1997 ANNUAL REPORT
IDS
Global Growth
Fund
(prospectus enclosed)
(icon of) world
The goal of IDS Global Growth Fund, a part of IDS Global Series, Inc., is
long-term growth of capital. The Fund invests in a Portfolio comprised primarily
of common stocks and securities convertible into common stocks of companies
throughout the world.
(This annual report includes a prospectus that describes in detail the Fund's
objective, investment policies, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.)
AMERICAN EXPRESS Financial Advisors
Distributed by American Express Financial Advisors Inc.
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(icon of) world
It's a big world
after all
No one needs to be told that the world is changing rapidly. For example, some
years ago U.S. stocks accounted for about two-thirds of the total value of
stocks worldwide. Today, that figure is down to about one-third, as many foreign
stock markets have enjoyed explosive growth. Global Growth Fund seeks to take
advantage of that trend by investing in companies throughout the world, not just
the United States. For the most part, these are foreign companies involved in
essential businesses such as infrastructure creation, finance and environmental
clean-up. As they prosper, Global Growth offers investors the potential to
prosper along with them.
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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.
1997 annual report
From the chairman 4
From the portfolio manager 4
The Portfolio's ten largest holdings 6
Making the most of the Fund 7
The Fund's long-term performance 8
Independent auditors' report (Fund) 9
Financial statements (Fund) 10
Notes to financial statements (Fund) 13
Independent auditors' report (Portfolio) 20
Financial statements (Portfolio) 21
Notes to financial statements (Portfolio) 24
Investments in securities 36
IDS mutual funds 41
Federal income tax information 45
1997 prospectus
The Fund in brief 3p
Goal 3p
Investment policies and risks 3p
Structure of the Fund 4p
Manager and distributor 4p
Portfolio managers 4p
Alternative purchase arrangements 5p
Sales charge and Fund expenses 6p
Performance 8p
Financial highlights 8p
Total returns 10p
Investment policies and risks 12p
Facts about investments and their risks 12p
Valuing Fund shares 16p
How to purchase, exchange or redeem shares 17p
Alternative purchase arrangements 17p
How to purchase shares 20p
How to exchange shares 22p
How to redeem shares 22p
Reductions and waivers of the sales charge 26p
Special shareholder services 31p
Services 31p
Quick telephone reference 31p
Distributions and taxes 32p
Dividend and capital gain distributions 32p
Reinvestments 33p
Taxes 34p
How to determine the correct TIN 36p
How the Fund and Portfolio are organized 37p
Shares 37p
Voting rights 38p
Shareholder meetings 38p
Special considerations regarding
master/feeder structure 39p
Board members and officers 42p
Investment manager 44p
Administrator and transfer agent 44p
Distributor 45p
About American Express Financial Corporation 46p
General information 46p
Appendix 47p
Descriptions of derivative instruments 47p
(This annual report is not part of the prospectus.)
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To our shareholders
(picture of) William R. Pearce
Chairman of the board
(picture of) John O'Brien
Portfolio manager
From the chairman
If you're an experienced investor, you know that the past few years have
been unusually strong ones in many financial markets. Perhaps just as
important, history shows that bull markets don't last forever. Though
they're often unpredictable, declines -- whether they're brief or
long-lasting, moderate or substantial -- are always a possibility. We saw
evidence of that in late October, when declines in certain Asian markets
spawned a sharp drop in the U.S. stock market.
That fact reinforces the need for investors to review periodically their
long-term goals and examine whether their investment program remains on
track to achieving them. Your quarterly investment statements are one part
of that monitoring process. The other is a meeting with your American
Express financial advisor. That becomes even more important if there's a
major change in your financial situation or in the financial markets.
In the meantime, for a review of the past fiscal year, please see the
accompanying letter from John O'Brien, who became portfolio manger of the
Fund this past September.
/s/ W. R. Pearce
William R. Pearce
From the portfolio manager
Global equity markets were highly volatile during the past fiscal year,
which concluded with a steep sell-off that began in Asia and spread
virtually throughout the world. Still, IDS Global Growth Fund finished in
positive territory for the 12 months, recording a total return of 6.2% for
Class A shares from November 1996 through October 1977. (This figure
includes a capital gain that was paid to shareholders in December 1996 and
reduced the Fund's net asset value by the same amount at that time.)
The early months of the period were quite productive, as many markets
around the world gained ground. Among the most consistent was the U.S.
market, which constituted an increasing portion of the portfolio as the
period progressed. Investments in other markets contributed during that
time, too, including those in Argentina, Germany, the United Kingdom and
Canada.
A spring slump
By March, though, stronger-than-expected economic data in the U.S. began
to foster fears of higher inflation and, in
(This annual report is not part of the prospectus.)
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turn, a rise in long-term interest rates. The result was a swift downturn
in the U.S., which was mimicked by several smaller markets, particularly
in Southeast Asia. However, by early summer the environment had become
more favorable, and, led by the U.S., most markets were on an advance
that, aside from a moderate setback in August, continued into the fall.
Asian sell-off
But the biggest news wouldn't come until the final week of the period,
when collapsing currencies in Southeast Asia sparked a severe sell-off in
the Hong Kong stock market, which in turn set in motion a domino effect
that drove down stocks worldwide, including in the U.S. Although the
Fund's exposure to the hardest-hit Southeast Asia markets was modest, the
pervasiveness of the downturn eroded most the Fund's gain to that point.
U.S. is largest exposure
As for the make-up of the portfolio, apart from the increase in U.S.
holdings (currently, the Fund's largest country exposure), changes
included reducing investments in Southeast Asia and adding to those in
Europe, particularly France and Germany, as well as Japan. The Fund's
Japanese holdings performed well, and its hedged position in the local
currency, the yen, added value.
At this writing (mid-November), I foresee little change in the portfolio
mix. I am continuing to avoid Southeast Asia, focusing instead on
opportunities in Europe. Above all, I'm emphasizing stocks of companies
with substantial international business presence and superior growth
potential.
/s/ John O'Brien
John O'Brien
Class A
12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1997 $ 6.90
Oct. 31, 1996 $ 7.12
Decrease $ 0.22
Distributions
Nov. 1, 1996 - Oct. 31, 1997
From income $ 0.46
From capital gains $ 0.18
Total distributions $ 0.64
Total return* +6.2%**
Class B
12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1997 $ 6.79
Oct. 31, 1996 $ 7.05
Decrease $ 0.26
Distributions
Nov. 1, 1996 - Oct. 31, 1997
From income $ 0.43
From capital gains $ 0.18
Total distributions $ 0.61
Total return* +5.5%**
Class Y
12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1997 $ 6.91
Oct. 31, 1996 $ 7.13
Decrease $ 0.22
Distributions
Nov. 1, 1996 - Oct. 31, 1997
From income $ 0.47
From capital gains $ 0.18
Total distributions $ 0.65
Total return* +6.3%**
* The prospectus discusses the effect of sales charges, if any, on the
various classes.
** The total return is a hypothetical investment in the Fund with all
distributions reinvested.
(This annual report is not part of the prospectus.)
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The Portfolio's ten largest holdings
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The ten holdings listed here make up 19.67% of the Portfolio's net assets
Percent Value
(of Portfolio's net assets) (as of Oct. 31, 1997)
Rhone-Poulenc (France) 3.50% $39,638,174
Credito Italiano (Italy) 2.12 24,074,316
Dassault Systemes (France) 2.09 23,637,149
Elf Aquitaine (France) 2.02 22,845,036
Bombardier Cl B (Canada) 1.86 21,085,514
Pfizer (United States) 1.65 18,748,750
BankBoston (United States) 1.65 18,644,375
Istituto Bancario
San Paulo di Torino (Italy) 1.62 18,300,086
Total Petroleum Cl B (France) 1.60 18,180,560
Philips Electronics (Netherlands) 1.56 17,676,597
Note: Certain foreign investment risks include: changes in currency exchange
rates, adverse political or economic order and lack of similar regulatory
requirements followed by U.S. companies.
(This annual report is not part of the prospectus.)
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Making the most of the Fund
Build your assets systematically
One of the best ways to invest in the Fund is by dollar-cost averaging --
a time-tested strategy that can make market fluctuations work for you. To
dollar-cost average, simply invest a fixed amount of money regularly.
You'll automatically buy more shares when the Fund's share price is low,
fewer shares when it is high.
Using this strategy does not ensure a profit or avoid a loss if the market
declines, and requires that you be able to keep on investing on a regular
basis, even when the price of your shares falls or the market declines.
Investing in this manner can be an effective way to accumulate shares to
meet your long-term goals.
How dollar cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00 XXXXX
Feb 100 18 5.56 XXXXXx
March 100 17 5.88 XXXXXx
April 100 15 6.67 XXXXXXx
May 100 16 6.25 XXXXXXx
June 100 18 5.56 XXXXXx
July 100 17 5.88 XXXXXx
Aug 100 19 5.26 XXXXXx
Sept 100 21 4.76 XXXXx
Oct 100 20 5.00 XXXXX
(footnote to table) By investing an equal number of dollars each month....
(arrow in table pointing to April) you automatically buy more shares when the
per share market price is low....
(arrow pointing to Sept) and fewer shares when the per share market price
is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
(This annual report is not part of the prospectus.)
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The Fund's long-term performance
Three ways to benefit from a mutual fund:
oyour shares increase in value when the Fund's
investments do well
oyou receive capital gains when the gains on
investments sold by the Fund exceed losses
oyou 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 $10,000 has grown in IDS Global Growth Fund
$20,000
Lipper International
MSCI Fund Index
All Country
World Free Index $15,792
Global Growth
Fund
$10,000 Class A
$ 9,500
MSCI
EAFE Index
6/1/90 '90 '91 '92 '93 '94 '95 '96 '97
Average annual total return
(as of Oct. 31, 1997)
1 year 5 years Since inception
Class A* +0.91% +9.37% + 6.35%
Class B** +1.54% --% + 9.43%
Class Y** +6.34% --% +11.75%
* Inception date was May 29, 1990.
** Inception date was March 20, 1995.
Assumes: oHolding period from 6/1/90 to 10/31/97. oReturns do not reflect
taxes payable on distributions. oReinvestment of all income and capital
gain distributions for the Fund, with a value of $2,689. Also see
"Performance" in the Fund's current prospectus.
The Morgan Stanley Capital International EAFE Index (MSCI EAFE Index),
compiled from a composite of securities markets of Europe, Australia and
the Far East, is widely recognized by investors in foreign markets as the
measurement index for portfolios of non-North American securities.
Lipper International Fund Index, published by Lipper Analytical Services,
Inc., includes 10 funds that are generally similar to the Fund, although
some funds in the index may have somewhat different investment policies or
objectives.
Morgan Stanley Capital International All Country World Free Index (MSCI
All Country World Free Index) is an unmanaged index compiled from a
composite of securities markets of 47 countries, including Canada, the
United States and 26 emerging market countries. It is widely recognized by
investors in foreign markets as the measurement index for portfolios of
global securities.
On the graph above you can see how the Fund's total return compared to
three widely cited unmanaged performance indexes, the MSCI EAFE Index, the
Lipper International Fund Index and the MSCI All Country World Free Index.
In comparing Global Growth Fund (Class A) to the three indexes, you should
take into account the fact that the Fund's performance reflects the
maximum sales charge of 5%, while such charges are not reflected in the
performance of the indexes.
Your investment and return values fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Average annual
total return figures reflect the impact of the applicable sales charge up
to a maximum 5%. This was a period of widely fluctuating security prices.
Past performance is no guarantee of future results.
(This annual report is not part of the prospectus.)
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The financial statements contained in Post-Effective Amendment #28 to
Registration statement No. 33-25824 filed on or about Dec. 24, 1997, are
incorporated herein by reference.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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(This annual report is not part of the prospectus.)
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IDS mutual funds
IDS Growth Fund
Invests in a Portfolio comprised primarily of companies that have above-average
potential for long-term growth as a result of new management, marketing
opportunities or technological superiority.
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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.
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IDS Progressive Fund
Invests primarily in undervalued common stocks. The Fund holds stocks for the
long term with the goal of capital growth.
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Growth & income funds
These funds focus on securities of medium to large, well-established companies
that offer long-term growth of capital and reasonable income from dividends and
interest. Foreign investments may be subject to currency fluctuations and
political and economic risks of the countries in which the investments are made.
IDS Equity Select Fund
Invests primarily in a combination of moderate growth stocks, higher-yielding
equities and bonds. Seeks growth of capital and income.
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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.
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IDS Managed Allocation Fund
Invests in a Portfolio comprised primarily of U.S. equity securities, U.S. and
foreign debt securities, foreign equity securities and money market instruments.
The Fund provides diversification among these major investment categories and
has a target mix that represents the way the Fund's investments will be
allocated over the long term. Seeks maximum total return.
(icon of) gyroscope
IDS Stock Fund
Invests in a Portfolio comprised primarily of common stock of companies
representing many sectors of the economy. Seeks current income and growth of
capital.
(icon of) building with columns
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential for growth
of capital and income.
(icon of) three growing flowers
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek high current
income and growth of income and capital with reduced volatility.
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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.
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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.
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(This annual report is not part of the prospectus.)
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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.
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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.
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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.
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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.
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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.)
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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.
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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.
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(This annual report is not part of the prospectus.)
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IDS mutual funds
Money market funds
These money market funds have three main goals: conservation of capital,
constant liquidity and the highest possible current income consistent with these
objectives. An investment in these funds is neither insured nor guaranteed by
the U.S. government, and there can be no assurance that these funds will be able
to maintain a stable net asset value of $1.00 per share. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial paper,
bankers' acceptances, certificates of deposit (CDs) and other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and local
governments to seek high current income exempt from federal income taxes.
(icon of) shield with piggy bank enclosed
For more complete information about any of these funds, including charges and
expenses, you can obtain a prospectus by contacting your financial advisor or
writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN
55440-0534. Read it carefully before you invest or send money.
(This annual report is not part of the prospectus.)
<PAGE>
Federal income tax information
IDS Global Growth Fund
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its
fiscal year. The dividends listed below were reported to you on a Form
1099-DIV, Dividends and Distributions, last January. Shareholders should
consult a tax advisor on how to report distributions for state and local
purposes.
IDS Global Growth Fund
Fiscal year ended Oct. 31, 1997
Class A
Income distribution
taxable as dividend income, 74.20% qualifying for deduction by
corporations.
Payable date Per share
Dec. 30, 1996 $0.45891
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 30, 1996 $0.18089
Total distributions $0.63980
The distribution of $0.63980 per share, payable Dec. 30, 1996, consisted
of $0.21967 derived from net investment income, $0.23924 from net
short-term capital gains (a total of $0.45891 taxable as dividend income)
and $0.18089 from net long-term capital gains.
(This annual report is not part of the prospectus.)
<PAGE>
Federal income tax information
IDS Global Growth Fund
Class B
Income distribution
taxable as dividend income, 74.20% qualifying for deduction by
corporations.
Payable date Per share
Dec. 30, 1996 $0.43056
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 30, 1996 $0.18089
Total distributions $0.61145
The distribution of $0.61145 per share, payable Dec. 30, 1996, consisted
of $0.19132 derived from net investment income, $0.23924 from net
short-term capital gains (a total of $0.43056 taxable as dividend income)
and $0.18089 from net long-term capital gains.
(This annual report is not part of the prospectus.)
<PAGE>
Class Y
Income distribution
taxable as dividend income, 74.20% qualifying for deduction by
corporations.
Payable date Per share
Dec. 30, 1996 $0.47038
Capital gain distribution
taxable as long-term capital gain.
Payable date Per share
Dec. 30, 1996 $0.18089
Total distributions $0.65127
The distribution of $0.65127 per share, payable Dec. 30, 1996, consisted
of $0.23114 derived from net investment income, $0.23924 from net
short-term capital gains (a total of $0.47038 taxable as dividend income)
and $0.18089 from net long-term capital gains.
(This annual report is not part of the prospectus.)
<PAGE>
Quick telephone reference
American Express Redemptions and exchanges, National/Minnesota
Financial Advisors dividend payments or 800-437-3133
Telephone Transaction reinvestments and automatic
Service payment arrangements Mpls./St. Paul area:
671-3800
TTY Service For the hearing impaired 800-846-4852
American Express Automated account information 800-862-7919
Financial Advisors (TouchTone(R) phones only),
Easy Access Line including current fund prices
and performance, account values
and recent account transactions
AMERICAN EXPRESS Financial Advisors
IDS Global Growth Fund
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
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.
