1998 SEMIANNUAL REPORT
IDS
Global
Balanced Fund
The goal of IDS Global Balanced Fund, a part of IDSGlobal Series, Inc., is to
provide a balance of growth of capital and current income.
American Express Financial Advisors
Distributed by American Express Financial Advisors Inc.
<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 chairman 3
From the portfolio managers 3
The Fund's ten largest holdings 5
Financial statements 6
Notes to financial statements 9
Investments in securities 22
Board members and officers 34
IDS mutual funds 35
<PAGE>
To our shareholders
From the chairman
If you're an experienced investor, you know that the past few years have
been unusually strong 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 last October, when declines in certain Asian markets
spawned a sharp drop in several financial markets worldwide, including the
U.S.
The potential for such volatility 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.
William R. Pearce
(picture of) William R. Pearce
William R. Pearce
Chairman of the board
<PAGE>
From the portfolio managers
Robust stock and bond markets in the U.S. and in Europe set the stage for
a strong performance by IDS Global Balanced Fund during the first half of
the fiscal year. For the six months -- November 1997 through April 1998 --
the Fund's Class A shares generated a total return of 14.2%.
The period got off to a slow start, as the aftershock of last October's
financial collapse in Asia was still being felt around the world. The
Fund's exposure to Asian markets was minimal and confined to Singapore,
Hong Kong and Japan. Still, the turmoil did have some effect, and the Fund
managed only a slight advance through January.
The next three months were far more productive. Buoyed by ongoing low
inflation, a healthy economy and generally good corporate profits, the
U.S. stock market mounted a powerful advance. In Europe, where stocks
enjoyed a boost from a trend toward corporate restructuring, returns were
even better.
U.S. and Europe are
chief exposures
The Fund was well positioned to take advantage of the upturns, as the
great majority of its holdings were in those markets, the U.S. portion
being the largest. In Europe, we spread our investments among several
countries, including France, the United Kingdom, Italy, Germany, Sweden,
Norway and Finland. We began the period with a small exposure to Japanese
stocks, but eliminated those holdings last winter.
As for the stock/bond mix, we started out with a majority of the portfolio
(just over 50%) invested in bonds. As the period progressed and the
environment for equities improved, we shifted the emphasis to stocks,
finishing the period with a mix of 59% stocks, 35% bonds and 6% in
cash-equivalent investments. All told, the largest investment exposure was
to the U.S., followed by Europe.
Although the worst appears to be over in Asia and security prices remain
attractively low, we think it is too early to make any meaningful
commitment to those markets. Therefore, we plan to continue our investment
focus on continental Europe and the U.S. The bulk of the investments
remains in stocks, complemented by government and corporate bonds in those
two parts of the world.
Peter Lamaison
(picture of ) Peter Lamaison
Peter Lamaison
Portfolio Manager
Ray Goodner
(picture of) Ray Goodner
Ray Goodner
Portfolio Manager
<PAGE>
To our shareholders
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 1998 $ 6.01
Oct. 31, 1997 $ 5.33
Increase $ 0.68
Distributions
Nov. 1, 1997 - April 30, 1998
From income $ 0.06
From capital gains $ --
Total distributions $ 0.06
Total return* 14.2%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 1998 $ 5.99
Oct. 31, 1997 $ 5.31
Increase $ 0.68
Distributions
Nov. 1, 1997 - April 30, 1998
From income $ 0.05
From capital gains $ --
Total distributions $ 0.05
Total return* 13.7%**
Class Y
6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 1998 $ 6.01
Oct. 31, 1997 $ 5.33
Increase $ 0.68
Distributions
Nov. 1, 1997 - April 30, 1998
From income $ 0.07
From capital gains $ --
Total distributions $ 0.07
Total return* 14.2%**
* 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, 1998)
ING Groep (Netherlands) 2.14% $1,800,411
Rhone-Poulenc Cl A (France) 1.89 1,587,094
Banque Natl de Paris (France) 1.73 1,450,741
Telecom Italia (Italy) 1.60 1,345,688
Treuhandanstalt (Germany) 1.47 1,231,906
3.98% 2003
Intel (United States) 1.41 1,179,863
Great Universal Stores (United Kingdom) 1.33 1,118,166
Federal Republic of Germany (Germany) 1.33 1,117,152
3.33% 2016
Interpublic Group of Cos (United States) 1.30 1,095,456
Pfizer (United States) 1.27 1,069,838
Excludes U.S. Treasury and government agencies holdings.
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.
For further detail about these holdings, please refer to the section
entitled "Investments in securities" herein.
(icon of) pie chart
The ten holdings listed here make up 15.47% of the Fund's net assets
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<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Global Balanced Fund
April 30, 1998
Assets
(Unaudited)
Investments in securities, at value (Note 1) (identified cost $73,828,412) $83,135,573
Cash in bank on demand deposit 364,922
Dividends and accrued interest receivable 805,742
Receivable for investment securities sold 8,436
Organizational cost 33
Unrealized appreciation on foreign currency contracts held, at value (Notes 1 and 5) 26
--
Total assets 84,314,732
----------
Liabilities
<S> <C>
Payable for investment securities purchased 262,255
Unrealized depreciation on foreign currency contracts held, at value (Notes 1 and 5) 58
Accrued investment management services fee 1,787
Accrued distribution fee 669
Accrued service fee 396
Accrued transfer agency fee 151
Accrued administrative services fee 136
Open option contracts written, at value (premium received $3,725) (Note 6) 3,725
Other accrued expenses 37,622
------
Total liabilities 306,799
-------
Net assets applicable to outstanding capital stock $84,007,933
-----------
Represented by
Capital stock-- $.01 par value (Note 1) $ 139,911
Additional paid-in capital 73,854,648
Undistributed net investment income 40,226
Accumulated net realized gain (loss) 660,500
Unrealized appreciation (depreciation) on investments and on translation
of assets and liabilities in foreign currencies 9,312,648
---------
Total-- representing net assets applicable to outstanding capital stock $84,007,933
===========
Net assets applicable to outstanding shares: Class A $50,900,155
Class B $33,106,539
Class Y $ 1,239
Net asset value per share of outstanding capital stock: Class A shares 8,466,004 $ 6.01
Class B shares 5,524,844 $ 5.99
Class Y shares 206 $ 6.01
See accompanying notes to financial statements.
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<CAPTION>
Statement of operations
IDS Global Balanced Fund
Six months ended April 30, 1998
Investment income
(Unaudited)
<S> <C>
Income:
Dividends $ 190,107
Interest 831,047
Less foreign taxes withheld (24,645)
-------
Total income 996,509
-------
Expenses (Note 2):
Investment management services fee 253,681
Distribution fee -- Class B 93,872
Transfer agency fee 64,179
Incremental transfer agency fee-- Class B 1,747
Service fee
Class A 34,207
Class B 21,885
Administrative services fees and expenses 18,874
Compensation of board members 4,594
Custodian fees 15,425
Postage 7,859
Registration fees 6,919
Audit fees 6,500
Other 7,467
-----
Total expenses 537,209
Earnings credits on cash balances (Note 2) (4,453)
------
Total net expenses 532,756
-------
Investment income (loss) -- net 463,753
-------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 586,512
Financial futures contracts 10
Foreign currency transactions 67,344
------
Net realized gain (loss) on investments 653,866
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 7,921,764
---------
Net gain (loss) on investments and foreign currencies 8,575,630
---------
Net increase (decrease) in net assets resulting from operations $9,039,383
==========
See accompanying notes to financial statements.
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<CAPTION>
Financial statements
Statements of changes in net assets
IDS Global Balanced Fund
Operations and distributions
April 30, 1998 For the period
Six months ended from Nov. 3,1996*
(Unaudited) to Oct. 31, 1997
<S> <C> <C>
Investment income (loss)-- net $ 463,753 $ 453,136
Net realized gain (loss) on investments 653,866 128,780
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 7,921,764 1,390,884
--------- ---------
Net increase (decrease) in net assets resulting from operations 9,039,383 1,972,800
--------- ---------
Distributions to shareholders from:
Net investment income
Class A (365,115) (256,330)
Class B (148,308) (99,742)
Class Y (11) (16)
Net realized gain
Class A (81,058) --
Class B (51,691) --
Class Y (3) --
---- ----
Total distributions (646,186) (356,088)
-------- --------
Capital share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 17,535,418 31,350,589
Class B shares 11,984,245 19,600,987
Reinvestment of distributions at net asset value
Class A shares 424,876 246,035
Class B shares 196,983 98,569
Class Y shares 14 16
Payments for redemptions
Class A shares (2,802,181) (1,997,729)
Class B shares (Note 2) (1,547,203) (1,095,595)
---------- ----------
Increase (decrease) in net assets from capital share transactions 25,792,152 48,202,872
---------- ----------
Total increase (decrease) in net assets 34,185,349 49,819,584
Net assets at beginning of period 49,822,584 3,000
Net assets at end of period $84,007,933 $49,822,584
----------- -----------
Undistributed net investment income $ 40,226 $ 89,907
----------- -----------
*Commencement of operations.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
IDS Global Balanced Fund
(Unaudited as to April 30, 1998)
1
Summary of
significant
accounting policies
The Fund is a series of IDS Global Series, Inc. and is registered under
the Investment Company Act of 1940 (as amended) as a diversified open-end
management investment company. The Fund invests primarily in equity and
debt securities of companies throughout the world. 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
that represented 200 shares for Class A, Class B and Class Y,
respectively. 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 shares during the
ninth calendar year of ownership. 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. Debt securities are
generally traded in the over-the-counter market and are valued at a price
deemed best to reflect fair value as quoted by dealers who make markets in
these securities or by an independent pricing service. Securities for
which market quotations are not readily available are valued at fair value
according to methods selected in good faith by the board. 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
and write options traded on any U.S. or foreign exchange or in the
over-the-counter market where the completion of the obligation is
dependent upon the credit standing of the other party. The Fund also may
buy and sell put and call options and write covered call options on
portfolio securities and may write cash-secured put options. The risk in
writing a call option is that the Fund gives up the opportunity of profit
if the market price of the security increases. The risk in writing a put
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 and 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 or option may not
correlate with changes in the value of the underlying securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin)
are made or received by the Fund each day. The variation margin payments
are equal to the daily changes in the contract value and are recorded as
unrealized gains and losses. The Fund recognizes a realized gain or loss
when the contract is closed or expires.
Foreign currency translations and
foreign currency contracts
Securities and other assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the closing rate of
exchange. Foreign currency amounts related to the purchase or sale of
securities and income and expenses are translated at the exchange rate on
the transaction date. The effect of changes in foreign exchange rates on
realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the statement of operations, net
realized gains or losses from foreign currency transactions may arise from
sales of foreign currency, closed forward contracts, exchange gains or
losses realized between the trade date and settlement dates on securities
transactions, and other translation gains or losses on 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 and/or depreciation is determined using foreign currency
exchange rates from an independent pricing service. The Fund is subject to
the credit risk that the other party will not complete the obligations of
the contract.
Federal taxes
Since the Fund's policy is to comply with all sections of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders, no provision for
income or excise taxes is required.
Net investment income (loss) and net realized gains (losses) may differ
for financial statement and tax purposes primarily because of the deferral
of losses on certain futures contracts, the recognition of certain foreign
currency gains (losses) as ordinary income (loss) for tax purposes, and
losses deferred due to "wash sale" transactions. The character of
distributions made during the year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. 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 from net investment income, declared and paid each calendar
quarter, are reinvested in additional shares of the Fund at net asset
value or payable in cash. Capital gains, when available, are distributed
along with the last income dividend of the calendar year.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Dividend income is recognized on the ex-dividend date
or upon receipt of ex-dividend notification in the case of certain foreign
securities. For U.S. dollar denominated bonds, interest income includes
level-yield amortization of premium and discount. For foreign bonds, the
Fund amortizes premium and original issue discount daily and market
discount is recognized at the time of sale.
At April 30, 1998, AEFC owned 206 shares of Class Y.
2
Expenses and
sales charges
The Fund entered into agreements with American Express Financial
Corporation (AEFC) for managing its portfolio and providing administrative
services. 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 0.060% to 0.035%
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 and approved by the board.
Under a separate Transfer Agency Agreement, American Express Client
Service Corporation (AECSC) maintains shareholder accounts and records.
The Fund pays AECSC 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 and commencing on May 9,
1997, the fee is calculated at a rate of 0.10% of the Fund's average daily
net assets attributable to Class Y shares.
Sales charges received by American Express Financial Advisors Inc. for
distributing Fund shares were $255,909 for Class A and $8,389 for Class B
for the six months ended April 30, 1998. The Fund also pays custodian fees
to American Express Trust Company, an affiliate of AEFC.
During the six months ended April 30, 1998, the Fund's custodian and
transfer agency fees were reduced by $4,453 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 $49,382,416 and $22,981,956,
respectively, for the six months ended April 30, 1998. Realized gains and
losses are determined on an identified cost basis.
4
Capital share
transactions
Transactions in shares of capital stock for the periods indicated are as
follows:
Six months ended April 30, 1998
Class A Class B Class Y
Sold 3,143,350 2,152,811 --
Issued for reinvested 77,297 36,242 3
distributions
Redeemed (501,280) (278,048) --
Net increase (decrease) 2,719,367 1,911,005 3
Period ended Oct. 31, 1997*
Class A Class B Class Y
Sold 6,080,386 3,803,795 --
Issued for reinvested 46,529 18,710 3
distributions
Redeemed (380,478) (208,866) --
Net increase (decrease) 5,746,437 3,613,639 3
* Inception date was Nov. 13, 1996.
5
Foreign currency
contracts
At April 30, 1998, the Fund had entered into foreign currency exchange
contracts that obligate the Fund to deliver currencies at specified future
dates. The unrealized appreciation and/or depreciation on these contracts
is included in the accompanying financial statements. See "Summary of
significant accounting policies." The terms of the open contracts are as
follows:
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
May 4, 1998 66,843 119,984 $26 $--
U. S. Dollar Deutsche Mark
May 4, 1998 195,443 987,478 -- 58
U. S. Dollar South African Rand
Total $26 $58
6
Option contracts
written
The number of contracts and premium amounts associated with options
contracts written is as follows:
Six months ended April 30, 1998
Puts
Contracts Premium
Balance Oct. 31, 1997 -- $ --
Opened 5 3,725
Balance April 30, 1998 5 $3,725
See "Summary of significant accounting policies."
7
Interest rate
futures contracts
At April 30, 1998, investments in securities included securities valued at
$465,572 that were pledged as collateral to cover initial margin deposits
on five open purchase contracts. The market value of the open purchase
contracts at April 30, 1998 was $271,563 with a net unrealized gain of
$4,441. See "Summary of significant accounting policies."
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<CAPTION>
8. Financial highlights
The tables below show certain important financial information for
evaluating the Fund's results.
Fiscal period endedOct. 31,
Per share income and capital changesa
Class A Class B Class Y
<S> <C> <C> <C> <C> <C> <C>
1998(b) 1997(c) 1998(b) 1997(c) 1998(b) 1997(c)
Net asset value, $5.33 $5.00 $5.31 $5.00 $5.33 $5.00
beginning of period
Income from investment operations:
Net investment income (loss) .06 .09 .04 .06 .06 .10
Net gains (losses) (both .68 .31 .69 .30 .69 .31
realized and unrealized)
Total from investment operations .74 .40 .73 .36 .75 .41
Less distributions:
Dividends from net
investment income (.05) (.07) (.04) (.05) (.06) (.08)
Distributions from
realized gains (.01) -- (.01) -- (.01) --
Total distributions (.06) (.07) (.05) (.05) (.07) (.08)
Net asset value, $6.01 $5.33 $5.99 $5.31 $6.01 $5.33
end of period
Ratios/supplemental data
Class A Class B Class Y
1998b 1997c 1998b 1997c 1998b 1997c
Net assets, end of $51 $31 $33 $19 $-- $--
period (in millions)
Ratio of expenses to 1.37%e 1.45%e,f 2.14%e 2.22%e,f 1.35%e 1.30%e,f
average daily net assetsd
Ratio of net income (loss) to 1.74%e 2.18%e .98%e 1.41%e 1.80%e 2.46%e
average daily net assets
Portfolio turnover rate 38% 44% 38% 44% 38% 44%
(excluding short-term
securities)
Total returng 14.2% 8.1% 13.7% 7.3% 14.2% 8.2%
Average brokerage $.0231 $.0339 $.0231 $.0339 $.0231 $.0339
commission rateh
a For a share outstanding throughout the period. Rounded to the nearest
cent.
b Six months ended April 30, 1998 (Unaudited).
c Inception date period from Nov. 13, 1996 to Oct. 31, 1997.
d Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
e Adjusted to an annual basis.
f During the period from Nov. 13, 1996 to Oct. 31, 1997, AEFC reimbursed
the Fund for certain expenses. Had AEFC not done so, the annual ratios of
expenses would have been 2.29%, 2.96% and 2.14% for Class A, B, and Y,
respectively.
g Total return does not reflect payment of a sales charge.
h The 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.
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<PAGE>
Investments in securities
IDS Global Balanced Fund
April 30, 1998 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Common stocks (58.9%)
Issuer Shares Value(a)
Australia (0.2%)
Banks and savings & loans
Westpac Banking 28,000(b) $188,110
Brazil (0.4%)
Energy (0.2%)
Petroleo Brasileiro ADR 7,000(b) 177,139
Utilities -- electric (0.2%)
Centrais Eletricas Brasileiras
ADR 7,000 145,321
Chile (0.1%)
Utilities -- telephone
Cia de Telecomunicaciones
de Chile ADR 2,000 50,125
France (6.9%)
Automotive & related (0.3%)
Michelin Cl B 3,478 219,234
Banks and savings & loans (1.8%)
Banque Natl de Paris 17,200 1,450,741
Computers & office equipment (0.7%)
Dassault Systems 15,460 606,981
Energy (0.8%)
TOTAL Cl B 5,600(b) 666,112
Food (0.3%)
Sodexho Alliance 1,167 213,753
Household products (1.9%)
Rhone-Poulenc Cl A 32,438 1,587,094
Leisure time & entertainment (1.1%)
Accor 3,300 899,800
Germany (2.7%)
Automotive & related (0.1%)
Volkswagen AG 87 69,288
Banks and savings & loans (1.1%)
Bayerische Vereinsbank 12,061(b) 917,531
Chemicals (0.6%)
Henkel KGaA 6,790 529,789
Industrial equipment & services (0.9%)
Mannesmann 897(b) 711,881
Hong Kong (1.2%)
Financial services
Cheung Kong Holdings 145,000(b) 964,047
Italy (3.8%)
Banks and savings & loans (2.2%)
Credito Italiano 182,600 959,727
Instituto Bancario
San Paolo di Torino 59,389 858,308
Total 1,818,035
Utilities -- telephone (1.6%)
Telecom Italia 179,900 1,345,688
Japan (3.1%)
Banks and savings & loans (0.4%)
Sakura Bank 100,000 343,920
Computers & office equipment (0.6%)
Fujitsu 42,000 490,476
Electronics (1.4%)
NEC 38,000 427,967
Rohm 5,000(b) 564,626
Tokyo Electron 4,000 157,218
Total 1,149,811
Financial services (0.2%)
Sumitomo Realty
& Development 36,000 172,789
Media (0.5%)
Sony 4,800 399,456
Mexico (1.0%)
Banks and savings & loans (0.7%)
Grupo Financiero
Bancomer Cl B 795,200(b) 549,190
Media (0.3%)
Grupo Televisa ADR 5,700(b) 233,700
Netherlands (3.7%)
Computers & office equipment (0.5%)
Baan 9,626 $421,712
Household products (0.4%)
Unilever 33,490 356,839
Industrial equipment & services (0.6%)
Philips Electronics 5,553 489,299
Insurance (2.2%)
ING Groep 27,700 1,800,411
Singapore (0.7%)
Banks and savings & loans (0.2%)
Oversea-Chinese Banking 4,000 21,099
United Overseas Bank 25,000(b) 118,445
Total 139,544
Building materials & construction (0.3%)
Singapore Technologies
Engineering 325,000(b) 279,208
Financial services (0.2%)
City Developments 46,000 199,051
Spain (1.5%)
Banks and savings & loans (1.0%)
Argentaria 9,625(b) 802,610
Building materials & construction (0.5%)
Grupo Acciona 1,670 375,997
Sweden (0.7%)
Communications equipment & services
Ericsson (LM) Cl B 10,650 561,251
Switzerland (3.3%)
Banks and savings & loans (2.1%)
Credit Suisse Group 3,406 748,971
Schweizer Bankgesellschaft 590(b) 949,850
Total 1,698,821
Health care (1.2%)
Novartis 625 1,032,851
United Kingdom (6.8%)
Banks and savings & loans (0.4%)
Barclays 12,915(b) $370,923
Chemicals (0.6%)
Imperial Chemical Inds 28,041(b) 508,442
Energy (0.5%)
Shell Transport & Trading 54,189 402,901
Healthcare (0.5%)
SmithKline Beecham 34,213 410,039
Multi-industry conglomerates (1.7%)
General Electric PLC 105,080(b) 859,061
Williams ADR 74,072 567,466
Total 1,426,527
Retail (1.4%)
Great Universal Stores 73,258 1,118,166
Transportation (0.3%)
British Airways 23,580 247,698
Utilities -- telephone (1.4%)
Orange 81,737 594,056
Vodafone 50,036 551,132
Total 1,145,188
United States (23.4%)
Banks and savings & loans (2.1%)
Banc One 16,720 983,345
BankAmerica 9,200 782,000
Total 1,765,345
Computers & office equipment (2.5%)
Cisco Systems 11,425(b) 836,881
Compaq Computer 17,000 477,062
Natl Data 21,100 861,143
Total 2,175,086
Electronics (1.4%)
Intel 14,600 1,179,863
Energy equipment & services (0.9%)
Baker Hughes 18,600 753,300
Financial services (3.0%)
CIT Group Cl A 21,890 $775,726
Fannie Mae 14,700 880,162
Travelers Group 13,300 813,793
Total 2,469,681
Health care (1.3%)
Pfizer 9,400 1,069,838
Health care services (1.1%)
HBO & Co 15,700 939,056
Household products (0.9%)
Colgate-Palmolive 8,500 762,344
Industrial equipment & services (1.1%)
Illinois Tool Works 12,400 874,200
Insurance (1.1%)
American Intl Group 7,080 931,463
Leisure time & entertainment (1.1%)
Disney (Walt) 7,440 $924,885
Media (1.3%)
Interpublic Group of Cos 17,150 1,095,456
Multi-industry conglomerates (0.9%)
General Electric 8,660 737,183
Retail (3.4%)
Safeway 26,600(b) 1,017,450
Walgreen 23,300 803,850
Wal-Mart Stores 20,600 1,041,588
Total 2,862,888
Utilities -- telephone (1.3%)
AirTouch Communications 19,800(b) 1,051,875
Total common stocks
(Cost: $40,157,808) $49,279,952
<PAGE>
<TABLE>
<CAPTION>
Bonds (35.1%)
<S> <C> <C> <C>
Issuer Coupon Principal Value(a)
rate amount
Argentina (0.3%)
Comp Nav Perez Companc
(U.S. Dollar)
01-30-04 9.00% $100,000(c) $101,000
Republic of Argentina
(U.S. Dollar)
01-30-17 11.38 150,000 166,125
Total 267,125
Brazil (0.6%)
Espirito Santo Centrais
(U.S. Dollar) Sr Nts
07-15-07 10.00 200,000(c) 192,928
Republic of Brazil
(U.S. Dollar)
05-15-27 10.13 300,000 289,578
Total 482,506
Canada (0.7%)
Govt of Canada
(Canadian Dollar)
06-01-23 8.00 400,000 362,625
Rogers Communication
(Canadian Dollar) Sr Nts
07-24-07 6.37 300,000 212,435
Total 575,060
China (0.3%)
Greater Beijing
(U.S. Dollar) Sr Nts
06-15-07 9.50 300,000(c) 238,962
Denmark (0.6%)
Govt of Denmark
(Danish Krone)
05-15-03 8.00 600,000 99,319
11-10-24 7.00 2,500,000 428,663
Total 527,982
Germany (4.0%)
Federal Republic of Germany
(Deutsche Mark)
06-20-16 6.00 1,850,000 1,117,152
07-04-27 6.50 1,400,000 888,546
Treuhandanstalt
(Deutsche Mark)
01-29-03 7.125 2,000,000 1,231,906
Total 3,237,604
Greece (0.6%)
Hellenic Republic
(Greek Drachma)
03-21-00 9.80 160,000,000 508,144
Hong Kong (1.4%)
Dao Heng Bank
(U.S. Dollar) Sub Nts
01-24-07 7.75 600,000(c) 543,972
Guangdong Enterprises
(U.S. Dollar) Sr Nts
05-22-07 8.88 200,000(c) 177,758
Hutchison Whampo Finance
(U.S. Dollar) Company Guaranty
08-01-27 7.50 525,000(c) 472,626
Total 1,194,356
Indonesia (0.1%)
Tjiwi Kimia FN Mauritius
(U.S. Dollar) Company Guaranty
08-01-04 10.00 100,000 82,000
Japan (0.3%)
Sony
(U.S. Dollar)
03-04-03 6.13 250,000 250,230
Mexico (1.2%)
Banco Nacional de Comercio Exterior
(U.S. Dollar)
02-02-04 7.25 500,000 471,250
Bancomext Trust
(U.S. Dollar)
05-30-06 11.25 150,000(c) 170,802
United Mexican States
(U.S. Dollar)
05-15-26 11.50 150,000 180,750
United Mexican States
(British Pound) Medium-term Nts Series E
05-30-02 14.48 125,000 205,145
Total 1,027,947
Norway (1.2%)
Govt of Norway
(Norwegian Krone)
11-30-04 5.75 7,200,000 987,365
Panama (0.3%)
Banco General
(U.S. Dollar)
08-01-02 7.70 250,000(c) 248,358
Peru (0.3%)
Southern Peru Copper
(U.S. Dollar)
05-30-07 7.90 250,000 255,320
Philippines (0.2%)
Philippine Long Distance Telephone
(U.S. Dollar) Medium-term Nts Series E
03-06-17 8.35 150,000(c) 135,696
Russia (0.2%)
Tatneft Finance
(U.S. Dollar) Company Guaranty
10-29-02 9.00 150,000(c) 136,415
South Africa (0.4%)
Escom
(South Africa Rand)
09-01-01 8.00 1,000,000 173,440
Republic of South Africa
(South African Rand)
02-28-05 12.00 1,000,000 191,632
Total 365,072
South Korea (0.9%)
Hyundai Semiconductor
(U.S. Dollar) Sr Nts
05-15-07 8.63 200,000(c) 175,729
Korea Development Bank
(U.S. Dollar)
05-15-06 7.25 75,000 67,804
Korea Electric Power
(U.S. Dollar)
07-01-02 8.00 200,000 191,757
Republic of Korea
(U.S. Dollar)
04-15-08 8.88 330,000 324,670
Total 759,960
Spain (0.5%)
Govt of Spain
(Spanish Peseta)
04-30-06 8.80 53,700,000 438,622
Sweden (0.7%)
Govt of Sweden
(Swedish Krona)
02-09-05 6.00 1,300,000 175,611
08-15-07 8.00 1,600,000 247,491
Paulson Enteprenad
(Swedish Krona)
12-15-00 6.14 1,000,000 120,423
Total 543,525
United Kingdom (3.2%)
United Kingdom Treasury
(British Pound)
03-03-00 9.00 250,000 435,595
07-14-00 13.00 250,000 472,468
06-07-02 7.00 75,000 129,569
06-10-03 8.00 100,000 181,912
04-18-05 9.50 340,000 681,442
08-25-17 8.75 350,000 776,217
Total 2,677,203
United States (16.6%)
ABN-Amro Bank
(U.S. Dollar)
05-15-23 7.75 300,000 328,653
California Infrastructure
Pacific Gas & Electric
(U.S.Dollar)
06-25-03 6.16 400,000 402,240
EES Coke Battery
(U.S. Dollar) Sr Nts
04-15-02 7.13 169,901(c) 171,248
Federal Natl Mtge Assn
(U.S. Dollar)
03-01-27 7.50 263,660 271,064
Ford Motor Credit
(U.S. Dollar)
09-10-02 6.55 400,000 405,372
GTE North
(U.S. Dollar) Series F
02-15-10 6.38 250,000 249,048
Morgan (JP)
(U.S. Dollar) Sr Sub Medium-term Nts Series A
02-15-12 4.00 100,000(d) 92,781
Phillips Petroleum
(U.S. Dollar)
03-15-28 7.13 200,000 195,032
Resolution Funding Corp
(U.S. Dollar)
01-15-19 3.45 250,000 69,480
TU Electric Capital
(U.S. Dollar) Company Guaranty
01-30-37 8.18 100,000 102,318
U.S. Treasury
(U.S. Dollar)
11-15-99 5.88% $1,350,000 $1,355,751
11-30-99 5.63 800,000 800,728
05-15-00 6.38 500,000 507,545
08-31-00 6.25 600,000 608,358
11-15-01 7.50 1,200,000 1,270,656
02-28-03 5.50 650,000 645,600
02-15-05 7.50 650,000 713,876
10-15-06 6.50 465,000 487,441
11-15-16 7.50 2,900,000(g) 3,375,397
11-15-26 6.50 300,000 319,506
02-15-27 6.63 700,000 758,520
(U.S. Dollar) TIPS
01-15-07 3.375 200,000(e) 197,942
USX
(U.S. Dollar)
03-01-08 6.85 200,000 200,680
Zurich Capital
(U.S. Dollar) Company Guaranty
06-01-37 8.38 125,000(c) 136,721
Total 13,665,957
Venezuela (0.5%)
Govt of Venezuela
(U.S. Dollar) Series DM
03-31-07 2.42 512,000 246,472
Venezuela Synthetic
(Deutsche Mark)
12-29-03 5.54 350,000 199,169
Total 445,641
Total bonds
(Cost: $28,884,255) $29,051,050
Other (--%)
Issuer Shares Value(a)
France
Rhone-Poulenc
Warrants 3,777 $18,222
Total other
(Cost: $--) $18,222
Short-term securities (5.7%) (f)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
U.S. government agency
Federal Home Loan Mtge Corp Disc Nts
05-08-98 5.45% $100,000 $99,894
05-20-98 5.42 4,200,000 4,188,030
05-22-98 5.42 500,000 498,425
Total short-term securities
(Cost: $4,786,349) $4,786,349
Total investments in securities
(Cost: $73,828,412) (h) $83,135,573
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 securities values are stated in U.S.dollars.
For debt securities, principal amounts are denominated in the currency
indicated.
(b) Non-income producing.
(c) Represents a security sold under Rule 144A, which is exempt
from registration under the Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines established by the board.
(d) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on April 30, 1998.
(e) U.S. Treasury inflation-protection securities (TIPS) are securities in which
the principal amount is adjusted for inflation and the
semi-annual interest payments equal a fixed percentage of the inflation-adjusted
principal amount.
(f) At April 30, 1998, cash or short-term securities were designated to cover
open put options written as follows:
Issuer Shares Exercise Expiration Value(a)
price date
U.S. Treasury Bonds,
June 1998 500 $118 May 1998 $3,725
(g) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 7 to the financial statements):
Type of security Notional amount
Purchase contracts
British Gilt futures $2,500
(h) At April 30, 1998, the cost of securities for federal income tax purposes
was approximately $73,821,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation ........................................$10,406,000
Unrealized depreciation .........................................(1,091,000)
Net unrealized appreciation .....................................$9,315,000
</TABLE>
<PAGE>
Board members and officers
Independent board members and officers
Chairman William R. Pearce*
of the board 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).
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.
Heinz F. Hutter
Former president and chief operating officer, Cargill, Inc.
Anne P. Jones
Attorney and telecommunications consultant.
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.
Officer
Vice president, Leslie L. Ogg*
general counsel President, treasurer and corporate secretary of Board Services
and secretary Corporation.
Board members and officers associated with AEFC
President John R. Thomas*
Senior vice president, AEFC.
William H. Dudley*
Senior advisor to the chief executive officer, AEFC.
David R. Hubers*
President and chief executive officer, AEFC.
Officers associated with AEFC
Vice president Peter J. Anderson*
Senior vice president, AEFC
Treasurer Matthew N. Karstetter*
Vice president, AEFC
* Interested person as defined by the Investment Company Act of 1940.
<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 with countries
IDS Global Growth Fund
Invests in a Portfolio comprised primarily of stocks of companies throughout the
world that are positioned to meet market needs in a changing world economy.
These companies offer above-average potential for long-term growth.
(icon of) world
IDS International Fund
Invests primarily in common stocks of foreign companies that offer potential for
superior growth. The Fund may invest up to 20% of its assets in the U.S. market.
(icon of) three flags
IDS Global Balanced Fund
Invests in stocks and bonds in, for the most part, major markets throughout the
world, including the U.S. Seeks to provide a balance of growth of capital and
current income.
(icon of) scale of globes
IDS Global Bond Fund
Invests in a Portfolio comprised primarily of debt securities of U.S. and
foreign issuers to seek high total return through income and growth of capital.
(icon of) globe
Growth funds
Funds in this group seek capital growth, primarily from common stocks. They are
high risk mutual funds with a potential for high reward.
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic companies that
explore for, mine and process or distribute gold and other precious metals. A
highly aggressive and speculative fund that seeks long-term growth of capital.
(icon of) cart of precious gems
IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies emphasizing
technological innovation and productivity enhancement. Buys and holds larger
growth-oriented stocks.
(icon of) ship
IDS Small Company Index Fund
Invests in all or a representative group of the equity securities comprising the
S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation.
(icon of) building
IDS Strategy Aggressive Fund
Invests primarily in common stocks of companies that are selected for their
potential for above-average growth. Above-average means that their growth
potential is better, in the opinion of the portfolio's investment manager, than
the Standard & Poor's Corporation (S&P) 500 Stock Index.
(icon of) chess piece
IDS Research Opportunities Fund
Invests in a Portfolio comprised primarily of equity securities of companies
included in the S&P 500 Index that are believed to have strong growth potential.
The Portfolio is managed using a research methodology by the Research Department
of AEFC. Goal is long-term appreciation.
(icon of) magnifying glass
IDS Growth Fund
Invests in a Portfolio comprised primarily of companies that have above-average
potential for long-term growth as a result of new management, marketing
opportunities or technological superiority.
(icon of) trees
IDS New Dimensions Fund
Invests in a Portfolio comprised primarily of companies with
significant growth potential due to superiority in
technology, marketing or management. The Fund frequently
changes its industry mix.
(icon of) dimension
IDS Progressive Fund
Invests primarily in undervalued common stocks. The Fund holds stocks for the
long term with the goal of capital growth.
(icon of) shooting star
Growth & income funds
These funds focus on securities of medium to large, well-established companies
that offer long-term growth of capital and reasonable income from dividends and
interest. Foreign investments may be subject to currency fluctuations and
political and economic risks of the countries in which the investments are made.
IDS Equity Select Fund
Invests primarily in a combination of moderate growth stocks, higher-yielding
equities and bonds. Seeks growth of capital and income.
(icon of) three pine trees
IDS Blue Chip Advantage Fund
Invests in selected stocks from a major market index. Securities purchased are
those recommended by our research analysts as the best from each industry
represented on the index. Offers potential for long-term growth as well as
dividend income.
(icon of) ribbon
IDS Managed Allocation Fund
Invests in a Portfolio comprised primarily of U.S. equity securities, U.S. and
foreign debt securities, foreign equity securities and money market instruments.
The Fund provides diversification among these major investment categories and
has a target mix that represents the way the Fund's investments will be
allocated over the long term. Seeks maximum total return.
(icon of) gyroscope
IDS Stock Fund
Invests in a Portfolio comprised primarily of common stock of companies
representing many sectors of the economy. Seeks current income and growth of
capital.
(icon of) building with columns
IDS Equity Value Fund
Invests primarily in undervalued common stocks that offer potential for growth
of capital and income.
(icon of) three growing flowers
IDS Utilities Income Fund
Invests primarily in the stocks of public utility companies to seek high current
income and growth of income and capital with reduced volatility.
(icon of) light bulb
IDS Diversified Equity Income Fund
Invests in a Portfolio comprised primarily in high-yielding common stocks to
seek high current income and, secondarily, to benefit from the growth potential
offered by stock investments.
(icon of) two puzzle pieces
IDS Mutual
Invests in a Portfolio which seeks to balance between common stocks and senior
securities (preferred stocks and bonds). Seeks a balance of growth of capital
and current income.
(icon of) scale of justice
Income funds
The funds in this group invest their assets primarily in corporate bonds or
government securities to seek interest income. Secondary objective is capital
growth. Risk varies by bond quality.
IDS Extra Income Fund
Invests in a Portfolio comprised mainly of long-term, high-yielding corporate
fixed-income securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(icon of) two coins
IDS Bond Fund
Invests mainly in corporate bonds, at least 50% in the higher rated, lower risk
bond categories, or the equivalent, and in government bonds.
(icon of) Greek column
IDS Selective Fund
Invests in a Portfolio comprised primarily of high-quality corporate bonds and
other highly rated debt instruments including government securities and
short-term investments. Seeks current income and preservation of capital.
(icon of) skyline
IDS Federal Income Fund
Invests in a Portfolio comprised primarily of securities issued or guaranteed as
to the timely payment of principal and interest by the U.S. government, its
agencies and instrumentalities. Seeks a high level of current income and safety
of principal consistent with its type of investments.
(icon of) shield with eagle head
Tax-exempt income funds
These funds provide tax-free income by investing in municipal bonds. The income
is generally free from federal income tax, but a portion of the income may be
subject to state and local taxes. Risk varies by bond quality.
IDS Tax-Exempt Bond Fund
Invests mainly in bonds and notes of state or local government units, with at
least 75% in the four highest rated, lowest risk bond categories.
(icon of) shield with Greek column
IDS Insured Tax-Exempt Fund
Invests primarily in municipal securities that are insured as to the timely
payment of principal and interest. The insurance feature minimizes credit risk
of the Fund but does not guarantee the market value of the Fund's shares.
(icon of) shield with star
IDS State Tax-Exempt Funds
(CA, MA, MI, MN, NY, OH)
Invests primarily in high- and medium-grade municipal securities to provide
income to residents of each respective state that is exempt from federal, state
and local income taxes. (New York is the only state that is exempt at the local
level.)
(icon of) shield with U.S. enclosed
IDS High Yield Tax-Exempt Fund
Invests in a Portfolio comprised primarily of medium- and lower-quality
municipal bonds and notes. Lower-quality securities generally involve greater
risk of principal and income.
(icon of) shield with basket of apples enclosed
IDS Intermediate Tax-Exempt Fund
Invests in mainly investment-grade bonds and other debt securities with
intermediate-term maturities issued by state and local government units. Goal is
to seek a high level of current income exempt from federal taxes.
(icon of) shield with tree enclosed
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 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 Balanced Fund
IDS Tower 10
Minneapolis, MN 55440-0010
