<PAGE>
IDS Global
Bond Fund
1998 ANNUAL REPORT
(PROSPECTUS ENCLOSED)
(icon of) Compass
The goal of IDS Global Bond Fund, a part of IDS Global Series, Inc., is a high
total return through income and growth of capital. The Fund invests in a
Portfolio composed primarily of debt securities of U.S. and foreign issuers.
(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.
<PAGE>
A Bounty of Bonds
In today's global economy, investment opportunities don't stop at the water's
edge. While bonds issued by the U.S. government and corporations once made up
almost all of the bond market, today more than half of the world's debt
securities are issued from outside the United States. This means expanded
opportunity for investors. Global Bond Fund's aim is to take advantage of
opportunities in bond markets at any time and in any place, providing investors
with greater portfolio diversification.
IDS GLOBAL BOND FUND (This annual report is not part of the prospectus.)
<PAGE>
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 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) 11
Financial Statements (Fund) 12
Notes to Financial Statements (Fund) 15
Independent Auditors' Report (Portfolio) 19
Financial Statements (Portfolio) 20
Notes to Financial Statements (Portfolio) 23
Investments in Securities 29
Federal Income Tax Information 41
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 9p
Management 10p
Buying and Selling Shares 10p
Valuing Fund Shares 10p
Investment Options 11p
Purchasing Shares 12p
Sales Charges 15p
Exchanging/Selling Shares 19p
Distributions and Taxes 23p
Personalized Shareholder Information 25p
Master/Feeder Structure 26p
About the Company 27p
Quick Telephone Reference 29p
Financial Highlights 30p
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1998
<PAGE>
From the Chairman
If you're an experienced investor, you probably 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.
That potential for such volatility reinforces the need for investors to
periodically review 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
From the Portfolio Manager
Despite substantial downturns in many smaller, or emerging, foreign markets, IDS
Global Bond Fund produced a positive result for the past fiscal year. For the 12
months -- November 1997 through October 1998 -- the Fund's Class A shares
generated a total return (net asset value change and dividends) of 5.52%.
For the period as a whole, persistently low inflation and improving financial
conditions in all the industrialized countries put a ceiling on any tendency for
interest rates to rise. In fact, several European countries, which enjoyed a
convergence of sounder economic policies, were able to lower interest rates in
anticipation of the introduction of the common European currency, the euro,
scheduled for 1999. Bond values rose in response to the rate decline.
IDS GLOBAL BOND FUND (This annual report is not part of the prospectus.)
<PAGE>
In the U.S., government bonds benefited from healthy demand driven chiefly by a
continuation of remarkably low inflation, a balanced federal budget and a
"flight to quality" on the part of investors seeking a safe haven amid financial
upheaval in Asia, Russia and Latin America. Ultimately, all the bond-buying
drove down long-term interest rates, which in turn boosted bond values.
AN EMPHASIS ON THE DOLLAR
As usual, the greatest portion of the Fund's investments was in U.S. and foreign
government bonds. To negate fluctuations in foreign currencies, I also employed
hedging strategies for most of the period. Overall, the dollar appreciated
against the major foreign currencies, including the yen (Japan) and the mark
(Germany).
Among the foreign markets, the clear investment emphasis was on Europe,
including the United Kingdom, Germany and the Scandinavian countries. The only
sore spot overseas was the emerging market sector, which, for the Fund, was
largely confined to Latin America and Asia. Although the total emerging-market
exposure was relatively modest (17% at the peak last spring) and the great
majority of holdings were denominated in U.S. dollars, the severity of the
decline in emerging-market bond values last summer did, however, take a toll on
the Fund's overall performance. The period ended on an encouraging note, though,
as most emerging market bonds rebounded strongly during the final weeks.
I believe the low-inflation trend that benefited bonds in the past period
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. Both of those factors are positive for bonds. In addition,
European investments should benefit from improving economies in that region, as
well as the launch of a common currency in 1999. On the emerging-market front,
the worst appears to be over. Therefore, I expect to maintain the Fund's small
exposure to such markets, chiefly comparatively stable countries such as Mexico,
Argentina, Korea and China/Hong Kong.
Ray Goodner
(picture of) Ray Goodner
Ray Goodner
Portfolio Manager
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1998
<PAGE>
Fund Facts
Class A -- 12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1998 $ 6.17
Oct. 31, 1997 $ 6.26
Decrease $ 0.09
Distributions -- Nov. 1, 1997 - Oct. 31, 1998
From income $ 0.36
From capital gains $ 0.07
Total distributions $ 0.43
Total return* +5.52%**
Class B -- 12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1998 $ 6.17
Oct. 31, 1997 $ 6.26
Decrease $ 0.09
Distributions -- Nov. 1, 1997 - Oct. 31, 1998
From income $ 0.31
From capital gains $ 0.07
Total distributions $ 0.38
Total return* +4.73%**
Class Y -- 12-month performance
(All figures per share)
Net asset value (NAV)
Oct. 31, 1998 $ 6.17
Oct. 31, 1997 $ 6.26
Decrease $ 0.09
Distributions -- Nov. 1, 1997 - Oct. 31, 1998
From income $ 0.36
From capital gains $ 0.07
Total distributions $ 0.43
Total return* +5.62%**
*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 BOND FUND (This annual report is not part of the prospectus.)
<PAGE>
The 10 Largest Holdings
Percent Value
(of net assets) (as of Oct. 31, 1998)
U.S. Treasury 9.47% $93,631,699
7.50% 2016
U.S. Treasury 6.83 67,459,162
7.50% 2001
United Kingdom Treasury 5.13 50,713,911
8.00% 2003
Govt of Canada 4.46 44,100,644
8.00% 2023
United Kingdom Treasury 3.82 37,764,705
9.00% 2000
Govt of Italy 3.43 33,947,999
8.50% 2004
Govt of Sweden 2.98 29,492,359
8.00% 2007
Govt of Spain 2.68 26,486,554
8.80% 2006
Federal Republic of Germany 2.67 26,386,324
6.50% 2027
Govt of Denmark 2.09 20,692,167
8.00% 2003
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 43.56% of net assets
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1998
<PAGE>
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
- -------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------
$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 BOND FUND (This annual report is not part of the prospectus.)
<PAGE>
The Fund's Long-term Performance
How $10,000 has grown in IDS Global Bond Fund
$30,000
$23,001
$20,000 Global Bond
Salomon Brothers Fund
Global Gov't Bond Class A
Composite Index
Lipper Global Income
$10,000 Salomon Brothers Fund Index
World Gov't
Bond Index
$9,500
4/1/89 10/89 '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 +0.24% --% +5.10% +9.06%**
Class B +0.79% +7.22%* --% --%
Class Y +5.62% +8.34%* --% --%
*Inception date was March 20, 1995.
**Inception date was March 20, 1989.
Assumes: Holding period from 4/1/89 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 $11,318. 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 three
widely cited performance indexes, Salomon Brothers Global Government Bond
Composite Index, Salomon Brothers World Government Bond Index and the Lipper
Global Income Fund Index. Recently, the Fund's investment manager recommended to
the Fund that the Fund change its comparative index from the Salomon Brothers
Global Government Bond Composite Index to the Salomon Brothers World Government
Bond Index. The investment manager made this recommendation because the new
index more closely represents the Fund's holdings and information for the index
is more readily available. We will include both indexes in this transition year.
In the future however, only the Salomon Brothers World Government Bond Index
will be included. In comparing Global Bond Fund to the two indexes, you should
take account of the fact that the Fund's performance reflects the maximum sales
charge of 5%, while no such charges are reflected in the performance of the
index. If you were actually to buy either individual bonds or bond mutual funds,
any sales charges that you pay would reduce your total return as well.
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.) ANNUAL REPORT - 1998
<PAGE>
Salomon Brothers Global Government Bond Composite Index, an unmanaged index,
includes all government bond markets tracked by Salomon Brothers. The index is a
general measure of government bondperformance. The bondsincluded in the index
may not be in Global Bond Fund.
Salomon Brothers Global World Government Bond Index, an unmanged
market-capitalization weighted benchmark, 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 goverment bond securities.
Lipper Global Income 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.
IDS GLOBAL BOND FUND (This annual report is not part of the prospectus.)
<PAGE>
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.
<PAGE>
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. Some of the dividends listed below were 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 Bond Fund Fiscal year ended Oct. 31, 1998
Class A
Income distribution taxable as dividend income, none qualifying for deduction by
corporations.
Payable date Per share
Dec. 26, 1997 $0.15345
March 26, 1998 0.06788
June 25, 1998 0.08417
Sept. 24, 1998 0.05263
Total $0.35813
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 26, 1997 $0.06708
Total distributions $0.42521
The distribution of $0.22053 per share, payable Dec. 26, 1997, consisted of
$0.07914 derived from net investment income, $0.07431 from net short-term
capital gains (a total of $0.15345 taxable as dividend income) and $0.06708 from
net long-term capital gains.
The long-term capital gains distribution is divided into two rate categories:
28% - $0.04337 and 20% - $0.02371.
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1998
<PAGE>
Class B
Income distribution taxable as dividend income, none qualifying for deduction by
corporations.
Payable date Per share
Dec. 26, 1997 $0.14173
March 26, 1998 0.05625
June 25, 1998 0.07250
Sept. 24, 1998 0.04108
Total $0.31156
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 26, 1997 $0.06708
Total distributions $0.37864
The distribution of $0.20881 per share, payable Dec. 26, 1997, consisted of
$0.06742 derived from net investment income, $0.07431 from net short-term
capital gains (a total of $0.14173 taxable as dividend income) and $0.06708 from
net long-term capital gains.
The long-term capital gains distribution is divided into two rate categories:
28% - $0.04337 and 20% - $0.02371.
IDS GLOBAL BOND FUND (This annual report is not part of the prospectus.)
<PAGE>
Class Y
Income distributions taxable as dividend income, none qualifying for deduction
by corporations.
Payable date Per share
Dec. 26, 1997 $0.15540
March 26, 1998 $0.06962
June 25, 1998 $0.08628
Sept. 24, 1998 $0.05413
Total $0.36543
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 26, 1997 $0.06708
Total distributions $0.43251
The distribution of $0.22248 per share, payable Dec. 26, 1997, consisted of
$0.08109 derived from net investment income, $0.07431 from net short-term
capital gains (a total of $0.15540 taxable as dividend income) and $0.06708 from
net long-term capital gains.
The long-term capital gains distribution is divided into two rate categories:
28% - $0.04337 and 20% - $0.02371.
(This annual report is not part of the prospectus.) ANNUAL REPORT - 1998
<PAGE>
This page left blank intentionally
<PAGE>
This page left blank intentionally
<PAGE>
This page left blank intentionally
<PAGE>
This page left blank intentionally
<PAGE>
S-6309 M (12/98)
IDS Global Bond Fund
IDS Tower 10
Minneapolis, MN 55440-0010
AMERICAN EXPRESS Financial Advisors (logo)
<PAGE>
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.
