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IDS Global Balanced Fund
1998 ANNUAL REPORT
(PROSPECTUS ENCLOSED)
(icon of) Compass
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 strategy, 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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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.
IDS GLOBAL BALANCED FUND (This annual report is not part of the prospectus.)
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Table of Contents
1998 ANNUAL REPORT
The purpose of this annual report is to tell
investors how the Fund performed.
From the Chairman 4
From the Portfolio Managers 4
Fund Facts 6
The 10 Largest Holdings 7
Making the Most of the Fund 8
The Fund's Long-term Performance 9
Independent Auditors' Report 10
Financial Statements 11
Notes to Financial Statements 14
Investments in Securities 21
Federal Income Tax Information 34
1998 PROSPECTUS
The prospectus, which is bound into the middle of this annual report, describes
the Fund in detail.
The Fund 3p
Goal 3p
Investment Strategy 3p
Risks 4p
Past Performance 6p
Fees and Expenses 8p
Management 9p
Buying and Selling Shares 9p
Valuing Fund Shares 9p
Investment Options 10p
Purchasing Shares 11p
Sales Charges 14p
Exchanging/Selling Shares 18p
Distributions and Taxes 22p
Personalized Shareholder
Information 24p
About the Company 25p
Quick Telephone Reference 27p
Financial Highlights 28p
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1998
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From the Chairman
If you're an experienced investor, you know that the past 12 months was a highly
volatile period in many financial markets. But history tells us that substantial
market moves are nothing new. Though they're often unpredictable, declines --
whether they're brief or long-lasting, moderate or substantial -- are always a
possibility.
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
From the Portfolio Managers
Despite a major downturn in worldwide financial markets late in the fiscal year,
IDS Global Balanced Fund generated a double-digit return for the period as a
whole. Over the 12 months -- November 1997 through October 1998 -- the Fund's
Class A shares generated a total return of 11.01%.
The period got off to a slow start, as the aftershock of the financial collapse
in Asia was still being felt around the world. Although the Fund's exposure to
Asian markets was minimal, 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
IDS GLOBAL BALANCED FUND (This annual report is not part of the prospectus.)
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advance. And in Europe, the Fund's other major investment exposure, the
returns were even better. Bonds also gained some ground, though to a
much-smaller degree.
A RAPID REVERSAL
The positive environment was not to last, however. With investors still
wondering how much negative effect Asia's problems might eventually have on
other markets, in late summer Russia, already on shaky economic ground,
defaulted on its loan obligations and was forced to devalue its currency. That
development sent shock waves throughout the world and, compounded by the
financial woes of certain hedge funds, led to a tidal wave of stock-selling for
several weeks. Fortunately, the Funds' bond holdings helped mitigate the extent
of downturn, which was followed by a remarkable rebound in October that
concluded the fiscal year on an encouraging note.
For the most part, we kept the majority of assets invested in stocks,
concentrating on two regions: the United States and Europe, chiefly the United
Kingdom, France, Italy and Germany. We altered the asset mix at times, with the
stock portion ranging from just under half at the outset of the fiscal year to
about two-thirds last spring, which is roughly where it stayed through
period-end.
Looking toward the new fiscal year, the low-inflation trend that has benefited
both stocks and bonds in recent years remains in place throughout the world's
major economies. In addition, central banks, including the Federal Reserve in
the U.S., have recently shown a willingness to reduce short-term interest rates
to thwart the possibility of a global recession. In Europe, the financial
markets should benefit from improving economies, as well as the introduction of
a common currency in 1999. As for the U.S., a potential slowdown in corporate
profits could hinder the stock market, but, overall, the investment environment
appears to be reasonably good.
Peter Lamaison
(picture of) Peter Lamaison
Peter Lamaison
Portfolio manager
Ray Goodner
(picture of) Ray Goodner
Ray Goodner
Portfolio manager
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1998
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Fund Facts
Class A -- 12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1998 $5.79
Oct. 31, 1997 $5.33
Increase $0.46
Distributions -- Nov. 1, 1997 - Oct. 31, 1998
From income $0.12
From capital gains $ --
Total distributions $0.12
Total return* 11.01%**
Class B -- 12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1998 $5.77
Oct. 31, 1997 $5.31
Increase $0.46
Distributions -- Nov. 1, 1997 - Oct. 31, 1998
From income $0.08
From capital gains $ --
Total distributions $0.08
Total return* 10.18%**
Class Y -- 12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1998 $5.79
Oct. 31, 1997 $5.33
Increase $0.46
Distributions -- Nov. 1, 1997 - Oct. 31, 1998
From income $0.13
From capital gains $ --
Total distributions $0.13
Total return* 11.17%**
* 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.
IDS GLOBAL BALANCED FUND (This annual report is not part of the prospectus.)
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The 10 Largest Holdings
Percent Value
(of net assets) (as of Oct. 31, 1998)
Mannesmann (Germany) 2.22% $2,380,687
General Electric (United Kingdom) 1.88 2,019,553
Safeway (United States) 1.85 1,990,435
Credito Italiano (Italy) 1.85 1,989,928
Novartis (Switzerland) 1.76 1,888,276
Fannie Mae 1.69 1,813,508
Federal Republic of Germany (Germany) 1.68 1,801,351
2.45% 2002
Intl Business Machines (United States) 1.65 1,775,313
MCI WorldCom (United States) 1.61 1,734,850
Walgreen (United States) 1.59 1,708,931
Excludes U.S. Treasury and government agencies debt 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 10 holdings listed here make up 17.78% of net assets
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1998
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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. The chart below shows how dollar-cost averaging works. In these
three hypothetical scenarios, you will see six months of share price
fluctuations.
This strategy does not ensure a profit or avoid a loss if the market declines.
But, if you can continue to invest regularly through changing market conditions
even when the price of your shares fall or the market declines, it can be an
effective way to accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Jan Feb Mar Apr May Jun
$15 $16 $18 $20
$10 $10 $12 $14
$ 5
Accumulated shares* Average market Your average
price per share cost per share
42.25 $15 $14.20
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Jan Feb Mar Apr May Jun
$15
$10 $10 $8 $8 $10
$ 5 $5 $5
Accumulated shares* Average market Your average
price per share cost per share
85.0 $7.66 $7.05
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Jan Feb Mar Apr May Jun
$15
$10 $10 $8 $6 $7
$ 5 $4 $4
Accumulated shares* Average market Your average
price per share cost per share
103.5 $6.50 $5.80
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$100 invested per month. Total invested: $600
*Shares purchased is determined by dividing the amount invested per month by the
current share price.
THREE WAYS TO BENEFIT FROM A MUTUAL FUND:
o your shares increase in value when the Fund's investments do well
o you receive capital gains when the gains on investments sold by the Fund
exceed losses
o you receive income when the Fund's stock dividends, interest and
short-term gains exceed its expenses.
All three make up your total return. 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.
IDS GLOBAL BALANCED 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
$20,000
MSCI World Index
$10,000 $11,400
Salomon Brothers Global Balanced
$9,500 World Gov't Fund
Bond Index Class A
12/1/96 1/97 4/97 7/97 10/97 1/98 4/98 7/98 10/98
Average annual total return (as of Oct. 31, 1998):
1 year Since inception*
Class A +5.46% +6.90%
Class B +6.18% +7.01%
Class Y +11.17% +9.88%
* Inception date was Nov. 13, 1996.
Assumes: Holding period from 12/1/96 to 10/31/98. Returns do not reflect taxes
payable on distributions. Reinvestment of all income and capital gain
distributions for the Fund, with a value of $401. Also see "Past Performance" in
the Fund's current prospectus.
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.
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.
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1998
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The financial statements contained in Post-Effective Amendment #31 to
Registration Statement No. 811-5696 filed on or about December 28, 1998, are
incorporated herein by reference.
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Federal Income Tax Information
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 was reported to you on Form 1099-DIV, Dividends
and Distributions, last January. Dividends paid to you since the end of last
year will be reported to you on a tax statement sent next January. Shareholders
should consult a tax advisor on how to report distributions for state and local
purposes.
IDS Global Balanced Fund
Fiscal year ended Oct. 31, 1998
Class A
Income distribution taxable as dividend income, 14.41% qualifying for deduction
for corporations.
Payable date Per share
Dec. 29, 1997 $0.04499
March 27, 1998 $0.01889
June 26, 1998 $0.03510
Sept. 25, 1998 $0.02225
Total $0.12123
Capital gain distributions taxable for long-term capital gain.
Payable date Per share
Dec. 29, 1997 $0.00018
Total distributions $0.12141
The distribution of $0.04517 per share, payable Dec. 29, 1997, consisted of
$0.03285 from net investment income, $0.01214 from net short-term capital gains
(a total of $0.04499 taxable as dividend income) and $0.00018 from net long-term
capital gains.
The long-term capital gains distribution is divided into two rate categories:
28% -- $0.00000 and 20% -- $0.00018.
IDS GLOBAL BALANCED FUND (This annual report is not part of the prospectus.)
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Class B
Income distribution taxable as dividend income, 14.41% qualifying for deduction
for corporations.
Payable date Per share
Dec. 29, 1997 $0.03570
March 27, 1998 $0.00959
June 26, 1998 $0.02490
Sept. 25, 1998 $0.01182
Total $0.08201
Capital gain distributions taxable for long-term capital gain.
Payable date Per share
Dec. 29, 1997 $0.00018
Total distributions $0.08219
The distribution of $0.03588 per share, payable Dec. 29, 1997, consisted of
$0.02356 from net investment income, $0.01214 from net short-term capital gains
(a total of $0.03570 taxable as dividend income) and $0.00018 from net long-term
capital gains.
The long-term capital gains distribution is divided into two rate categories:
28% -- $0.00000 and 20% -- $0.00018.
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1998
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Class Y
Income distribution taxable as dividend income, 14.41% qualifying for deduction
for corporations.
Payable date Per share
Dec. 29, 1997 $0.04638
March 27, 1998 $0.02038
June 26, 1998 $0.03688
Sept. 25, 1998 $0.02405
Total $0.12769
Capital gain distributions taxable for long-term capital gain.
Payable date Per share
Dec. 29, 1997 $0.00018
Total distributions $0.12787
The distribution of $0.04656 per share, payable Dec. 29, 1997, consisted of
$0.03424 from net investment income, $0.01214 from net short-term capital gains
(a total of $0.04638 taxable as dividend income) and $0.00018 from net long-term
capital gains.
The long-term capital gains distribution is divided into two rate categories:
28% -- $0.00000 and 20% -- $0.00018.
IDS GLOBAL BALANCED FUND (This annual report is not part of the prospectus.)
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S-6352 C (12/98)
IDS Global Balanced Fund
IDS Tower 10
Minneapolis, MN 55440-0010
AMERICAN EXPRESS Financial Advisors (logo)
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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.
