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IDS
Global Growth Fund
1998 ANNUAL REPORT
(PROSPECTUS ENCLOSED)
(icon of) Compass
The goal of IDS Global Growth Fund, a part of IDS Global Series, Inc., is
long-term capital growth. The Fund invests in a Portfolio composed primarily of
equity securities of companies throughout the world.
(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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It's a Big World After All
No one needs to be told that the world is changing rapidly. For example, some
years ago U.S. stocks accounted for about two-thirds of the total value of
stocks worldwide. Today, that figure is down to about one-third, as many foreign
stock markets have enjoyed explosive growth. Global Growth Fund seeks to take
advantage of that trend by investing in companies throughout the world, not just
the United States. For the most part, these are foreign companies involved in
essential businesses such as infrastructure creation, finance and environmental
clean-up. As they prosper, Global Growth offers investors the potential to
prosper along with them.
IDS GLOBAL GROWTH FUND (This annual report is not part of the prospectus.)
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Table of Contents
1998 ANNUAL REPORT
The purpose of the annual report is to tell
investors how the Fund performed.
From the Chairman 4
From the Portfolio Manager 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 (Fund) 10
Financial Statements (Fund) 11
Notes to Financial Statements (Fund) 14
Independent Auditors' Report (Portfolio) 18
Financial Statements (Portfolio) 19
Notes to Financial Statements (Portfolio) 22
Investments in Securities 26
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
Master/Feeder Structure 25p
About the Company 26p
Quick Telephone Reference 28p
Financial Highlights 29p
(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 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 Manager
A well-positioned portfolio and generally strong stock markets in the U.S. and
Europe led to a productive 12 months for IDS Global Growth Fund. Ultimately, for
the fiscal year -- November 1997 through October 1998 -- investors in the Fund's
Class A shares realized a total return of 17.00%. This figure was well ahead of
that generated by the Morgan Stanley Capital International All Country World
Free 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 reached the conclusion that
the major markets of the U.S. and Europe would likely weather the "Asian flu"
with relatively little negative effect. European markets led the way, rallying
through the winter and into the summer. The U.S., on the other hand, essentially
marked time until February, when it mounted a powerful rally that lasted until
mid-July.
IDS GLOBAL GROWTH FUND (This annual report is not part of the prospectus.)
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Within a few weeks, though, the environment became radically different. Russia,
already on shaky economic ground, was forced to devalue its currency, which in
turn spawned fear that much of Latin America would soon be forced to follow
suit. Then, just as the shock waves from that development had begun to subside a
bit, financial markets worldwide were confronted with the possibility that heavy
losses in speculative investments made by so-called hedge funds could ultimately
cause banks to greatly curtail corporate lending activities.
FALL'S FALL-OUT
The result of all this bad news was widespread stock-selling in all major
markets that didn't let up until October. By that time, the Fund was forced to
give back more than half of what it earned through July. The period did end on
an encouraging note, however, as most major markets bounced back strongly in
October, which allowed the Fund's gain to reach well into double digits for the
fiscal year as a whole.
I kept most of the portfolio (about 60%) invested in Europe throughout the 12
months, chiefly in the United Kingdom, France, Italy, Germany and the
Netherlands. This proved to be productive, as those markets benefited from a
trend toward corporate restructuring. The next-biggest exposure (about 40% at
the peak) was to the U.S., whose stock market also enjoyed generally rising
prices. I maintained only a minimal exposure (about 5%) to the struggling
markets of Asia, including Japan, and Latin America.
As the new fiscal year begins, I continue to believe that the best opportunities
for gain are in Europe, followed by the U.S., both of which should be able to
sustain reasonably good economic growth accompanied by low inflation. Therefore,
as of mid-November, those two regions still compromise the great majority of the
portfolio's investments.
John O'Brien
(picture of) John O'Brien
John O'Brien
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 $7.80
Oct. 31, 1997 $6.90
Increase $0.90
Distributions -- Nov. 1, 1997 - Oct. 31, 1998
From income $0.06
From capital gains $0.18
Total distributions $0.24
Total return* +17.00%**
Class B -- 12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1998 $7.68
Oct. 31, 1997 $6.79
Increase $0.89
Distributions -- Nov. 1, 1997 - Oct. 31, 1998
From income $0.01
From capital gains $0.18
Total distributions $0.19
Total return* +16.13%**
Class Y -- 12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1998 $7.81
Oct. 31, 1997 $6.91
Increase $0.90
Distributions -- Nov. 1, 1997 - Oct. 31, 1998
From income $0.07
From capital gains $0.18
Total distributions $0.25
Total return* +17.10%**
*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 GROWTH 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) 3.55% $45,420,136
Credito Italiano (Italy) 3.27 41,814,127
General Electric (United Kingdom) 3.01 38,506,614
Novartis (Switzerland) 2.94 37,661,144
Orange (United Kingdom) 2.69 34,420,716
Telecom Italia (Italy) 2.53 32,365,644
Total Petroleum Cl B (France) 2.41 30,895,707
Banca Intesa (Italy) 2.37 30,323,821
Banque Natl de Paris (France) 2.33 29,846,665
Bayerische Vereinsbank (Germany) 2.20 28,115,568
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 27.30% 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 GROWTH 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 Growth Fund
$30,000
$20,000
$18,477
Global Growth
Fund
Lipper International Class A
$10,000 Fund Index
MSCI
All Country
World Free Index
$9,500
6/1/90 '90 '91 '92 '93 '94 '95 '96 '97 '98
Average annual total return (as of Oct. 31, 1998)
1 year Since inception (B&Y) 5 years Since inception (A)
Class A +11.15% --% +7.11% +7.56%**
Class B +12.13% +11.58%* --% --%
Class Y +17.10% +13.20%* --% --%
*Inception date was March 20, 1995.
**Inception date was May 29, 1990.
Assumes: Holding period from 6/1/90 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 $3,661. Also see "Past Performance"
in the Fund's current prospectus.
On the graph above you can see how the Fund's totalreturn compared to two widely
cited unmanaged performance indexes, the MSCIAll Country World Free Index and
the Lipper International Fund Index. In comparing IDS Global Growth 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 5%.
This was a period of widely fluctuating security prices. Past performance is no
guarantee of future results.
Morgan Stanley Capital International (MSCI) All Country World Free Index is an
unmanaged index compiled from a composite of securities markets of 47 countries,
including Canada, the United States and 26 emerging market countries.
Lipper International Fund Index, an unmanaged index published by Lipper
Analytical Services, Inc., includes 30 funds that are generally similar to the
Fund, although some funds in the index may have somewhat different investment
policies or objectives.
(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 were reported to you on Form 1099-DIV,
Dividends and Distributions, last January. Shareholders should consult a tax
advisor on how to report distributions for state and local purposes.
IDS Global Growth Fund
Fiscal year ended Oct. 31, 1998
Class A
Income distribution taxable as dividend income, 13.14% qualifying for deduction
by corporations.
Payable date Per share
Dec. 29, 1997 $0.06030
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 29, 1997 $0.17711
Total distributions $0.23741
The distribution of $0.23741 per share, payable Dec. 29, 1997, consisted of
$0.06030 derived from net investment income and $0.17711 from net long-term
capital gains.
The long-term capital gains distribution is divided into two rate categories:
28% - $0.01576 and 20% - $0.16135.
IDS GLOBAL GROWTH FUND (This annual report is not part of the prospectus.)
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Class B
Income distribution taxable as dividend income, 13.14% qualifying for deduction
by corporations.
Payable date Per share
Dec. 29, 1997 $0.01171
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 29, 1997 $0.17711
Total distributions $0.18882
The distribution of $0.18882 per share, payable Dec. 29, 1997, consisted of
$0.01171 derived from net investment income and $0.17711 from net long-term
capital gains.
The long-term capital gains distribution is divided into two rate categories:
28% - $0.01576 and 20% - $0.16135.
Class Y
Income distribution taxable as dividend income, 13.14% qualifying for deduction
by corporations.
Payable date Per share
Dec. 29, 1997 $0.06904
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 29, 1997 $0.17711
Total distributions $0.24615
The distribution of $0.24615 per share, payable Dec. 29, 1997, consisted of
$0.06904 derived from net investment income and $0.17711 from net long-term
capital gains.
The long-term capital gains distribution is divided into two rate categories:
28% - $0.01576 and 20% - $0.16135.
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1998
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S-6334 M (12/98)
IDS Global Growth 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.
