
Total 10,947,200
_____________________________________________________________________________________________________________________________
Korea (1.1%)
Korea Electric Power
(U.S. Dollar) 7.75 2013 6,100,000 6,306,424
_____________________________________________________________________________________________________________________________
Mexico (2.2%)
BNCE
(U.S. Dollar) 7.25 2004 5,250,000 3,858,750
Mexican Cetes Treasury Bill
(Mexican Peso) Zero Coupon 42.29 1996 17,281,150 (e) 2,101,400
United Mexican States
(U.S. Dollar) 6.50 2019 6,000,000 3,532,500
8.50 2002 4,000,000 3,360,000
____________
Total 12,852,650
______________________________________________________________________________________________________________________________
New Zealand (1.7%)
Government of New Zealand
(New Zealand Dollar) 6.50 2000 15,685,000 10,095,531
_____________________________________________________________________________________________________________________________
Poland (1.2%)
Poland Discount
(U.S. Dollar) 6.812 2024 9,500,000 7,273,437
______________________________________________________________________________________________________________________________
Spain (2.9%)
Government of Spain
(Spanish Peseta) 7.40 1999 695,000,000 5,163,850
8.00 2004 1,755,000,000 12,091,950
____________
Total 17,255,800
_____________________________________________________________________________________________________________________________
South Africa (--%)
SAPI
(U.S. Dollar) 7.50 2002 175,000 (d) 178,281
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 25
United Kingdom (11.6%)
Abbey Natl
(U.S. Dollar) 8.20 2004 5,000,000 5,519,700
United Kingdom Treasury
(British Pound) 8.00 2003 18,650,000 29,856,039
8.50 2005 9,200,000 15,091,588
9.00 2000 10,700,000 17,922,179
_____________
Total 68,389,506
_____________________________________________________________________________________________________________________________
United States (18.0%)
AMR
(U.S. Dollar) 9.75 2021 500,000 582,490
10.00 2021 1,000,000 1,186,140
Chesapeake
(U.S. Dollar) 9.875 2003 1,000,000 1,178,810
Cleveland Electric Illuminating
(U.S. Dollar) 9.50 2005 3,000,000 3,115,800
Dayton Hudson
(U.S. Dollar) 8.50 2022 3,265,000 3,436,804
Fairchild Inds
(U.S. Dollar) Sr Sec Nts 12.25 1999 1,000,000 1,040,000
General Motors
(U.S. Dollar) 9.125 2001 2,000,000 2,253,500
Georgia-Pacific
(U.S. Dollar) Credit Sensitive Nts 9.85 1997 500,000 525,790
Government Natl Mtge Assn
(U.S. Dollar) 8.00 2024 4,843,953 4,992,323
Pacific Bell
(U.S. Dollar) 8.50 2031 5,000,000 5,369,200
PDV Amer
(U.S. Dollar) 7.875 2003 3,500,000 3,292,240
Phillips Pertoleum
(U.S. Dollar) 7.92 2023 3,115,000 3,221,658
Questar Pipeline
(U.S. Dollar) 9.375 2021 1,000,000 1,173,280
Reliance Inds
(U.S. Dollar) 8.125 2005 3,000,000 (d) 3,039,210
Resolution Funding Corp
(U.S. Dollar) Zero Coupon 7.50 2017 2,000,000 (e) 481,320
8.00 2016 3,259,000 (e) 839,812
Southern California Gas
(U.S. Dollar) 7.375 2023 900,000 917,487
Tele-Communications
(U.S. Dollar) 7.875 2013 3,000,000 2,964,180
Texas Utilities
(U.S. Dollar) 1st Mtge 9.75 2021 500,000 597,685
U.S. Treasury
(U.S. Dollar) 4.75 1998 14,535,000 14,184,706
7.25 2004 3,200,000 3,465,184
7.50 2016 19,300,000 21,734,888
7.625 2022 13,000,000 14,997,450
8.875 2019 8,595,000 (f) 11,113,163
____________
Total 105,703,120
_____________________________________________________________________________________________________________________________
Total bonds
(Cost: $480,966,928) $494,964,211
_____________________________________________________________________________________________________________________________
/TABLE
<PAGE>
PAGE 26
<TABLE>
<CAPTION>
_____________________________________________________________________________________________________________________________
Short-term securities (12.6%)
_____________________________________________________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable
date of at
purchase maturity
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agencies (1.3%)
Federal Home Loan Bank
Disc Note
11-16-95 5.64% $3,600,000 $ 3,591,570
Federal Home Loan Mtge Corp
Disc Notes
11-20-95 5.63 1,900,000 1,894,385
11-20-95 5.64 1,500,000 1,495,559
Federal Natl Mtge Assn
Disc Note
11-13-95 5.64 800,000 798,501
_____________
Total 7,780,015
_____________________________________________________________________________________________________________________________
Commercial paper (11.3%)
Alabama Power
12-12-95 5.74 3,700,000 3,675,981
CPC Intl
11-08-95 5.77 5,500,000 (g) 5,493,861
Dean Witter, Discover & Co.
11-22-95 5.76 3,500,000 3,488,301
Deutsche Bank Financial
11-09-95 5.75 5,100,000 5,093,517
Mobil Australia
Finance
11-09-95 5.75 4,500,000 (g) 4,494,280
PACCAR Financial
11-20-95 5.75 3,500,000 3,489,434
11-28-95 5.75 1,200,000 1,194,852
11-29-95 5.75 4,900,000 4,878,201
PepsiCo
11-10-95 5.79 3,000,000 (g) 2,995,688
Pioneer Hi-Bred Intl
12-07-95 5.75 600,000 596,568
SAFECO Credit
11-28-95 5.75 2,900,000 2,887,559
St. Paul Companies
11-08-95 5.78 5,100,000 (g) 5,094,298
Sandoz
11-21-95 5.76 1,000,000 996,822
Sara Lee
11-06-95 5.84 1,400,000 1,398,872
Siemens
11-16-95 5.74 900,000 897,859
11-17-95 5.75 4,800,000 4,787,797
11-17-95 5.76 3,800,000 3,790,340
Sysco
12-04-95 5.75 2,400,000 (g) 2,387,438
Toyato Motor Credit
11-13-95 5.75 4,900,000 4,890,657
SL Capital
11-16-95 5.76 3,700,000 3,691,166
____________
Total 66,223,491
_____________________________________________________________________________________________________________________________
Total short-term securities
(Cost: $74,003,506) $ 74,003,506
_____________________________________________________________________________________________________________________________
Total investments in securities
(Cost: $554,970,434)(h) $568,967,717
_____________________________________________________________________________________________________________________________
<PAGE>
PAGE 27
Notes to investments in securities
_____________________________________________________________________________________________________________________________
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Foreign security values are stated in U.S. dollars. For debt securities, principal amounts are denominated
in the currency indicated.
(c) Interest rate varies, rate shown is the effective rate on Oct. 31, 1995.
(d) Represents a security sold under Rule 144A, which is exempt from registration under the Securities
Act of 1933, as amended. This security has been determined to be liquid under guidelines established
by the board of directors.
(e) For zero coupon bonds, the interest rate disclosed represents the annualized effective yield on
the date of acquisition.
(f) Partially pledged as initial deposit on the following open interest rate futures purchase contracts
(see Note 4 to the financial statements):
Type of Security Notional
amount
____________________________________________________________________________________
Italian Lira Currency futures 10,000,000
(g) 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.
(h) At Oct. 31, 1995, the cost of securities for federal income tax purposes was $555,096,142
and the aggregate gross unrealized appreciation and depreciation based on that
cost was:
Unrealized appreciation $ 22,055,968
Unrealized depreciation (8,184,393)
_____________________________________________________________________________
Net unrealized appreciation $ 13,871,575
_____________________________________________________________________________
</TABLE>
<PAGE>
PAGE 28
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>
PAGE 29
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
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
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
<PAGE>
PAGE 30
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 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 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 apple 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 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 Equity Value Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) three growing flowers
<PAGE>
PAGE 31
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.
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 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
<PAGE>
PAGE 32
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.
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 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.
<PAGE>
PAGE 33
Federal income tax information
IDS Global Bond Fund
___________________________________________________________________
The Fund is required by the Internal Revenue Code of 1986 to tell
its shareholders about the tax treatment of the dividends it pays
during its fiscal year. Some of the dividends listed below were
reported to you on a Form 1099-DIV, Dividends and Distributions,
last January. Dividends paid to you since the end of last year will
be reported to you on a tax statement sent next January.
Shareholders should consult a tax advisor on how to report
distributions for state and local purposes.
IDS Global Bond Fund
Fiscal year ended Oct. 31, 1995
Class A
Income distributions
taxable as dividend income,
.04% qualifying for deduction by corporations.
Payable date Per share
Dec. 29, 1994 $0.09926
March 29, 1995 0.07149
June 27, 1995 0.10191
Sept. 27, 1995 0.13334
Total distributions $0.40600
The distribution of $0.09926 per share, payable Dec. 29, 1994,
consisted of $0.07926 derived from net investment income, $0.0200
from net short-term capital gains (a total of $0.09926 taxable as
dividend income).
Class B
Income distributions
taxable as dividend income,
.04% qualifying for deduction by corporations.
Payable date Per share
March 29, 1995 $0.07094
June 27, 1995 0.09096
Sept. 27, 1995 0.12185
Total distributions $0.28375
<PAGE>
PAGE 34
Class Y
Income distributions
taxable as dividend income,
.04% qualifying for deduction by corporations.
Payable date Per share
March 29, 1995 $0.07174
June 27, 1995 0.10455
Sept. 27, 1995 0.13602
Total distributions $0.31231
<PAGE>
PAGE 35
Quick telephone reference
American Express Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express Infoline
Automated account information (TouchToneR phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
AMERICAN
EXPRESS
FINANCIAL
ADVISORS
IDS Global Bond Fund
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
PAGE 36
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.
