<PAGE>
1997 SEMIANNUAL REPORT
IDS
Global
Balanced Fund
(icon of) scale of globes
The goal of IDS Global Balanced Fund, a part of IDS Global Series, Inc., is
to provide a balance of growth of capital and current income.
Distributed by American Express Financial Advisors Inc., Member SIPC
<PAGE>
(icon of) scale of globes
An international blend
IDS Global Balanced Fund offers a logical first step for investors who want to
have some exposure to foreign markets, but also want to avoid the greater
volatility of a portfolio consisting of only foreign stocks.
Contents
From the president 3
From the portfolio managers 3
The Fund's ten largest holdings 5
Financial statements 6
Notes to financial statements 9
Investments in securities 20
Board members and officers 27
IDS mutual funds 28
<PAGE>
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 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.
William R. Pearce
(picture of) William Pearce
William R. Pearce
President of the Fund
From the portfolio managers
It was a mixed environment for global investors during the past six
months. IDS Global Balanced Fund's performance in its initial reporting
period -- November 13, 1996, through April 30, 1997 -- reflected the
conditions as it registered a total return of (0.7%) for Class A shares.
As might be expected, much of the first few months of the period was spent
investing incoming assets. By February, most of the money had been
invested in stocks (60%) and bonds (31%), with the rest remaining in
cash-equivalent holdings. Ultimately, we expect to have an ongoing mix of
about 65% stocks and 35% bonds. On a country basis, the largest exposure
was to the U.S., followed by the United Kingdom, Japan, France and Italy.
At period-end the Fund held 58.8% common stocks and 25.3% bonds.
Ups and downs in the U.S.
Looking at country performance, the U.S. stock market, supported by good
economic growth, healthy corporate profits and mild inflation, moved up
smartly through the winter. But by early March, an increase in long-term
interest rates started taking a toll that ended in nearly a 10% decline
four weeks later. The U.S. bond market also got off to a good start, but
by early December, it too was in a retreat that, aside from an upturn in
February, lasted nearly through the end of the period.
Overseas, Europe enjoyed generally good securities performance, but its
returns to U.S.-based investors were hurt by declines in local currencies,
particularly the German mark. Returns from Japan suffered from a weak
currency as well. To mitigate that trend, we "hedged" some of the
currencies -- a strategy that reduces the effect of currency value
fluctuations on Fund performance.
Small markets strong
The strongest markets overall were the so-called "emerging" markets in
less-developed parts of the world, such as Southeast Asia and Latin
America. The latter group, which includes Mexico, Argentina and Brazil,
was particularly strong. Although we had only a small exposure to these
markets, their sharp stock and bond gains did enhance Fund performance.
As for the rest of 1997, we think the worldwide investment outlook is
largely favorable. Perhaps the most positive factor is low, or at least
declining, inflation in most countries. Beyond that, Europe, while it's
still experiencing a weak economy, has begun to undergo corporate
restructuring -- a trend that has been a boon to stock values of U.S.
companies in recent years. Among the emerging markets, Latin America
continues to enjoy advancing securities prices. And in the U.S., while the
possibility of higher interest rates may keep stocks and bonds off balance
at times, the underpinnings for potential longer-term gains remain in
place.
William Westhoff
(picture of) William Westhoff
William Westhoff
Portfolio manager
Ray Goodner
(picture of) Ray Goodner
Ray Goodner
Portfolio manager
<PAGE>
Class A
Nov. 13, 1996* - April 30, 1997
(All figures per share)
Net asset value (NAV)
April 30, 1997 $ 4.93
Nov. 13, 1996* $ 5.00
Decrease $ 0.07
Distributions
Nov. 13, 1996* - April 30, 1997
From income $ 0.03
From capital gains $ --
Total distributions$ 0.03
Total return** -0.7%
Class B
Nov. 13, 1996* - April 30, 1997
(All figures per share)
Net asset value (NAV)
April 30, 1997 $ 4.92
Nov. 13, 1996* $ 5.00
Decrease $ 0.08
Distributions
Nov. 13, 1996* - April 30, 1997
From income $ 0.02
From capital gains $ --
Total distributions$ 0.02
Total return** -1.1%
Class Y
Nov. 13, 1996* - April 30, 1997
(All figures per share)
Net asset value (NAV)
April 30, 1997 $ 4.93
Nov. 13, 1996* $ 5.00
Decrease $ 0.07
Distributions
Nov. 13, 1996* - April 30, 1997
From income $ 0.03
From capital gains $ --
Total distributions$ 0.03
Total return** -0.7%
*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.
<PAGE>
The Fund's ten largest holdings
Percent Value
(of Fund's net assets) (as of April 30, 1997)
U.S. Treasury 5.69% $1,307,361
7.50% 2001-2016
U.S. Treasury 4.69 1,077,857
5.00% 1999
Banque Nationale de Paris (France) 1.71 392,496
SGL Carbon (Germany) 1.60 368,266
Adidas (Germany) 1.53 351,877
United Overseas Bank (Singapore) 1.47 338,238
U.K. Treasury (United Kingdom) 1.46 335,867
8.00% 2003
Philips Electronics (Netherlands) 1.46 335,179
Credito Italiano (Italy) 1.39 320,995
Govt of Canada (Canada) 1.37 314,656
8.00% 2023
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.
(icon of) pie chart
The ten holdings listed here make up 22.37% of the Fund's net assets
<PAGE>
<TABLE>
Financial statements
Statement of assets and liabilities
IDS Global Balanced Fund
April 30, 1997
<CAPTION>
Assets
(Unaudited)
Investments in securities, at value (Note 1)
<S> <C>
(identified cost $22,922,037) $22,947,890
Cash in bank on demand deposit 333,463
Dividends and accrued interest receivable 173,180
Receivable for investment securities sold 156,542
Unrealized appreciation on foreign currency contracts held, at value (Notes 1 and 5) 15
Organizational cost 44
--
Total assets 23,611,134
----------
Liabilities
Payable for investment securities purchased 529,985
Unrealized depreciation on foreign currency contracts held, at value (Notes 1 and 5) 992
Accrued investment management services fee 485
Accrued distribution fee 171
Accrued service fee 107
Accrued transfer agency fee 100
Accrued administrative services fee 37
Other accrued expenses 93,438
------
Total liabilities 625,315
-------
Net assets applicable to outstanding capital stock $22,985,819
Represented by
Capital stock-- $.01 par value (Note 1) $ 46,634
Additional paid-in capital 22,984,440
Undistributed net investment income 14,357
Accumulated net realized loss (82,468)
Unrealized appreciation of investments and on translation
of assets and liabilties in foreign currencies (Note 1) 22,856
------
Total-- representing net assets applicable to outstanding capital stock $22,985,819
===========
Net assets applicable to outstanding shares: Class A $14,469,672
Class B $ 8,515,156
Class Y $ 991
Net asset value per share of outstanding capital stock: Class A shares 2,933,745 $ 4.93
Class B shares 1,729,438 $ 4.92
Class Y shares 201 $ 4.93
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of operations
IDS Global Balanced Fund
For the period from Nov. 13, 1996
(commencement of operations) to April 30, 1997
Investment income
<CAPTION>
(Unaudited)
Income:
<S> <C>
Dividends (net of foreign taxes withheld of $6,928) $ 49,491
Interest (net of foreign taxes withheld of $468) 146,953
-------
Total income 196,444
-------
Expenses (Note 2):
Investment management services fee 41,436
Distribution fee -- Class B 14,095
Transfer agency fee 12,901
Incremental transfer agency fee-- Class B 327
Service fee
Class A 5,888
Class B 3,289
Administrative services fees and expenses 3,147
Compensation of board members 2,763
Compensation of officers 75
Custodian fees 75,548
Postage 7,745
Registration fees 71,247
Reports to shareholders 3,521
Audit fees 5,141
Other 1,063
-----
Total expenses 248,186
Less expenses voluntarily reimbursed by AEFC (Note 2) (153,571)
--------
94,615
Earnings credits on cash balances (Note 2) (1,259)
------
Total net expenses 93,356
------
Investment income-- net 103,088
-------
Realized and unrealized gain (loss) -- net
Net realized loss on security and foreign currency transactions
(including loss of $2,146 from foreign currency transactions) (Note 3) (82,468)
Net change in unrealized appreciation or depreciation of investments and on
translation of assets and liabilities in foreign currencies 22,856
------
Net loss on investments and foreign currencies (59,612)
-------
Net increase in net assets resulting from operations $ 43,476
========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Financial statements
Statement of changes in net assets
IDS Global Balanced Fund
For the period from Nov. 13, 1996
(commencement of operations) to April 30, 1997
Operations and distributions
<CAPTION>
(Unaudited)
<S> <C>
Investment income-- net $ 103,088
Net realized loss on investments and foreign currencies (82,468)
Net change in unrealized appreciation or depreciation of investments
and on translation of assets and liabilities in foreign currencies 22,856
------
Net increase in net assets resulting from operations 43,476
------
Distributions to shareholders from:
Net investment income
Class A (62,421)
Class B (26,303)
Class Y (7)
--
Total distributions (88,731)
-------
Capital share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 14,849,149
Class B shares 8,759,290
Reinvestment of distributions at net asset value
Class A shares 60,489
Class B shares 26,200
Class Y shares 7
Payments for redemptions
Class A shares (411,950)
Class B shares (Note 2) (255,111)
--------
Increase in net assets from capital share transactions 23,028,074
----------
Total increase in net assets 22,982,819
Net assets at beginning of period (Note 1) 3,000
-----
Net assets at end of period (including undistributed
net investment income of $14,357) $22,985,819
===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
IDS Global Balanced Fund
(Unaudited as to April 30, 1997)
1. Summary of significant accounting policies
IDS Global Balanced Fund (a series of IDS Global Series, Inc.) 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 that can be allocated among the separate
series as designated by the board. On Nov. 12, 1996, American Express Financial
Corporation (AEFC) invested $3,000 in the Fund which represented 200 shares for
Class A, Class B and Class Y. Operations commenced on Nov. 13, 1996.
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 may be subject to a contingent
deferred sales charge and such shares automatically convert to Class A after
eight years. Class Y shares have no sales charge and are offered only to
qualifying institutional investors.
All classes of shares have identical voting, dividend, liquidation and other
rights, and 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:
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increase and decrease in net assets from operations
during the period. Actual results could differ from those estimates.
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. 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 or sell put and call options and write
covered call options on portfolio securities and may write cash-secured put
options. The risk in writing a call option is that the Fund gives up the
opportunity of profit if the market price of the security increases. The risk in
writing a put option is that the Fund may incur a loss if the market price of
the security decreases and the option is exercised. The risk in buying an option
is that the Fund pays a premium whether or not the option is exercised. The Fund
also has the additional risk of not being able to enter into a closing
transaction if a liquid secondary market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Fund will
realize a gain or loss upon expiration or closing of the option transaction.
When an option is exercised, the proceeds on sales for a written call option,
the purchase cost for a written put option or the cost of a security for a
purchased put or call option is adjusted by the amount of premium received or
paid.
Futures transactions
In order to gain exposure to or protect itself from changes in the market, the
Fund may buy and sell financial futures contracts traded on any U.S. or foreign
exchange. The Fund also may buy or write put and call options 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 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 dividends,
interest income and foreign withholding taxes.
The Fund may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate fluctuation.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates from an
independent pricing service. The Fund is subject to the credit risk that the
other party will not complete the obligations of the contract.
Federal taxes
Since the Fund's policy is to comply with all sections of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to the 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. 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.
Dividends to shareholders
Dividends declared and paid each calendar quarter from net investment income 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 and interest income,
including level-yield amortization of premium and discount, is accrued daily.
At April 30, 1997, AEFC owned 201 shares of Class Y.
2. Expenses and sales charges
The Fund entered into agreements with AEFC for managing its portfolio, providing
administrative services and serving as transfer agent. 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 0.79% to 0.67% annually.
Under its Administrative Services Agreement, the Fund pays AEFC a fee 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.
Additional administrative service expenses paid by the Fund are office expenses,
consultants' fees, and compensation of officers and employees. Under this
agreement, the Fund also pays taxes, audit and certain legal fees, registration
fees for shares, compensation of board members, corporate filing fees,
organizational expenses, and any other expenses properly payable by the Fund
approved by the board.
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:
oClass A $15
oClass B $16
oClass Y $15
The Fund entered into agreements with American Express Financial Advisors Inc.
for distribution and shareholder servicing-related services. 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.
Sales charges received by American Express Financial Advisors Inc. for
distributing Fund shares were $194,838 for Class A and $21 for Class B for the
period ended April 30, 1997. The Fund also pays custodian fees to American
Express Trust Company, an affiliate of AEFC.
AEFC has agreed to waive certain fees and to absorb certain other of the Fund's
expenses until Oct. 31, 1997. Under this agreement, the Fund's total expenses
will not exceed 1.50% for Class A, 2.26% for Class B and 1.33% for Class Y of
the Fund's average daily net assets.
During the period ended April 30, 1997, the Fund's custodian and transfer agency
fees were reduced by $1,259 as a result of earnings credits from overnight cash
balances.
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $21,584,916 and $2,180,344, respectively, for the period
from Nov. 13, 1996 to April 30, 1997. Realized gains and losses are determined
on an identified cost basis.
4. Capital share transactions
Transactions in shares of capital stock for the period indicated is as follows:
Period ended April 30, 1997*
Class A Class B Class Y
Sold 3,005,076 1,775,899 --
Issued for reinvested 12,293 5,330 1
distributions
Redeemed (83,824) (51,991) --
------- -------
Net increase 2,933,545 1,729,238 1
* Inception date was Nov. 13, 1996.
5. Foreign currency contracts
At April 30, 1997, the Fund had entered into eight foreign currency exchange
contracts that obligate the Fund to deliver currencies at specified future
dates. The unrealized appreciation and/or depreciation (see Summary of
significant accounting policies) on these contracts is included in the
accompanying financial statements. The terms of the open contracts are as
follows:
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
May 2, 1997 58,683 36,255 $-- $108
U.S. Dollar British Pound
May 2, 1997 355 455 -- 1
U.S. Dollar Australian Dollar
May 2, 1997 21,431 41,555 -- 95
U.S. Dollar Dutch Guilder
May 5, 1997 37,404 72,863 7 --
U.S. Dollar Dutch Guilder
May 6, 1997 13,564 8,358 -- 20
U.S. Dollar British Pound
May 6, 1997 38,371 23,527 -- 243
U.S. Dollar British Pound
May 7, 1997 148,942 215,605 8 --
U.S. Dollar Singapore Dollar
May 14, 1997 54,183 6,800,000 -- 525
U.S. Dollar Japanese Yen
$15 $992
<PAGE>
<TABLE>
6. Financial highlights
The tables below show certain important financial information for evaluating the
Fund's results.
Period ended April 30,
Per share income and capital changesa
<CAPTION>
Class A Class B Class Y
<S> <C> <C> <C>
1997b 1997b 1997b
Net asset value, $5.00 $5.00 $5.00
beginning of period
Income from investment operations:
Net investment income .30 .29 .30
Net gains (both (.34) (.35) (.34)
realized and unrealized)
Total from investment operations (.04) (.06) (.04)
Less distributions:
Dividends from net investment income (.03) (.02) (.03)
Net asset value, 4.93 4.92 4.93
end of period
Ratios/supplemental data
Class A Class B Class Y
1997b 1997b 1997b
Net assets, end of $14 $9 --
period (in millions)
Ratio of expenses to 1.50%c,f 2.26%c,f 1.17%c,f
average daily net assetsd
Ratio of net income to 2.22%c 1.47%c 2.44%c
average daily net assets
Portfolio turnover rate 20% 20% 20%
(excluding short-term
securities)
Total returne (0.7%) (1.1%) (0.7%)
Average brokerage $.0310 $.0310 $.0310
commission rateg
aFor a share outstanding throughout the period. Rounded to the nearest cent.
bPeriod from Nov. 13, 1996 (inception date) to April 30, 1997 (Unaudited).
cAdjusted to an annual basis.
dExpense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
eTotal return does not reflect payment of a sales charge.
fDuring the period from Nov. 13, 1996 to April 30, 1997, AEFC reimbursed the
Fund for certain expenses. Had AEFC not done so, the annual ratios of expenses
would have been 4.43%, 5.20% and 4.36% for Class A, B, and Y, respectively.
gThe Fund is required to disclose an average brokerage commission rate per share
for security trades on which commissions are charged. The comparability of this
information may be affected by the fact that commission rates per share vary
significantly among foreign countries.
</TABLE>
<PAGE>
Investments in securities
IDS Global Balanced Fund
April 30, 1997 (Unaudited)
(Percentages represent value of
investments compared to net assets)
Common stocks (58.8%)
Issuer Shares Value(a)
Australia (0.8%)
Banks and savings & loans (0.3%)
Westpac Banking 12,000 $ 64,682
Energy (0.3%)
Woodside Petroleum 7,300 58,082
Metals (0.2%)
WMC 9,072 53,782
Brazil (0.8%)
Utilities -- telephone
Telecomunicacoes
Brasileiras- Telebras ADR 1,600 183,600
Canada (1.2%)
Multi-industry conglomerates (0.4%)
Bombardier 5,000(b) 100,949
Utilities -- telephone (0.8%)
BCE Mobile Communications 6,000(b) 184,714
France (5.8%)
Automotive & related (0.8%)
Michelin 3,440 192,201
Banks and savings & loans (1.7%)
Banque Nationale de Paris 9,200 392,496
Computers & office equipment (0.3%)
Dassault Systems 1,100(b) 67,547
Electronics (0.8%)
SGS-THOMSON Microelectronics 2,400(b) 185,042
Energy (1.9%)
Elf Acquitaine 2,265(b) 219,650
Total Petroleum 2,520(b) 208,975
Total 428,625
Leisure time & entertainment (0.3%)
Accor 507 72,708
Germany (4.3%)
Chemicals (0.9%)
Bayer 4,000 $160,000
Hoechst 1,138 44,698
Total 204,698
Metals (1.6%)
SGL Carbon 2,640(b) 368,266
Textiles & apparel (1.5%)
Adidas 3,375 351,877
Utilities -- telephone (0.3%)
Deutsche Telekom 3,000(b) 65,121
Hong Kong (2.6%)
Banks and savings & loans (0.9%)
HSBC Holdings 8,450(b) 218,035
Financial services (1.1%)
Cheung Kong 14,000(b) 122,894
New World Development 7,000 40,392
Sun Hung Kai Properties 8,000(b) 86,749
Total 250,035
Multi-industry conglomerates (0.6%)
Hutchinson Whampoa 19,000 141,031
Italy (3.0%)
Banks and savings & loans (1.4%)
Credito Italiano 229,000(b) 320,995
Energy (0.8%)
Ente Nazionale Idrocarburi 36,750 186,521
Textiles & apparel (0.3%)
Gucci 790(b) 55,042
Utilities -- telephone (0.5%)
Stet Risp 25,300 119,616
Japan (5.3%)
Automotive & related (0.5%)
Mitsubishi Motors 16,000(b) 110,914
Beverages & tobacco (0.3%)
Kirin Brewery 8,000 $ 69,321
Electronics (1.7%)
Fujitsu 5,000(b) 51,991
Ibiden 5,000(b) 65,777
Mitsumi Electric 3,000(b) 63,098
NEC 5,000(b) 61,050
TDK 2,000(b) 144,157
Total 386,073
Media (0.9%)
Dai Nippon Printing 2,000(b) 36,079
Sony 1,100(b) 80,066
Tokyo Broadcasting Systems 6,000(b) 93,584
Total 209,729
Metals (0.4%)
Sumitomo Metal & Mining 41,000(b) 102,060
Multi-industry conglomerates (0.3%)
Secom 1,000(b) 59,475
Paper & packaging (0.4%)
Uni-Charm 3,000(b) 91,930
Real estate (0.3%)
Tokyu Land 23,000(b) 72,472
Retail (0.3%)
Takashiyama 6,000(b) 67,116
Utilities -- electric (0.1%)
Sumitomo Electric 2,000(b) 27,098
Utilities -- telephone (0.1%)
Nippon Comsys 3,000(b) 34,267
Malaysia (1.3%)
Banks and savings & loans (0.8%)
Malayan Banking 17,000(b) 169,289
Multi-industry conglomerates (0.1%)
Renong 23,000(b) 31,461
Utilities -- electric (0.4%)
Tenaga Nasional 21,000(b) 97,032
Mexico (0.5%)
Building materials & construction (0.2%)
Cemex ADR 3,500(b) $ 26,578
Cemex 5,000(b) 18,315
Total 44,893
Multi-industry conglomerates (0.3%)
Grupo Industrial 14,000(b) 76,833
Netherlands (2.9%)
Chemicals (0.7%)
Akzo Nobel 1,345(b) 173,335
Industrial equipment & services (1.5%)
Philips Electronics 6,419(b) 335,179
Insurance (0.7%)
Ing Groep 4,010 157,505
Singapore (2.8%)
Banks and savings & loans (1.5%)
United Overseas Bank 36,000(b) 338,238
Financial services (0.9%)
City Developments 12,000(b) 96,995
Wing Tai Holdings 46,000(b) 118,853
Total 215,848
Transportation (0.4%)
Straits Steamship 36,000(b) 92,518
Spain (0.1%)
Energy
Repsol 330(b) 13,836
Sweden (0.8%)
Communications equipment & services (0.1%)
Ericcson (LM) CI B 540 17,071
Industrial equipment & services (0.7%)
Asea Brown Boveri AB Cl B 14,000 169,541
Switzerland (1.4%)
Financial services (0.3%)
CS Holdings 680(b) 76,555
Health care (1.1%)
Novartis 95(b) $125,120
Roche Holdings 14 118,210
Total 243,330
United Kingdom (9.7%)
Banks and savings & loans (0.4%)
Lloyds TSB Group 10,730(b) 98,073
Building materials & construction (0.3%)
Redland 11,360 64,435
Electronics (0.7%)
Johnson Matthey 8,720(b) 70,728
Premier Farnell 11,800(b) 89,591
Total 160,319
Energy (0.9%)
Shell Transport & Trading 11,583(b) 204,607
Health care (1.0%)
Glaxo Wellcome 11,400 224,191
Household products (0.7%)
Unilever 6,131(b) 161,209
Insurance (0.5%)
Sun Alliance Group 13,478(b) 106,700
Leisure time & entertainment (0.7%)
Granada Group 11,900(b) 171,636
Multi-industry conglomerates (1.2%)
EMI Group 4,100 81,328
Siebe 13,076(b) 193,260
Total 274,588
Retail (1.1%)
Great Universal Stores 17,500(b) 180,939
Harvey Nichols 12,750(b) 64,570
Total 245,509
Transportation (0.5%)
NFC 46,000 106,602
Utilities -- gas (0.8%)
BG 64,149(b) 186,087
<PAGE>
Utilities -- telephone (0.9%)
British Telecommunications 29,564 $216,798
United States (15.5%)
Aerospace & defense (0.9%)
Boeing 2,130 210,071
Airlines (0.7%)
AMR 1,600(b) 149,000
Banks and savings & loans (1.0%)
BankAmerica 2,000 233,750
Beverages & tobacco (0.8%)
Philip Morris 4,770 187,819
Communications equipment & services (0.9%)
Motorola 3,500 200,375
Computers & office equipment (1.9%)
Cisco Systems 2,550(b) 131,963
Electronic Data Systems 2,400 80,100
Hewlett-Packard 4,200 220,500
Total 432,563
Electronics (1.1%)
Intel 1,700 260,313
Energy equipment & services (0.5%)
Schlumberger 1,100 121,825
Health care (1.0%)
Amgen 3,730(b) 219,604
Industrial equipment & services (1.0%)
Illinois Tool Works 2,400 219,300
Insurance (0.9%)
American Intl Group 1,620 208,170
Leisure time & entertainment (0.4%)
Disney (Walt) 1,240 101,680
Media (1.1%)
Interpublic Group of Companies 4,400 249,150
Multi-industry conglomerates (0.9%)
General Electric 1,930 $213,989
Retail (1.1%)
Walgreen 5,250 241,500
Utilities -- telephone (1.3%)
AirTouch Communications 12,000(b) $ 306,000
Total common stocks
(Cost: $13,345,804) $13,524,447
<PAGE>
<TABLE>
Bonds (25.3%)
<CAPTION>
Issuer Coupon Maturity Principal Value(a)
rate year amount
Argentina (1.5%)
Perez Companc
<S> <C> <C> <C> <C>
(U.S. Dollar) 9.00 % 2006 $ 100,000(d) $101,250
Republic of Argentina
(Japanese Yen) 5.50 2001 10,000,000 82,871
Republic of Argentina
(U.S. Dollar) 11.375 2017 150,000 159,094
Total 343,215
Australia (1.1%)
Govt of Australia
(Australian Dollar) 10.00 2007 125,000 110,737
Govt of Australia
(Australian Dollar) 9.75 2002 150,000 128,281
Total 239,018
Canada (1.4%)
Govt of Canada
(Canadian Dollar) 8.00 2023 400,000 314,656
Denmark (0.4%)
Kingdom of Denmark
(Danish Krone) 8.00 2003 600,000 100,985
Germany (1.4%)
Bundes Republic
(Deutsche Mark) 7.50 2004 200,000 129,340
(Deutsche Mark) 6.00 2016 350,000 192,887
Total 322,227
Italy (1.7%)
Republic of Italy
(Japanese Yen) 5.00 2004 5,000,000 46,477
(Italian Lira) 8.50 2004 350,000,000 215,148
(Italian Lira) 10.50 2000 200,000,000 128,140
Total 389,765
Mexico (0.7%)
United Mexican States
(U.S. Dollar) 8.00 2026 150,000 159,094
Philippines (0.6%)
Philippine Long Distance Telephone
(U.S. Dollar) 8.35 2017 150,000(d) 138,386
South Korea (0.3%)
Korea Development Bank
(U.S. Dollar) 7.25 2006 75,000 73,735
Spain (0.4%)
Govt of Spain
(Spanish Peseta) 8.00 2004 13,000,000 96,430
Sweden (0.9%)
Govt of Sweden
(Swedish Krona) 8.00 2007 1,600,000 214,965
United Kingdom (2.4%)
U.K. Treasury
(British Pound) 7.00 2002 75,000 120,860
(British Pound) 8.00 2003 200,000 335,867
(British Pound) 9.00 2000 50,000 84,929
Total 541,656
United States (12.5%)
Federal Natl Mtge Assn
(U.S. Dollar) 7.50 2027 302,261 299,900
Morgan (JP)
(U.S. Dollar) 4.73 2012 100,000(c) 97,650
U.S. Treasury
(U.S. Dollar) 5.00 1999 1,100,000 1,077,857
(U.S. Dollar) 7.50 2001-16 1,250,000 1,307,361
Texas Utilities Electric
(U.S. Dollar) 8.175 2037 100,000 98,525
Total 2,881,293
Total bonds
(Cost: $5,957,248) $5,815,425
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
Other (--%)
Issuer Shares Value(a)
Akzo Nobel
Warrants 1,230 $ 10,231
Total other
(Cost: $21,198) $ 10,231
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
U.S. governement agency (15.7%)
Federal Home Loan Bank Disc Nt
05-01-97 5.43% $800,000 $800,000
Federal Home Loan Mtge Corp Disc Nts
05-01-97 5.36% $ 700,000 $ 700,000
05-06-97 5.46 1,500,000 1,498,867
05-13-97 5.42 600,000 598,920
Total short-term securities
(Cost: $3,597,787) $ 3,597,787
Total investment in securities
(Cost: $22,922,037)(e) $22,947,890
See accompanying notes to investments in securities.
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements. Foreign security values are stated in U.S. dollars. For debt
securities, principal amounts are denominated in the currency indicated.
(b) Non-income producing.
(c) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on April 30, 1997.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1993, as amended. This security has
been determined to be liquid under guidelines established by the board.
(e) At April 30, 1997, the cost of securities for federal income tax purposes
was approximately $22,920,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation............................................$ 627,000
Unrealized depreciation.............................................(599,000)
Net unrealized appreciation.......................................$ 28,000
<PAGE>
Board members and officers
Board members and officers of the Fund
President and interested board member
William R. Pearce
Chairman of the board, Board Services Corporation (provides administrative
services to boards including the boards of the IDS and IDSLife funds and
Master Trust portfolios).
Independent board members
H. Brewster Atwater Jr.
Former chairman and chief executive officer, General Mills, Inc.
Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for Public Policy
Research.
Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
Melvin R. Laird
Senior counsellor for national and international affairs,
The Reader's Digest Association, Inc.
Alan K. Simpson
Former United States senator for Wyoming.
Edson W. Spencer
Former chairman and chief executive officer,
Honeywell, Inc.
Wheelock Whitney
Chairman, Whitney Management Company.
C. Angus Wurtele
Chairman of the board, The Valspar Corporation.
Interested board members who are officers and/or employees of AEFC
William H. Dudley
Senior advisor to the Chief Executive Officer.
David R. Hubers
President and chief executive officer, AEFC.
John R. Thomas
Senior vice president, AEFC.
Officers who also are officers and/or employees of AEFC
Peter J. Anderson
Senior vice president, AEFC. Vice president - Investments for the Fund.
Melinda S. Urion Senior vice president and chief financial officer, AEFC.
Treasurer for the Fund.
Other officer
Leslie L. Ogg
President, treasurer and corporate secretary of Board Services
Corporation. Vice president, general counsel and secretary for the Fund.
Refer to the SAI for the board members' and officers' biographies.
<PAGE>
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 globe
IDS Global Growth Fund
Invests in a Portfolio comprised primarily of stocks of companies throughout the
world that are positioned to meet market needs in a changing world economy.
These companies offer above-average potential for long-term growth.
(icon of) world
IDS International Fund
Invests primarily in common stocks of foreign companies that offer potential for
superior growth. The Fund may invest up to 20% of its assets in the U.S. market.
(icon of) three flags
IDS Global Balanced Fund
Invests in stocks-and bonds in, for the most part, major markets throughout the
world, including the U.S. Seeks to provide a balance of growth of capital and
current income.
(icon of) scale of globes
IDS Global Bond Fund
Invests in a Portfolio comprised primarily of debt securities of U.S. and
foreign issuers to seek high total return through income and growth of capital.
(icon of) globe
Growth funds
Funds in this group seek capital growth, primarily from common stocks. They are
high risk mutual funds with a potential for high reward.
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic companies that
explore for, mine and process or distribute gold and other precious metals. A
highly aggressive and speculative fund that seeks long-term growth of capital.
(icon of) cart of precious gems
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies emphasizing
technological innovation and productivity enhancement. Buys and holds larger
growth-oriented stocks.
(icon of) ship
IDS Small Company Index Fund
Invests in all or a representative group of the equity securities comprising the
S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation.
(icon of) building
IDS Strategy Aggressive Fund
Invests primarily in common stocks of companies that are selected for their
potential for above-average growth. Above-average means that their growth
potential is better, in the opinion of the portfolio's investment manager, than
the Standard & Poor's Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS Research Opportunities Fund
Invests in a Portfolio comprised primarily of equity securities of companies
included in the S&P 500 Index that are believed to have strong growth potential.
The Portfolio is managed using a research methodology by the Research Department
of AEFC. Goal is long-term appreciation.
(icon of) magnifying glass
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) flower
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 and 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) spinning toy
IDS Stock Fund
Invests in a Portfolio comprised primarily of common stocks of companies
representing many sectors of the economy. Seeks current income and growth of
capital.
(icon of) building with columns
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential for growth
of capital and income.
(icon of) three growing flowers
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek high current
income and growth of income and capital with reduced volatility.
(icon of) light bulb
IDS Diversified Equity Income Fund
Invests in a Portfolio comprised primarily in high-yielding common stocks to
seek high current income and, secondarily, to benefit from the growth potential
offered by stock investments.
(icon of) two puzzle pieces
IDS Mutual
Invests in a Portfolio which seeks to balance between common stocks and senior
securities (preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
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 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) two coins
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk
bond categories, or the equivalent, and in government bonds.
(icon of) Greek column
IDS Selective Fund
Invests in a Portfolio comprised primarily of high-quality corporate bonds and
other highly rated debt instruments including government securities and
short-term investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests in a Portfolio comprised primarily of securities issued or guaranteed as
to the timely payment of principal and interest by the U.S. government, its
agencies and instrumentalities. Seeks a high level of current income and safety
of principal consistent with its type of investments.
(icon of) shield with eagle head
Tax-exempt income funds
These funds provide tax-free income by investing in municipal bonds. The income
is generally free from federal income tax, but a portion of the income may be
subject to state and local taxes. Risk varies by bond quality.
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government units, with at
least 75% in the four highest rated, lowest risk bond categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to the timely
payment of principal and interest. The insurance feature minimizes credit risk
of the Fund but does not guarantee the market value of the Fund's shares.
(icon of) shield with star
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities to provide
income to residents of each respective state that is exempt from federal, state
and local income taxes. (New York is the only state that is exempt at the local
level.)
(icon of) shield with U.S. enclosed
IDS High Yield Tax-Exempt Fund
Invests in a Portfolio comprised primarily of medium- and lower-quality
municipal bonds and notes. Lower-quality securities generally involve greater
risk of principal and income.
(icon of) shield with basket of apples enclosed
IDS Intermediate Tax-Exempt Fund
Invests in mainly investment-grade bonds and other debt securities with
intermediate-term maturities issued by state and local government units. Goal is
to seek a high level of current income exempt from federal taxes.
(icon of) shield with tree enclosed
Money market funds
These money market funds have three main goals: conservation of capital,
constant liquidity and the highest possible current income consistent with these
objectives. An investment in these funds is neither insured nor guaranteed by
the U.S. government, and there can be no assurance that these funds will be able
to maintain a stable net asset value of $1.00 per share. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial paper,
bankers' acceptances, certificates of deposit (CDs) and other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and local
governments to seek high current income exempt from federal income taxes.
(icon of) shield with piggy bank enclosed
For more complete information about any of these funds, including charges and
expenses, you can obtain a prospectus by contacting your financial advisor or
writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN
55440-0534. Read it carefully before you invest or send money.
<PAGE>
Quick telephone reference
American Express Financial Advisors 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
TTY Service
For the hearing impaired
800-846-4852
American Express Financial Advisors Easy Access Line
Automated account information (TouchTone(R) phones only), including current fund
prices and performance, account values and recent account transactions
800-862-7919
BULK RATE
U.S. POSTAGE
PAID
PERMIT NO. 85
SPENCER, IA
IDS Global Balanced Fund
IDS Tower 10
Minneapolis, MN 55440-0010