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1996 Annual Report
IDS Global Bond Fund
(prospectus enclosed)
(Icon of) a globe
The goal of IDS Global Bond Fund, a part of IDS Global Series,
Inc., is a high total return through income and growth of capital.
The Fund invests in a Portfolio comprised primarily of debt
securities of U.S. and foreign issuers.
(This annual report includes a prospectus that describes in detail
the Fund's objective, investment policies, risks, sales charges,
fees and other matters of interest. Please read the prospectus
carefully before you invest or send money.)
American Express Financial Advisors
Distributed by American Express Financial Advisors
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(Icon of) a globe
A bounty of bonds
In today's global economy, investment opportunities don't stop at
the water's edge. While bonds issued by the U.S. government and
corporations once made up almost all of the bond market, today more
than half of the world's debt securities are issued from outside
the United States. This means expanded opportunity for investors.
Global Bond Fund's aim is to take advantage of opportunities in
bond markets at any time and in any place, providing investors with
greater portfolio diversification.
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Contents
(Icon of) One open book inside of another.
The purpose of this annual report is to tell investors how the Fund
performed.
The prospectus, which is bound into the middle of this annual
report, describes the Fund in detail.
1996 annual report
From the president 4
From the portfolio manager 4
Ten largest holdings 6
Making the most of your Fund 7
Long-term performance 8
Independent auditors' report (Fund) 9
Financial statements (Fund) 10
Notes to financial statements (Fund) 13
Independent auditors' report (Portfolio) 19
Financial statements (Portfolio) 20
Notes to financial statements (Portfolio) 23
Investments in securities 28
IDS mutual funds 34
Federal income tax information 38
1996 prospectus
The Fund in brief 3p
Goal 3p
Investment policies and risks 3p
Structure of the Fund 4p
Manager and distributor 4p
Portfolio manager 4p
Alternative purchase arrangements 4p
Sales charge and Fund expenses 5p
Performance 8p
Financial highlights 8p
Total returns 10p
Yield 12p
Investment Policies and Risks 13p
Facts about investements and their risks 13p
Valuing Fund shares 20p
How to purchase, exchange or redeem shares 21p
Alternative purchase arrangements 21p
How to purchase shares 24p
How to exchange shares 26p
How to redeem shares 26p
Reductions and waivers of the sales charge 32p
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Special shareholder services 37p
Services 37p
Quick telephone reference 37p
Distributions and taxes 38p
Dividend and capital gain distributions 38p
Reinvestments 39p
Taxes 39p
How to determine the correct TIN 42p
How the Fund and Portfolio are organized 43p
Shares 43p
Voting rights 43p
Shareholder meeting 43p
Special considerations regarding master/feeder structure 44p
Board members and officers 45p
Investment manager 47p
Administrator and transfer agent 47p
Distributor 48p
About American Express Financial Corporation 50p
General information 50p
Appendices 51p
Description of corporate bond ratings 51p
Descriptions of derivative instruments 53p
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(Picture of) William R. Pearce
President of the Fund
(Picture of) Ray Goodner
Portfolio manager
To our shareholders
From the president
If you're an experienced investor, you know that the past two years
have been unusually strong ones in many world wide financial
markets. Perhaps just as important, you also know that history
shows that bull markets don't last forever. Though they're often
unpredictable, declines--whether they're brief or long-lasting,
moderate or substantial--are always a possibility.
That fact reinforces the need for investors to periodically review
their long-term goals and examine whether their investment program
remains on track to achieving them. Your quarterly investment
statements are one part of that monitoring process. The other is a
meeting with your American Express financial advisor. That becomes
even more important if there's a major change in your financial
situation or in the financial markets.
On May 13, 1996, the Fund began investing its assets in Equity
Income Portfolio instead of directly in Securities of Individual
Companies. Following the Portfolio Manager's letter are the
financial statements of both the Fund and Portfolio. The notes to
the financial and prospectus go into more detail of how the new
structure works.
William R. Pearce
President of the Fund
From the portfolio manager
Despite a sharp downturn in worldwide bond markets early in 1996,
IDS Global Bond Fund recorded a clearly positive performance in the
past fiscal year. For the 12 months (November 1995 through October
1996), Class A shareholders realized a total return of 8.9%.
A largely favorable bond environment, characterized by generally
declining long-term interest rates, dominated the first three
months of the fiscal period. As rates fell in many global markets,
they boosted the value of existing bonds and, therefore, the Fund's
net asset value. The rate trend was especially beneficial to our
portfolio because of its longer-than-average maturity level, which
makes a portfolio more price-sensitive to swings in interest rates.
Inflation scare prompts sell-off
By February, though, the investment environment had changed,
particularly in the U.S. Amid signs of a possible pick-up in
economic growth and resultant concern about a rise in the inflation
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PAGE 6
rate, long-term interest rates began heading higher and, in the
process, sending bond prices lower. In sympathy with the U.S., the
bond markets in Japan, the United Kingdom and Germany also
performed poorly, all of which negatively affected the Fund's
results. In the spring, the U.S. market stabilized, then
essentially marked time until fall, when it rebounded sharply.
While the Fund enjoyed the good gains from a number of major
markets, the standout performers were the so-called "emerging"
markets, especially those in Latin America, including Brazil,
Argentina, Mexico and Venezuela. Although emerging markets
comprised only about 10-15% of the portfolio (I increased the
percentage as the fiscal year progressed), their strong gains
provided a substantial boost to the Fund's performance. Other
notable winners included the high-yield markets of Italy, Spain and
Sweden, which experienced rising bond prices and stronger
currencies during the period.
Protective measures
As for the other portfolio changes, they included a reduciton in
exposure to the U.S. (from about 40% of assets to under 30%) and
Japanese markets. Last spring, I also raised the level of cash
reserves and reduced the average maturity of U.S. holdings to
protect the Fund against the negative effect of a potentially
ongoing rise in U.S. interest rates. Late in the period, when the
threat of a rate rise lessened, I brought the cash level down.
In this new fiscal year that began in November, I think the best
opportunities for gain lie in the emerging markets and Europe.
Therefore, I'm maintaining substantial exposure to those regions.
I also expect the Japanese yen to appreciate against the dollar, so
I plan to increase investment in that market.
Ray Goodner
Portfolio manager
Class A
12-month perfomance
(All figures per share)
Net asset value (NAV)
__________________________
Oct. 31, 1996 $6.28
__________________________
Oct. 31, 1995 $6.11
__________________________
Increase $0.17
__________________________
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Distributions
Nov. 1, 1995-Oct. 31, 1996
__________________________
From income $0.36
__________________________
From capital gains $ --
__________________________
Total distributions $0.36
__________________________
Total return* +8.9%**
__________________________
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
__________________________
Oct. 31, 1996 $6.28
__________________________
Oct. 31, 1995 $6.11
__________________________
Increase $0.17
__________________________
Distributions
Nov. 1, 1995-Oct. 31, 1996
__________________________
From income $0.31
__________________________
From capital gains $ --
__________________________
Total distributions $0.31
__________________________
Total return +8.1%**
__________________________
*The prospectus discusses the effect of sales charges, if any, on
the various classes.
**The total return is a hypothetical investment in the Fund with
all distributions reinvested.
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<TABLE><CAPTION>
World Income Portfolio
The Portfolio's ten largest holdings
The ten holdings listed here make up 38.41% of the Portfolio's net assets
Percent Value
(of Portfolio's net assets) (as of Oct. 31, 1996)
<S> <C> <C>
Govt of Italy 6.26% $52,260,544
8.50% Bond 1999-2004
Federal Republic of Germany 5.51 46,006,647
8% 2002
Govt of Sweden 4.92 41,031,719
8% Bond 2007
U.S. Treasury 3.70 30,919,880
7.25% Bond 2004
United Kingdom Treasury 3.68 30,713,993
8% Bond 2003
U.S. Treasury 3.03 25,283,995
7.50% Bond 2016
Govt of Canada 3.01 25,109,956
10.50% Bond 2001
BNCE 2.82 23,550,796
7.25% Bond 2004
Federal Republic of Germany 2.78 23,201,133
7.50% Bond 2004
Federal Republic of Germany 2.70 22,509,139
6% Bond 2016
Note: Certain foreign investment risks include: changes in currency exchange rates, adverse political
or economic order, and lack of similar regulatory requirements followed by U.S. companies.
/TABLE
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Class A
12-month performance
(All figures per share)
Net asset value (NAV)
____________________________
Oct. 31, 1996 $ 6.28
____________________________
Oct. 31, 1995 $ 6.11
____________________________
Increase $ 0.17
____________________________
Distributions
Nov. 1, 1995 - Oct. 31, 1996
____________________________
From income $ 0.36
____________________________
From capital gains $ --
____________________________
Total distributions $ 0.36
____________________________
Total return* +8.9%**
____________________________
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
____________________________
Oct. 31, 1996 $ 6.28
____________________________
Oct. 31, 1995 $ 6.11
____________________________
Increase $ 0.17
____________________________
Distributions
Nov. 1, 1995 - Oct. 31, 1996
____________________________
From income $ 0.31
____________________________
From capital gains $ --
____________________________
Total distributions $ 0.31
____________________________
Total return* +8.1%**
____________________________
*The prospectus discusses the
effect of sales charges, if any,
on the various classes.
**The total return is a hypothetical
investment in the Fund with all
distributions reinvested.
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PAGE 10
Making the most of the Fund
Average annual total return
(as of Oct. 31, 1996)
__________________________________________________________________
1 year 5 years Since Inception
Class A* +3.50% +9.00% +10.09%
Class B** +4.14% --% +9.75%
Class Y** +9.20% --% +13.24%
*Inception date was March 20, 1989.
**Inception date was March 20, 1995.
The performance of Class B and Class Y will vary from the
performance of Class A based on differences in sales charges and
fees.
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
Figures for Class A reflect the effect of the maximum 5% sales
charge and figures for Class B reflect the applicable contingent
deferred sales charge. This was a period of widely fluctuating
secuity prices. Past performance is no guarantee of future
results.
Build your assets systematically
One of the best ways to invest in the Fund is by dollar-cost
averaging--a time-tested strategy that can make market fluctuations
work for you. To dollar-cost average, simply invest a fixed amount
of money regularly. You'll automatically buy more shares when the
Fund's share price is low, fewer shares when it is high.
This does not ensure a profit or avoid a loss if the market
declines. But, if you can continue to invest regularly through
changing market conditions, it can be an effective way to
accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
___________________________________________________________________
Jan $100 $20 5.00
Feb 100 18 5.56
March 100 17 5.88
April 100 15 6.67
May 100 16 6.25
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
Sept 100 21 4.76
Oct 100 20 5.00
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By investing an equal number of dollars each month you
automatically buy more shares when the per share market price is
low and fewer shares when the per share market price is high.
You have paid an average price of only $17.91 per share over the
ten months, while the average market price actually was $18.10.
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The Fund's long-term perfomance
Three ways to benefit from a mutual fund:
o your shares increase in value when the Fund's investments do well
o you receive capital gains when the gains on investments sold by
the Fund exceed losses
o you receive income when the Fund's stock dividends, interest and
short-term gains exceed its expenses.
All three make up your total return. And you potentially can
increase your investment if, like most investors, you reinvest your
dividends and capital gain distributions to buy additional shares
of the Fund or another fund.
How your $10,000 has grown in IDS Global Bond Fund
(graph illustrating the growth of $10,000 in the Fund)
Assumes:
o Holding period from 4/1/89 to 10/31/96
o Returns do not reflect taxes payable on distributions
o Reinvestment of all income and capital gain distributions for
the Fund, with a value of $8,862. Also see "Performance" in the
Fund's current prospectus.
Saloman Brothers Global Government Bond Composite Index, an
unmanaged index, is a representative list of government bonds of 17
countries throughout the world. The index is a general measure of
government bond performance. Performance is expressed in the U.S.
dollar as well as the currencies of governments making up the
index. The bonds included in the index may not be in Global Bond
Fund.
Lipper Global Income Fund Index, an unmanaged index published by
Lipper Analytical Services, Inc., includes 30 funds that are
generally similar to the Fund, although some funds in the index may
have somewhat different investment policies or objectives.
Average annual total return
(as of Oct. 31, 1996)
__________________________________________________________________
1 year 5 years Since Inception
Class A* +3.50% +9.00% +10.09%
Class B** +4.14% --% +9.75%
Class Y** +9.20% --% +13.24%
__________________________________________________________________
*Inception date was March 20, 1989.
**Inception date was March 20, 1995.
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On the graph above you can see how the Fund's total return compared
to two widely cited performance indexes, Salomon Brothers Global
Government Bond Composite Index and the Lipper Global Income Fund
Index. In comparing Global Bond Fund to the two idexes, you should
take account of the fact that the Fund's perfomance reflects the
maximum sales charge of 5%, while no such charges are reflected in
the performance of the index. If you were actually to buy either
individual bonds or bond mutual funds, any sales charges that you
pay would reduce your total return as well.
Your investment and return values fluctuate so that your shares,
when redeemed, may be worth more or less than the original cost.
This was a period of widely fluctuating security prices. Past
performance is no guarantee of future results.
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IDS mutual funds
Global/International funds
Funds in this group seek capital growth and/or income by investing
primarily in foreign securities. Foreign investments may be
subject to currency fluctuations and political and economic risks
of the countries in which the investments are made. They are high
risk mutual funds with a potential for high reward.
IDS Emerging Markets Fund
Invests in a Portfolio comprised primarily of stocks of companies
in developing countries throughout the world that are believed to
offer growth potential. Seeks to provide long-term growth of
capital.
(icon of) world with countries
IDS Global Growth Fund
Invests in a Portfolio comprised primarily of stocks of companies
throughout the world that are positioned to meet market needs in a
changing world economy. These companies offer above-average
potential for long-term growth.
(icon of) world
IDS International Fund
Invests primarily in common stocks of foreign companies that offer
potential for superior growth. The Fund may invest up to 20% of
its assets in the U.S. market.
(icon of) three flags
IDS Global Balanced Fund
Invests in stocks and bonds in, for the most part, major markets
throughout the world, including the U.S. Seeks to provide a
balance of growth of capital and current income.
(icon of) scale holding two worlds
IDS Global Bond Fund
Invests in a Portfolio comprised primarily of debt securities of
U.S. and foreign issuers to seek high total return through income
and growth of capital.
(icon of) globe
Growth funds
Funds in this group seek capital growth, primarily from common
stocks. They are high risk mutual funds with a potential for high
reward.<PAGE>
PAGE 15
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic
companies that explore for, mine and process or distribute gold and
other precious metals. A highly aggressive and speculative fund
that seeks long-term growth of capital.
(icon of) cart of precious gems
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies
emphasizing technological innovation and productivity enhancement.
Buys and holds larger growth-oriented stocks.
(icon of) ship
IDS Small Company Index Fund
Invests in all or a representative group of the equity securities
comprising the S&P SmallCap 600 Index, as it strives to provide
long-term capital appreciation.
(icon of) office building
IDS Strategy Aggressive Fund
Invests primarily in common stocks of companies that are selected
for their potential for above-average growth. Above-average means
that their growth potential is better, in the opinion of the
portfolio's investment manager, than the Standard & Poor's
Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS Research Opportunities Fund
Invests in a Portfolio comprised primarily of equity securities of
companies included in the S&P 500 Index that are believed to have
strong growth potential. The Portfolio is managed using a research
methodology by the Research Department of AEFC. Goal is long-term
appreciation.
(icon of) magnifying glass
IDS Growth Fund
Invests in a Portfolio comprised primarily of companies that have
above-average potential for long-term growth as a result of new
management, marketing opportunities or technological superiority.
(icon of) trees
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IDS New Dimensions Fund
Invests in a Portfolio comprised primarily of companies with
significant growth potential due to superiority in technology,
marketing or management. The Fund frequently changes its industry
mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The Fund holds
stocks for the long term with the goal of capital growth.
(icon of) shooting star
Growth & income funds
These funds focus on securities of medium to large, well-
established companies that offer long-term growth of capital and
reasonable income from dividends and interest.
IDS Equity Select Fund
Invests primarily in a combination of moderate growth stocks,
higher-yielding equities and bonds. Seeks growth of capital and
income.
(icon of) three pine trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities
purchased are those recommended by our research analysts as the
best from each industry represented on the index. Offers potential
for long-term growth as well as dividend income.
(icon of) ribbon
IDS Managed Allocation Fund
Invests in a Portfolio comprised primarily of U.S. equity
securities, U.S. and foreign debt securities, foreign equity
securities and money market instruments. The Fund provides
diversification among these major investment categories and has a
target mix that represents the way the Fund's investments will be
allocated over the long term. Seeks maximum total return.
(icon of) gyroscope
IDS Stock Fund
Invests in a Portfolio comprised primarily of common stock of
companies representing many sectors of the economy. Seeks current
income and growth of capital.
(icon of) building with columns<PAGE>
PAGE 17
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential
for growth of capital and income.
(icon of) three growing flowers
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek
high current income and growth of income and capital with reduced
volatility.
(icon of) light bulb
IDS Diversified Equity Income Fund
Invests in a Portfolio comprised primarily of high-yielding common
stocks to seek high current income and, secondarily, to benefit
from the growth potential offered by stock investments.
(icon of) two puzzle pieces
IDS Mutual
Invests in a Portfolio which seeks to balance between common stocks
and senior securities (preferred stocks and bonds). Seeks a
balance of growth of capital and current income.
(icon of) scale of justice
Income funds
The funds in this group invest their assets primarily in corporate
bonds or government securities to seek interest income. Secondary
objective is capital growth. Risk varies by bond quality.
IDS Extra Income Fund
Invests in a Portfolio comprised mainly of long-term, high-yielding
corporate fixed-income securities in the lower rated, higher risk
bond categories to seek high current income. Secondary objective
is capital growth.
(icon of) coins
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher
rated, lower risk bond categories, or the equivalent, and in
government bonds.
(icon of) greek column
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IDS Selective Fund
Invests in a Portfolio comprised primarily of high-quality
corporate bonds and other highly rated debt instruments including
government securities and short-term investments. Seeks current
income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests in a Portfolio comprised primarily of securities issued or
guaranteed as to the timely payment of principal and interest by
the U.S. government, its agencies and instrumentalities. Seeks a
high level of current income and safety of principal consistent
with its type of investments.
(icon of) shield with eagle head enclosed
Tax-exempt income funds
These funds provide tax-free income by investing in municipal
bonds. The income is generally free from federal income tax, but a
portion of the income may be subject to state and local taxes.
Risk varies by bond quality.
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government
units, with at least 75% in the four highest rated, lowest risk
bond categories.
(icon of) shield with Greek column enclosed
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to
the timely payment of principal and interest. The insurance
feature minimizes credit risk of the Fund but does not guarantee
the market value of the Fund's shares.
(icon of) shield with star enclosed
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities to
provide income to residents of each respective state that is exempt
from federal, state and local income taxes. (New York is the only
state that is exempt at the local level.)
(icon of) shield with U.S. enclosed
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IDS High Yield Tax-Exempt Fund
Invests in a Portfolio comprised primarily of medium- and lower-
quality municipal bonds and notes. Lower-quality securities
generally involve greater risk of principal and income.
(icon of) shield with basket of apples enclosed
IDS Intermediate Tax-Exempt Fund
Invests in mainly investment-grade bonds and other debt securities
with intermediate-term maturities issued by state and local
government units. Goal is to seek a high level of current income
exempt from federal taxes.
(icon of) shield with a tree enclosed
Money market funds
These money market funds have three main goals: conservation of
capital, constant liquidity and the highest possible current income
consistent with these objectives. An investment in these funds is
neither insured nor guaranteed by the U.S. government, and there
can be no assurance that these funds will be able to maintain a
stable net asset value of $1.00 per share. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial
paper, bankers' acceptances, certificates of deposit (CDs) and
other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and
local governments to seek high current income exempt from federal
income taxes.
(icon of) shield with piggy bank enclosed
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PAGE 20
Federal income tax information
IDS Global Bond Fund
The Fund is required by the Internal Revenue Code of 1986 to tell
its shareholders about the tax treatment of the dividends it pays
during its fiscal year. Some of the dividends listed below were
reported to you on a Form 1099-DIV, Dividends and Distributions,
last January. Dividend paid to you since the end of last year will
be reported to you on a tax statement sent next January.
Shareholders should consult a tax advisor on how to report
distributions for state and local purposes.
IDS Global Bond Fund
Fiscal year ended Oct. 31, 1996
Class A
Income distribution
taxable as dividend income,
none qualifying for deduction by corporations.
Payable date Per share
Dec. 28, 1995 $0.11661
March 28, 1996 0.07973
June 27, 1996 0.07973
Sept. 26, 1996 0.08459
Total distributions $0.36066
Class B
Income distribution
taxable as dividend income,
none qualifying for deduction by corporations.
Payable date Per share
Dec. 28, 1995 $0.10499
March 28, 1996 0.06813
June 27, 1996 0.06838
Sept. 26, 1996 0.07306
Total distributions $0.31456
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PAGE 21
Quick telephone reference
American Express Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express Infoline
Automated account information (TouchToneR phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
AMERICAN
EXPRESS
Financial
Advisors
IDS Mutual
IDS Tower 10
Minneapolis, MN 55440-0010
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PAGE 22
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report are
placed in a blue strip
at the top of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
