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1997 ANNUAL REPORT
IDS
Global
Balanced Fund
(prospectus enclosed)
(icon of)scale of globes
The goal of IDS Global Balanced Fund, a part of IDS Global Series, Inc., is to
provide a balance of growth of capital and current income.
(This annual report includes a prospectus that describes in detail the Fund's
objective, investment policies, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.)
AMERICAN EXPRESS Financial Advisors
Distributed by American Express Financial Advisors Inc.
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(icon of)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.
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Contents
(icon of)one open book inside of another
The purpose of this annual report is to tell investors how the Fund performed.
The prospectus, which is bound into the middle of this annual report, describes
the Fund in detail.
1997 annual report
From the chairman 4
From the portfolio managers 4
The Fund's ten largest holdings 6
Making the most of the Fund 7
The Fund's long-term performance 8
Independent auditors' report 9
Financial statements 10
Notes to financial statements 13
Investments in securities 27
IDS mutual funds 35
Federal income tax information 39
1997 prospectus
The Fund in brief 3p
Goal 3p
Investment policies and risks 3p
Manager and distributor 3p
Portfolio managers 4p
Alternative purchase arrangements 4p
Sales charge and Fund expenses 5p
Performance 7p
Financial highlights 7p
Total returns 8p
Investment policies and risks 10p
Facts about investments and their risks 10p
Alternative investment option 16p
Valuing Fund shares 17p
How to purchase, exchange or redeem shares 18p
Alternative purchase arrangements 18p
How to purchase shares 20p
How to exchange shares 23p
How to redeem shares 24p
Reductions and waivers of the sales charge 29p
Special shareholder services 34p
Services 34p
Quick telephone reference 34p
Distributions and taxes 35p
Dividend and capital gain distributions 35p
Reinvestments 36p
Taxes 36p
How to determine the correct TIN 38p
How the Fund is organized 39p
Shares 39p
Voting rights 39p
Shareholder meetings 39p
Board members and officers 39p
Investment manager 41p
Administrator and transfer agent 41p
Distributor 42p
About American Express Financial Corporation 43p
General information 43p
Appendices 44p
Description of corporate bond ratings 44p
Descriptions of derivative instruments 46p
(This annual report is not part of the prospectus.)
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To our shareholders
(Picture of) William R. Pearce
Chairman of the board
(Picture of) Peter Lamaison
Portfolio manager
(Picture of) Ray Goodner
Portfolio manager
From the chairman
If you're an experienced investor, you know that the past few years have
been unusually strong ones in many financial markets. Perhaps just as
important, history shows that bull markets don't last forever. Though
they're often unpredictable, declines -- whether they're brief or
long-lasting, moderate or substantial -- are always a possibility. We saw
evidence of that in late October, when declines in certain Asian markets
spawned a sharp drop in several financial markets worldwide, including the
U.S.
That fact reinforces the need for investors to review periodically their
long-term goals and examine whether their investment program remains on
track to achieving them. Your quarterly investment statements are one part
of that monitoring process. The other is a meeting with your American
Express financial advisor. That becomes even more important if there's a
major change in your financial situation or in the financial markets.
/s/ W.R. Pearce
William R. Pearce
From the portfolio managers
IDS Global Balanced Fund took advantage of improving conditions in
worldwide financial markets this past spring and summer, ultimately
posting positive results for the past 12 months. In its initial fiscal
period -- Nov. 13, 1996 through October 1997 -- the Fund provided a total
return of 8.1% for Class A shares.
The early months of the period were spent investing incoming assets, a
task that was largely completed by February. During the winter, U.S.
stocks performed quite well. But the U.S. bond market languished, as did
most major foreign stock markets. The mixed environment was reflected by
the Fund's slightly negative performance for those months.
Conditions began improving in the spring, however. The U.S. stock market
shook off a March slump and rallied strongly until late summer, with bonds
largely following suit. Many foreign stock markets, especially those in
Europe and Japan, also took part in the advance, though the Fund's gains
were tempered by weak local currencies. The road was
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rockier from that point, however, and, sparked by currency crises in
Southeast Asia, the period concluded with a sharp drop in worldwide
markets at the end of October.
U.S. is largest exposure
On a country basis, we kept the most money (about one-third of Fund
assets) invested in the U.S., the majority of it in stocks. Other, though
considerably smaller, areas of investment included Japan, the United
Kingdom, France, Germany and Italy. Smaller yet were our investments in
emerging markets such as Latin America, but overall robust returns there
gave the Fund a nice boost.
As for the asset mix, most of the money (up to 62%), stayed in stocks,
followed by bonds and cash reserves. We reduced the stock allocation
somewhat over the final months of the period, as prices, particularly in
the U.S., reached especially high levels. On an ongoing basis, though, we
expect the stock portion to account for 60% to 65% of assets, with bonds
at about 30%.
Prior to the tremors that hit worldwide markets in late fall, the
investment outlook remained relatively bright. But, while the fundamentals
haven't really changed in most countries, it may take some time for the
financial markets to regain solid footing. We have reduced the Fund's
investments in the most vulnerable markets, most notably Southeast Asia
and Japan, and plan to be highly selective about adding to securities in
all parts of the world.
/s/ Peter Lamaison
Peter Lamaison
/s/ Ray Goodner
Ray Goodner
Class A
Nov. 13, 1996* - Oct. 31, 1997
(All figures per share)
Net asset value (NAV)
Oct. 31, 1997 $5.33
Nov. 13, 1996* $5.00
Increase $0.33
Distributions
Nov. 13, 1996* - Oct. 31, 1997
From income $0.07
From capital gains $ --
Total distributions $0.07
Total return** +8.1%***
Class B
Nov. 13, 1996* - Oct. 31, 1997
(All figures per share)
Net asset value (NAV)
Oct. 31, 1997 $5.31
Nov. 13, 1996* $5.00
Increase $0.31
Distributions
Nov. 13, 1996* - Oct. 31, 1997
From income $0.05
From capital gains $ --
Total distributions $0.05
Total return** +7.3%***
Class Y
Nov. 13, 1996* - Oct. 31, 1997
(All figures per share)
Net asset value (NAV)
Oct. 31, 1997 $5.33
Nov. 13, 1996* $5.00
Increase $0.33
Distributions
Nov. 13, 1996* - Oct. 31, 1997
From income $0.08
From capital gains $ --
Total distributions $0.08
Total return** +8.2%***
* Inception date.
** The prospectus discusses the effect of sales charges, if any, on the
various classes.
*** The total return is a hypothetical investment in the Fund with all
distributions reinvested.
(This annual report is not part of the prospectus.)
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The Fund's ten largest holdings
(icon of)pie chart
The ten holdings listed here make up 13.29% of the Fund's net assets
Percent Value
(of Fund's net assets) (as of Oct. 31, 1997)
Republic of Italy (Italy) 2.03% $1,012,646
8.50% 2004
Philips Electronics (Netherlands) 1.59 792,714
Rhone-Poulenc (France) 1.57 782,077
U.K. Treasury (United Kingdom) 1.33 664,042
9.50% 2005
Credito Italiano (Italy) 1.22 609,847
AirTouch Communications 1.21 602,550
(United States)
Disney Walt (United States) 1.18 587,265
Rodamco (Netherlands) 1.06 528,675
7.30% 2005
Interpublic Group of Cos 1.06 524,875
(United States)
Rite Aid (United States) 1.04 516,563
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.
(This annual report is not part of the prospectus.)
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Making the most of the Fund
Build your assets systematically
One of the best ways to invest in the Fund is by dollar-cost averaging --
a time-tested strategy that can make market fluctuations work for you. To
dollar-cost average, simply invest a fixed amount of money regularly.
You'll automatically buy more shares when the Fund's share price is low,
fewer shares when it is high.
Using this strategy does not ensure a profit or avoid a loss if the market
declines, and requires that you be able to keep on investing on a regular
basis, even when the price of your shares falls or the market declines.
Investing in this manner can be an effective way to accumulate shares to
meet your long-term goals.
How dollar cost averaging works
Month Amount Per-share Number of shares purchased
invested market price
Jan $100 $20 5.00 XXXXX
Feb 100 18 5.56 XXXXXx
March 100 17 5.88 XXXXXx
April 100 15 6.67 XXXXXXx
May 100 16 6.25 XXXXXXx
June 100 18 5.56 XXXXXx
July 100 17 5.88 XXXXXx
Aug 100 19 5.26 XXXXXx
Sept 100 21 4.76 XXXXx
Oct 100 20 5.00 XXXXX
(footnote to table) By investing an equal number of dollars each month....
(arrow in table pointing to April) you automatically buy more shares when
the per share market price is low....
(arrow pointing to Sept) and fewer shares when the per share market price
is high.
You have paid an average price of only $17.91 per share over the 10
months, while the average market price actually was $18.10.
Three ways to benefit from a mutual fund:
oyour shares increase in value when the Fund's
investments do well
oyou receive capital gains when the gains on
investments sold by the Fund exceed losses
oyou receive income when the Fund's stock dividends, interest and
short-term gains exceed its expenses.
All three make up your total return, and you potentially can increase your
investment if, like most investors, you reinvest your dividends and
capital gain distributions to buy additional shares of the Fund or another
fund.
(This annual report is not part of the prospectus.)
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The Fund's long-term performance
How $10,000 has grown in IDS Global Balanced Fund
MSCI World Index
$10,000
$9,500
SB World Government $10,280
Bond Index Global Balanced Fund
Class A
11/96 12/96 1/97 2/97 3/97 4/97 5/97 6/97 7/97 8/97 9/97 10/97
Average annual total return
(as of Oct. 31, 1997)
Since inception*
Class A +2.69%
Class B +3.31%
Class Y +8.24%
*Inception date was Nov. 13, 1996.
For purposes of the graph above, start date was Nov. 30, 1996.
Assumes: oHolding period from 11/13/96 to 10/31/97. oReturns do not
reflect taxes payable on distributions. oReinvestment of all income and
capital gain distributions for the Fund, with a value of $146. Also see
"Performance" in the Fund's current prospectus.
Morgan Stanley Capital International (MSCI) World Index, an unmanaged
market index, compiled from a composite of over 1500 companies listed on
the stock exchange of North America, Europe, New Zealand and the Far East,
is widely recognized by investors as the measurement index for portfolios
of global securities.
Salomon Brothers World Government Bond Index, an unmanaged
market-capitalization weighted benchmark that tracks the performance of
the 17 government bond markets around the world. It is widely recognized
by investors as a measurement index for portfolios of world government
bond securities.
On the graph above you can see how the Fund's total return compared to two
widely cited performance indexes, the MSCI World Index and the Salomon
Brothers World Government Bond Index. In comparing IDS Global Balanced
Fund (Class A) to the two indexes, you should take into account the fact
that the Fund's performance reflects the maximum sales charge of 5%, while
such charges are not reflected in the performance of the indexes.
Your investment and return values fluctuate so that your shares, when
redeemed, may be worth more or less than the original cost. Average annual
total return figures reflect the impact of the applicable sales charge, up
to a maximum of 5%. This was a period of widely fluctuating security
prices. Past performance is no guarantee of future results.
(This annual report is not part of the prospectus.)
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The financial statements contained in Post-Effective Amendment #28 to
Registration statement No. 33-25824 filed on or about Dec. 24, 1997, are
incorporated herein by reference.
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IDS mutual funds
Global/International funds
Funds in this group seek capital growth and/or income by investing primarily in
foreign securities. Foreign investments may be subject to currency fluctuations
and political and economic risks of the countries in which the investments are
made. They are high risk mutual funds with a potential for high reward.
IDS Emerging Markets Fund
Invests in a Portfolio comprised primarily of stocks of companies in developing
countries throughout the world that are believed to offer growth potential.
Seeks to provide long-term growth of capital.
(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.
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IDS Global Bond Fund
Invests in a Portfolio comprised primarily of debt securities of U.S. and
foreign issuers to seek high total return through income and growth of capital.
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Growth funds
Funds in this group seek capital growth, primarily from common stocks. They are
high risk mutual funds with a potential for high reward.
IDS Precious Metals Fund
Invests primarily in the securities of foreign or domestic companies that
explore for, mine and process or distribute gold and other precious metals. A
highly aggressive and speculative fund that seeks long-term growth of capital.
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IDS Discovery Fund
Invests in small- and medium-size, growth-oriented companies emphasizing
technological innovation and productivity enhancement. Buys and holds larger
growth-oriented stocks.
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IDS Small Company Index Fund
Invests in all or a representative group of the equity securities comprising the
S&P SmallCap 600 Index, as it strives to provide long-term capital appreciation.
(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.
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IDS Research Opportunities Fund
Invests in a Portfolio comprised primarily of equity securities of companies
included in the S&P 500 Index that are believed to have strong growth potential.
The Portfolio is managed using a research methodology by the Research Department
of AEFC. Goal is long-term appreciation.
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(This annual report is not part of the prospectus.)
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IDS mutual funds
IDS Growth Fund
Invests in a Portfolio comprised primarily of companies that have above-average
potential for long-term growth as a result of new management, marketing
opportunities or technological superiority.
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IDS New Dimensions Fund
Invests in a Portfolio comprised primarily of companies with significant growth
potential due to superiority in technology, marketing or management. The Fund
frequently changes its industry mix.
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IDS Progressive Fund
Invests primarily in undervalued common stocks. The Fund holds stocks for the
long term with the goal of capital growth.
(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.
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(This annual report is not part of the prospectus.)
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Income funds
The funds in this group invest their assets primarily in corporate bonds or
government securities to seek interest income. Secondary objective is capital
growth. Risk varies by bond quality.
IDS Extra Income Fund
Invests in a Portfolio comprised mainly of long-term, high-yielding corporate
fixed-income securities in the lower rated, higher risk bond categories to seek
high current income. Secondary objective is capital growth.
(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.
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IDS Federal Income Fund
Invests in a Portfolio comprised primarily of securities issued or guaranteed as
to the timely payment of principal and interest by the U.S. government, its
agencies and instrumentalities. Seeks a high level of current income and safety
of principal consistent with its type of investments.
(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.
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(This annual report is not part of the prospectus.)
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IDS mutual funds
Money market funds
These money market funds have three main goals: conservation of capital,
constant liquidity and the highest possible current income consistent with these
objectives. An investment in these funds is neither insured nor guaranteed by
the U.S. government, and there can be no assurance that these funds will be able
to maintain a stable net asset value of $1.00 per share. Very limited risk.
IDS Cash Management Fund
Invests in such money market securities as high quality commercial paper,
bankers' acceptances, certificates of deposit (CDs) and other bank securities.
(icon of) piggy bank
IDS Tax-Free Money Fund
Invests primarily in short-term bonds and notes issued by state and local
governments to seek high current income exempt from federal income taxes.
(icon of) shield with piggy bank enclosed
For more complete information about any of these funds, including charges and
expenses, you can obtain a prospectus by contacting your financial advisor or
writing to American Express Shareholder Service, P.O. Box 534, Minneapolis, MN
55440-0534. Read it carefully before you invest or send money.
(This annual report is not part of the prospectus.)
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Federal income tax information
IDS Global Balanced Fund
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its
fiscal year. The dividends listed below were reported to you on a Form
1099-DIV, Dividends and Distributions, last January. Shareholders should
consult a tax adviser on how to report distributions for state and local
purposes.
IDS Global Balanced Fund
Fiscal period ended Oct. 31, 1997
Class A
Income distribution
taxable as dividend income, 6.49% qualifying for deduction for
corporations.
Payable date Per share
Sept. 26, 1997 $0.02238
June 27, 1997 $0.02095
March 27, 1997 $0.02317
Dec. 27, 1996 $0.00807
Total distributions $0.07457
Class B
Income distribution
taxable as dividend income, 6.49% qualifying for deduction for
corporations.
Payable date Per share
Sept. 26, 1997 $0.01349
June 27, 1997 $0.01325
March 27, 1997 $0.01723
Dec. 27, 1996 $0.00595
Total distributions $0.04992
Class Y
Income distribution
taxable as dividend income, 6.49% qualifying for deduction for
corporations.
Payable date Per share
Sept. 26, 1997 $0.02378
June 27, 1997 $0.02244
March 27, 1997 $0.02456
Dec. 27, 1996 $0.00860
Total distributions $0.07938
(This annual report is not part of the prospectus.)
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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 Balanced Fund
IDS Tower 10
Minneapolis, MN 55440-0010
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STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report are
placed in a blue strip
at the top of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described in
annual report. parentheses.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
