1998 SEMIANNUAL REPORT
IDS
Global Growth
Fund
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 primarily in common stocks and
securities convertible into common stocks of companies throughout the world.
American Express Financial Advisors
Distributed by American Express Financial Advisors Inc.
<PAGE>
(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 fast-growing foreign companies involved in essential businesses such
as infrastructure creation, finance and environmental clean-up. As they
prosper, Global Growth Fund offers investors the potential to prosper
along with them.
Contents
From the chairman 3
From the portfolio manager 3
The Portfolio's ten largest holdings 5
Financial statements (Fund) 6
Notes to financial statements (Fund) 9
Financial statements (Portfolio) 17
Notes to financial statements (Portfolio) 20
Investments in securities 30
Board members and officers 35
IDS mutual funds 36
<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 the U.S. stock market.
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 manager
A well-positioned portfolio and strong stock markets in the U.S. and
Europe made for an exceptionally rewarding six months for IDS Global
Growth Fund. Ultimately, over the first half of the fiscal year --
November 1997 through April 1998 -- investors in the Fund's Class A shares
realized a total return of 26.0%. (This figure includes a capital gain
that was paid to shareholders in December 1997 and reduced the Fund's net
asset value by the same amount at that time.) For the six months, the
Fund's return was well ahead of that generated by the Morgan Stanley World
Index, an unmanaged group of stocks commonly used to measure the
performance of major worldwide markets.
When the period began last November, the global investment world was still
in a state of shock as a result of the financial crisis that first struck
Asia in late October. Within a few weeks, though, investors were coming to
the conclusion that the major markets of the U.S. and Europe would likely
weather the "Asian flu" with relatively little negative effect. Europe led
the way, rallying through the winter and into the spring. The U.S., on the
other hand, essentially marked time until February, when it exploded with
a two-month surge that ended the period on a resoundingly positive note.
Favorable environments
in the U.S. and Europe
In the U.S., where I maintained an investment exposure of roughly 30%-40%
during the six months, the story was the same as it's been for the past
three years: low inflation, low long-term interest rates, solid economic
growth and surprisingly good corporate profits -- a nearly perfect
prescription for rising stock prices. The same could be said of the
investment environment in Europe, where stocks also benefited from the
trend toward corporate restructuring that had helped power the U.S. market
in previous years. The bulk of the Fund's European holdings were
concentrated in the United Kingdom, France, Italy and the Netherlands --
all told, about 60% of the portfolio. That left little to be invested in
Asia, which was by design and proved to be a prudent strategy given the
decimation most of those markets endured.
As for specific stock sectors, in the U.S. I emphasized
consumer-spending-related issues. In Europe, the principal investment
theme was financial services stocks, which enjoyed a boost from falling
interest rates. I kept very little money -- as low as 1% of portfolio
assets -- in cash reserves. This worked to the Fund's advantage, as the
returns from stock holdings far exceeded that provided by cash-equivalent
investments.
Looking ahead to the rest of the fiscal year, I think it's very unlikely
that we'll enjoy a repeat of the past six months' performance. Still, the
investment environments in the U.S. and Europe remain reasonably good.
Given that, I continue to concentrate the portfolio's assets in those
regions, emphasizing stocks of companies that appear best able to generate
consistent earnings growth.
John O'Brien
(picture of) John O'Brien
John O'Brien
Portfolio manager
<PAGE>
To our shareholders
Class A
6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 1998 $ 8.40
Oct. 31, 1997 $ 6.90
Increase $ 1.50
Distributions
Nov. 1, 1997 - April 30, 1998
From income $ 0.06
From capital gains $ 0.18
Total distributions $ 0.24
Total return* +26.0%**
Class B
6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 1998 $ 8.30
Oct. 31, 1997 $ 6.79
Increase $ 1.51
Distributions
Nov. 1, 1997 - April 30, 1998
From income $ 0.01
From capital gains $ 0.18
Total distributions $ 0.19
Total return* +25.5%**
Class Y
6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 1998 $ 8.40
Oct. 31, 1997 $ 6.91
Increase $ 1.49
Distributions
Nov. 1, 1997 - April 30, 1998
From income $ 0.07
From capital gains $ 0.18
Total distributions $ 0.25
Total return* +26.0%**
*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 Portfolio's ten largest holdings
Percent Value
(of Portfolio's net assets) (as of April 30, 1998)
ING Groep (Netherlands) 3.85% $50,930,193
Credito Italiano (Italy) 3.24 42,830,350
General Electric (United Kingdom) 2.87 37,955,138
Rhone-Poulenc Cl A (France) 2.82 37,280,074
Mannesmann (Germany) 2.77 36,628,142
Great Universal Stores
(United Kingdom) 2.71 35,875,920
Banca Intesa (Italy) 2.56 33,893,661
Dassault Systems (France) 2.34 31,016,506
Philips Electronics (Netherlands) 2.10 27,756,036
Instituto Bancario San Paulo di Torino
(Italy) 2.06 27,336,439
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 27.32%
of the Portfolio's net assets
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<CAPTION>
Financial statements
Statement of assets and liabilities
IDS Global Growth Fund
April 30, 1998
Assets
(Unaudited)
<S> <C> <C>
Investment in World Growth Portfolio (Note 1) $1,322,343,545
--------------
Liabilities
Accrued distribution fees 5,654
Accrued service fee 4,592
Accrued transfer agency fee 5,885
Accrued administrative services fee 1,760
-----
Total liabilities 17,891
------
Net assets applicable to outstanding capital stock $1,322,325,654
==============
Represented by
Capital stock-- $.01 par value (Note 1) $ 1,578,375
Additional paid-in capital 1,002,659,174
Excess of distributions over net investment income (3,220,738)
Accumulated net realized gain (loss) (Note 1) 54,573,053
Unrealized appreciation (depreciation) on investments and on translation
of assets and liabilities in foreign currencies 266,735,790
-----------
Total-- representing net assets applicable to outstanding capital stock $1,322,325,654
==============
Net assets applicable to outstanding shares: Class A $1,018,897,983
Class B $ 280,344,618
Class Y $ 23,083,053
Net asset value per share of outstanding capital stock: Class A shares 121,304,682 $ 8.40
Class B shares 33,785,441 $ 8.30
Class Y shares 2,747,382 $ 8.40
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Statement of operations
IDS Global Growth Fund
Six months ended April 30, 1998
Investment income
(Unaudited)
Income:
<S> <C>
Dividends $ 5,674,787
Interest 1,490,531
Less foreign taxes withheld (339,153)
--------
Total income 6,826,165
---------
Expenses (Note 2):
Expenses allocated from World Growth Portfolio 4,785,373
Distribution fee -- Class B 897,277
Transfer agency fee 1,062,537
Incremental transfer agency fee-- Class B 16,639
Service fee
Class A 787,504
Class B 208,023
Class Y 10,392
Administrative services fees and expenses 297,783
Compensation of board members 5,014
Postage 39,817
Reports to shareholders 133
Registration fees 46,152
Audit fees 3,625
Other 3,763
-----
Total expenses 8,164,032
---------
Earnings credits on cash balances (Note 2) (94,543)
-------
Total net expenses 8,069,489
---------
Investment income (loss) -- net (1,243,324)
----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions 46,616,957
Foreign currency transactions 8,088,540
---------
Net realized gain (loss) on investments 54,705,497
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 223,211,794
-----------
Net gain (loss) on investments and foreign currencies 277,917,291
-----------
Net increase (decrease) in net assets resulting from operations $276,673,967
============
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets
IDS Global Growth Fund
Operations and distributions April 30, 1998 Oct. 31, 1997
Six months ended Year ended
(Unaudited)
<S> <C> <C>
Investment income (loss)-- net $ (1,243,324) $ 5,641,919
Net realized gain (loss) on investments 54,705,497 28,598,422
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 223,211,794 37,958,543
----------- ----------
Net increase (decrease) in net assets resulting from operations 276,673,967 72,198,884
----------- ----------
Distributions to shareholders from:
Net investment income
Class A (7,469,662) (28,168,728)
Class B (381,862) (4,484,312)
Class Y (218,480) (638,540)
Net realized gain
Class A (21,935,266) (53,866,031)
Class B (5,756,015) (9,804,471)
Class Y (560,473) (1,160,638)
-------- ----------
Total distributions (36,321,758) (98,122,720)
----------- -----------
Capital share transactions (Note 3)
Proceeds from sales
Class A shares (Note 2) 470,579,877 616,162,763
Class B shares 31,135,159 108,742,262
Class Y shares 5,412,437 11,904,314
Reinvestment of distributions at net asset value
Class A shares 28,786,647 80,789,966
Class B shares 6,101,542 14,226,612
Class Y shares 778,953 1,799,178
Payments for redemptions
Class A shares (556,452,521) (696,086,506)
Class B shares (Note 2) (28,993,786) (40,144,963)
Class Y shares (7,749,087) (11,823,251)
---------- -----------
Increase (decrease) in net assets from capital share transactions (50,400,779) 85,570,375
----------- ----------
Total increase (decrease) in net assets 189,951,430 59,646,539
Net assets at beginning of period 1,132,374,224 1,072,727,685
------------- -------------
Net assets at end of period $1,322,325,654 $1,132,374,224
============== ==============
Undistributed (excess of distributions over) net investment income $ (3,220,738) $ 6,092,590
-------------- --------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
IDS Global Growth Fund
(Unaudited as to April 30, 1998)
1
Summary of
significant
accounting policies
The Fund is a series of IDS Global Series, Inc. is registered under the
Investment Company Act of 1940 (as amended) as a 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. 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.
Investment in World Growth Portfolio
Effective May 13, 1996, the Fund began investing all of its assets in
World Growth Portfolio (the Portfolio), a series of World Trust, an
open-end investment company that has the same objectives as the Fund. This
was accomplished by transferring the Fund's assets to the Portfolio in
return for a proportionate ownership interest in the Portfolio. World
Growth Portfolio seeks to provide shareholders with a long-term growth of
capital by investing primarily in common stocks and securities convertible
into common stocks of companies throughout the world.
The Fund records daily its share of the Portfolio's income, expenses and
realized and unrealized gains and losses. The financial statements of the
Portfolio are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements.
The Fund records its investment in the Portfolio at the value which is
equal to the Fund's proportionate ownership interest in the net assets of
the Portfolio. The percentage of the Portfolio owned by the Fund at April
30, 1998 was 99.94%. Valuation of securities held by the Portfolio is
discussed in Note 1 of the Portfolio's "Notes to financial statements,"
which are included elsewhere in this report.
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.
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) allocated
from the Portfolio 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
An annual dividend declared and paid by the end of the calendar year from
net investment income is reinvested in additional shares of the Fund at
net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
2
Expenses and
sales charges
In addition to the expenses allocated from the Portfolio, the Fund accrues
its own expenses as follows:
Effective March 20, 1995, the Fund entered into agreements with American
Express Financial Corporation (AEFC) for providing administrative services
. 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 0.035%
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
Also effective March 20, 1995, 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 $948,219 for Class A and $125,625 for Class
B for the six months ended April 30, 1998.
During the six months ended April 30, 1998, the Fund's transfer agency
fees were reduced by $94,543 as a result of earnings credits from
overnight cash balances.
3
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 62,385,149 4,198,705 731,854
Issued for reinvested 4,209,191 900,598 113,899
distributions
Redeemed (74,248,570) (4,034,428) (1,079,323)
Net increase (decrease) (7,654,230) 1,064,875 (233,570)
Year ended Oct. 31, 1997
Class A Class B Class Y
Sold 87,554,390 15,597,722 1,674,726
Issued for reinvested 12,112,441 2,150,985 269,701
distributions
Redeemed (98,216,986) (5,704,957) (1,643,746)
Net increase (decrease) 1,449,845 12,043,750 300,681
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<CAPTION>
Global Growth Fund
4
Financial
highlights
The tables below show certain important financial information for evaluating the
Fund's results.
Fiscal period ended Oct. 31,
Per share income and capital changes(a)
Class A
1998 b 1997 1996 1995 1994 1993 1992 1991 1990c
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $6.90 $7.12 $6.37 $6.96 $6.30 $4.92 $5.03 $4.67 $5.00
beginning of period
Income from investment operations:
Net investment income (loss) -- .03 .08 .10 .04 .02 .04 .08 .04
Net gains (losses) 1.74 .39 .83 (.59) .73 1.43 (.11) .36 (.37)
(both realized and unrealized)
Total from investment operations 1.74 .42 .91 (.49) .77 1.45 (.07) .44 (.33)
Less distibutions:
Divideds from net investment (.06) (.22) (.13) (.05) (.02) (.03) (.04) (.08) --
income
Distributions from realized gains (.18) (.42) (.03) (.05) (.09) (.03) -- -- --
Excess distributions of realized gains -- -- -- -- -- (.01) -- -- --
Total distributions (.24) (.64) (.16) (.10) (.11) (.07) (.04) (.08) --
Net asset value, $8.40 $6.90 $7.12 $6.37 $6.96 $6.30 $4.92 $5.03 $4.67
end of period
Ratios/supplemental data
Class A
1998 b 1997 1996 1995 1994 1993 1992 1991 1990c
Net assets, end of $1,019 $889 $908 $659 $670 $244 $69 $38 $21
period (in millions)
Ratio of expenses to 1.24% e 1.27% 1.37% 1.39% 1.38% 1.51% 1.72% 1.70% .81%e
average daily net assets(d)
Ratio of net income (loss) to (.06%) e .60% 1.45% 1.59% .85% .80% 1.16% 1.66% 2.99% e
average daily net assets
Portfolio turnover rate (excluding 40% 199% 134% 90% 26% 27% 41% 33% 20%
short-term securities)
Total return(f) 26.0% 6.2% 14.5% (7.0%) 12.1% 29.9% (1.5%) 9.8% (6.7%)
Average brokerage $.0335 $.0113 $.0094 -- -- -- -- -- --
commission rate(g)
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 May 29, 1990 to Oct. 31, 1990.
d Effective fiscal year 1996, 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 Total return does not reflect payment of a sales charge.
g Effective fiscal year 1996, 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.
</TABLE>
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<TABLE>
<CAPTION>
Performance
Financial highlights
Fiscal period ended Oct. 31,
Per share income and capital changes(a)
Class B Class Y
1998 b 1997 1996 1995c 1998 b 1997 1996 1995c
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $6.79 $7.05 $6.34 $5.82 $6.91 $7.13 $6.38 $5.82
beginning of period
Income from investment operations:
Net investment income (loss) (.05) -- .05 .02 .03 .03 .09 .06
Net gains (losses) on securities 1.75 .35 .81 .50 1.71 .40 .83 .50
(both realized and unrealized)
Total from investment operations 1.70 .35 .86 .52 1.74 .43 .92 .56
Less distributions:
Dividends from net (.01) (.19) (.12) -- (.07) (.23) (.14) --
investment income
Distributions from realized gains (.18) (.42) (.03) -- (.18) (.42) (.03) --
Total distributions (.19) (.61) (.15) -- (.25) (.65) (.17) --
Net asset value, $8.30 $6.79 $7.05 $6.34 $8.40 $6.91 $7.13 $6.38
end of period
Ratios/supplemental data
Class B Class Y
1998 b 1997 1996 1995c 1998 b 1997 1996 1995c
Net assets, end of $280 $222 $146 $21 $23 $21 $19 $24
period (in millions)
Ratio of expenses to 2.01% e 2.03% 2.14% 2.16%e 1.16% e 1.15% 1.19% 1.20%e
average daily net assets(d)
Ratio of net income (loss) to (.81%)e (.18%) 1.05% .85% e -- .72% 1.60% 2.37%e
average daily net assets
Portfolio turnover rate (excluding 40% 199% 134% 90% 40% 199% 134% 90%
short-term securities)
Total return(f) 25.5% 5.5% 13.6% 8.9% 26.0% 6.3% 14.7% 9.6%
Average brokerage $.0335 $.0113 $.0094 -- $.0335 $.0113 $.0094 --
commission rate(g)
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended April 30, 1998 (Unaudited).
c Inception date was March 20, 1995.
d Effective fiscal year 1996, 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 Total return does not reflect payment of a sales charge.
g Effective fiscal year 1996, 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.
</TABLE>
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<CAPTION>
Financial statements
Statement of assets and liabilities
World Growth Portfolio
April 30, 1998
Assets
(Unaudited)
Investments in securities, at value (Note 1)
<S> <C>
(identified cost $1,155,369,019) $1,422,296,063
Dividends and accrued interest receivable 2,101,495
Receivable for investment securities sold 19,253,499
Unrealized appreciation on foreign currency contracts held, at value (Notes 1 and 4) 784
U.S. government securities held as collateral (Note 5) 17,241,197
----------
Total assets 1,460,893,038
-------------
Liabilities
Disbursements in excess of cash on demand deposit 9,061,880
Payable for investment securities purchased 1,743,218
Payable upon return of securities loaned (Note 5) 126,714,597
Unrealized depreciation on foreign currency contracts held, at value (Notes 1 and 4) 45,462
Accrued investment management services fee 26,540
Other accrued expenses 175,700
-------
Total liabilities 137,767,397
-----------
Net assets $1,323,125,641
==============
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Financial statements
Statement of operations
World Growth Portfolio
Six months ended April 30, 1998
Investment income
(Unaudited)
Income:
<S> <C>
Dividend $ 5,678,081
Interest 1,488,657
Less foreign taxes withheld (339,352)
--------
Total income 6,827,386
---------
Expenses (Note 2):
Investment management services fee 4,409,612
Compensation of board members 6,138
Custodian fees 359,381
Audit fees 11,000
Other 12,995
------
Total expenses 4,799,126
Earnings credits on cash balances (Note 2) (10,997)
-------
Total net expenses 4,788,129
---------
Investment income (loss) -- net 2,039,257
---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 46,641,666
Financial futures contracts 8,092,635
---------
Net realized gain (loss) on investments 54,734,301
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 223,344,105
-----------
Net gain (loss) on investments 278,078,406
-----------
Net increase (decrease) in net assets resulting from operations $280,117,663
============
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Statements of changes in net assets
World Growth Portfolio
Operations April 30, 1998 Oct. 31, 1997
Six months ended Year ended
(Unaudited)
<S> <C> <C>
Investment income (loss)-- net $ 2,039,257 $ 12,285,162
Net realized gain (loss) on investments 54,734,301 28,608,288
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 223,344,105 37,976,694
----------- ----------
Net increase (decrease) in net assets resulting from operations 280,117,663 78,870,144
Net contributions (withdrawals) from partners (90,107,926) (19,158,130)
----------- -----------
Total increase (decrease) in net assets 190,009,737 59,712,014
Net assets at beginning of period 1,133,115,904 1,073,403,890
------------- -------------
Net assets at end of period $1,323,125,641 $1,133,115,904
============== ==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
World Growth Portfolio
(Unaudited as to April 30, 1998)
1
Summary of
significant
accounting policies
World Growth Portfolio (the Portfolio) is a series of World Trust (the
Trust) and is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company. World
Growth Portfolio seeks to provide a long-term growth of capital by
investing primarily in common stocks and securities convertible into
common stocks of companies throughout the world. The Declaration of Trust
permits the Trustees to issue non-transferable interests in the Portfolio.
Significant accounting polices followed by the Portfolio 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 Portfolio
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 Portfolio 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 Portfolio gives up the opportunity of
profit if the market price of the security increases. The risk in writing
a put option is that the Portfolio 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 Portfolio pays a premium whether or not the option is
exercised. The Portfolio 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
Portfolio 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 Portfolio may buy and sell financial futures contracts traded on any
U.S. or foreign exchange. The Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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 Portfolio 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 Portfolio and the resulting unrealized
appreciation or depreciation are determined using foreign currency
exchange rates from an independent pricing service. The Portfolio is
subject to the credit risk that the other party will not complete the
obligations of the contract.
Federal taxes
For federal income tax purposes the Portfolio qualifies as a partnership
and each investor in the Portfolio is treated as the owner of its
proportionate share of the net assets, income, expenses and realized and
unrealized gains and losses of the Portfolio. Accordingly, as a
"pass-through" entity, the Portfolio does not pay any income dividends or
capital gain distributions.
Other
Security transactions are accounted for on the date securities are
purchased or sold. Dividend income is recognized on the ex-dividend date
or upon receipt of ex-dividend notification in the case of certain foreign
securities. For U.S. dollar denominated bonds, interest income includes
level-yield amortization of premium and discount. For foreign bonds,
except for original issue discount, the Portfolio does not amortize
premium and discount.
2
Fees and
expenses
The Trust, on behalf of the Portfolio, has entered into an Investment
Management Services Agreement with AEFC for managing its portfolio. Under
this agreement, AEFC determines which securities will be purchased, held
or sold. The management fee is a percentage of the Portfolio's average
daily net assets in reducing percentages from 0.8% to 0.675% annually.
Under the agreement, the Trust also pays taxes, brokerage commissions and
nonadvisory expenses, which include custodian fees, audit and certain
legal fees, fidelity bond premiums, registration fees for units, office
expenses, consultants' fees, compensation of trustees, corporate filing
fees, expenses incurred in connection with lending securities of the
Portfolio and any other expenses properly payable by the Trust or
Portfolio and approved by the board.
During the six months ended April 30, 1998, the Portfolio's custodian fees
were reduced by $10,997 as a result of earnings credits from overnight
cash balances.
Pursuant to a Placement Agency Agreement, American Express Financial
Advisors Inc. acts as placement agent of the units of the Trust.
3
Securities
transactions
Cost of purchases and proceeds from sales of securities (other than
short-term obligations) aggregated $460,933,633 and $641,656,675
respectively, for the six months ended April 30, 1998. For the same
period, the portfolio turnover rate was 40%. Realized gains and losses are
determined on an identified cost basis.
4
Foreign currency
contracts
At April 30, 1998, the Portfolio had entered into foreign currency
exchange contracts that obligate the Portfolio 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 1, 1998 11,905,324 8,280,813 $ -- $45,462
Canadian Dollar U.S. Dollar
May 4, 1998 1,742,538 3,127,856 680 --
U.S. Dollar Deutsche Mark
May 6, 1998 977,712 162,758 104 --
French Franc U.S. Dollar
Total $784 $45,462
5
Lending of
portfolio securities
At April 30, 1998, securities valued at $121,487,555 were on loan to
brokers. For collateral, the Portfolio received $109,473,400 in cash and
U.S. government securities valued at $17,241,197. Income from securities
lending amounted to $224,631 for the six months ended April 30, 1998. The
risks to the Portfolio of securities lending are that the borrower may not
provide additional collateral when required or return the securities when
due.
<PAGE>
Investments in securities
World Growth Portfolio
April 30, 1998 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Common stocks (91.5%)
Issuer Shares Value(a)
Argentina (1.1%)
Financial services (0.1%)
IRSA Inversiones-
Representaciones GDR 34,500 $1,341,187
Multi-industry conglomerates (0.5%)
Perez Companc ADR 550,000 6,611,000
Utilities -- telephone (0.5%)
Telefonica de Argentina ADR170,000(c) 6,555,625
Australia (0.7%)
Transportation
Brambles Inds 465,000 9,587,184
Brazil (0.4%)
Energy
Petroleo Brasileiro ADR 237,500(b,c) 6,010,055
Canada (3.4%)
Communications equipment & services (0.9%)
Northern Telecom 200,000 12,175,000
Multi-industry conglomerates (1.0%)
Bombardier Cl B 502,700(c) 13,570,807
Utilities -- telephone (1.5%)
BCE468,200 19,927,763
Chile (0.4%)
Multi-industry conglomerates
Quinenco ADR 458,690(b,c) 4,730,241
France (11.5%)
Automotive & related (1.4%)
Michelin Cl B 285,000(b) 17,964,804
Banks and savings & loans (2.0%)
Banque Natl de Paris 306,000(b) 25,809,692
Computers & office equipment (2.3%)
Dassault Systems 790,000 31,016,506
Energy (1.9%)
TOTAL Cl B 207,723(b) 24,708,360
Food (0.1%)
Sodexho Alliance 6,432 1,178,112
Household products (2.8%)
Rhone-Poulenc Cl A 761,953(b) 37,280,074
Leisure time & entertainment (1.0%)
Accor 49,748(b) 13,564,628
Germany (5.7%)
Automotive & related (0.1%)
Volkswagen AG 2,268 1,806,260
Banks and savings & loans (2.0%)
Bayerische Vereinsbank 354,128(b,c) 26,940,004
Industrial equipment & services (2.8%)
Mannesmann 46,153(b) 36,628,142
Textiles & apparel (0.8%)
Adidas 62,768(b) 10,407,110
Hong Kong (0.4%)
Financial services
Cheung Kong Holdings 884,000(b) 5,877,362
Italy (9.4%)
Banks and savings & loans (7.9%)
Banca Intesa 6,003,766(c) 33,893,661
Credito Italiano 8,149,004(b,c) 42,830,350
Instituto Bancario
San Paolo di Torino 1,891,494(b,c) 27,336,439
Total 104,060,450
Utilities -- telephone (1.5%)
Telecom Italia 3,900,000(b) 20,563,920
Japan (3.0%)
Automotive & related (0.7%)
Honda Motor 255,000 9,251,706
Computers & office equipment (0.7%)
Fujitsu 800,000 9,342,400
Electronics (1.0%)
Fujikura 1,250,000 6,443,750
Ibiden 413,000(c) 6,524,326
Total 12,968,076
Media (0.6%)
Sony 98,000 8,155,560
Mexico (1.7%)
Financial services (0.1%)
Grupo Financiero Bancomer
Cl B 1,271,900 878,414
Paper & packaging (0.9%)
Kimberly-Clark de Mexico 2,400,000 11,780,791
Multi-industry conglomerates (0.7%)
Banco Nacional do Norte 6,000,000 9,899,826
Netherlands (7.1%)
Computers & office equipment (1.1%)
Baan 341,499(b,c) 14,960,969
Industrial equipment & services (2.1%)
Philips Electronics 315,000(b) 27,756,036
Insurance (3.9%)
ING Groep 783,580(b) 50,930,193
Singapore (0.4%)
Financial services
DBS Land 3,100,000 4,680,380
Sweden (1.0%)
Banks and savings & loans
Nordbanken Holding 1,785,832(c) 13,148,010
Switzerland (4.2%)
Banks and savings & loans (2.7%)
Credit Suisse Group 76,500(b) 16,822,151
Schweizer Bankgesellschaft 11,557(b) 18,605,792
Total 35,427,943
Health care (1.5%)
Novartis 12,268 20,273,632
United Kingdom (12.8%)
Health care (1.5%)
SmithKline Beecham 1,622,000 19,439,508
Media (1.3%)
Pearson 1,130,000 17,729,587
Multi-industry conglomerates (4.2%)
General Electric 4,642,660 37,955,138
Williams ADR 2,246,826 17,212,934
Total 55,168,072
Retail (2.7%)
Great Universal Stores 2,350,454(b) 35,875,920
Utilities -- telephone (3.1%)
Orange 3,460,894 25,153,432
Vodafone 1,440,657 15,868,405
Total 41,021,837
United States (28.3%)
Banks and savings & loans (3.6%)
BankAmerica 200,000 17,000,000
BankBoston 230,000 24,825,625
NationsBank 85,200 6,453,900
Total 48,279,525
Beverages & tobacco (0.9%)
Philip Morris 330,000 12,313,125
Communications equipment & services (0.6%)
Motorola 150,000 8,343,750
Computers & office equipment (2.2%)
Cisco Systems 225,000(b) 16,481,250
Compaq Computer 450,000 12,628,125
Total 29,109,375
Electronics (1.5%)
Intel 242,000 19,556,625
Energy equipment & services (0.9%)
Baker Hughes 300,000 12,150,000
Financial services (2.1%)
CIT Group Cl A 54,800 1,941,975
Fannie Mae 210,000 12,573,750
Travelers Group 225,000 13,767,187
Total 28,282,912
Health care (1.7%)
Pfizer 199,000 22,648,687
Health care services (1.4%)
HBO & Co 300,000 17,943,750
Household products (2.5%)
Colgate-Palmolive 145,000 13,004,688
Gillette 172,100 19,866,794
Total 32,871,482
Industrial equipment & services (1.8%)
Illinois Tool Works 340,000 23,970,000
Insurance (0.6%)
American Intl Group 56,000 7,367,500
Leisure time & entertainment (1.1%)
Disney (Walt) 117,000 14,544,562
Media (0.6%)
Interpublic Group of Cos 114,000 7,281,750
Multi-industry conglomerates (1.2%)
General Electric 180,000 15,322,500
Retail (4.2%)
Rite Aid 460,000 14,777,500
Safeway 476,000(b) 18,207,000
Wal-Mart Stores 296,000 14,966,500
Walgreen 215,000 7,417,500
Total 55,368,500
Utilities -- telephone (1.4%)
AirTouch Communications 350,000(b) 18,593,750
Total common stocks
(Cost: $951,369,429) $1,210,950,939
Other (0.7%)
Issuer Shares Value(a)
Argentina (--%)
Inversiones y Representaciones GDR
Rights 34,500(e) $--
France (0.1%)
Rhone-Poulenc
Warrants 187,676 905,443
Italy (0.6%)
Banca Intesa
Warrants 6,003,766 7,761,669
Total other
(Cost: $1,321,578) $8,667,112
Short-term securities (15.3%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
U.S. government agencies (3.5%)
Federal Home Loan Mtge Corp Disc Nts
05-18-98 5.42% $10,000,000 $9,974,500
05-29-98 5.44 10,000,000 9,957,844
Federal Natl Mtge Assn Disc Nts
05-11-98 5.43 15,000,000 14,977,458
05-11-98 5.44 1,500,000 1,497,742
05-18-98 5.44 10,000,000 9,974,358
Total 46,381,902
Commercial paper (11.6%)
ABB Treasury Center USA
05-04-98 5.54 4,126,000(d) 4,124,102
Albertson's
05-21-98 5.54 10,800,000 10,766,820
Bell Atlantic Finance
05-21-98 5.52 5,300,000 5,283,806
05-27-98 5.55 4,800,000 4,780,829
Ciesco LP
05-18-98 5.52 11,200,000 11,170,911
Commerzbank U.S. Finance
06-01-98 5.55 10,300,000 10,250,952
Consolidated Natural Gas
05-05-98 5.51 1,600,000 1,599,022
Daimler-Benz
06-04-98 5.55 11,000,000 10,942,550
Delaware Funding
05-18-98 5.53 6,500,000(d) 6,483,087
Deutsche Bank Financial
05-01-98 5.53 4,200,000 4,200,000
05-08-98 5.57 5,700,000 5,693,860
Dresdner US Finance
05-21-98 5.52 3,300,000 3,289,917
Gannett
05-14-98 5.51 6,000,000(d) 5,988,127
Glaxo Wellcome
05-20-98 5.53 5,000,000(d) 4,985,434
GTE Funding
05-18-98 5.53 5,000,000 4,986,990
Paccar Financial
05-04-98 5.54 5,000,000 4,997,700
05-05-98 5.52 2,000,000 1,998,778
05-13-98 5.54 2,400,000 2,395,584
05-26-98 5.54 13,000,000 12,950,167
Pfizer
06-03-98 5.54 3,200,000(d) 3,183,808
Toyota Motor Credit
05-01-98 5.58 7,100,000 7,100,000
05-21-98 5.54 13,179,000 13,138,511
Xerox
05-06-98 5.51 6,000,000 5,995,425
Xerox Credit
05-08-98 5.54 7,000,000 6,992,500
Total 153,298,880
Letter of credit (0.2%)
Credit Agricol-
Louis Dreyfus
05-07-98 5.54 3,000,000 2,997,230
Total short-term securities
(Cost: $202,678,012) $202,678,012
Total investments in securities
(Cost: $1,155,369,019)(f) $1,422,296,063
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
World Growth Portfolio
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.
(b) Non-income producing.
(c) Security is partially or fully on loan. See Note 5 to the financial
statements.
(d) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(e) Negligible market value.
(f) At April 30, 1998 the cost of securities for federal income tax purposes was
approximately $1,155,368,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation.......................................$291,428,000
Unrealized depreciation........................................(24,500,000)
Net unrealized appreciation...................................$266,928,000
<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.
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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
