UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number 811-5696
RIVERSOURCE GLOBAL SERIES, INC.
(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
(Address of principal executive offices) (Zip code)
Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474
(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 671-1947
Date of fiscal year end: 10/31
Date of reporting period: 4/30
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
ABSOLUTE RETURN CURRENCY AND INCOME FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
APRIL 30, 2008
RIVERSOURCE ABSOLUTE RETURN
CURRENCY AND INCOME FUND SEEKS TO
PROVIDE SHAREHOLDERS WITH POSITIVE
ABSOLUTE RETURN.
(ADVANCED ALPHA(SM) STRATEGIES ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance............... 2
Manager Commentary.................. 6
Fund Expenses Example............... 10
Portfolio of Investments............ 12
Financial Statements................ 19
Notes to Financial Statements....... 24
Approval of Investment Management
Services Agreement............... 43
Proxy Voting........................ 45
</Table>
(DALBAR LOGO)
The RiverSource mutual fund
shareholder reports have been
awarded the Communications Seal
from Dalbar Inc., an independent
financial services research firm.
The Seal recognizes communications
demonstrating a level of
excellence in the industry.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> RiverSource Absolute Return Currency and Income Fund's (the Fund) Class A
shares declined 3.51% (excluding sales charge) for the six months ended April
30, 2008.
> The Fund underperformed its benchmark, the Citigroup 3-month U.S. Treasury
Bill Index (Citigroup Index), which increased 1.48% during the same period.
ANNUALIZED TOTAL RETURNS (for period ended April 30, 2008)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Since
6 months* 1 year inception(a)
- -------------------------------------------------------------------------------
RiverSource Absolute Return
Currency and Income Fund Class A
(excluding sales charge) -3.51% +0.22% +4.51%
- -------------------------------------------------------------------------------
Citigroup 3-month U.S. Treasury
Bill Index(1) (unmanaged) +1.48% +3.90% +4.43%
- -------------------------------------------------------------------------------
</Table>
* Not annualized.
(a) Fund data is from June 15, 2006. Citigroup 3-month U.S. Treasury Bill Index
is from July 1, 2006.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 3.00% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses. See the Average Annual Total Returns table for performance of other
share classes of the Fund.
The index does not reflect the effects of sales charges, expenses and taxes.
It is not possible to invest directly in an index.
(1) The Citigroup 3-month U.S. Treasury Bill Index, an unmanaged index,
represents the performance of three-month Treasury bills. The index
reflects reinvestment of all distributions and changes in market prices.
- --------------------------------------------------------------------------------
2 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
ANNUAL OPERATING EXPENSE RATIO
(as of the current prospectus)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Total Net Expenses
- --------------------------------------------------------------------------------------
Class A 1.36% 1.36%
- --------------------------------------------------------------------------------------
Class B 2.10% 2.10%
- --------------------------------------------------------------------------------------
Class C 2.12% 2.12%
- --------------------------------------------------------------------------------------
Class I 1.07% 1.07%
- --------------------------------------------------------------------------------------
Class R4 1.39% 1.35%(a)
- --------------------------------------------------------------------------------------
Class R5 1.06% 1.06%
- --------------------------------------------------------------------------------------
Class W 1.54% 1.54%
- --------------------------------------------------------------------------------------
</Table>
(a) The Investment Manager and its affiliates have contractually agreed to
waive certain fees and to absorb certain expenses until Oct. 31, 2008,
unless sooner terminated at the discretion of the Fund's Board. Any amounts
waived will not be reimbursed by the Fund. Under this agreement, net fund
expenses (excluding fees and expenses of acquired funds), will not exceed
1.35% for Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT APRIL 30, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR INCEPTION
Class A (inception 6/15/06) -3.51% +0.22% +4.51%
- -----------------------------------------------------------------------
Class B (inception 6/15/06) -3.84% -0.20% +3.91%
- -----------------------------------------------------------------------
Class C (inception 6/15/06) -3.79% -0.16% +3.93%
- -----------------------------------------------------------------------
Class I (inception 6/15/06) -3.37% +0.71% +4.96%
- -----------------------------------------------------------------------
Class R4 (inception 6/15/06) -3.39% +0.67% +4.76%
- -----------------------------------------------------------------------
Class R5 (inception 10/18/07) -3.29% N/A -2.86%*
- -----------------------------------------------------------------------
Class W (inception 12/1/06) -3.55% +0.28% +3.75%
- -----------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 6/15/06) -6.43% -4.57% +1.82%
- -----------------------------------------------------------------------
Class B (inception 6/15/06) -8.44% -4.90% +1.88%
- -----------------------------------------------------------------------
Class C (inception 6/15/06) -4.71% -1.10% +3.93%
- -----------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
4 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT MARCH 31, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR INCEPTION
Class A (inception 6/15/06) -2.84% +1.28% +4.59%
- -----------------------------------------------------------------------
Class B (inception 6/15/06) -3.22% +0.76% +3.99%
- -----------------------------------------------------------------------
Class C (inception 6/15/06) -3.27% +0.71% +3.96%
- -----------------------------------------------------------------------
Class I (inception 6/15/06) -2.72% +1.78% +5.05%
- -----------------------------------------------------------------------
Class R4 (inception 6/15/06) -2.78% +1.59% +4.82%
- -----------------------------------------------------------------------
Class R5 (inception 10/18/07) N/A N/A -3.20%*
- -----------------------------------------------------------------------
Class W (inception 12/1/06) -3.01% +1.35% +3.82%
- -----------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 6/15/06) -7.42% -3.51% +1.77%
- -----------------------------------------------------------------------
Class B (inception 6/15/06) -7.84% -3.97% +1.87%
- -----------------------------------------------------------------------
Class C (inception 6/15/06) -4.19% -0.24% +3.96%
- -----------------------------------------------------------------------
</Table>
On Oct. 18, 2007, the maximum sales charge for Class A shares changed from 4.75%
to 3.00%. Class A share performance for the 6-month period ended April 30, 2008
reflects the maximum sales charge of 3.00%, which was in effect on Nov. 1, 2007.
Class A share performance for all other periods reflects the maximum sales
charge of 4.75%, which was in effect at the beginning of those periods. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I, Class R4, Class R5 and Class W shares. Class I, Class R4
and Class R5 are available to institutional investors only. Class W shares are
offered through qualifying discretionary accounts.
* Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 5
MANAGER COMMENTARY -------------------------------------------------------------
(UNAUDITED)
At April 30, 2008, approximately 34% of the Fund's shares were owned in the
aggregate by affiliated funds-of-funds managed by RiverSource Investments, LLC
(RiverSource). As a result of asset allocation decisions by RiverSource, it is
possible that RiverSource Absolute Return Currency and Income Fund may
experience relatively large purchases or redemptions from affiliated
funds-of-funds (see page 32, Class I capital share transactions for related
activity during the most recent fiscal period). RiverSource seeks to minimize
the impact of these transactions by structuring them over a reasonable period of
time. RiverSource Absolute Return Currency and Income Fund may experience
increased expenses as it buys and sells securities as a result of purchases or
redemptions by affiliated funds-of-funds. For more information on the Fund's
expenses, see the discussions beginning on pages 10 and 29.
Dear Shareholders,
RiverSource Absolute Return Currency and Income Fund's Class A shares declined
3.51% (excluding sales charge) for the six months ended April 30, 2008. The Fund
underperformed its benchmark, the Citigroup 3-month U.S. Treasury Bill Index
(Citigroup Index), which increased 1.48% during the same period.
SIGNIFICANT PERFORMANCE FACTORS
We use a two-part investment process. The first part includes investments in
primarily high quality, short-term fixed income securities with minimal interest
rate risk with a goal to generate positive total return. These short-term
investments are also designated, as necessary, to cover obligations invested in
through the second component of our strategy, which is based on a proprietary
quantitative model. Our model uses various fundamental and technical factors,
including current and historical data, to rank the anticipated value of nine
different currencies from developed countries relative to the U.S. dollar. Based
on that ranking, we enter into long forward currency contracts for the three
most attractive currencies compared to the U.S. dollar and enter into short
forward currency contracts for the three least attractive currencies compared to
the U.S. dollar. The Fund experiences profits or losses to the extent the value
of the currency appreciates or depreciates relative to the U.S. dollar.
- --------------------------------------------------------------------------------
6 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
During the period, we were able to generate positive total return from our
investment in short-term fixed income securities, while our proprietary
quantitative model detracted from total returns. For the six months ended April
30, 2008, the Fund's positioning in the New Zealand dollar and Canadian dollar
benefited the Fund's results. Positioning in the Japanese yen, Swedish krona,
Australian dollar, British pound, euro, Norwegian krone, and Swiss franc
detracted from the Fund's performance.
SECTOR DIVERSIFICATION
(at April 30, 2008; % of bond and cash & cash equivalents portfolio assets)
- -----------------------------------------------------------------
<Table>
Asset-Backed 6.0%
- --------------------------------------------------------------
Commercial Mortgage-Backed 1.7%
- --------------------------------------------------------------
Consumer Discretionary 1.3%
- --------------------------------------------------------------
Consumer Staples 0.3%
- --------------------------------------------------------------
Energy 0.6%
- --------------------------------------------------------------
Financials 3.5%
- --------------------------------------------------------------
Health Care 0.9%
- --------------------------------------------------------------
Industrials 1.8%
- --------------------------------------------------------------
Mortgage-Backed 0.5%
- --------------------------------------------------------------
Telecommunication 0.8%
- --------------------------------------------------------------
Utilities 0.6%
- --------------------------------------------------------------
Other (1) 82.0%
- --------------------------------------------------------------
</Table>
(1) Cash & Cash Equivalents.
QUALITY BREAKDOWN
(at April 30, 2008; % of portfolio assets
excluding cash equivalents and equities)
- -----------------------------------------------------------------
<Table>
AAA bonds 46.1%
- --------------------------------------------------------------
AA bonds 8.8%
- --------------------------------------------------------------
A bonds 29.8%
- --------------------------------------------------------------
BBB bonds 15.3%
- --------------------------------------------------------------
Non-investment grade bonds --%
- --------------------------------------------------------------
</Table>
Bond ratings apply to the underlying holdings of the Fund and not the Fund
itself. Whenever possible, the Standard and Poor's rating is used to determine
the credit quality of a security. Standard and Poor's rates the creditworthiness
of corporate bonds, with 15 categories, ranging from AAA (highest) to D
(lowest). Ratings from AA to CCC may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating categories.
If Standard and Poor's doesn't rate a security, then Moody's rating is used.
RiverSource Investments, LLC, the Fund's investment manager, rates a security
using an internal rating system when Moody's doesn't provide a rating.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
The Fund experiences profits or losses to the extent the value of the currency
appreciates or depreciates relative to the U.S. dollar.
OUR CURRENT INVESTMENT STRATEGY
We run our quantitative model weekly and reset
currency positions as needed, applying the output of
this model on a systematic basis. We generally seek
neutral exposure to the U.S. dollar, which is the
base currency. In our view, remaining neutral to the
U.S. dollar helps control overall volatility of the
investment strategy. We also use an externally
developed but fully integrated risk management
system to help us monitor and manage market risk. We
believe the Fund is designed to do well in either
rising or falling dollar environments.
OUR FUTURE STRATEGY
We intend to stay disciplined to our systematic
investment strategy. Through the use of our
proprietary quantitative model, which determines the
Fund's positions in forward foreign currency
contracts relative to the U.S. dollar, we will
continue to seek an absolute return that is
unrelated to general movements in the U.S. dollar
and other types of financial assets. Overall, we
will continue to seek to generate positive total
returns from the income produced by the Fund's
investments in short-term debt obligations, plus or
minus the gain or loss resulting from the
fluctuations in the values of various foreign
currencies relative to the U.S. dollar.
- --------------------------------------------------------------------------------
8 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
It is important to remember that the Fund does not actually take ownership of
foreign currencies or sell actual foreign currencies. Rather, through forward
currency contracts, the Fund gains economic exposure comparable to the exposure
that it would have if it had bought or sold the currencies directly. Because the
establishment of the Fund's forward foreign currency contracts requires little
cash outlay, the Fund's assets will consist primarily of (i) U.S.
dollar-denominated non-government, corporate and structured debt securities
rated investment grade, or if unrated, determined to be of comparable quality by
the investment manager, and (ii) shares of an affiliated money market fund.
<Table>
(PHOTO - NIC PIFER)
Nic Pifer, CFA(R)
Portfolio Manager
</Table>
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource fund.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 9
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the expenses of the funds in which it invests (also
referred to as "acquired funds"), including affiliated and non-affiliated pooled
investment vehicles (including mutual funds and exchange traded funds). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the acquired funds' expense ratio as of the most recent shareholder
report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended April 30, 2008.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Expenses paid during the period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
10 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
NOV. 1, 2007 APRIL 30, 2008 THE PERIOD(A) EXPENSE RATIO
- --------------------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 964.90 $ 6.99 1.43%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,017.75 $ 7.17 1.43%
- --------------------------------------------------------------------------------------------
Class B
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 961.60 $10.88 2.23%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,013.77 $11.17 2.23%
- --------------------------------------------------------------------------------------------
Class C
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 962.10 $10.73 2.20%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,013.92 $11.02 2.20%
- --------------------------------------------------------------------------------------------
Class I
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 966.30 $ 5.13 1.05%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,019.64 $ 5.27 1.05%
- --------------------------------------------------------------------------------------------
Class R4
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 966.10 $ 6.60 1.35%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,018.15 $ 6.77 1.35%
- --------------------------------------------------------------------------------------------
Class R5
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 967.10 $ 5.33 1.09%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,019.66 $ 5.53 1.09%
- --------------------------------------------------------------------------------------------
Class W
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 964.50 $ 7.86 1.61%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,016.86 $ 8.07 1.61%
- --------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the Fund's annualized expense ratio as indicated
above, multiplied by the average account value over the period, multiplied
by 182/366 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended April 30, 2008: -3.51%
for Class A, - 3.84% for Class B, -3.79% for Class C, -3.37% for Class I,
-3.39% for Class R4, -3.29% for Class R5 and -3.55% for Class W.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 11
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
APRIL 30, 2008 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
BONDS (17.9%)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
ASSET-BACKED (6.0%)
Capital Auto Receivables Asset Trust
Series 2006-SN1A Cl A4B
03-20-10 2.91% $1,500,000(d,g) $1,484,876
Capital Auto Receivables Asset Trust
Series 2007-SN2 Cl A2
01-15-10 3.50 1,250,000(d,g) 1,240,039
Capital One Multi-Asset Execution Trust
Series 2003-A3 Cl A3
05-16-11 2.97 2,000,000(g) 1,995,000
Citibank Credit Card Issuance Trust
Series 2003-A9 Cl A9
11-22-10 3.15 455,000(g) 453,705
Citibank Credit Card Issuance Trust
Series 2007-A1 Cl A1
03-22-12 2.59 1,000,000(g) 977,813
College Loan Corp Trust
Series 2003-2 Cl A3
07-25-13 3.12 776,444(g) 772,441
College Loan Corp Trust
Series 2004-1 Cl A2
04-25-16 3.03 2,500,000(g) 2,494,399
Countrywide Asset-backed Ctfs
Series 2007-7 Cl 2A2
10-25-37 3.06 1,000,000(g) 849,844
Countrywide Home Equity Loan Trust
Series 2005-H Cl 2A (FGIC)
12-15-35 2.96 194,782(e,g) 109,660
Countrywide Home Equity Loan Trust
Series 2005-M Cl A2 (MBIA)
02-15-36 2.84 15,012(e,g) 14,967
CPS Auto Trust
Series 2006-C Cl A2 (XLCA)
03-15-10 5.31 360,084(d,e) 358,857
Ford Credit Floorplan Master Owner Trust
Series 2006-3 Cl A
06-15-11 2.90 900,000(g) 870,338
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
ASSET-BACKED (CONT.)
Hertz Vehicle Financing LLC
Series 2004-1A Cl A3 (MBIA)
05-25-09 2.85% $166,667(d,e) $166,667
Keycorp Student Loan Trust
Series 2003-A Cl 2A2 (MBIA)
10-25-25 3.23 726,587(e,g) 704,903
Northstar Education Finance
Series 2007-1 Cl A2
01-29-46 2.93 750,000(g) 735,352
Providian Master Note Trust
Series 2006-A1A Cl A
01-15-13 2.75 1,000,000(d,g) 992,969
Residential Asset Securities
Series 2006-KS2 Cl A2
03-25-36 3.03 279,297(g) 274,017
SLC Student Loan Trust
Series 2006-A Cl A4
01-15-19 2.83 1,800,000(g) 1,799,438
SLM Student Loan Trust
Series 2003-10A Cl A2
12-16-19 2.96 1,000,000(d,g) 997,031
SLM Student Loan Trust
Series 2004-3 Cl A3
04-25-16 3.01 580,776(g) 579,072
SLM Student Loan Trust
Series 2005-5 Cl A1
01-25-18 2.92 65,077(g) 64,890
SLM Student Loan Trust
Series 2005-5 Cl A2
10-25-21 3.00 1,000,000(g) 972,813
SLM Student Loan Trust
Series 2005-8 Cl A2
07-25-22 3.01 1,500,000(g) 1,479,557
SLM Student Loan Trust
Series 2005-B Cl A1
12-16-19 2.84 503,536(g) 499,208
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND - 2008 SEMIANNUAL
REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
ASSET-BACKED (CONT.)
SLM Student Loan Trust
Series 2006-2 Cl A2
01-25-17 2.92% $107,192(g) $106,658
SLM Student Loan Trust
Series 2006-5 Cl A2
07-25-17 2.91 708,936(g) 704,062
SLM Student Loan Trust
Series 2006-A Cl A1
03-16-20 2.82 1,597,139(g) 1,574,867
SLM Student Loan Trust
Series 2006-A Cl A2
12-15-20 2.88 2,000,000(g) 1,906,081
SLM Student Loan Trust
Series 2006-C Cl A2
09-15-20 2.85 1,000,000(g) 974,531
SLM Student Loan Trust
Series 2007-2 Cl A2
07-25-17 2.92 1,000,000(g) 957,656
Superior Wholesale Inventory Financing Trust
Series 2005-B12 Cl A
06-15-10 2.92 2,000,000(g) 1,998,660
---------------
Total 29,110,371
- ------------------------------------------------------------------------------------
COMMERCIAL MORTGAGE-BACKED (1.7%)(f)
Commercial Mtge Acceptance
Series 1999-C1 Cl A2
06-15-31 7.03 2,191,962 2,228,540
First Union-Lehman Brothers-Bank of America
Series 1998-C2 Cl A2
11-18-35 6.56 35,251 35,182
GS Mtge Securities II
Series 2007-EOP Cl A2
03-06-20 2.87 1,200,000(d,g) 1,111,725
GS Mtge Securities II
Series 2007-EOP Cl A3
03-06-20 2.92 1,770,000(d,g) 1,642,866
JP Morgan Chase Commercial Mtge Securities
Series 2005-LDP1 Cl A1
03-15-46 4.12 1,801,364 1,794,999
Morgan Stanley Dean Witter Capital I
Series 2002-TOP7 Cl A1
01-15-39 5.38 1,358,974 1,368,447
---------------
Total 8,181,759
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
MORTGAGE-BACKED (0.5%)(f)
Deutsche Bank Alternate Mtge Loan Trust
Collateralized Mtge Obligation
Series 2006-AR6 Cl A3
02-25-37 2.99% $434,758(g) $424,981
Downey Savings & Loan Assn Mtge Loan Trust
Collateralized Mtge Obligation
Series 2006-AR2 Cl 2AB1
11-19-37 2.89 634,924(b) 579,248
Harborview Mtge Loan Trust
Collateralized Mtge Obligation
Series 2006-12 Cl 2A11
01-19-38 2.89 637,381(b) 602,066
Harborview Mtge Loan Trust
Collateralized Mtge Obligation
Series 2006-8 Cl 2A1B
08-21-36 3.05 1,010,750(b) 696,779
---------------
Total 2,303,074
- ------------------------------------------------------------------------------------
AUTOMOTIVE (0.6%)
American Honda Finance
07-11-08 2.80 400,000(d,g) 399,901
02-05-10 3.50 2,500,000(d,g) 2,499,825
---------------
Total 2,899,726
- ------------------------------------------------------------------------------------
BANKING (2.0%)
ANZ Natl Intl
Bank Guaranteed
08-07-09 3.17 750,000(c,d,g) 748,323
Bank of America
Sr Unsecured
02-17-09 3.22 640,000(g) 638,557
Bank of New York Mellon
Sr Unsecured
02-05-10 3.50 3,000,000(g) 2,982,122
Citigroup
Sr Unsecured
06-09-09 3.13 640,000(g) 635,537
Credit Suisse First Boston USA
12-09-08 3.12 640,000(g) 637,791
Rabobank Nederland
Sr Nts
01-15-09 2.73 600,000(c,d,g) 599,239
Santander US Debt Unipersonal
Bank Guaranteed
09-19-08 2.66 640,000(c,d,g) 638,413
</Table>
See accompanying Notes to Portfolio
of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND - 2008 SEMIANNUAL
REPORT 13
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
BANKING (CONT.)
US Bancorp
Sr Unsecured
02-04-10 3.51% $1,250,000(g) $1,242,463
Wachovia Mtge FSB
Sr Unsecured
03-02-09 3.20 400,000(g) 400,787
Wachovia
Sr Unsecured
10-28-08 2.95 640,000(g) 638,474
Washington Mutual
Sr Unsecured
01-15-10 3.01 750,000(g) 694,996
---------------
Total 9,856,702
- ------------------------------------------------------------------------------------
BROKERAGE (0.5%)
Bear Stearns Companies
03-30-09 2.79 750,000(g) 723,724
Lehman Brothers Holdings
Sr Unsecured
10-22-08 3.00 640,000(g) 637,944
Merrill Lynch & Co
08-22-08 3.17 640,000(g) 633,164
Morgan Stanley
Sr Unsecured
02-09-09 3.21 640,000(g) 634,321
---------------
Total 2,629,153
- ------------------------------------------------------------------------------------
CONSTRUCTION MACHINERY (1.7%)
Caterpillar Financial Services
Sr Unsecured
10-28-08 2.98 1,005,000(g) 1,004,351
02-08-10 3.58 2,000,000(g) 1,996,580
John Deere Capital
Sr Unsecured
06-10-08 3.12 640,000(g) 639,844
01-18-11 3.43 4,500,000(g) 4,487,175
---------------
Total 8,127,950
- ------------------------------------------------------------------------------------
ELECTRIC (0.6%)
Dominion Resources
Sr Unsecured Series B
11-14-08 3.25 3,000,000(g) 2,985,744
- ------------------------------------------------------------------------------------
FOOD AND BEVERAGE (0.3%)
Diageo Capital
11-10-08 3.20 1,640,000(c,g) 1,635,226
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
HEALTH CARE (0.4%)
Cardinal Health
Sr Unsecured
10-02-09 2.96% $2,080,000(g) $2,030,685
- ------------------------------------------------------------------------------------
HEALTH CARE INSURANCE (0.4%)
UnitedHealth Group
Sr Unsecured
03-02-09 3.16 750,000(g) 737,936
06-21-10 2.78 1,500,000(g) 1,417,638
---------------
Total 2,155,574
- ------------------------------------------------------------------------------------
INDEPENDENT ENERGY (0.6%)
Anadarko Petroleum
Sr Unsecured
09-15-09 3.20 3,000,000(g) 2,948,667
- ------------------------------------------------------------------------------------
LIFE INSURANCE (0.8%)
Lincoln Natl
Sr Unsecured
04-06-09 2.84 2,275,000(g) 2,245,803
Pacific Life Global Funding
11-13-08 3.16 400,000(d,g) 400,098
Pricoa Global Funding I
09-12-08 2.91 640,000(d,g) 639,716
12-15-09 2.85 400,000(d,g) 396,048
---------------
Total 3,681,665
- ------------------------------------------------------------------------------------
MEDIA CABLE (0.6%)
Comcast
07-14-09 3.01 2,920,000(g) 2,867,700
- ------------------------------------------------------------------------------------
NON CAPTIVE DIVERSIFIED (0.1%)
General Electric Capital
Sr Unsecured
12-01-08 3.23 640,000(g) 638,877
- ------------------------------------------------------------------------------------
RETAILERS (0.1%)
Home Depot
Sr Unsecured
12-16-09 2.93 750,000(g) 716,820
- ------------------------------------------------------------------------------------
TRANSPORTATION SERVICES (0.2%)
ERAC USA Finance
04-30-09 3.15 825,000(d,g) 822,135
- ------------------------------------------------------------------------------------
WIRELINES (0.8%)
BellSouth
08-15-08 3.17 750,000(g) 749,056
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND - 2008 SEMIANNUAL
REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
WIRELINES (CONT.)
Telefonica Emisiones
06-19-09 2.84% $3,190,000(c,g) $3,155,507
---------------
Total 3,904,563
- ------------------------------------------------------------------------------------
TOTAL BONDS
(Cost: $88,867,231) $87,496,391
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (49.7%)
SHARES VALUE(A)
RiverSource Short-Term
Cash Fund, 2.72% 242,251,388(h) $242,251,388
- ------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $242,251,388) $242,251,388
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SHORT-TERM SECURITIES (31.7%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(A)
U.S. GOVERNMENT AGENCIES (30.7%)
Federal Home Loan Bank Disc Nts
05-06-08 2.29% $10,000,000 $9,996,230
06-04-08 1.93 15,000,000 14,972,270
06-25-08 1.96 10,000,000 9,969,971
07-07-08 1.96 15,000,000 14,945,565
Federal Home Loan Mtge Corp Disc Nts
05-15-08 2.05 10,000,000 9,991,578
06-02-08 2.02 15,000,000 14,972,678
06-30-08 1.90 15,000,000 14,952,495
07-14-08 1.96 14,250,000 14,192,886
</Table>
<Table>
<Caption>
SHORT-TERM SECURITIES (CONTINUED)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(A)
U.S. GOVERNMENT AGENCIES (CONT.)
Federal Natl Mtge Assn Disc Nts
05-07-08 2.04% $5,500,000 $5,497,844
05-09-08 2.11 3,500,000 3,498,176
05-14-08 2.02 8,000,000 7,993,818
05-21-08 1.48 13,700,000 13,688,374
05-28-08 1.83 5,000,000 4,992,975
06-25-08 1.96 10,000,000 9,969,971
---------------
Total 149,634,831
- ------------------------------------------------------------------------------------
ASSET-BACKED (1.0%)
Cheyne Finance LLC
11-20-07 4.99 1,626,589(i,j) 1,125,600
12-11-07 4.91 1,627,444(i,j) 1,126,191
WhistleJacket Capital LLC
11-20-08 3.26 3,000,000(i,j) 2,871,000
---------------
Total 5,122,791
- ------------------------------------------------------------------------------------
TOTAL SHORT-TERM SECURITIES
(Cost: $155,853,819) $154,757,622
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $486,972,438)(k) $484,505,401
====================================================================================
</Table>
See accompanying Notes to Portfolio
of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND - 2008 SEMIANNUAL
REPORT 15
INVESTMENTS IN DERIVATIVES
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT APRIL 30, 2008
<Table>
<Caption>
CURRENCY TO BE CURRENCY TO BE UNREALIZED UNREALIZED
EXCHANGE DATE DELIVERED RECEIVED APPRECIATION DEPRECIATION
- ------------------------------------------------------------------------------------------------------
May 14, 2008 48,385,000 44,541,538 $-- $(1,038,114)
Australian Dollar U.S. Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 465,000 436,821 -- (1,219)
Australian Dollar U.S. Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 75,032,000 70,238,581 -- (443,085)
Australian Dollar U.S. Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 637,000 598,143 -- (2,867)
Australian Dollar U.S. Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 6,947,790,000 67,899,906 1,023,078 --
Japanese Yen U.S. Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 328,268,000 3,187,068 27,283 --
Japanese Yen U.S. Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 65,206,000 624,100 -- (3,061)
Japanese Yen U.S. Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 273,147,000 45,786,628 181,526 --
Swedish Krona U.S. Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 4,904,000 832,668 13,888 --
Swedish Krona U.S. Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 3,187,000 531,043 -- (1,437)
Swedish Krona U.S. Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 66,211,927 33,360,000 60,981 --
U.S. Dollar British Pound
- ------------------------------------------------------------------------------------------------------
May 14, 2008 48,061,943 24,278,000 168,683 --
U.S. Dollar British Pound
- ------------------------------------------------------------------------------------------------------
May 14, 2008 818,962 414,000 3,489 --
U.S. Dollar British Pound
- ------------------------------------------------------------------------------------------------------
May 14, 2008 550,074 276,000 -- (1,772)
U.S. Dollar British Pound
- ------------------------------------------------------------------------------------------------------
May 14, 2008 1,809,358 915,000 9,844 --
U.S. Dollar British Pound
- ------------------------------------------------------------------------------------------------------
May 14, 2008 68,436,593 86,327,000 -- (1,115,323)
U.S. Dollar New Zealand Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 402,410 509,000 -- (5,472)
U.S. Dollar New Zealand Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 1,507,658 1,921,000 -- (9,585)
U.S. Dollar New Zealand Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 900,674 1,154,000 1,062 --
U.S. Dollar New Zealand Dollar
- ------------------------------------------------------------------------------------------------------
May 14, 2008 44,336,515 225,296,000 -- (107,124)
U.S. Dollar Norwegian Krone
- ------------------------------------------------------------------------------------------------------
May 14, 2008 866,877 4,332,000 -- (16,433)
U.S. Dollar Norwegian Krone
- ------------------------------------------------------------------------------------------------------
May 14, 2008 1,498,030 7,641,000 2,027 --
U.S. Dollar Norwegian Krone
- ------------------------------------------------------------------------------------------------------
May 14, 2008 461,404 2,360,000 2,496 --
U.S. Dollar Norwegian Krone
- ------------------------------------------------------------------------------------------------------
Total $1,494,357 $(2,745,492)
- ------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
16 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND - 2008 SEMIANNUAL
REPORT
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) Adjustable rate mortgage; interest rate varies to reflect current market
conditions; rate shown is the effective rate on April 30, 2008.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in U.S. dollar currency unless otherwise
noted. At April 30, 2008, the value of foreign securities represented 1.4%
of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
may be determined to be liquid under guidelines established by the Fund's
Board of Directors. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At April 30,
2008, the value of these securities amounted to $15,138,728 or 3.1% of net
assets.
(e) The following abbreviations are used in the portfolio security descriptions
to identify the insurer of the issue:
<Table>
FGIC -- Financial Guaranty Insurance Company
MBIA -- MBIA Insurance Corporation
XLCA -- XL Capital Assurance
</Table>
(f) Mortgage-backed securities represent direct or indirect participations in,
or are secured by and payable from, mortgage loans secured by real
property, and include single- and multi-class pass-through securities and
collateralized mortgage obligations. These securities may be issued or
guaranteed by U.S. government agencies or instrumentalities, or by private
issuers, generally originators and investors in mortgage loans, including
savings associations, mortgage bankers, commercial banks, investment
bankers and special purpose entities. The maturity dates shown represent
the original maturity of the underlying obligation. Actual maturity may
vary based upon prepayment activity on these obligations. Unless otherwise
noted, the coupon rates presented are fixed rates.
(g) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on April 30,
2008.
(h) Affiliated Money Market Fund - See Note 5 to the financial statements. The
rate shown is the seven-day current annualized yield at April 30, 2008.
(i) Denotes investments in structured investment vehicles ("SIVS"). See Note 7
to the financial statements.
(j) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). These securities may be valued at fair
value according to procedures approved, in good faith, by the Fund's Board
of Directors. Information concerning such security holdings at April 30,
2008, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ---------------------------------------------------------------------------------
Cheyne Finance LLC
4.99% 2007 05-22-07 $1,626,589
4.91% 2007 06-11-07 1,627,444
WhistleJacket Capital LLC
3.26% 2008 03-23-07 3,000,005
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 17
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(k) At April 30, 2008, the cost of securities for federal income tax purposes
was approximately $486,972,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $145,000
Unrealized depreciation (2,612,000)
- ------------------------------------------------------------------------------
Net unrealized depreciation $(2,467,000)
- ------------------------------------------------------------------------------
</Table>
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
18 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
FINANCIAL STATEMENTS -----------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2008 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value
Unaffiliated issuers (identified cost $244,721,050) $242,254,013
Affiliated money market fund (identified cost
$242,251,388) 242,251,388
- ----------------------------------------------------------------------------
Total investments in securities (identified cost
$486,972,438) 484,505,401
Cash 12,584
Capital shares receivable 4,875,432
Dividends and accrued interest receivable 333,782
Receivable for investment securities sold 1,065,168
Unrealized appreciation on forward foreign currency
contracts 1,494,357
Cash deposits and collateral held with brokers 370,000
- ----------------------------------------------------------------------------
Total assets 492,656,724
- ----------------------------------------------------------------------------
LIABILITIES
Capital shares payable 651,726
Payable for investment securities purchased 1,380,815
Unrealized depreciation on forward foreign currency
contracts 2,745,492
Accrued investment management services fee 11,689
Accrued distribution fee 2,353
Accrued transfer agency fee 1,361
Accrued administrative services fee 1,051
Accrued plan administration services fee 1
Other accrued expenses 52,520
- ----------------------------------------------------------------------------
Total liabilities 4,847,008
- ----------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $487,809,716
============================================================================
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 19
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
APRIL 30, 2008 (UNAUDITED)
<Table>
REPRESENTED BY
Capital stock -- $.01 par value $ 501,031
Additional paid-in capital 506,303,081
Undistributed net investment income 1,232
Accumulated net realized gain (loss) (15,277,456)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (3,718,172)
- ----------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $487,809,716
============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $123,488,859
Class B $ 1,326,895
Class C $ 7,142,979
Class I $165,945,132
Class R4 $ 75,115
Class R5 $ 9,180
Class W $189,821,556
Net asset value per share of outstanding Class A
capital stock: shares(1) 12,688,886 $ 9.73
Class B shares 136,377 $ 9.73
Class C shares 735,196 $ 9.72
Class I shares 17,031,138 $ 9.74
Class R4 shares 7,718 $ 9.73
Class R5 shares 942 $ 9.75
Class W shares 19,502,840 $ 9.73
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $10.03. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 3.00%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
20 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2008 (UNAUDITED)
<Table>
INVESTMENT INCOME
Income:
Interest $ 3,278,792
Income distributions from affiliated money market fund 2,778,019
Less foreign taxes withheld (9,778)
- ----------------------------------------------------------------------------
Total income 6,047,033
- ----------------------------------------------------------------------------
Expenses:
Investment management services fee 1,466,151
Distribution fee
Class A 92,802
Class B 1,430
Class C 17,853
Class W 76,410
Transfer agency fee
Class A 34,455
Class B 148
Class C 1,713
Class R4 15
Class R5 2
Class W 61,128
Administrative services fee 131,533
Plan administration services fee -- Class R4 73
Compensation of board members 3,822
Custodian fees 7,960
Printing and postage 17,150
Registration fees 118,089
Professional fees 17,907
Other 9,259
- ----------------------------------------------------------------------------
Total expenses 2,057,900
Expenses waived/reimbursed by the Investment Manager and
its affiliates (232)
Earnings and bank fee credits on cash balances (220)
- ----------------------------------------------------------------------------
Total net expenses 2,057,448
- ----------------------------------------------------------------------------
Investment income (loss) -- net 3,989,585
- ----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions 13,531
Foreign currency transactions (15,125,678)
- ----------------------------------------------------------------------------
Net realized gain (loss) on investments (15,112,147)
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies (3,674,199)
- ----------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (18,786,346)
- ----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $(14,796,761)
============================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 21
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2008 OCT. 31, 2007
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) - net $ 3,989,585 $ 4,270,377
Net realized gain (loss) on investments (15,112,147) 5,699,827
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies (3,674,199) (119,494)
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (14,796,761) 9,850,710
- -----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (886,703) (203,734)
Class B (2,189) (336)
Class C (27,910) (605)
Class I (2,556,350) (4,073,834)
Class R4 (889) (464)
Class R5 (137) (35)
Class W (600,741) (179)
Net realized gain
Class A (1,516,443) (98,464)
Class B (355) (99)
Class C (52,812) (99)
Class I (4,183,105) (704,931)
Class R4 (1,945) (99)
Class R5 (334) --
Class W (175) (49)
- -----------------------------------------------------------------------------------------
Total distributions (9,830,088) (5,082,928)
- -----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
22 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2008 OCT. 31, 2007
(UNAUDITED)
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $144,824,658 $ 8,607,654
Class B shares 1,410,082 --
Class C shares 7,274,900 209,110
Class I shares 138,952,573 46,377,881
Class R4 shares 48,000 28,800
Class R5 shares -- 10,000
Class W shares 202,357,575 5,000
Reinvestment of distributions at net asset value
Class A shares 2,348,103 20,454
Class B shares 2,079 --
Class C shares 73,184 261
Class I shares 6,738,952 4,778,225
Class R4 shares 2,333 44
Class W shares 452,931 --
Payments for redemptions
Class A shares (27,378,528) (10,093,640)
Class B shares (78,627) --
Class C shares (197,295) --
Class I shares (88,081,694) (1,818,898)
Class R4 shares (10,152) --
Class W shares (7,408,622) --
- -----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 381,330,452 48,124,891
- -----------------------------------------------------------------------------------------
Total increase (decrease) in net assets 356,703,603 52,892,673
Net assets at beginning of period 131,106,113 78,213,440
- -----------------------------------------------------------------------------------------
Net assets at end of period $487,809,716 $131,106,113
=========================================================================================
Undistributed net investment income $ 1,232 $ 86,566
- -----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 23
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS TO APRIL 30, 2008)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Absolute Return Currency and Income Fund (the Fund) is a series of
RiverSource Global Series, Inc. and is registered under the Investment Company
Act of 1940 (as amended) as a non-diversified, open-end management investment
company. RiverSource Global Series, Inc. has 10 billion authorized shares of
capital stock that can be allocated among the separate series as designated by
the Board of Directors (the Board). The Fund invests primarily in short-term
debt obligations and forward foreign currency contracts.
The Fund offers Class A, Class B, Class C, Class I, Class R4, Class R5 and Class
W shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership. Class B of RiverSource Absolute Return Currency and Income Fund is
currently closed to investors for new purchases.
- - Class C shares may be subject to a CDSC.
- - Class I, Class R4 and Class R5 shares are sold without a front-end sales
charge or CDSC and are offered to qualifying institutional investors.
- - Class W shares are sold without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts.
At April 30, 2008, RiverSource Investments, LLC (the Investment Manager) and the
RiverSource affiliated funds-of-funds owned 100% of Class I shares, and the
Investment Manager owned 100% of Class R5 shares.
At April 30, 2008, the Investment Manager and the RiverSource affiliated funds-
of-funds owned approximately 34% of the total outstanding Fund shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ 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.
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
- --------------------------------------------------------------------------------
24 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
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 that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Foreign securities are valued based on quotations from the principal market in
which such securities are normally traded. The procedures adopted by the Board
generally contemplate the use of fair valuation in the event that price
quotations or valuations are not readily available, price quotations or
valuations from other sources are not reflective of market value and thus deemed
unreliable, or a significant event has occurred in relation to a security or
class of securities (such as foreign securities) that is not reflected in price
quotations or valuations from other sources. A fair value price is a good faith
estimate of the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the New York Stock Exchange and therefore the closing prices for securities
in such markets or on such exchanges may not fully reflect events that occur
after such close but before the close of the New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial, Inc. (Ameriprise
Financial), parent company of the Investment Manager, as administrator to the
Fund, will fair value foreign securities pursuant to procedures adopted by the
Board, including utilizing a third party pricing service to determine these fair
values. These procedures take into account multiple factors, including movements
in the U.S. securities markets, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the New
York Stock Exchange.
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.
ILLIQUID SECURITIES
At April 30, 2008, investments in securities included issues that are illiquid
which the Fund currently limits to 15% of net assets, at market value, at the
time of purchase. The aggregate value of such securities at April 30, 2008 was
$5,122,791 representing 1.05% of net assets. These securities may be valued at
fair value according to procedures approved, in good faith, by the Board.
According to Board guidelines, certain unregistered securities are determined to
be liquid and are not included within the 15% limitation specified above. Assets
are liquid if they can be sold or disposed of in the ordinary course of business
within seven days at approximately the value at which the asset is valued by the
Fund.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 25
SECURITIES PURCHASED ON A FORWARD-COMMITMENT BASIS
Delivery and payment for securities that have been purchased by the Fund on a
forward-commitment basis, including when-issued securities and other forward-
commitments, can take place one month or more after the transaction date. During
this period, such securities are subject to market fluctuations, and they may
affect the Fund's net assets the same as owned securities. The Fund designates
cash or liquid securities at least equal to the amount of its
forward-commitments. At April 30, 2008, the Fund had no outstanding
forward-commitments.
The Fund also enters into transactions to sell purchase commitments to third
parties at current market values and concurrently acquires other purchase
commitments for similar securities at later dates. As an inducement for the Fund
to "roll over" its purchase commitments, the Fund receives negotiated amounts in
the form of reductions of the purchase price of the commitment. The Fund records
the incremental difference between the forward purchase and sale of each forward
roll realized gain or loss. Losses may arise due to changes in the value of the
securities or if a counterparty does not perform under the terms of the
agreement. If a counterparty files for bankruptcy or becomes insolvent, the
Fund's right to repurchase or sell securities may be limited. The Fund did not
enter into any mortgage dollar roll transactions during the six months ended
April 30, 2008.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains, and facilitate buying and
selling of securities for investments, the Fund may buy and write options traded
on any U.S. or foreign exchange or in the over-the-counter market where
completing the obligation depends upon the credit standing of the other party.
Cash collateral may be collected by the Fund to secure certain over-the-counter
options trades. Cash collateral held by the Fund for such option trades must be
returned to the counterparty upon closure, exercise or expiration of the
contract. The Fund also may buy and sell put and call options and write covered
call options on portfolio securities as well as write cash-secured put options.
The risk in writing a call option is that the Fund gives up the opportunity for
profit if the market price of the security increases. The risk in writing a put
option is that the Fund 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
Fund pays a premium whether or not the option is exercised. The Fund also has
the additional risk of being unable 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 Fund will
realize a gain or loss when the option transaction expires or closes. 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. At
April 30, 2008, and for the six months then ended, the Fund had no outstanding
option contracts.
- --------------------------------------------------------------------------------
26 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund 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 of 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.
Futures are valued daily based upon the last sale price at the close of market
on the principal exchange on which they are traded. Upon entering into a futures
contract, the Fund 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 Fund 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 Fund recognizes a realized
gain or loss when the contract is closed or expires. At April 30, 2008, the Fund
had no outstanding futures contracts.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. 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, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes.
The Fund may enter into forward foreign currency exchange contracts to produce
incremental earnings, for operational purposes, or to protect against adverse
exchange rate fluctuation. The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the Fund and the resulting
unrealized appreciation or depreciation are determined using foreign currency
exchange rates from an independent pricing service. The Fund is subject to the
credit risk that the other party will not complete its contract obligations.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 27
made against the Fund cannot be determined and the Fund has no historical basis
for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income to shareholders. No provision for income or excise
taxes is thus required.
The Fund has adopted Financial Accounting Standards Board (FASB) Interpretation
48 (FIN 48), "Accounting for Uncertainty in Income Taxes," which is effective
for fiscal periods beginning after Dec. 15, 2006. FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in accordance with FASB
Statement 109, "Accounting for Income Taxes." FIN 48 prescribes a two-step
process to recognize and measure a tax position taken or expected to be taken in
a tax return. The first step is to determine whether a tax position has met the
more-likely-than-not recognition threshold and the second step is to measure a
tax position that meets the threshold to determine the amount of benefit to
recognize. FIN 48 also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and
transition. Management of the Fund has concluded that there are no significant
uncertain tax positions that would require recognition in the financial
statements. Generally, the tax authorities can examine all the tax returns filed
for the last three years.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of the deferred 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.
RECENT ACCOUNTING PRONOUNCEMENTS
In March 2008, the FASB issued Statement on Financial Accounting Standards No.
161 (SFAS "161"), "Disclosures about Derivative Instruments and Hedging
Activities -- an amendment of FASB Statement No. 133," which requires enhanced
disclosures about a fund's derivative and hedging activities. Funds are required
to provide enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect a fund's financial
position, financial performance, and cash flows. SFAS 161 is effective for
financial statements issued for fiscal years and interim periods beginning after
Nov. 15,
- --------------------------------------------------------------------------------
28 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
2008. As of April 30, 2008, management does not believe the adoption of SFAS 161
will impact the financial statement amounts; however, additional footnote
disclosures may be required about the use of derivative instruments and hedging
items.
On Sept. 20, 2006, the FASB released Statement of Financial Accounting Standards
No. 157 "Fair Value Measurements" (SFAS 157). SFAS 157 establishes an
authoritative definition of fair value, sets out a hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported in
the Statement of Operations for a fiscal period. The application of SFAS 157
will be effective for the Fund's fiscal year beginning Nov. 1, 2008. The
adoption of SFAS 157 is not anticipated to have a material impact on the Fund's
financial statements; however, additional disclosures will be required about the
inputs used to develop the measurements of fair value and the effect of certain
measurements reported in the Statement of Operations for a fiscal period.
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, declared daily and payable monthly, when
available, are reinvested in additional shares of the Fund at net asset value or
payable in cash. Capital gains, when available, are distributed along with the
last income dividend of the calendar year.
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. Interest
income, including amortization of premium, market discount and original issue
discount using the effective interest method, is accrued daily.
2. EXPENSES AND SALES CHARGES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.89%
to 0.70% annually as the Fund's assets increase. The management fee for the six
months ended April 30, 2008 was 0.89% of the Fund's average daily net assets.
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.08% to 0.05% annually as the
Fund's assets increase. The fee for the six months ended April 30, 2008 was
0.08% of the Fund's average daily net assets.
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 29
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended
April 30, 2008, other expenses paid to this company were $108.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
Under a Deferred Compensation Plan (the Plan), non-interested board members may
defer receipt of their compensation. Deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of the Fund or other
RiverSource funds. The Fund's liability for these amounts is adjusted for market
value changes and remains in the Fund until distributed in accordance with the
Plan.
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual account-based fee at a rate equal to $20.50 for Class A, $21.50
for Class B and $21.00 for Class C for this service. The Fund also pays the
Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's
average daily net assets attributable to Class R4 and Class R5 shares and an
annual asset-based fee at a rate of 0.20% of the Fund's average daily net assets
attributable to Class W shares.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the Statement of Operations.
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares for the provision of various administrative,
recordkeeping, communication and educational services.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund pays a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A and
Class W shares and a fee at an annual rate of up to 1.00% of the Fund's average
daily net assets attributable to Class B and Class C shares.
Sales charges received by the Distributor for distributing Fund shares were
$206,019 for Class A and $859 for Class C for the six months ended April 30,
2008.
- --------------------------------------------------------------------------------
30 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in which
it invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). Because the acquired funds have varied expense and fee levels and
the Fund may own different proportions of acquired funds at different times, the
amount of fees and expenses incurred indirectly by the Fund will vary.
For the six months ended April 30, 2008, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds) were 2.23% for Class B and 1.10%
for Class R4. Of these waived fees and expenses, the transfer agency fees at the
class level were $62 for Class B and $3 for Class R4, the plan administration
services fee at the class level was $73 for Class R4, and the management fees at
the Fund level were $94. Effective Nov. 1, 2007, the Investment Manager and its
affiliates have contractually agreed to waive certain fees and expenses such
that net expenses (excluding fees and expenses of acquired funds) will not
exceed 1.47% for Class A, 2.23% for Class B, 2.22% for Class C, 1.17% for Class
I, 1.35% for Class R4, 1.22% for Class R5 and 1.62% for Class W of the Fund's
average daily net assets until Oct. 31, 2008, unless sooner terminated at the
discretion of the Board.
During the six months ended April 30, 2008, the Fund's transfer agency fees were
reduced by $220 as a result of bank fee credits from overnight cash balances.
The Fund pays custodian fees to Ameriprise Trust Company, an affiliate of
Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $54,980,317 and $13,742,705, respectively, for the six
months ended April 30, 2008. Realized gains and losses are determined on an
identified cost basis.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 31
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED APRIL 30, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- -----------------------------------------------------------------------------------------
Class A 14,399,769 235,100 (2,782,258) 11,852,611
Class B 143,231 213 (8,067) 135,377
Class C 727,263 7,332 (20,225) 714,370
Class I 13,882,895 673,125 (9,040,373) 5,515,647
Class R4 4,723 233 (971) 3,985
Class W 20,211,414 46,380 (755,448) 19,502,346
- -----------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- -----------------------------------------------------------------------------------------
Class A 815,101 1,939 (976,765) (159,725)
Class C 19,801 25 -- 19,826
Class I 4,483,439 462,890 (173,987) 4,772,342
Class R4 2,729 4 -- 2,733
Class R5* 942 -- -- 942
Class W** 494 -- -- 494
- -----------------------------------------------------------------------------------------
</Table>
* For the period from Oct. 18, 2007 (inception date) to Oct. 31, 2007.
** For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
5. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. The cost of the
Fund's purchases and proceeds from sales of shares of the RiverSource Short-Term
Cash Fund aggregated $549,816,037 and $367,471,129, respectively, for the six
months ended April 30, 2008.
6. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
headed by JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the
temporary funding of shareholder redemptions or for other temporary or emergency
purposes. The credit facility became effective on Oct. 18, 2007, replacing a
prior credit facility. The credit facility agreement, which is a collective
agreement between the Fund and certain other RiverSource funds, severally and
not jointly, permits collective borrowings up to $500 million. Interest is
charged to each Fund based on its borrowings at a rate equal to the federal
funds rate plus
- --------------------------------------------------------------------------------
32 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
0.30%. Each borrowing under the credit facility matures no later than 60 days
after the date of borrowing. The Fund also pays a commitment fee equal to its
pro rata share of the amount of the credit facility at a rate of 0.06% per
annum. Under the prior credit facility, a Fund paid interest on its outstanding
borrowings at a rate equal to either the higher of the federal funds effective
rate plus 0.40% or the JPMCB Prime Commercial Lending Rate. The Fund had no
borrowings during the six months ended April 30, 2008.
7. INVESTMENTS IN STRUCTURED INVESTMENT VEHICLES
Structured investment vehicles ("SIVs") have generally experienced a significant
decrease in liquidity as a result of the reduction in demand for asset backed
commercial paper as well as the lack of liquidity and overall volatility in the
markets for the collateral underlying these investment structures. As of April
30, 2008, the Fund had two SIVs which remain outstanding, Cheyne Finance and
Whistlejacket Capital LLC, with an aggregate value of $5.1 million, representing
1.1% of net assets.
On Aug. 28, 2007, Cheyne Finance breached a financial covenant relating to the
market value of its underlying collateral, resulting in the occurrence of an
"enforcement event." This led to the appointment of receivers on Sept. 4, 2007.
On Oct. 17, 2007, the receivers declared Cheyne Finance to be insolvent. The
Fund's holdings in Cheyne Finance are in default as of their Nov. 20, 2007 and
Dec. 11, 2007 maturity dates. On April 17, 2008, the Fund received a payment
from Cheyne of $0.7 million, reducing the Fund's total remaining outstanding
principal to $3.3 million. The receivers are currently developing a
restructuring plan which will likely result in the Fund receiving less than full
payment on its investment. Accordingly, these holdings have been determined to
be illiquid.
On Feb. 11, 2008, Whistlejacket Capital LLC (WJC) breached a financial covenant
relating to the market value of its underlying collateral, resulting in the
occurrence of an "enforcement event." This resulted in the appointment of
receivers on Feb. 12, 2008. On Feb. 15, 2008, the receivers declared WJC to be
insolvent. The Fund's position in WJC is in default as its Feb. 25, 2008
maturity date. The receivers are currently developing a restructuring plan which
may result in the Fund receiving less than full payment on its investment. This
holding has been determined to be illiquid.
As of April 30, 2008, the Fund's holdings in Cheyne and WJC were fair valued at
$2.3 million and $2.9 million, respectively, down from their respective
amortized costs of $3.3 million and $3.0 million. As of June 17, 2008 the
remaining position of Cheyne has been fair valued at $2.2 million and WJC has
been fair valued at 2.9 million.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 33
8. RISKS RELATING TO CERTAIN INVESTMENTS
DIVERSIFICATION RISK
The Fund is non-diversified. A non-diversified fund may invest more of its
assets in fewer companies than if it were a diversified fund. The Fund may be
more exposed to the risks of loss and volatility than a fund that invests more
broadly.
FOREIGN CURRENCY RISK
The Fund's exposure to foreign currencies subjects the Fund to constantly
changing exchange rates and the risk that those currencies will decline in value
relative to the U.S. dollar, or, in the case of short positions, that the U.S.
dollar will decline in value relative to the currency being sold forward.
Currency rates in foreign countries may fluctuate significantly over short
periods of time for a number of reasons, including changes in interest rates and
economic or political developments in the U.S. or abroad.
GEOGRAPHIC CONCENTRATION RISK
The Fund may be particularly susceptible to economic, political or regulatory
events affecting companies and countries within the specific geographic region
in which the Fund focuses its investments. Currency devaluations could occur in
countries that have not yet experienced currency devaluation to date, or could
continue to occur in countries that have already experienced such devaluations.
As a result, the Fund may be more volatile than a more geographically
diversified fund.
9. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc., was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company mutual funds and
they purport to bring the action derivatively on behalf of those funds under the
Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid
to the defendants by the funds for investment advisory and administrative
services are excessive. The plaintiffs seek remedies including restitution and
rescission of investment advisory and distribution agreements. The plaintiffs
voluntarily agreed to transfer this case to the United States District Court for
the District of Minnesota. In response to defendants' motion to dismiss the
complaint, the Court dismissed one of plaintiffs' four claims and granted
plaintiffs limited discovery. Defendants moved for summary judgment in April
2007. Summary judgment was granted in the defendants' favor on July 9, 2007. The
plaintiffs filed a notice of appeal with the Eighth Circuit Court of Appeals on
August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
- --------------------------------------------------------------------------------
34 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 35
10. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(L) 2007 2006(B)
Net asset value, beginning of period $10.58 $10.09 $9.98
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .11(c) .41(c) .12
Net gains (losses) (both realized and unrealized) (.47) .57 .11
- -----------------------------------------------------------------------------------------------
Total from investment operations (.36) .98 .23
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.14) (.39) (.12)
Distributions from realized gains (.35) (.10) --
- -----------------------------------------------------------------------------------------------
Total distributions (.49) (.49) (.12)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $9.73 $10.58 $10.09
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $123 $9 $10
- -----------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (d),(e) 1.43%(f) 1.36% 1.59%(f)
- -----------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.43%(f) 1.36% 1.37%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) 2.22%(f) 3.98% 3.89%(f)
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 36% 12%
- -----------------------------------------------------------------------------------------------
Total return(i) (3.51%)(j) 9.96%(k) 2.37%(j)
- -----------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from June 15, 2006 (when shares became publicly available)
to Oct. 31, 2006.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) During the year ended Oct. 31, 2007, Ameriprise Financial reimbursed the
Fund for a loss on a trading error. Had the Fund not received this
reimbursement, total return figures would have been lower by 0.05%.
(l) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
36 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(L) 2007 2006(B)
Net asset value, beginning of period $10.58 $10.09 $9.97
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04(c) .34(c) .09
Net gains (losses) (both realized and unrealized) (.44) .59 .12
- -----------------------------------------------------------------------------------------------
Total from investment operations (.40) .93 .21
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.10) (.34) (.09)
Distributions from realized gains (.35) (.10) --
- -----------------------------------------------------------------------------------------------
Total distributions (.45) (.44) (.09)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $9.73 $10.58 $10.09
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1 $-- $--
- -----------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 2.34%(f) 2.10% 2.38%(f)
- -----------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 2.23%(f) 2.10% 2.16%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) .81%(f) 3.26% 3.11%(f)
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 36% 12%
- -----------------------------------------------------------------------------------------------
Total return(i) (3.84%)(j) 9.38%(k) 2.16%(j)
- -----------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from June 15, 2006 (when shares became publicly available)
to Oct. 31, 2006.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) During the year ended Oct. 31, 2007, Ameriprise Financial reimbursed the
Fund for a loss on a trading error. Had the Fund not received this
reimbursement, total return figures would have been lower by 0.05%.
(l) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 37
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(L) 2007 2006(B)
Net asset value, beginning of period $10.57 $10.09 $9.97
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .06(c) .34(c) .09
Net gains (losses) (both realized and unrealized) (.45) .58 .12
- -----------------------------------------------------------------------------------------------
Total from investment operations (.39) .92 .21
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.11) (.34) (.09)
Distributions from realized gains (.35) (.10) --
- -----------------------------------------------------------------------------------------------
Total distributions (.46) (.44) (.09)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $9.72 $10.57 $10.09
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $7 $-- $--
- -----------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 2.20%(f) 2.12% 2.38%(f)
- -----------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 2.20%(f) 2.12% 2.16%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) 1.33%(f) 3.42% 3.11%(f)
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 36% 12%
- -----------------------------------------------------------------------------------------------
Total return(i) (3.79%)(j) 9.37%(k) 2.16%(j)
- -----------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from June 15, 2006 (when shares became publicly available)
to Oct. 31, 2006.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is and before reduction for earnings and bank fee credits on
cash balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) During the year ended Oct. 31, 2007, Ameriprise Financial reimbursed the
Fund for a loss on a trading error. Had the Fund not received this
reimbursement, total return figures would have been lower by 0.05%.
(l) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
38 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(L) 2007 2006(B)
Net asset value, beginning of period $10.59 $10.10 $9.98
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .14(c) .44(c) .13
Net gains (losses) (both realized and unrealized) (.49) .59 .12
- -----------------------------------------------------------------------------------------------
Total from investment operations (.35) 1.03 .25
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.15) (.44) (.13)
Distributions from realized gains (.35) (.10) --
- -----------------------------------------------------------------------------------------------
Total distributions (.50) (.54) (.13)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $9.74 $10.59 $10.10
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $166 $122 $68
- -----------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.05%(f) 1.07% 1.34%(f)
- -----------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.05%(f) 1.07% 1.12%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) 2.86%(f) 4.30% 4.37%(f)
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 36% 12%
- -----------------------------------------------------------------------------------------------
Total return(i) (3.37%)(j) 10.49%(k) 2.56%(j)
- -----------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from June 15, 2006 (when shares became publicly available)
to Oct. 31, 2006.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) During the year ended Oct. 31, 2007, Ameriprise Financial reimbursed the
Fund for a loss on a trading error. Had the Fund not received this
reimbursement, total return figures would have been lower by 0.05%.
(l) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 39
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(L) 2007 2006(B)
Net asset value, beginning of period $10.58 $10.09 $9.98
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .14(c) .42(c) .13
Net gains (losses) (both realized and unrealized) (.49) .59 .11
- -----------------------------------------------------------------------------------------------
Total from investment operations (.35) 1.01 .24
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.15) (.42) (.13)
Distributions from realized gains (.35) (.10) --
- -----------------------------------------------------------------------------------------------
Total distributions (.50) (.52) (.13)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $9.73 $10.58 $10.09
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- -----------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.36%(f) 1.36% 1.45%(f)
- -----------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.10%(f) 1.31% 1.23%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) 2.89%(f) 4.13% 4.04%(f)
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 36% 12%
- -----------------------------------------------------------------------------------------------
Total return(i) (3.39%)(j) 10.27%(k) 2.42%(j)
- -----------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from June 15, 2006 (when shares became publicly available)
to Oct. 31, 2006.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) During the year ended Oct. 31, 2007, Ameriprise Financial reimbursed the
Fund for a loss on a trading error. Had the Fund not received this
reimbursement, total return figures would have been lower by 0.05%.
(l) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
40 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(L) 2007(B)
Net asset value, beginning of period $10.59 $10.58
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .15 .02
Net gains (losses) (both realized and unrealized) (.49) .03
- -----------------------------------------------------------------------------------------------
Total from investment operations (.34) .05
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.15) (.04)
Distributions from realized gains (.35) --
- -----------------------------------------------------------------------------------------------
Total distributions (.50) (.04)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $9.75 $10.59
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $--
- -----------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.09%(f) 1.06%(f)
- -----------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.09%(f) 1.06%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) 2.99%(f) 4.43%(f)
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 36%
- -----------------------------------------------------------------------------------------------
Total return(i) (3.29%)(j) .44%(j),(k)
- -----------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Oct. 18, 2007 (inception date) to Oct. 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) During the year ended Oct. 31, 2007, Ameriprise Financial reimbursed the
Fund for a loss on a trading error. Had the Fund not received this
reimbursement, total return figures would have been lower by 0.05%.
(l) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 41
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(L) 2007(B)
Net asset value, beginning of period $10.58 $10.13
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .07 .36
Net gains (losses) (both realized and unrealized) (.44) .55
- -----------------------------------------------------------------------------------------------
Total from investment operations (.37) .91
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.13) (.36)
Distributions from realized gains (.35) (.10)
- -----------------------------------------------------------------------------------------------
Total distributions (.48) (.46)
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $9.73 $10.58
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $190 $--
- -----------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.61%(f) 1.54%(f)
- -----------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.61%(f) 1.54%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) 1.39%(f) 3.88%(f)
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 19% 36%
- -----------------------------------------------------------------------------------------------
Total return(i) (3.55%)(j) 9.21%(j),(k)
- -----------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratio.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) During the year ended Oct. 31, 2007, Ameriprise Financial reimbursed the
Fund for a loss on a trading error. Had the Fund not received this
reimbursement, total return figures would have been lower by 0.05%.
(l) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
42 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT ----------------------------------------------------------------------
RiverSource Investments, LLC ("RiverSource Investments" or the "investment
manager"), a wholly-owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise
Financial"), serves as the investment manager to the Fund. Under an investment
management services agreement (the "IMS Agreement") RiverSource Investments
provides investment advice and other services to the Fund and all RiverSource
funds (collectively, the "Funds").
On an annual basis, the Fund's Board of Directors (the "Board"), including the
independent Board members (the "Independent Directors"), considers renewal of
the IMS Agreement. RiverSource Investments prepared detailed reports for the
Board and its Contracts Committee in March and April 2008, including reports
based on data provided by independent organizations to assist the Board in
making this determination. In addition, throughout the year, the Board (or its
committees) reviews information prepared by RiverSource Investments addressing
the services RiverSource Investments provides and Fund performance. The Board
accords particular weight to the work, deliberations and conclusions of the
Contracts, Investment Review and Compliance Committees in determining whether to
continue the IMS Agreement. At the April 9-10, 2008 in-person Board meeting,
independent legal counsel to the Independent Directors reviewed with the
Independent Directors various factors relevant to the Board's consideration of
advisory agreements and the Board's legal responsibilities related to such
consideration. Following an analysis and discussion of the factors identified
below, the Board, including all of the Independent Directors, approved renewal
of the IMS Agreement.
Nature, Extent and Quality of Services Provided by RiverSource Investments: The
Board analyzed various reports and presentations it had received detailing the
services performed by RiverSource Investments, as well as its expertise,
resources and capabilities. The Board specifically considered many developments
during the past year concerning the services provided by RiverSource
Investments, including, in particular, the continued investment in, and
resources dedicated to, the Fund's operations, particularly in the areas of
trading systems, new product initiatives, legal and compliance. Further, in
connection with the Board's evaluation of the overall package of services
provided by RiverSource Investments, the Board considered the quality of the
administrative and transfer agency services provided by RiverSource Investments'
affiliates to the Fund. The Board also reviewed the financial condition of
RiverSource Investments (and its affiliates) and each entity's ability to carry
out its responsibilities under the IMS Agreement. The Board also discussed the
acceptability of the terms of the IMS Agreement (including the relatively broad
scope of services required to be performed by RiverSource Investments). The
Board concluded that the services being performed under the
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 43
IMS Agreement were of a reasonably high quality, particularly in light of recent
market conditions.
Based on the foregoing, and based on other information received (both oral and
written, including the information on investment performance referenced below)
and other considerations, the Board concluded that RiverSource Investments and
its affiliates were in a position to continue to provide a high quality and
level of services to the Fund.
Investment Performance: For purposes of evaluating the nature, extent and
quality of services provided under the IMS Agreement, the Board carefully
reviewed the investment performance of the Fund. In this regard, the Board
considered: (i) detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index and the net assets of the Fund; and (ii) a
report detailing the Fund's performance over various periods (including since
inception), recent Fund inflows (and outflows) and a comparison of the Fund's
net assets from December 2006 to December 2007. The Board observed that the
Fund's investment performance met expectations.
Comparative Fees, Costs of Services Provided and the Profits Realized By
RiverSource Investments and its Affiliates from their Relationships with the
Fund: The Board reviewed comparative fees and the costs of services to be
provided under the IMS Agreement. The Board observed that there has not yet
developed an adequate comparable peer group against which to compare the Fund's
expense ratio. The Board did take into account that the investment management
services and administrative fee schedules were in line with those applicable to
other global fixed income funds in the Fund's family. Based on its review, the
Board concluded that the Fund's management fee was fair and reasonable in light
of the extent and quality of services that the Fund receives.
The Board also considered the expected profitability of RiverSource Investments
and its affiliates in connection with RiverSource Investments providing
investment management services to the Fund. In this regard, the Board referred
to a detailed profitability report, discussing the profitability to RiverSource
Investments and Ameriprise Financial from managing and operating the Fund,
including data showing comparative profitability since inception. The Board also
considered the services acquired by the investment manager through the use of
commission dollars paid by the Funds on portfolio transactions. The Board noted
that the fees paid by the Fund should permit the investment manager to offer
competitive compensation to its personnel, make necessary investments in its
business and earn an appropriate profit. The Board concluded that profitability
levels were reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by RiverSource Investments as the Fund grows and
- --------------------------------------------------------------------------------
44 RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT
took note of the extent to which Fund shareholders might also benefit from such
growth. The Board considered that the IMS Agreement provides for lower fees as
assets increase at pre-established breakpoints and concluded that the IMS
Agreement satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees were fair and reasonable
in light of the extent and quality of services provided. In reaching this
conclusion, no single factor was determinative. On April 10, 2008, the Board,
including all of the Independent Directors, approved the renewal of the IMS
Agreement.
PROXY
VOTING ----------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling RiverSource Funds at (888) 791-3380; contacting your financial
institution; visiting riversource.com/funds; or searching the website of the
Securities and Exchange Commission (SEC) at http://www.sec.gov. Information
regarding how the Fund voted proxies relating to portfolio securities is filed
with the SEC by August 31 for the most recent 12-month period ending June 30 of
that year, and is available without charge by visiting riversource.com/funds; or
searching the website of the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2008 SEMIANNUAL
REPORT 45
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by
the Fund's current prospectus. RiverSource(R)
mutual funds are distributed by RiverSource
Distributors, Inc., Member FINRA, and managed by
RiverSource Investments, LLC. These companies are
part of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2008 RiverSource Distributors, Inc. S-6512 C (6/08)
</Table>
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
EMERGING MARKETS BOND FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
APRIL 30, 2008
RIVERSOURCE EMERGING MARKETS BOND
FUND SEEKS TO PROVIDE SHAREHOLDERS
WITH HIGH TOTAL RETURN THROUGH
CURRENT INCOME AND CAPITAL
APPRECIATION.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance............... 2
Manager Commentary.................. 5
Fund Expenses Example............... 10
Portfolio of Investments............ 12
Financial Statements................ 17
Notes to Financial Statements....... 22
Approval of Investment Management
Services Agreement............... 39
Proxy Voting........................ 41
</Table>
(DALBAR LOGO)
The RiverSource mutual fund
shareholder reports have been
awarded the Communications Seal
from Dalbar Inc., an independent
financial services research firm.
The Seal recognizes communications
demonstrating a level of
excellence in the industry.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> RiverSource Emerging Markets Bond Fund's (the Fund) Class A shares declined
0.31% (excluding sales charge) for the six months ended April 30, 2008.
> The Fund underperformed its benchmark, the J.P. Morgan Emerging Markets Bond
Index-Global (J.P. Morgan EMBI-Global), which rose 1.90%.
> The Fund closely tracked the Lipper Emerging Markets Debt Funds Index,
representing the Fund's peer group, which fell 0.29% during the same period.
ANNUALIZED TOTAL RETURNS (for period ended April 30, 2008)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Since
6 months* 1 year inception(a)
- ------------------------------------------------------------------------------
RiverSource Emerging Markets Bond Fund
Class A (excluding sales charge) -0.31% +2.10% +6.71%
- ------------------------------------------------------------------------------
J.P. Morgan EMBI-Global(1) (unmanaged) +1.90% +4.60% +7.63%
- ------------------------------------------------------------------------------
Lipper Emerging Markets Debt Funds
Index(2) -0.29% +2.46% +6.35%
- ------------------------------------------------------------------------------
</Table>
* Not annualized.
(a) Fund data is from Feb. 16, 2006. J.P. Morgan EMBI-Global and Lipper peer
group data is from March 1, 2006.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 4.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses. See the Average Annual Total Returns table for performance of other
share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
It is not possible to invest directly in an index.
(1) J.P. Morgan EMBI-Global, an unmanaged index, is based on U.S.
dollar-denominated debt instruments issued by emerging market sovereign and
quasi-sovereign entities, such as Brady bonds, Eurobonds and loans. The
index reflects reinvestment of all distributions and changes in market
prices.
(2) The Lipper Emerging Markets Debt Funds Index includes the 10 largest
emerging markets debt funds tracked by Lipper Inc. The index's returns
include reinvested dividends.
- --------------------------------------------------------------------------------
2 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
STYLE MATRIX
- ----------------------------------------
<Table>
<Caption>
DURATION
SHORT INT. LONG
HIGH
MEDIUM QUALITY
X LOW
</Table>
Shading within the style matrix indicates areas in which the Fund is designed to
generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
PORTFOLIO STATISTICS
(at April 30, 2008)
- ----------------------------------------
<Table>
Weighted average life(1) 13.2 years
- --------------------------------------------
Effective duration(2) 7.3 years
- --------------------------------------------
Weighted average bond rating(3) BB
- --------------------------------------------
</Table>
ANNUAL OPERATING EXPENSE RATIO
(as of the current prospectus)
- ----------------------------------------
<Table>
<Caption>
Total
- -------------------------------------
Class A 1.33%
- -------------------------------------
Class B 2.13%
- -------------------------------------
Class C 2.13%
- -------------------------------------
Class I 0.93%
- -------------------------------------
Class R4 1.25%
- -------------------------------------
Class W 1.33%
- -------------------------------------
</Table>
(1) WEIGHTED AVERAGE LIFE measures a bond's maturity, which takes into
consideration the possibility that the issuer may call the bond before its
maturity date.
(2) EFFECTIVE DURATION measures the sensitivity of a security's price to
parallel shifts in the yield curve (the graphical depiction of the levels
of interest rates from two years out to 30 years). Positive duration means
that as rates rise, the price decreases, and negative duration means that
as rates rise, the price increases.
(3) WEIGHTED AVERAGE BOND RATING represents the average credit quality of the
underlying bonds in the portfolio.
There are risks associated with an investment in a bond funds, including credit
risk, interest rate risk, and prepayment and extension risk. See the Fund's
prospectus for information on these and other risks associated with the Fund. In
general, bond prices rise when interest rates fall and vice versa. This effect
is usually more pronounced for longer-term securities. Non-investment grade
securities, commonly called "high-yield" or "junk" bonds, generally have more
volatile prices and carry more risk to principal and income than investment
grade securities.
International investing involves increased risk and volatility due to potential
political and economic instability, currency fluctuations, and differences in
financial reporting and accounting standards and oversight. Risks are
particularly significant in emerging markets.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT APRIL 30, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR INCEPTION
Class A (inception 2/16/06) -0.31% +2.10% +6.71%
- -----------------------------------------------------------------------
Class B (inception 2/16/06) -0.69% +1.36% +5.92%
- -----------------------------------------------------------------------
Class C (inception 2/16/06) -0.58% +1.43% +5.91%
- -----------------------------------------------------------------------
Class I (inception 2/16/06) -0.07% +2.59% +7.10%
- -----------------------------------------------------------------------
Class R4 (inception 2/16/06) +0.15% +2.62% +6.99%
- -----------------------------------------------------------------------
Class W (inception 12/1/06) -0.22% +2.15% +5.78%
- -----------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 2/16/06) -5.07% -2.77% +4.37%
- -----------------------------------------------------------------------
Class B (inception 2/16/06) -5.47% -3.40% +4.21%
- -----------------------------------------------------------------------
Class C (inception 2/16/06) -1.54% +0.48% +5.91%
- -----------------------------------------------------------------------
<Caption>
AT MARCH 31, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR INCEPTION
Class A (inception 2/16/06) +0.65% +2.55% +6.32%
- -----------------------------------------------------------------------
Class B (inception 2/16/06) +0.27% +1.71% +5.53%
- -----------------------------------------------------------------------
Class C (inception 2/16/06) +0.27% +1.78% +5.51%
- -----------------------------------------------------------------------
Class I (inception 2/16/06) +0.90% +3.04% +6.71%
- -----------------------------------------------------------------------
Class R4 (inception 2/16/06) +0.97% +2.92% +6.58%
- -----------------------------------------------------------------------
Class W (inception 12/1/06) +0.66% +2.51% +5.10%
- -----------------------------------------------------------------------
WITH SALES CHARGE
- -----------------------------------------------------------------------
Class A (inception 2/16/06) -4.15% -2.31% +3.89%
- -----------------------------------------------------------------------
Class B (inception 2/16/06) -4.56% -3.08% +3.74%
- -----------------------------------------------------------------------
Class C (inception 2/16/06) -0.69% +0.82% +5.51%
- -----------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum sales charge of 4.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I, Class R4 and Class W shares. Class I and Class R4 are
available to institutional investors only. Class W shares are offered through
qualifying discretionary accounts.
* Not annualized.
- --------------------------------------------------------------------------------
4 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
MANAGER COMMENTARY -------------------------------------------------------------
(UNAUDITED)
At April 30, 2008, approximately 76% of the Fund's shares were owned in
aggregate by affiliated funds-of-funds managed by RiverSource Investments, LLC
(RiverSource). As a result of asset allocation decisions by RiverSource, it is
possible RiverSource Emerging Markets Bond Fund may experience relatively large
purchases or redemptions from affiliated funds-of-funds (see page 29, Class I
capital share transactions for related activity during the most recent fiscal
period). RiverSource seeks to minimize the impact of these transactions by
structuring them over a reasonable period of time. RiverSource Emerging Markets
Bond Fund may experience increased expenses as it buys and sells securities as a
result of purchases or redemptions by affiliated funds-of-funds. For more
information on the Fund's expenses, see the discussions beginning on pages 10
and 27.
Dear Shareholders,
RiverSource Emerging Markets Bond Fund's Class A shares declined 0.31%
(excluding sales charge) for the six months ended April 30, 2008. The Fund
underperformed its benchmark, the J.P. Morgan Emerging Markets Bond Index-Global
(J.P. Morgan EMBI-Global), which rose 1.90%. The Fund closely tracked the Lipper
Emerging Markets Debt Funds Index, representing the Fund's peer group, which
fell 0.29% during the same period.
SIGNIFICANT PERFORMANCE FACTORS
From a broad perspective, performance in the emerging markets bond asset class
was muted during the period by heightened financial market volatility. Equity
market volatility, contagion from the subprime crisis, surging commodity prices
and a weak U.S. dollar combined to increase investors' aversion to risk assets.
There were also concerns about the real economic impacts of these factors,
including much slower growth in the developed market nations and rising
inflation in emerging market nations.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 5
MANAGER COMMENTARY (continued) -------------------------------------------------
Exposure to local currencies was the primary contributor to the Fund's
performance, as several emerging market currencies strengthened against the U.S.
dollar during the period. Fund holdings of bonds denominated in the Brazilian
real, the Colombian peso and the Uruguayan peso contributed the most. The Fund's
holdings of assets with average yields higher than the J.P. Morgan EMBI-Global
also contributed significantly to results.
Country selection detracted from the Fund's performance. Modest exposure to
Brazil and Venezuela, which contributed to results, did not fully offset the
negative performance from overweight exposures to Argentina, Indonesia and
Turkey. The portfolio's emerging market corporate bonds underperformed the J.P.
Morgan EMBI-Global during the period, detracting from performance. While
holdings of local currencies helped relative performance, non-U.S. interest
rates, including those in Brazil, Colombia and Uruguay, generally trended higher
and hurt Fund
PORTFOLIO BREAKDOWN BY COUNTRY
(at April 30, 2008; % of portfolio assets)
- -----------------------------------------------------------------
<Table>
Argentina 7.1%
- --------------------------------------------------------------
Brazil 12.9%
- --------------------------------------------------------------
Cayman Islands 3.7%
- --------------------------------------------------------------
Colombia 5.4%
- --------------------------------------------------------------
Dominican Republic 2.5%
- --------------------------------------------------------------
El Salvador 1.8%
- --------------------------------------------------------------
Indonesia 6.5%
- --------------------------------------------------------------
Jamaica 1.0%
- --------------------------------------------------------------
Kazakhstan 1.1%
- --------------------------------------------------------------
Luxembourg 7.3%
- --------------------------------------------------------------
Mexico 9.7%
- --------------------------------------------------------------
Netherlands 3.0%
- --------------------------------------------------------------
Pakistan 0.6%
- --------------------------------------------------------------
Panama 0.4%
- --------------------------------------------------------------
Peru 0.9%
- --------------------------------------------------------------
Philippine Islands 7.1%
- --------------------------------------------------------------
Russia 4.2%
- --------------------------------------------------------------
Turkey 8.5%
- --------------------------------------------------------------
Ukraine 2.0%
- --------------------------------------------------------------
United Kingdom 0.8%
- --------------------------------------------------------------
Uruguay 4.6%
- --------------------------------------------------------------
Venezuela 8.2%
- --------------------------------------------------------------
Other(1) 0.7%
- --------------------------------------------------------------
</Table>
(1) Cash and Cash Equivalents.
- --------------------------------------------------------------------------------
6 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
performance because the prices of these underlying bonds declined as rates
increased. In addition, U.S. interest rates declined during the semiannual
period. An underexposure to U.S. dollar-denominated sovereign bonds compared
with the J.P. Morgan EMBI-Global detracted because lower rates caused the prices
of these bonds to increase.
CHANGES TO THE FUND'S PORTFOLIO
We made modest changes to the Fund's portfolio during the period. We slightly
reduced the portfolio's exposure to corporate bonds. Also, because fundamentals
continue to support the strength of many foreign currencies relative to the U.S.
dollar, we gradually and opportunistically increased the portfolio's foreign
currency exposure.
As of April 30, 2008, approximately 77% of the Fund's net assets were invested
in sovereign debt and approximately 23% in corporate emerging market debt. The
Fund had its most significant allocations relative to the J.P. Morgan
EMBI-Global in the bond markets of Uruguay, Argentina, Colombia, Indonesia and
El Salvador. Conversely, the Fund had its most modest exposures relative to the
J.P. Morgan EMBI-Global in the bond markets of Brazil, Russia, Mexico, Peru and
Panama.
QUALITY BREAKDOWN
(at April 30, 2008; % of portfolio assets excluding cash equivalents and
equities)
- -----------------------------------------------------------------
<Table>
AA bonds 5.3%
- --------------------------------------------------------------
A bonds 1.6%
- --------------------------------------------------------------
BBB bonds 14.2%
- --------------------------------------------------------------
BB bonds 56.1%
- --------------------------------------------------------------
B bonds 21.5%
- --------------------------------------------------------------
Non-rated bonds 1.3%
- --------------------------------------------------------------
</Table>
Bond ratings apply to the underlying holdings of the Fund and not the Fund
itself. Whenever possible, the Standard and Poor's rating is used to determine
the credit quality of a security. Standard and Poor's rates the creditworthiness
of corporate bonds, with 15 categories, ranging from AAA (highest) to D
(lowest). Ratings from AA to CCC may be modified by the addition of a plus (+)
or minus (-) sign to show relative standing within the major rating categories.
If Standard and Poor's doesn't rate a security, then Moody's rating is used.
RiverSource Investments, LLC, the Fund's investment manager, rates a security
using an internal rating system when Moody's doesn't provide a rating.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
We continue to seek opportunities to invest in local currency denominated
sovereign bonds, particularly in countries benefiting from higher commodity
prices.
OUR FUTURE STRATEGY
In our opinion, we are likely closer to the end of
the U.S. financial and credit market crisis than to
the beginning. That said, a good number of
unanswered questions remain regarding the extent of
the impact of recent financial volatility and
turmoil on U.S. economic growth.
Causing further uncertainty for the view ahead is
the fact that at the end of April, commodity prices
remained at or near historic highs. While high
commodity prices historically have been a boon to
commodity-exporting emerging market economies, this
time the specter of higher inflation, especially in
food, complicates the picture. Indeed, several
emerging market nations raised their interest rates
during the semiannual period in an effort to stave
off inflation. Still, it is important to keep in
mind that most of these countries came into this
period of higher financial market volatility with
low budget deficits, healthy current account
balances and relatively low debt load. With flexible
exchange rates and lower reliance on international
capital, many of the vulnerabilities that triggered
past crises are less of an issue today.
We continue to seek opportunities to invest in local
currency denominated sovereign bonds, particularly
in countries benefiting from higher commodity
prices. Additionally, we look to see if these
countries exhibit strong internal and external
balance sheets. This strategy is based on our
current view and value analysis.
- --------------------------------------------------------------------------------
8 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
Looking ahead, we deem several factors important. Among them are the
creditworthiness of each country, the strength of its economic policies, the
soundness of its fundamentals and the attractiveness of its local interest
rates. Using our top-down investment approach, we intend to continually evaluate
these factors as we seek to identify individual securities and local currency
investments that present attractive value opportunities.
(PHOTO - NICOLAS PIFER)
Nic Pifer, CFA
Portfolio Manager
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource fund.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 9
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the expenses of the funds in which it invests (also
referred to as "acquired funds"), including affiliated and non-affiliated pooled
investment vehicles (including mutual funds and exchange traded funds). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the acquired funds' expense ratio as of the most recent shareholder
report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended April 30, 2008.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Expenses paid during the period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
10 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
NOV. 1, 2007 APRIL 30, 2008 THE PERIOD(A) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 996.90 $ 6.95 1.40%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,017.90 $ 7.02 1.40%
- -------------------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 993.10 $10.75 2.17%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,014.07 $10.87 2.17%
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 994.20 $10.71 2.16%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,014.12 $10.82 2.16%
- -------------------------------------------------------------------------------------------
Class I
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 999.30 $ 4.57 .92%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,020.29 $ 4.62 .92%
- -------------------------------------------------------------------------------------------
Class R4
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,001.50 $ 6.22 1.25%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,018.65 $ 6.27 1.25%
- -------------------------------------------------------------------------------------------
Class W
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 997.80 $ 6.76 1.36%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,018.10 $ 6.82 1.36%
- -------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the Fund's annualized expense ratio as indicated
above, multiplied by the average account value over the period, multiplied
by 182/366 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended April 30, 2008: -0.31%
for Class A, -0.69% for Class B, -0.58% for Class C, -0.07% for Class I,
+0.15% for Class R4 and -0.22% for Class W.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 11
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
APRIL 30, 2008 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
BONDS (95.6%)(c)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
ARGENTINA (6.8%)
Alto Palermo
Sr Unsecured
05-11-17 7.88% $500,000(d) $400,580
Banco Hipotecario
Sr Unsecured
04-27-16 9.75 975,000(d) 858,000
Industrias Metalurgicas Pescarmona
Sr Unsecured
10-22-14 11.25 2,250,000(d) 2,140,313
Republic of Argentina
09-12-13 7.00 2,850,000 2,244,375
04-17-17 7.00 1,670,000 1,160,650
12-15-35 5.00 9,450,000(b) 1,096,200
Republic of Argentina
(Argentine Peso) Sr Unsecured
06-12-12 10.50 2,200,000 521,739
---------------
Total 8,421,857
- ----------------------------------------------------------------------------------
BRAZIL (12.3%)
Bertin Ltda
Sr Unsecured
10-05-16 10.25 1,380,000(d) 1,438,650
Eletropaulo Metropolitana de Sao Paulo
(Brazilian Real) Sr Unsecured
06-28-10 19.13 3,400,000(d) 2,230,245
Federative Republic of Brazil
01-20-34 8.25 358,000 454,660
Federative Republic of Brazil
Sr Unsecured
01-17-17 6.00 1,050,000 1,097,250
10-14-19 8.88 1,738,000 2,239,761
JBS
Sr Unsub
08-04-16 10.50 350,000(d) 365,313
Marfrig Overseas
11-16-16 9.63 1,330,000(d) 1,343,300
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
BRAZIL (CONT.)
Merrill Lynch & Co
(Brazilian Real) Sr Unsecured
03-08-17 10.71% 5,300,000 $2,930,357
Morgan Stanley
(Brazilian Real) Sr Unsecured
05-03-17 10.09 6,650,000(d) 3,321,597
---------------
Total 15,421,133
- ----------------------------------------------------------------------------------
CAYMAN ISLANDS (3.5%)
EEB Intl
10-31-14 8.75 1,050,000(d) 1,115,625
Odebrecht Finance
10-18-17 7.50 1,100,000(d) 1,166,319
Peru Enhanced Pass-Thru
Sr Secured Zero Coupon
05-31-18 3.78 1,084,000(d,g) 731,700
TGI Intl
10-03-17 9.50 1,300,000(d) 1,383,200
---------------
Total 4,396,844
- ----------------------------------------------------------------------------------
COLOMBIA (5.2%)
Republic of Colombia
09-18-37 7.38 1,850,000 2,062,750
Republic of Colombia
(Colombian Peso)
03-01-10 11.75 1,000,000,000 576,705
10-22-15 12.00 4,218,000,000 2,569,145
06-28-27 9.85 966,000,000 516,042
Santa Fe de Bogota
(Colombian Peso) Sr Unsub
07-26-28 9.75 1,377,000,000(d) 678,485
---------------
Total 6,403,127
- ----------------------------------------------------------------------------------
DOMINICAN REPUBLIC (2.4%)
Aes Dominicana Energia Finance
12-13-15 11.00 1,050,000(d) 1,018,500
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
DOMINICAN REPUBLIC (CONT.)
Cerveceria Nacional Dominicana
Sr Unsub
03-27-12 16.00% $1,450,000(d,f) $1,421,000
Dominican Republic
Sr Unsecured
04-20-27 8.63 150,000(d) 159,750
EGE Haina Finance
04-26-17 9.50 450,000(d) 412,313
---------------
Total 3,011,563
- ----------------------------------------------------------------------------------
EL SALVADOR (1.7%)
Republic of El Salvador
Sr Unsecured
06-15-35 7.65 2,010,000(d) 2,150,700
- ----------------------------------------------------------------------------------
INDONESIA (6.3%)
Republic of Indonesia
(Indonesian Rupiah)
10-15-14 11.00 13,000,000,000 1,309,054
07-15-17 10.00 15,000,000,000 1,383,929
07-15-22 10.25 18,200,000,000 1,600,594
Republic of Indonesia
Sr Unsecured
01-17-18 6.88 200,000(d) 204,250
10-12-35 8.50 1,040,000(d) 1,133,600
02-17-37 6.63 2,450,000(d) 2,180,500
---------------
Total 7,811,927
- ----------------------------------------------------------------------------------
JAMAICA (1.0%)
Govt of Jamaica
Sr Unsecured
03-15-39 8.00 1,280,000 1,235,200
- ----------------------------------------------------------------------------------
KAZAKHSTAN (1.0%)
Kazkommerts Intl
11-03-15 8.00 450,000(d) 360,000
Temir Capital for JSC TemirBank
05-21-14 9.50 850,000(d) 916,408
---------------
Total 1,276,408
- ----------------------------------------------------------------------------------
LUXEMBOURG (7.0%)
Gaz Capital
Sr Unsecured
11-22-16 6.21 2,050,000(d) 1,965,949
03-07-22 6.51 900,000(d) 823,500
08-16-37 7.29 1,650,000(d) 1,577,813
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
LUXEMBOURG (CONT.)
MHP
11-30-11 10.25% $1,650,000(d) $1,650,000
TNK-BP Finance
07-18-16 7.50 400,000(d) 385,268
03-20-17 6.63 800,000(d) 729,965
03-13-18 7.88 1,525,000(d) 1,530,384
---------------
Total 8,662,879
- ----------------------------------------------------------------------------------
MEXICO (9.3%)
Controladora Comerical Mexicana
(Mexican Peso)
03-30-27 8.70 31,700,000(d) 2,948,588
Mexican Fixed Rate Bonds
(Mexican Peso)
12-20-12 9.00 9,600,000 953,364
12-18-14 9.50 9,500,000 979,122
Pemex Project Funding Master Trust
03-01-18 5.75 1,000,000(d) 1,030,000
06-15-35 6.63 3,304,000 3,441,994
Vitro
02-01-17 9.13 2,620,000 2,249,270
---------------
Total 11,602,338
- ----------------------------------------------------------------------------------
NETHERLANDS (2.9%)
Intergas Finance
05-14-17 6.38 500,000(d) 432,145
Majapahit Holding
10-17-16 7.75 1,600,000(d) 1,575,999
06-28-17 7.25 1,450,000(d) 1,419,507
06-29-37 7.88 200,000(d) 181,760
---------------
Total 3,609,411
- ----------------------------------------------------------------------------------
PAKISTAN (0.6%)
Islamic Republic of Pakistan
06-01-17 6.88 850,000(d) 732,063
- ----------------------------------------------------------------------------------
PANAMA (0.4%)
Republic of Panama
04-28-34 8.13 175,000 212,625
Republic of Panama
Sr Unsecured
01-26-36 6.70 250,000 259,375
---------------
Total 472,000
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio
of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 13
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
PERU (0.9%)
Banco de Credito del Peru
Sub Nts
11-07-21 6.95% $800,000(d,f) $838,624
Republic of Peru
Sr Unsecured
03-14-37 6.55 256,000 268,800
---------------
Total 1,107,424
- ----------------------------------------------------------------------------------
PHILIPPINE ISLANDS (6.8%)
Natl Power
11-02-16 6.88 900,000(d) 917,604
Republic of Philippines
10-07-16 8.75 100,000(d) 119,750
01-15-19 9.88 550,000 706,750
10-21-24 9.50 1,821,000 2,317,223
01-14-31 7.75 3,906,000 4,404,015
---------------
Total 8,465,342
- ----------------------------------------------------------------------------------
RUSSIA (4.1%)
Alfa MTN Markets/ABH Financial
06-25-12 8.20 850,000(d) 824,500
Gazstream
07-22-13 5.63 706,378(d) 707,261
Russian Federation
03-31-30 7.50 1,980,835(d) 2,268,057
Russian Standard Finance
Sr Unsub
05-05-11 8.63 1,350,000(d) 1,242,001
---------------
Total 5,041,819
- ----------------------------------------------------------------------------------
TURKEY (8.2%)
Republic of Turkey
03-15-15 7.25 679,000 707,009
04-03-18 6.75 350,000 350,875
02-05-25 7.38 2,100,000 2,128,875
02-14-34 8.00 1,320,000 1,397,550
03-17-36 6.88 6,000,000 5,550,599
---------------
Total 10,134,908
- ----------------------------------------------------------------------------------
UKRAINE (1.9%)
Credit Suisse First Boston Intl for City of Kiev Ukraine
11-06-15 8.00 100,000(d) 95,000
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UKRAINE (CONT.)
Credit Suisse First Boston Intl for Ex-Im Bank of Ukraine
02-09-16 8.40% $300,000 $291,390
Govt of Ukraine
06-26-12 6.39 1,700,000(d) 1,781,048
Standard Bank London Holdings for NAK Naftogaz Ukrainy
Secured
09-30-09 8.13 200,000 192,460
---------------
Total 2,359,898
- ----------------------------------------------------------------------------------
UNITED KINGDOM (0.8%)
UK SPV Credit Finance for JSC
Commercial Bank Privatbank
02-06-12 8.00 1,100,000(d) 996,991
- ----------------------------------------------------------------------------------
URUGUAY (4.5%)
Republic of Uruguay
Pay-in-kind
01-15-33 7.88 500(e) 543
Republica Orient Uruguay
(Uruguay Peso)
04-05-27 4.25 73,706,880(i) 3,816,493
06-26-37 3.07 15,043,773(i) 684,423
Republica Orient Uruguay
Sr Unsecured
03-21-36 7.63 983,939 1,038,056
---------------
Total 5,539,515
- ----------------------------------------------------------------------------------
VENEZUELA (7.9%)
Petroleos de Venezuela
04-12-17 5.25 4,450,000 2,937,000
Republic of Venezuela
02-26-16 5.75 4,480,000 3,528,000
12-09-20 6.00 200,000 140,000
04-21-25 7.65 250,000 191,850
Republic of Venezuela
Sr Unsecured
10-08-14 8.50 2,994,000 2,806,875
01-13-34 9.38 231,000 209,055
---------------
Total 9,812,780
- ----------------------------------------------------------------------------------
TOTAL BONDS
(Cost: $120,982,840) $118,666,127
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
MONEY MARKET FUND (0.7%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund, 2.72% 830,133(h) $830,133
- ------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $830,133) $830,133
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $121,812,973)(j) $119,496,260
====================================================================================
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) This is a variable rate security that entitles holders to receive only
interest payments. Interest is paid annually. The interest payment is based
on the Gross Domestic Product (GDP) level of the previous year for the
respective country. To the extent that the previous year's GDP exceeds the
'base case GDP', an interest payment is made equal to 0.012225 of the
difference.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in U.S. dollar currency unless otherwise
noted.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
may be determined to be liquid under guidelines established by the Fund's
Board of Directors. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At April 30,
2008, the value of these securities amounted to $53,904,125 or 43.4% of net
assets.
(e) Pay-in-kind securities are securities in which the issuer makes interest or
dividend payments in cash or in additional securities. The securities
usually have the same terms as the original holdings.
(f) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on April 30,
2008.
(g) For zero coupon bonds, the interest rate disclosed represents the
annualized effective yield on the date of acquisition.
(h) Affiliated Money Market Fund - See Note 5 to the financial statements. The
rate shown is the seven-day current annualized yield at April 30, 2008.
(i) Inflation-indexed bonds are securities in which the principal amount is
adjusted for inflation and the semiannual interest payments equal a fixed
percentage of the inflation-adjusted principal amount.
(j) At April 30, 2008, the cost of securities for federal income tax purposes
was approximately $121,813,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $3,034,000
Unrealized depreciation (5,351,000)
- ------------------------------------------------------------------------------
Net unrealized depreciation $(2,317,000)
- ------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 15
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
16 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
FINANCIAL STATEMENTS -----------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2008 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value
Unaffiliated issuers (identified cost $120,982,840) $118,666,127
Affiliated money market fund (identified cost $830,133) 830,133
- ----------------------------------------------------------------------------
Total investments in securities (identified cost
$121,812,973) 119,496,260
Foreign currency holdings (identified cost $172,834) 178,020
Capital shares receivable 591,368
Dividends and accrued interest receivable 2,125,931
Receivable for investment securities sold 2,256,526
- ----------------------------------------------------------------------------
Total assets 124,648,105
- ----------------------------------------------------------------------------
LIABILITIES
Disbursements in excess of cash 16,078
Capital shares payable 403,723
Accrued investment management services fee 2,513
Accrued distribution fee 235
Accrued transfer agency fee 113
Accrued administrative services fee 279
Other accrued expenses 44,532
- ----------------------------------------------------------------------------
Total liabilities 467,473
- ----------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $124,180,632
============================================================================
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 17
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
APRIL 30, 2008 (UNAUDITED)
<Table>
REPRESENTED BY
Capital stock -- $.01 par value $ 123,060
Additional paid-in capital 125,307,208
Undistributed net investment income 347,039
Accumulated net realized gain (loss) 675,278
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (2,271,953)
- ----------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $124,180,632
============================================================================
</Table>
<Table>
Net assets applicable to outstanding shares: Class A $ 7,496,115
Class B $ 1,563,250
Class C $ 258,082
Class I $ 94,804,907
Class R4 $ 20,779
Class W $ 20,037,499
Net asset value per share of outstanding Class A
capital stock: shares(1) 742,628 $ 10.09
Class B shares 155,018 $ 10.08
Class C shares 25,626 $ 10.07
Class I shares 9,393,323 $ 10.09
Class R4 shares 2,060 $ 10.09
Class W shares 1,987,328 $ 10.08
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $10.59. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 4.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
18 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2008 (UNAUDITED)
<Table>
INVESTMENT INCOME
Income:
Interest $ 6,520,689
Income distributions from affiliated money market fund 117,426
Less foreign taxes withheld (1,749)
- ---------------------------------------------------------------------------
Total income 6,636,366
- ---------------------------------------------------------------------------
Expenses:
Investment management services fee 595,508
Distribution fee
Class A 7,416
Class B 6,469
Class C 993
Class W 32,259
Transfer agency fee
Class A 7,788
Class B 1,798
Class C 268
Class R4 5
Class W 25,807
Administrative services fee 66,167
Plan administration services fee -- Class R4 23
Compensation of board members 1,680
Custodian fees 19,350
Printing and postage 8,460
Registration fees 47,915
Professional fees 14,647
Other 3,396
- ---------------------------------------------------------------------------
Total expenses 839,949
Expenses waived/reimbursed by the Investment Manager and
its affiliates (2,262)
Earnings and bank fee credits on cash balances (37)
- ---------------------------------------------------------------------------
Total net expenses 837,650
- ---------------------------------------------------------------------------
Investment income (loss) -- net 5,798,716
- ---------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions 697,814
Foreign currency transactions 47,569
- ---------------------------------------------------------------------------
Net realized gain (loss) on investments 745,383
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies (7,037,031)
- ---------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (6,291,648)
- ---------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $ (492,932)
===========================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 19
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2008 OCT. 31, 2007
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 5,798,716 $ 6,058,237
Net realized gain (loss) on investments 745,383 1,803,817
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies (7,037,031) 2,593,776
Net increase (decrease) in net assets resulting from
operations (492,932) 10,455,830
- -----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (210,131) (501,538)
Class B (40,292) (32,727)
Class C (6,356) (4,490)
Class I (4,721,860) (4,198,103)
Class R4 (705) (838)
Class W (874,339) (1,049,016)
Net realized gain
Class A (47,559) (18,393)
Class B (11,052) (880)
Class C (1,687) (83)
Class I (1,321,379) (59,853)
Class R4 (167) (22)
Class W (304,713) (8)
- -----------------------------------------------------------------------------------------
Total distributions (7,540,240) (5,865,951)
- -----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
20 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2008 OCT. 31, 2007
(UNAUDITED)
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 3,695,661 $ 3,695,695
Class B shares 791,003 934,159
Class C shares 144,278 131,955
Class I shares 5,815,553 105,338,850
Class R4 shares 7,693 6,989
Class W shares 12,526,711 73,570,698
Reinvestment of distributions at net asset value
Class A shares 248,644 167,200
Class B shares 43,844 28,622
Class C shares 6,456 3,686
Class I shares 6,042,771 4,257,340
Class R4 shares 393 273
Class W shares 1,178,836 1,048,760
Payments for redemptions
Class A shares (870,179) (11,436,832)
Class B shares (361,833) (358,088)
Class C shares (53,217) (7,430)
Class I shares (57,884,927) (13,150,244)
Class R4 shares (2,688) (6,001)
Class W shares (30,152,262) (37,405,273)
- -----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (58,823,263) 126,820,359
- -----------------------------------------------------------------------------------------
Total increase (decrease) in net assets (66,856,435) 131,410,238
Net assets at beginning of period 191,037,067 59,626,829
- -----------------------------------------------------------------------------------------
Net assets at end of period $124,180,632 $191,037,067
=========================================================================================
Undistributed net investment income $ 347,039 $ 402,006
- -----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 21
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS TO APRIL 30, 2008)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Emerging Markets Bond Fund (the Fund) is a series of RiverSource
Global Series, Inc. and is registered under the Investment Company Act of 1940
(as amended) as a non-diversified, open-end management investment company.
RiverSource Global Series, Inc. has 10 billion authorized shares of capital
stock that can be allocated among the separate series as designated by the Board
of Directors (the Board). The Fund invests primarily in fixed income securities
of emerging market issuers.
The Fund offers Class A, Class B, Class C, Class I, Class R4 and Class W shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I and Class R4 shares are sold without a front-end sales charge or CDSC
and are offered to qualifying institutional investors.
- - Class W shares are sold without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts.
At April 30, 2008, RiverSource Investments, LLC (the Investment Manager) and the
RiverSource affiliated funds-of-funds owned 100% of Class I shares.
At April 30, 2008, the Investment Manager and the RiverSource affiliated funds-
of-funds owned approximately 76% of the total outstanding Fund shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ 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.
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
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
- --------------------------------------------------------------------------------
22 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
the last quoted sales price. Debt securities are generally traded in the
over-the-counter market and are valued at a price that reflects fair value as
quoted by dealers in these securities or by an independent pricing service.
Foreign securities are valued based on quotations from the principal market in
which such securities are normally traded. The procedures adopted by the Board
generally contemplate the use of fair valuation in the event that price
quotations or valuations are not readily available, price quotations or
valuations from other sources are not reflective of market value and thus deemed
unreliable, or a significant event has occurred in relation to a security or
class of securities (such as foreign securities) that is not reflected in price
quotations or valuations from other sources. A fair value price is a good faith
estimate of the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the New York Stock Exchange and therefore the closing prices for securities
in such markets or on such exchanges may not fully reflect events that occur
after such close but before the close of the New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial, Inc. (Ameriprise
Financial), parent company of the Investment Manager, as administrator to the
Fund, will fair value foreign securities pursuant to procedures adopted by the
Board, including utilizing a third party pricing service to determine these fair
values. These procedures take into account multiple factors, including movements
in the U.S. securities markets, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the New
York Stock Exchange.
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.
SECURITIES PURCHASED ON A FORWARD-COMMITMENT BASIS
Delivery and payment for securities that have been purchased by the Fund on a
forward-commitment basis, including when-issued securities and other forward-
commitments, can take place one month or more after the transaction date. During
this period, such securities are subject to market fluctuations, and they may
affect the Fund's net assets the same as owned securities. The Fund designates
cash or liquid securities at least equal to the amount of its
forward-commitments. At April 30, 2008, the Fund had no outstanding
forward-commitments.
The Fund also enters into transactions to sell purchase commitments to third
parties at current market values and concurrently acquires other purchase
commitments for similar securities at later dates. As an inducement for the Fund
to "roll over" its purchase commitments, the Fund receives negotiated amounts in
the form of reductions of the purchase price of the commitment. The Fund records
the incremental difference between the forward purchase and sale of each forward
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 23
roll as realized gain or loss. Losses may arise due to changes in the value of
the securities or if the counterparty does not perform under the terms of the
agreement. If the counterparty files for bankruptcy or becomes insolvent, the
Fund's right to repurchase or sell securities may be limited. The Fund did not
enter into any mortgage dollar roll transactions during the six months ended
April 30, 2008.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains, and facilitate buying and
selling of securities for investments, the Fund may buy and write options traded
on any U.S. or foreign exchange or in the over-the-counter market where
completing the obligation depends upon the credit standing of the other party.
Cash collateral may be collected by the Fund to secure certain over-the-counter
options trades. Cash collateral held by the Fund for such option trades must be
returned to the counterparty upon closure, exercise or expiration of the
contract. The Fund also may buy and sell put and call options and write covered
call options on portfolio securities as well as write cash-secured put options.
The risk in writing a call option is that the Fund gives up the opportunity for
profit if the market price of the security increases. The risk in writing a put
option is that the Fund 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
Fund pays a premium whether or not the option is exercised. The Fund also has
the additional risk of being unable 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 Fund will
realize a gain or loss when the option transaction expires or closes. 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. At
April 30, 2008, and for the six months then ended, the Fund had no outstanding
option contracts.
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund 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 of 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.
Futures are valued daily based upon the last sale price at the close of market
on the principal exchange on which they are traded. Upon entering into a futures
contract, the Fund 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 Fund each day. The
variation
- --------------------------------------------------------------------------------
24 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
margin payments are equal to the daily changes in the contract value and are
recorded as unrealized gains and losses. The Fund recognizes a realized gain or
loss when the contract is closed or expires. At April 30, 2008, the Fund had no
outstanding futures contracts.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. 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, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes. At April 30, 2008, foreign currency holdings were entirely
comprised of Mexican pesos.
The Fund may enter into forward foreign currency contracts to produce
incremental earnings, for operational purposes, or to protect against adverse
exchange rate fluctuation. The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the Fund and the resulting
unrealized appreciation or depreciation are determined using foreign currency
exchange rates from an independent pricing service. The Fund is subject to the
credit risk that the other party will not complete its contract obligations. At
April 30, 2008, the Fund had no outstanding forward foreign currency contracts.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income to shareholders. No provision for income or excise
taxes is thus required.
The Fund has adopted Financial Accounting Standards Board (FASB) Interpretation
48 (FIN 48), "Accounting for Uncertainty in Income Taxes" which is effective for
fiscal periods beginning after Dec. 15, 2006. FIN 48 clarifies the accounting
for uncertainty in income taxes recognized in accordance with FASB
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 25
Statement 109, "Accounting for Income Taxes." FIN 48 prescribes a two-step
process to recognize and measure a tax position taken or expected to be taken in
a tax return. The first step is to determine whether a tax position has met the
more-likely-than-not recognition threshold and the second step is to measure a
tax position that meets the threshold to determine the amount of benefit to
recognize. FIN 48 also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and
transition. Management of the Fund has concluded that there are no significant
uncertain tax positions that would require recognition in the financial
statements. Generally, the tax authorities can examine all the tax returns filed
for the last three years.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of the deferred 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.
RECENT ACCOUNTING PRONOUNCEMENTS
In March 2008, the FASB issued Statement on Financial Accounting Standards No.
161 (SFAS "161"), "Disclosures about Derivative Instruments and Hedging
Activities -- an amendment of FASB Statement No. 133," which requires enhanced
disclosures about a fund's derivative and hedging activities. Funds are required
to provide enhanced disclosures about (a) how and why a fund uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect a fund's financial
position, financial performance, and cash flows. SFAS 161 is effective for
financial statements issued for fiscal years and interim periods beginning after
Nov. 15, 2008. As of April 30, 2008, management does not believe the adoption of
SFAS 161 will impact the financial statement amounts; however, additional
footnote disclosures may be required about the use of derivative instruments and
hedging items.
On Sept. 20, 2006, the FASB released Statement of Financial Accounting Standards
No. 157 "Fair Value Measurements" (SFAS 157). SFAS 157 establishes an
authoritative definition of fair value, sets out a hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported in
the Statement of Operations for a fiscal period. The application of SFAS 157
will be effective for the Fund's fiscal year beginning Nov. 1, 2008. The
adoption of SFAS 157 is not anticipated to have a material impact on the Fund's
financial
- --------------------------------------------------------------------------------
26 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
statements; however, additional disclosures will be required about the inputs
used to develop the measurements of fair value and the effect of certain
measurements reported in the Statement of Operations for a fiscal period.
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, declared daily and payable monthly, when
available, are reinvested in additional shares of the Fund at net asset value or
payable in cash. Capital gains, when available, are distributed along with the
last income dividend of the calendar year.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income, if any, is recognized on the ex-dividend date or upon
receipt of ex-dividend notification in the case of certain foreign securities.
Interest income, including amortization of premium, market discount and original
issue discount using the effective interest method, is accrued daily.
2. EXPENSES AND SALES CHARGES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.72%
to 0.52% annually as the Fund's assets increase. The management fee for the six
months ended April 30, 2008 was 0.72% of the Fund's average daily net assets.
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.08% to 0.05% annually as the
Fund's assets increase. The fee for the six months ended April 30, 2008 was
0.08% of the Fund's average daily net assets.
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended
April 30, 2008, other expenses paid to this company were $678.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
Under a Deferred Compensation Plan (the Plan), non-interested board members may
defer receipt of their compensation. Deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of the Fund or other
RiverSource funds. The Fund's liability for these amounts is adjusted for market
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 27
value changes and remains in the Fund until distributed in accordance with the
Plan.
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual account-based fee at a rate equal to $20.50 for Class A, $21.50
for Class B and $21.00 for Class C for this service. The Fund also pays the
Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's
average daily net assets attributable to Class R4 shares and an annual
asset-based fee at a rate of 0.20% of the Fund's average daily net assets
attributable to Class W shares.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the Statement of Operations.
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares for the provision of various administrative,
recordkeeping, communication and educational services.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund pays a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A and
Class W shares and a fee at an annual rate of up to 1.00% of the Fund's average
daily net assets attributable to Class B and Class C shares.
Sales charges received by the Distributor for distributing Fund shares were
$24,247 for Class A, $615 for Class B and $186 for Class C for the six months
ended April 30, 2008.
In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in which
it invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). Because the acquired funds have varied expense and fee levels and
the Fund may own different proportions of acquired funds at different times, the
amount of fees and expenses incurred indirectly by the Fund will vary.
For the six months ended April 30, 2008, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds) were 1.40% for Class A, 2.16%
for Class B, 2.16% for Class C, 0.99% for Class R4 and 1.36% for Class W. Of
these waived/reimbursed fees and expenses, the transfer agency fees at the class
level were $1,789, $389 and $61 for Class A, Class B, and Class C, respectively
and the plan administration services fee at the class level was $23 for Class
R4. In addition, the Investment Manager and its affiliates have contractually
agreed to
- --------------------------------------------------------------------------------
28 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
waive certain fees and expenses such that net expenses (excluding fees and
expenses of acquired funds) will not exceed 1.40% for Class A, 2.17% for Class
B, 2.16% for Class C, 0.95% for Class I, 1.25% for Class R4 and 1.40% for Class
W of the Fund's average daily net assets until Oct. 31, 2008, unless sooner
terminated at the discretion of the Board.
During the six months ended April 30, 2008, the Fund's transfer agency fees were
reduced by $37 as a result of bank fee credits from overnight cash balances.
The Fund pays custodian fees to Ameriprise Trust Company, a subsidiary of
Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $11,405,120 and $66,719,984, respectively, for the six
months ended April 30, 2008. Realized gains and losses are determined on an
identified cost basis.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED APRIL 30, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 360,778 24,490 (85,048) 300,220
Class B 77,536 4,323 (35,511) 46,348
Class C 14,125 637 (5,205) 9,557
Class I 560,799 594,458 (5,685,674) (4,530,417)
Class R4 749 39 (263) 525
Class W 1,217,753 116,063 (2,939,592) (1,605,776)
- ----------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 355,415 16,082 (1,076,628) (705,131)
Class B 90,068 2,759 (34,366) 58,461
Class C 12,620 355 (724) 12,251
Class I 10,129,478 409,766 (1,279,390) 9,259,854
Class R4 677 26 (583) 120
Class W* 7,065,923 101,109 (3,573,928) 3,593,104
- ----------------------------------------------------------------------------------------------
</Table>
* For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 29
5. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. The cost of the
Fund's purchases and proceeds from sales of shares of RiverSource Short-Term
Cash Fund aggregated $44,802,292 and $51,669,698, respectively, for the six
months ended April 30, 2008.
6. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
headed by JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the
temporary funding of shareholder redemptions or for other temporary or emergency
purposes. The credit facility agreement, which is a collective agreement between
the Fund and certain other RiverSource funds, severally and not jointly, permits
collective borrowings up to $500 million. Interest is charged to each Fund based
on its borrowings at a rate equal to the federal funds rate plus 0.30%. Each
borrowing under the credit facility matures no later than 60 days after the date
of borrowing. The Fund also pays a commitment fee equal to its pro rata share of
the amount of the credit facility at a rate of 0.06% per annum. The Fund had no
borrowings during the six months ended April 30, 2008.
7. RISKS RELATING TO CERTAIN INVESTMENTS
DIVERSIFICATION RISK
The Fund is non-diversified. A non-diversified fund may invest more of its
assets in fewer companies than if it were a diversified fund. The Fund may be
more exposed to the risks of loss and volatility than a fund that invests more
broadly.
FOREIGN/EMERGING MARKETS RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities. Investing in
emerging markets may accentuate these risks.
8. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc., was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company mutual funds and
they
- --------------------------------------------------------------------------------
30 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
purport to bring the action derivatively on behalf of those funds under the
Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid
to the defendants by the funds for investment advisory and administrative
services are excessive. The plaintiffs seek remedies including restitution and
rescission of investment advisory and distribution agreements. The plaintiffs
voluntarily agreed to transfer this case to the United States District Court for
the District of Minnesota. In response to defendants' motion to dismiss the
complaint, the Court dismissed one of plaintiffs' four claims and granted
plaintiffs limited discovery. Defendants moved for summary judgment in April
2007. Summary judgment was granted in the defendants' favor on July 9, 2007. The
plaintiffs filed a notice of appeal with the Eighth Circuit Court of Appeals on
August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of Directors/
Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 31
or other adverse consequences to the Funds. Further, although we believe
proceedings are not likely to have a material adverse effect on the Funds or the
ability of Ameriprise Financial or its affiliates to perform under their
contracts with the Funds, these proceedings are subject to uncertainties and, as
such, we are unable to estimate the possible loss or range of loss that may
result. An adverse outcome in one or more of these proceedings could result in
adverse judgments, settlements, fines, penalties or other relief that could have
a material adverse effect on the consolidated financial condition or results of
operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
32 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
9. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(K) 2007 2006(B)
Net asset value, beginning of period $10.57 $10.16 $9.98
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .35(c) .59(c) .33
Net gains (losses) (both realized and
unrealized) (.39) .39 .18
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.04) .98 .51
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.35) (.55) (.33)
Distributions from realized gains (.09) (.02) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.44) (.57) (.33)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.09 $10.57 $10.16
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $7 $5 $12
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.46%(f) 1.33% 1.81%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.40%(f) 1.33% 1.39%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 6.84%(f) 5.61% 5.20%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 7% 41% 32%
- -----------------------------------------------------------------------------------------------------------
Total return(i) (.31%)(j) 9.94% 5.25%(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Feb. 16, 2006 (when shares became publicly available)
to Oct. 31, 2006.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 33
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(K) 2007 2006(B)
Net asset value, beginning of period $10.55 $10.16 $9.97
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .31(c) .52(c) .28
Net gains (losses) (both realized and
unrealized) (.38) .37 .19
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.07) .89 .47
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.31) (.48) (.28)
Distributions from realized gains (.09) (.02) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.40) (.50) (.28)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.08 $10.55 $10.16
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $2 $1 $1
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 2.22%(f) 2.13% 2.62%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 2.16%(f) 2.13% 2.20%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 6.05%(f) 4.90% 4.51%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 7% 41% 32%
- -----------------------------------------------------------------------------------------------------------
Total return(i) (.69%)(j) 8.94% 4.80%(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Feb. 16, 2006 (when shares became publicly available)
to Oct. 31, 2006.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
34 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(K) 2007 2006(B)
Net asset value, beginning of period $10.54 $10.15 $9.97
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .31(c) .53(c) .28
Net gains (losses) (both realized and
unrealized) (.37) .36 .18
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.06) .89 .46
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.32) (.48) (.28)
Distributions from realized gains (.09) (.02) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.41) (.50) (.28)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.07 $10.54 $10.15
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 2.22%(f) 2.13% 2.61%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 2.16%(f) 2.13% 2.19%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 6.11%(f) 5.00% 4.46%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 7% 41% 32%
- -----------------------------------------------------------------------------------------------------------
Total return(i) (.58%)(j) 8.94% 4.75%(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Feb. 16, 2006 (when shares became publicly available)
to Oct. 31, 2006.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 35
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(K) 2007 2006(B)
Net asset value, beginning of period $10.57 $10.16 $9.98
- ------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .37(c) .65(c) .35
Net gains (losses) (both realized and
unrealized) (.38) .38 .17
- ------------------------------------------------------------------------------------------------------------
Total from investment operations (.01) 1.03 .52
- ------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.38) (.60) (.34)
Distributions from realized gains (.09) (.02) --
- ------------------------------------------------------------------------------------------------------------
Total distributions (.47) (.62) (.34)
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.09 $10.57 $10.16
- ------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $95 $147 $47
- ------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) .92%(f) .93% 1.52%(f)
- ------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .92%(f) .93% 1.10%(f)
- ------------------------------------------------------------------------------------------------------------
Net investment income (loss) 7.12%(f) 6.14% 5.70%(f)
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 7% 41% 32%
- ------------------------------------------------------------------------------------------------------------
Total return(i) (.07%)(j) 10.38% 5.44%(j)
- ------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Feb. 16, 2006 (when shares became publicly available)
to Oct. 31, 2006.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
36 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(K) 2007 2006(B)
Net asset value, beginning of period $10.56 $10.16 $9.98
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .36(c) .60(c) .34
Net gains (losses) (both realized and
unrealized) (.35) .39 .18
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .01 .99 .52
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.39) (.57) (.34)
Distributions from realized gains (.09) (.02) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.48) (.59) (.34)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.09 $10.56 $10.16
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.25%(f) 1.24% 1.67%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .99%(f) 1.24% 1.25%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 7.18%(f) 5.75% 5.37%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 7% 41% 32%
- -----------------------------------------------------------------------------------------------------------
Total return(i) .15%(j) 9.97% 5.36%(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Feb. 16, 2006 (when shares became publicly available)
to Oct. 31, 2006.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 37
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(K) 2007(B)
Net asset value, beginning of period $10.55 $10.24
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .34 .57
Net gains (losses) (both realized and
unrealized) (.37) .28
- -----------------------------------------------------------------------------------------------------------
Total from investment operations (.03) .85
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.35) (.52)
Distributions from realized gains (.09) (.02)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.44) (.54)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.08 $10.55
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $20 $38
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.36%(f) 1.33%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.36%(f) 1.33%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 6.58%(f) 5.86%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 7% 41%
- -----------------------------------------------------------------------------------------------------------
Total return(i) (.22%)(j) 8.49%(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
38 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT ----------------------------------------------------------------------
RiverSource Investments, LLC ("RiverSource Investments" or the "investment
manager"), a wholly-owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise
Financial"), serves as the investment manager to the Fund. Under an investment
management services agreement (the "IMS Agreement") RiverSource Investments
provides investment advice and other services to the Fund and all RiverSource
funds (collectively, the "Funds").
On an annual basis, the Fund's Board of Directors (the "Board"), including the
independent Board members (the "Independent Directors"), considers renewal of
the IMS Agreement. RiverSource Investments prepared detailed reports for the
Board and its Contracts Committee in March and April 2008, including reports
based on data provided by independent organizations to assist the Board in
making this determination. In addition, throughout the year, the Board (or its
committees) reviews information prepared by RiverSource Investments addressing
the services RiverSource Investments provides and Fund performance. The Board
accords particular weight to the work, deliberations and conclusions of the
Contracts, Investment Review and Compliance Committees in determining whether to
continue the IMS Agreement. At the April 9-10, 2008 in-person Board meeting,
independent legal counsel to the Independent Directors reviewed with the
Independent Directors various factors relevant to the Board's consideration of
advisory agreements and the Board's legal responsibilities related to such
consideration. Following an analysis and discussion of the factors identified
below, the Board, including all of the Independent Directors, approved renewal
of the IMS Agreement.
Nature, Extent and Quality of Services Provided by RiverSource Investments: The
Board analyzed various reports and presentations it had received detailing the
services performed by RiverSource Investments, as well as its expertise,
resources and capabilities. The Board specifically considered many developments
during the past year concerning the services provided by RiverSource
Investments, including, in particular, the continued investment in, and
resources dedicated to, the Fund's operations, particularly in the areas of
trading systems, new product initiatives, legal and compliance. Further, in
connection with the Board's evaluation of the overall package of services
provided by RiverSource Investments, the Board considered the quality of the
administrative and transfer agency services provided by RiverSource Investments'
affiliates to the Fund. The Board also reviewed the financial condition of
RiverSource Investments (and its affiliates) and each entity's ability to carry
out its responsibilities under the IMS Agreement. The Board also discussed the
acceptability of the terms of the IMS Agreement (including the relatively broad
scope of services required to be performed by RiverSource Investments).
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 39
The Board concluded that the services being performed under the IMS Agreement
were of a reasonably high quality, particularly in light of recent market
conditions.
Based on the foregoing, and based on other information received (both oral and
written, including the information on investment performance referenced below)
and other considerations, the Board concluded that RiverSource Investments and
its affiliates were in a position to continue to provide a high quality and
level of services to the Fund.
Investment Performance: For purposes of evaluating the nature, extent and
quality of services provided under the IMS Agreement, the Board carefully
reviewed the investment performance of the Fund. In this regard, the Board
considered: (i) detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index, the percentage ranking of the Fund among its
comparison group and the net assets of the Fund; and (ii) a report detailing the
Fund's performance over various periods (including since inception), recent Fund
inflows (and outflows) and a comparison of the Fund's net assets from December
2006 to December 2007. The Board observed that the Fund's investment performance
met expectations.
Comparative Fees, Costs of Services Provided and the Profits Realized By
RiverSource Investments and its Affiliates from their Relationships with the
Fund: The Board reviewed comparative fees and the costs of services to be
provided under the IMS Agreement. The Board members considered detailed
comparative information set forth in an annual report on fees and expenses,
including, among other things, data (prepared by an independent organization)
showing a comparison of the Fund's expenses with median expenses paid by funds
in its peer group, as well as data showing the Fund's contribution to
RiverSource Investments' profitability.
The Board accorded particular weight to the notion that the level of fees should
reflect a rational pricing model applied consistently across the various product
lines in the Funds' family, while assuring that the overall fees for each fund
are generally in line with the "pricing philosophy" (i.e., that the total
expense ratio of each fund, with few exceptions, is at or below the median
expense ratio of funds in the same comparison group). The Board observed that
the Fund's expense ratio (after considering proposed expense caps/waivers)
approximated the peer group's median expense ratio. Based on its review, the
Board concluded that the Fund's management fee was fair and reasonable in light
of the extent and quality of services that the Fund receives.
The Board also considered the expected profitability of RiverSource Investments
and its affiliates in connection with RiverSource Investments providing
investment management services to the Fund. In this regard, the Board referred
to a detailed profitability report, discussing the profitability to RiverSource
Investments and
- --------------------------------------------------------------------------------
40 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT
Ameriprise Financial from managing and operating the Fund, including data
showing comparative profitability since inception. The Board also considered the
services acquired by the investment manager through the use of commission
dollars paid by the Funds on portfolio transactions. The Board noted that the
fees paid by the Fund should permit the investment manager to offer competitive
compensation to its personnel, make necessary investments in its business and
earn an appropriate profit. The Board concluded that profitability levels were
reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by RiverSource Investments as the Fund grows and
took note of the extent to which Fund shareholders might also benefit from such
growth. The Board considered that the IMS Agreement provides for lower fees as
assets increase at pre-established breakpoints and concluded that the IMS
Agreement satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees were fair and reasonable
in light of the extent and quality of services provided. In reaching this
conclusion, no single factor was determinative. On April 10, 2008, the Board,
including all of the Independent Directors, approved the renewal of the IMS
Agreement.
PROXY
VOTING ----------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling RiverSource Funds at (888) 791-3380; contacting your financial
institution; visiting riversource.com/funds; or searching the website of the
Securities and Exchange Commission (SEC) at http://www.sec.gov. Information
regarding how the Fund voted proxies relating to portfolio securities is filed
with the SEC by August 31 for the most recent 12-month period ending June 30 of
that year, and is available without charge by visiting riversource.com/funds; or
searching the website of the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2008 SEMIANNUAL REPORT 41
RIVERSOURCE EMERGING MARKETS BOND FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by
the Fund's current prospectus. RiverSource(R)
mutual funds are distributed by RiverSource
Distributors, Inc., Member FINRA, and managed by
RiverSource Investments, LLC. These companies are
part of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2008 RiverSource Distributors, Inc. S-6511 D (6/08)
</Table>
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
GLOBAL BOND FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
APRIL 30, 2008
RIVERSOURCE GLOBAL BOND FUND SEEKS
TO PROVIDE SHAREHOLDERS WITH HIGH
TOTAL RETURN THROUGH INCOME AND
GROWTH OF CAPITAL.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance............... 2
Manager Commentary.................. 5
Fund Expenses Example............... 10
Portfolio of Investments............ 12
Financial Statements................ 26
Notes to Financial Statements....... 32
Approval of Investment Management
Services Agreement............... 49
Proxy Voting........................ 51
</Table>
(DALBAR LOGO)
The RiverSource mutual fund
shareholder reports have been
awarded the Communications Seal
from Dalbar Inc., an independent
financial services research firm.
The Seal recognizes communications
demonstrating a level of
excellence in the industry.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> RiverSource Global Bond Fund's (the Fund) Class A shares gained 3.94%
(excluding sales charge) for the six months ended April 30, 2008.
> The Fund underperformed its benchmark, the Lehman Brothers Global Aggregate
Index, which rose 6.27%.
> The Fund outperformed the Lipper Global Income Funds Index, representing the
Fund's peer group, which increased 3.21% during the same period.
ANNUALIZED TOTAL RETURNS (for period ended April 30, 2008)
- --------------------------------------------------------------------------------
<Table>
<Caption>
6 months* 1 year 3 years 5 years 10 years
- -----------------------------------------------------------------------------------
RiverSource Global Bond
Fund Class A (excluding
sales charge) +3.94% +8.65% +4.47% +6.03% +5.26%
- -----------------------------------------------------------------------------------
Lehman Brothers Global
Aggregate Index(1)
(unmanaged) +6.27% +11.78% +5.54% +6.63% +6.30%
- -----------------------------------------------------------------------------------
Lipper Global Income Funds
Index(2) +3.21% +7.04% +4.93% +6.09% +5.41%
- -----------------------------------------------------------------------------------
</Table>
* Not annualized.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 4.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses. See the Average Annual Total Returns table for performance of other
share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
It is not possible to invest directly in an index.
(1) The Lehman Brothers Global Aggregate Index, an unmanaged market
capitalization weighted benchmark, tracks the performance of investment
grade fixed income securities denominated in 13 currencies. The index
reflects reinvestment of all distributions and changes in market prices.
(2) The Lipper Global Income Funds Index includes the 30 largest global income
funds tracked by Lipper Inc. The index's returns include net reinvested
dividends.
- --------------------------------------------------------------------------------
2 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
STYLE MATRIX
- ----------------------------------------
<Table>
<Caption>
DURATION
SHORT INT. LONG
X HIGH
MEDIUM QUALITY
LOW
</Table>
Shading within the style matrix indicates areas in which the Fund is designed to
generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
PORTFOLIO STATISTICS
(at April 30, 2008)
- ----------------------------------------
<Table>
Weighted average life(1) 6.8 years
- --------------------------------------------
Effective duration(2) 4.9 years
- --------------------------------------------
Weighted average bond rating(3) BB
- --------------------------------------------
</Table>
ANNUAL OPERATING EXPENSE RATIO
(as of the current prospectus)
- ----------------------------------------
<Table>
<Caption>
Total Net Expenses(a)
- -------------------------------------------------------
Class A 1.37% 1.25%
- -------------------------------------------------------
Class B 2.13% 2.01%
- -------------------------------------------------------
Class C 2.13% 2.01%
- -------------------------------------------------------
Class I 0.87% 0.82%
- -------------------------------------------------------
Class R4 1.17% 1.12%
- -------------------------------------------------------
Class W 1.35% 1.27%
- -------------------------------------------------------
</Table>
(a) The Investment Manager and its affiliates
have contractually agreed to waive certain fees and to absorb certain
expenses until Oct. 31, 2008, unless sooner terminated at the discretion of
the Fund's Board. Any amounts waived will not be reimbursed by the Fund.
Under this agreement, net fund expenses (excluding fees and expenses of
acquired funds) will not exceed 1.25% for Class A, 2.01% for Class B, 2.01%
for Class C, 0.82% for Class I, 1.12% for Class R4 and 1.27% for Class W.
(1)
WEIGHTED AVERAGE LIFE measures a bond's maturity, which takes into
consideration the possibility that the issuer may call the bond before its
maturity date.
(2) EFFECTIVE DURATION measures the sensitivity of a security's price to
parallel shifts in the yield curve (the graphical depiction of the levels
of interest rates from two years out to 30 years). Positive duration means
that as rates rise, the price decreases, and negative duration means that
as rates rise, the price increases.
(3) WEIGHTED AVERAGE BOND RATING represents the average credit quality of the
underlying bonds in the portfolio.
There are risks associated with an investment in a bond fund, including credit
risk, interest rate risk, and prepayment and extension risk. See the Fund's
prospectus for information on these and other risks associated with the Fund. In
general, bond prices rise when interest rates fall and vice versa. This effect
is usually more pronounced for longer-term securities. Non-investment grade
securities, commonly called "high-yield" or "junk" bonds, generally have more
volatile prices and carry more risk to principal and income than investment
grade securities.
International investing involves increased risk and volatility due to potential
political and economic instability, currency fluctuations, and differences in
financial reporting and accounting standards and oversight. Risks are
particularly significant in emerging markets.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT APRIL 30, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION**
Class A (inception 3/20/89) +3.94% +8.65% +4.47% +6.03% +5.26% N/A
- ---------------------------------------------------------------------------------------------------------
Class B (inception 3/20/95) +3.53% +7.73% +3.64% +5.20% +4.44% N/A
- ---------------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) +3.60% +7.86% +3.63% +5.21% N/A +6.11%
- ---------------------------------------------------------------------------------------------------------
Class I (inception 3/4/04) +4.16% +9.10% +4.84% N/A N/A +5.77%
- ---------------------------------------------------------------------------------------------------------
Class R4 (inception 3/20/95) +4.24% +9.06% +4.71% +6.24% +5.47% N/A
- ---------------------------------------------------------------------------------------------------------
Class W (inception 12/1/06) +4.00% +8.80% N/A N/A N/A +6.94%
- ---------------------------------------------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 3/20/89) -0.95% +3.53% +2.77% +5.01% +4.72% N/A
- ---------------------------------------------------------------------------------------------------------
Class B (inception 3/20/95) -1.47% +2.73% +2.38% +4.87% +4.44% N/A
- ---------------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) +2.60% +6.86% +3.63% +5.21% N/A +6.11%
- ---------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
AT MARCH 31, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION**
Class A (inception 3/20/89) +6.22% +10.74% +5.12% +6.54% +5.40% N/A
- ---------------------------------------------------------------------------------------------------------
Class B (inception 3/20/95) +5.77% +9.77% +4.28% +5.74% +4.59% N/A
- ---------------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) +5.86% +9.92% +4.32% +5.75% N/A +6.31%
- ---------------------------------------------------------------------------------------------------------
Class I (inception 3/4/04) +6.45% +11.04% +5.49% N/A N/A +6.11%
- ---------------------------------------------------------------------------------------------------------
Class R4 (inception 3/20/95) +6.52% +11.16% +5.36% +6.79% +5.61% N/A
- ---------------------------------------------------------------------------------------------------------
Class W (inception 12/1/06) +6.28% +10.73% N/A N/A N/A +8.08%
- ---------------------------------------------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 3/20/89) +1.16% +5.47% +3.44% +5.51% +4.86% N/A
- ---------------------------------------------------------------------------------------------------------
Class B (inception 3/20/95) +0.77% +4.77% +3.04% +5.41% +4.59% N/A
- ---------------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) +4.86% +8.92% +4.32% +5.75% N/A +6.31%
- ---------------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum sales charge of 4.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I, Class R4 and Class W shares. Class I and Class R4 are
available to institutional investors only. Class W shares are offered through
qualifying discretionary accounts.
* Not annualized.
** For classes with less than 10 years performance.
- --------------------------------------------------------------------------------
4 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
MANAGER COMMENTARY -------------------------------------------------------------
(UNAUDITED)
At April 30, 2008, approximately 28% of the Fund's shares were owned in
aggregate by affiliated funds-of-funds managed by RiverSource Investments, LLC
(RiverSource). As a result of asset allocation decisions by RiverSource, it is
possible RiverSource Global Bond Fund may experience relatively large purchases
or redemptions from affiliated funds-of-funds (see page 40, Class I capital
share transactions for related activity during the most recent fiscal period).
RiverSource seeks to minimize the impact of these transactions by structuring
them over a reasonable period of time. RiverSource Global Bond Fund may
experience increased expenses as it buys and sells securities as a result of
purchases or redemptions by affiliated funds-of-funds. For more information on
the Fund's expenses, see the discussions beginning on pages 10 and 38.
Dear Shareholders,
RiverSource Global Bond Fund's Class A shares gained 3.94% (excluding sales
charge) for the six months ended April 30, 2008. The Fund underperformed its
benchmark, the Lehman Brothers Global Aggregate Index (Lehman Global Index),
which rose 6.27%. However, the Fund outperformed the Lipper Global Income Funds
Index, representing the Fund's peer group, which increased 3.21% during the same
period.
SECTOR BREAKDOWN (at April 30, 2008; % of portfolio assets)
- -----------------------------------------------------------------
<Table>
Asset-Backed 1.5%
- --------------------------------------------------------------
Commercial Mortgage-Backed 6.8%
- --------------------------------------------------------------
Consumer Discretionary 1.6%
- --------------------------------------------------------------
Consumer Staples 1.2%
- --------------------------------------------------------------
Energy 1.1%
- --------------------------------------------------------------
Financials 7.3%
- --------------------------------------------------------------
Foreign Government 55.2%
- --------------------------------------------------------------
Health Care 0.6%
- --------------------------------------------------------------
Industrials 1.0%
- --------------------------------------------------------------
Materials 0.2%
- --------------------------------------------------------------
Mortgage-Backed 10.9%
- --------------------------------------------------------------
Telecommunication 5.2%
- --------------------------------------------------------------
U.S. Government Obligations & Agencies 5.4%
- --------------------------------------------------------------
Utilities 1.8%
- --------------------------------------------------------------
Other(1) 0.2%
- --------------------------------------------------------------
</Table>
(1) Cash & Cash Equivalents.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 5
MANAGER COMMENTARY (continued) -------------------------------------------------
SIGNIFICANT PERFORMANCE FACTORS
At the start of the period, the Fund had approximately 51% of its net assets
exposed to foreign currencies, which had a positive impact on performance. The
U.S. dollar fell 3.70% on a trade-weighted basis for the semiannual period. As
the value of the U.S. dollar decreases, the dollar value of foreign investments
typically increases and vice versa. One of the key factors driving the U.S.
dollar lower was the sharp drop in U.S. interest rates relative to interest
rates in major foreign economies. The decline in U.S. rates reflected
increasingly dislocated financial markets, fears the U.S. economy might slip
into recession and aggressive monetary easing by the Federal Open Market
Committee (the FOMC). Over the six-month period, the Fed cut the targeted
federal funds rate to 2.00% from 4.50%, a dramatic 2.50% reduction. Positive
returns from its fixed income holdings, as measured in local currency terms
(i.e., before the impact of currency fluctuations are taken into account)
further boosted the Fund's results. In general, foreign bond markets
underperformed the U.S. bond market in local currency terms, reflecting more
resilient economic performance, tighter central bank policy and less
advantageous bond yield movements overseas.
Relative to the Lehman Global Index, the Fund was hurt during the semiannual
period by several of our investment decisions. The Fund was impacted most by its
currency positioning, especially its underexposure to the Japanese yen, which
appreciated 10.31% against the U.S. dollar during the period. The Japanese yen
is a perpetually low-yielding currency and global investors tend to underweight
or short it to fund investment in other
TOP TEN COUNTRIES (at April 30, 2008; % of portfolio assets)
- -----------------------------------------------------------------
<Table>
United States 35.8%
- --------------------------------------------------------------
Japan 11.0%
- --------------------------------------------------------------
Germany 10.4%
- --------------------------------------------------------------
United Kingdom 6.4%
- --------------------------------------------------------------
France 5.0%
- --------------------------------------------------------------
Netherlands 4.9%
- --------------------------------------------------------------
Canada 3.7%
- --------------------------------------------------------------
Italy 3.6%
- --------------------------------------------------------------
Spain 3.0%
- --------------------------------------------------------------
Belgium 2.1%
- --------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
6 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
The Fund was impacted most by its currency positioning, especially its
underexposure to the Japanese yen, which appreciated 10.31% against the U.S.
dollar during the period.
currencies that offer higher yields. This strategy
tends to work well over time, but it often causes
the yen's value to abruptly rise during periods of
market crisis, as sentiment deteriorates and
investors look to reduce risk. We saw just this sort
of move in the yen during the semiannual period when
signs of stress in the financial markets multiplied.
Given its underweight position, the Fund derived
less benefit from the yen's appreciation than its
benchmark.
Our views on the broad direction of interest rates
and the Fund's yield curve positioning across the
maturity spectrum also detracted from performance
relative to the Lehman Global Index during the
period. The sharp drop in U.S. Treasury yields,
especially at the short-term end of the yield curve,
hurt performance in particular. On balance, our
allocations to various segments of the global bond
market also took a toll: The negative impact of an
overexposure to U.S. commercial mortgage-backed
securities and a small allocation to high yield
bonds more than offset the positive effect of the
Fund's underweight position in agency securities and
investment grade corporate bonds.
Relative to the Fund's peer group, the Fund likely
benefited from its generally conservative approach
toward riskier fixed income assets, such as emerging
market bonds, medium and lower quality corporate
bonds and non-agency U.S. mortgage-backed
securities. This conservative stance may have
insulated the Fund better than some of its peers
when financial market stress and forced debt payoffs
roiled the markets for these riskier assets.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
CHANGES TO THE FUND'S PORTFOLIO
We made several adjustments to portfolio positioning during the period. For
example, we added exposure to Japanese interest rates, as that country began to
show signs of slower growth. We reduced interest rate exposure in the U.S. with
the view that investors had started to price in too many interest rate cuts from
the Fed. Within the Fund's currency positioning, we modestly scaled back an
overweight position in the U.S. dollar and added some exposure to both the
Japanese yen and the euro.
The most significant change we made to the Fund's portfolio during the period
was to eliminate its long-standing underweight position in investment grade
corporate bonds, a shift we made primarily during the second half of the
semiannual period. A year ago, we felt the relative value in corporate bonds was
poor, with yield spreads (the difference in yields between investment grade
corporate bonds and U.S. Treasuries) near historically tight levels. The market
turmoil that unfolded in July 2007 and increased over the following months took
yield spreads on investment grade corporate bonds back to historically wide
levels not seen since 2002. With this in mind, we accomplished this shift by
adding mostly to our position in U.S. dollar-denominated corporate bonds, where
we see better value than foreign currency-denominated corporate bonds. Within
the riskier segments of the fixed income market, we decreased the Fund's already
modest exposure to high yield corporate bonds, where we expect default rates to
rise. Additionally, we increased the Fund's allocation to sovereign emerging
market debt.
OUR FUTURE STRATEGY
The dislocation across the global fixed income markets reached an extreme in the
early months of 2008. Falling asset prices led to margin calls that required
assets to be sold, which in turn reduced asset prices further. This vicious
cycle, in addition to other investor concerns, grabbed hold of the markets.
However, the dramatic steps taken by the Fed (including the Fed's unprecedented
financial support for JPMorgan's purchase of Bear Stearns in mid-March) and
other central banks appear to have broken the cycle. Indeed, market sentiment
improved substantially after the Bear Stearns takeover and such sentiment
continued to get better through the end of the semiannual period, suggesting
that the worst of the financial market crisis may finally be behind us. If so,
we expect to see a gradual process of normalization across the global bond
markets - including plenty of
- --------------------------------------------------------------------------------
8 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
setbacks along the way - that eventually reverses many of the sharp movements in
yields, spreads and currencies seen during the period. In this environment, we
believe it makes sense to continue adding exposure to bonds that were unfairly
punished during the market turmoil, since their valuations remain attractive
from a longer-term perspective.
As always, we constantly monitor the market for changing conditions and
regularly review the Fund's duration, country, sector, yield curve, and currency
positioning in an effort to seek an attractive balance between risk and
potential return. Our sector teams remain focused on careful individual security
selection, as we continue to seek opportunities to capitalize on attractively
valued bonds.
(PHOTO - NICOLAS PIFER)
Nic Pifer, CFA(R)
Portfolio Manager
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource fund.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 9
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the expenses of the funds in which it invests (also
referred to as "acquired funds"), including affiliated and non-affiliated pooled
investment vehicles (including mutual funds and exchange traded funds). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the acquired funds' expense ratio as of the most recent shareholder
report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended April 30, 2008.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Expenses paid during the period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
10 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
NOV. 1, 2007 APRIL 30, 2008 THE PERIOD(A) EXPENSE RATIO
- --------------------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,039.40 $ 6.34 1.25%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,018.65 $ 6.27 1.25%
- --------------------------------------------------------------------------------------------
Class B
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,035.30 $10.17 2.01%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,014.87 $10.07 2.01%
- --------------------------------------------------------------------------------------------
Class C
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,036.00 $10.17 2.01%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,014.87 $10.07 2.01%
- --------------------------------------------------------------------------------------------
Class I
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,041.60 $ 4.16 .82%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,020.79 $ 4.12 .82%
- --------------------------------------------------------------------------------------------
Class R4
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,042.40 $ 5.69 1.12%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,019.29 $ 5.62 1.12%
- --------------------------------------------------------------------------------------------
Class W
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,040.00 $ 6.44 1.27%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,018.55 $ 6.37 1.27%
- --------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the Fund's annualized expense ratio as indicated
above, multiplied by the average account value over the period, multiplied
by 182/366 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended April 30, 2008: +3.94%
for Class A, +3.53% for Class B, +3.60% for Class C, +4.16% for Class I,
+4.24% for Class R4 and +4.00% for Class W.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 11
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
APRIL 30, 2008 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
BONDS (95.1%)(c)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
ARGENTINA (0.1%)
Republic of Argentina
09-12-13 7.00% $748,000 $589,050
04-17-17 7.00 300,000 208,500
12-15-35 0.00 2,900,000(g) 336,400
---------------
Total 1,133,950
- ------------------------------------------------------------------------------------
AUSTRALIA (1.3%)
Commonwealth Bank of Australia
(European Monetary Unit) Sr Unsub
11-12-09 3.38 745,000 1,136,565
New South Wales Treasury
(Australian Dollar)
05-01-12 6.00 9,410,000 8,564,879
Telstra
Sr Unsub
04-01-12 6.38 500,000 526,988
---------------
Total 10,228,432
- ------------------------------------------------------------------------------------
AUSTRIA (1.0%)
Republic of Austria
(European Monetary Unit)
01-15-10 5.50 5,200,000 8,317,389
- ------------------------------------------------------------------------------------
BELGIUM (2.0%)
Fortis Bank
(European Monetary Unit) Sr Unsecured
05-30-14 4.50 420,000 631,605
Kingdom of Belgium
(European Monetary Unit)
03-28-10 3.00 9,945,000 15,256,378
---------------
Total 15,887,983
- ------------------------------------------------------------------------------------
BRAZIL (0.1%)
Federative Republic of Brazil
01-15-18 8.00 699,000 796,860
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
CANADA (3.5%)
Canadian Natl Railway
Sr Unsecured
05-15-18 5.55% $390,000(b) $395,653
Canadian Natural Resources
Sr Unsecured
02-01-39 6.75 310,000 325,032
Canadian Pacific Railway
(Canadian Dollar)
06-15-10 4.90 380,000(d) 380,570
EnCana
11-01-11 6.30 1,510,000 1,582,451
Molson Coors Capital Finance
09-22-10 4.85 1,000,000 1,002,531
Province of British Columbia
(Canadian Dollar)
08-23-10 6.38 5,600,000 5,938,725
Province of Ontario
(Canadian Dollar)
03-08-14 5.00 6,885,000 7,232,326
Province of Quebec
(Canadian Dollar)
12-01-17 4.50 1,820,000 1,819,729
TELUS
Sr Unsecured
06-01-11 8.00 6,480,000 6,990,591
Thomson
10-01-14 5.70 2,465,000 2,392,776
---------------
Total 28,060,384
- ------------------------------------------------------------------------------------
COLOMBIA (0.1%)
Republic of Colombia
01-27-17 7.38 380,000 424,650
09-18-37 7.38 320,000 356,800
---------------
Total 781,450
- ------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
12 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
CZECH REPUBLIC (0.4%)
Czech Republic
(Czech Koruna)
10-18-10 2.55% 31,230,000 $1,856,974
06-16-13 3.70 28,500,000 1,700,617
---------------
Total 3,557,591
- ------------------------------------------------------------------------------------
DENMARK (0.6%)
Danske Bank
(European Monetary Unit) Sr Nts
03-16-10 4.66 750,000(e) 1,165,942
Nykredit Realkredit
(Danish Krone)
10-01-28 5.00 17,155,255 3,491,717
---------------
Total 4,657,659
- ------------------------------------------------------------------------------------
FRANCE (4.8%)
BNP Paribas
(European Monetary Unit) Sr Unsub
10-20-08 4.78 750,000(e) 1,168,746
Compagnie de Financement Foncier
(European Monetary Unit)
01-29-09 2.38 1,500,000 2,304,982
France Telecom
(European Monetary Unit) Sr Unsub
02-21-17 4.75 1,565,000 2,347,582
Govt of France
(European Monetary Unit)
04-25-12 5.00 5,920,000 9,570,798
04-25-13 4.00 10,630,000 16,562,990
10-25-16 5.00 3,275,000 5,385,831
Societe Generale
(European Monetary Unit) Sr Unsecured
11-28-08 4.40 750,000(e) 1,168,531
---------------
Total 38,509,460
- ------------------------------------------------------------------------------------
GERMANY (10.0%)
Bayerische Landesbank
(Japanese Yen) Sr Nts
04-22-13 1.40 300,000,000 2,896,023
Bundesobligation
(European Monetary Unit)
04-13-12 4.00 4,700,000 7,358,540
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
GERMANY (CONT.)
Bundesrepublik Deutschland
(European Monetary Unit)
07-04-27 6.50% 8,500,000 $16,402,341
07-04-28 4.75 3,915,000 6,205,490
07-04-34 4.75 7,315,000 11,573,775
Bundesschatzanweisungen
(European Monetary Unit)
09-12-08 3.50 11,780,000 18,353,926
COREALCREDIT BANK
(European Monetary Unit) Series 501
09-02-09 5.00 1,800,000(d) 2,823,178
DEPFA Deutsche Pfandbriefbank
(European Monetary Unit) Series G6
01-15-10 5.50 2,200,000 3,492,638
Deutsche Bank
(European Monetary Unit) Sr Unsub
07-28-09 4.25 700,000 1,088,896
KfW
(British Pound)
12-07-15 5.50 2,815,000 5,765,297
Rheinische Hypothekenbank
(European Monetary Unit) Series 803
07-05-10 5.75 2,225,000(d) 3,568,130
---------------
Total 79,528,234
- ------------------------------------------------------------------------------------
GREECE (1.0%)
Hellenic Republic
(European Monetary Unit) Sr Unsub
10-22-22 5.90 4,650,000 8,030,413
- ------------------------------------------------------------------------------------
INDONESIA (0.4%)
Republic of Indonesia
(Indonesian Rupiah)
07-15-22 10.25 26,129,000,000 2,297,906
Republic of Indonesia
Sr Unsecured
01-17-18 6.88 550,000(d) 561,688
10-12-35 8.50 190,000(d) 207,100
---------------
Total 3,066,694
- ------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 13
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
ITALY (3.4%)
Buoni Poliennali Del Tesoro
(European Monetary Unit)
01-15-10 3.00% 6,250,000 $9,598,217
08-01-15 3.75 2,400,000 3,626,057
02-01-19 4.25 2,610,000 3,974,268
11-01-26 7.25 3,636,283 7,287,317
11-01-27 6.50 1,500,000 2,794,242
---------------
Total 27,280,101
- ------------------------------------------------------------------------------------
JAPAN (10.6%)
Development Bank of Japan
(Japanese Yen)
06-20-12 1.40 582,000,000 5,640,894
Govt of Japan CPI Linked
(Japanese Yen)
12-10-17 1.20 740,740,000(i) 7,047,539
Govt of Japan
(Japanese Yen)
09-20-10 0.80 962,000,000 9,248,431
06-20-12 1.40 774,000,000 7,541,695
12-20-12 1.00 1,455,000,000 13,915,213
12-20-14 1.30 398,000,000 3,833,348
09-20-17 1.70 100,000,000(b) 978,405
09-20-17 1.70 1,610,000,000 15,752,325
12-20-22 1.40 380,000,000 3,388,056
12-20-26 2.10 1,374,000,000 13,047,436
12-20-34 2.40 100,000,000(b) 958,272
12-20-34 2.40 268,000,000 2,568,168
---------------
Total 83,919,783
- ------------------------------------------------------------------------------------
JERSEY (0.2%)
ASIF III Jersey
(European Monetary Unit) Sr Secured
11-25-08 4.52 1,100,000(e) 1,704,495
- ------------------------------------------------------------------------------------
LUXEMBOURG (0.7%)
Gaz Capital
Sr Unsecured
08-16-37 7.29 230,000(d) 219,938
Telecom Italia Capital
11-15-13 5.25 5,725,000 5,489,072
---------------
Total 5,709,010
- ------------------------------------------------------------------------------------
MALAYSIA (0.2%)
Petronas Capital
05-22-12 7.00 1,500,000(d) 1,640,778
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
MEXICO (1.3%)
Mexican Fixed Rate Bonds
(Mexican Peso)
12-24-09 9.00% 60,230,000 $5,846,402
12-20-12 9.00 40,110,000 3,983,272
United Mexican States
Sr Unsecured
09-27-34 6.75 270,000 298,890
---------------
Total 10,128,564
- ------------------------------------------------------------------------------------
NETHERLANDS (4.6%)
BMW Finance
(European Monetary Unit)
01-22-14 4.25 875,000 1,324,425
Deutsche Telekom Intl Finance
(European Monetary Unit)
01-19-15 4.00 1,695,000 2,440,894
Govt of Netherlands
(European Monetary Unit)
07-15-12 5.00 5,750,000 9,316,700
07-15-13 4.25 11,990,000 18,916,818
ING Groep
(European Monetary Unit) Sr Unsecured
05-31-17 4.75 1,005,000 1,511,531
Rabobank Nederland
(European Monetary Unit) Sr Unsub
04-04-12 4.13 830,000 1,274,937
Telefonica Europe
09-15-10 7.75 2,010,000 2,155,828
---------------
Total 36,941,133
- ------------------------------------------------------------------------------------
NEW ZEALAND (0.8%)
Govt of New Zealand
(New Zealand Dollar)
04-15-13 6.50 7,750,000 6,001,452
- ------------------------------------------------------------------------------------
NORWAY (1.0%)
Govt of Norway
(Norwegian Krone)
05-16-11 6.00 38,150,000 7,759,036
- ------------------------------------------------------------------------------------
PHILIPPINE ISLANDS (0.1%)
Republic of Philippines
01-15-19 9.88 150,000 192,750
01-14-31 7.75 440,000 496,100
---------------
Total 688,850
- ------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
POLAND (1.8%)
Republic of Poland
(Polish Zloty)
03-24-10 5.75% 31,130,000 $13,972,899
- ------------------------------------------------------------------------------------
SOUTH AFRICA (0.2%)
Republic of South Africa
(South African Rand)
08-31-10 13.00 12,207,500 1,700,314
- ------------------------------------------------------------------------------------
SOUTH KOREA (0.3%)
Korea Development Bank
(Japanese Yen) Series 21RG
06-25-08 0.98 70,000,000 672,509
Korea Development Bank
(Japanese Yen) Series 23BR
06-28-10 0.87 200,000,000 1,899,831
---------------
Total 2,572,340
- ------------------------------------------------------------------------------------
SPAIN (2.9%)
AyT Cedular Cajas Global
(European Monetary Unit) Series 8
06-14-18 4.25 1,500,000 2,144,002
Caja de Ahorros y Monte de Piedad de Madrid
(European Monetary Unit)
03-25-11 3.50 2,900,000 4,386,445
Govt of Spain
(European Monetary Unit)
07-30-09 5.15 10,250,000 16,210,163
---------------
Total 22,740,610
- ------------------------------------------------------------------------------------
SUPRA-NATIONAL (0.8%)
European Investment Bank
(British Pound) Sr Unsecured
12-07-08 6.25 385,000 769,023
12-07-11 5.50 2,930,000 5,924,277
---------------
Total 6,693,300
- ------------------------------------------------------------------------------------
SWEDEN (0.7%)
Govt of Sweden
(Swedish Krona)
01-28-09 5.00 15,250,000 2,562,475
03-15-11 5.25 18,360,000 3,170,023
---------------
Total 5,732,498
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
TURKEY (0.1%)
Republic of Turkey
04-03-18 6.75% $150,000 $150,375
03-17-36 6.88 540,000 499,554
---------------
Total 649,929
- ------------------------------------------------------------------------------------
UKRAINE (0.1%)
Govt of Ukraine
Sr Unsecured
11-14-17 6.75 480,000(d) 473,179
- ------------------------------------------------------------------------------------
UNITED KINGDOM (6.1%)
Abbey Natl Treasury Services
(European Monetary Unit)
05-27-09 4.50 850,000(e) 1,324,673
British Sky Broadcasting Group
02-15-18 6.10 2,590,000(d) 2,635,297
BT Group
Sr Unsecured
12-15-10 8.63 550,000(l) 598,556
Diageo Capital
01-30-13 5.20 300,000 306,011
HBOS Treasury Services
(European Monetary Unit)
02-12-09 3.50 1,600,000 2,466,657
United Kingdom Treasury
(British Pound)
03-07-12 5.00 7,350,000 14,944,684
09-07-14 5.00 8,810,000 18,054,993
09-07-15 4.75 1,400,000 2,822,585
03-07-18 5.00 2,700,000 5,509,424
---------------
Total 48,662,880
- ------------------------------------------------------------------------------------
UNITED STATES (33.8%)
AmeriCredit Automobile Receivables Trust
Series 2007-DF Cl A3A (FSA)
07-06-12 5.49 1,025,000(j) 1,019,875
Anadarko Petroleum
Sr Unsecured
09-15-16 5.95 970,000 997,557
AT&T
Sr Unsecured
01-15-38 6.30 3,655,000(l) 3,657,997
Banc of America Commercial Mtge
Series 2005-1 Cl A4
11-10-42 4.99 750,000(f) 747,916
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 15
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Banc of America Commercial Mtge
Sr Unsecured
Series 2007-1 Cl A3
01-15-49 5.45% $2,075,000(f) $2,004,053
Bank of America
Sr Unsecured
05-01-18 5.65 2,390,000(b) 2,386,257
Bear Stearns Commercial Mtge Securities
Series 2003-T10 Cl A1
03-13-40 4.00 351,935(f) 343,865
Bear Stearns Commercial Mtge Securities
Series 2007-T26 Cl A4
01-12-45 5.47 1,050,000(f) 1,022,354
Brandywine Operating Partnership LP
05-01-17 5.70 370,000(l) 311,758
Cadbury Schweppes US Finance LLC
10-01-08 3.88 2,820,000(d,l) 2,813,900
California State Teachers' Retirement System Trust
Series 2002-C6 Cl A3
11-20-14 4.46 1,784,131(d,f) 1,810,473
Capital One Multi-Asset Execution Trust
Series 2007-A7 Cl A7
07-15-20 5.75 400,000 393,140
CenterPoint Energy Resources
Sr Unsecured
02-15-11 7.75 250,000 266,995
Citigroup Commercial Mtge Trust
Series 2005-EMG Cl A1
09-20-51 4.15 160,195(d,f) 159,691
Citigroup Commercial Mtge Trust
Series 2006-C5 Cl A4
10-15-49 5.43 1,700,000(f) 1,664,816
Citigroup Commercial Mtge Trust
Series 2007-C6 Cl A4
12-10-49 5.70 1,900,000(f) 1,877,571
Citigroup
(European Monetary Unit) Sr Unsecured
05-21-10 3.88 1,960,000 2,964,992
Citigroup
Sr Unsecured
03-05-38 6.88 875,000 911,680
Clorox
Sr Unsecured
03-01-13 5.00 1,565,000 1,549,053
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Colorado Interstate Gas
Sr Unsecured
11-15-15 6.80% $2,235,000 $2,347,358
Comcast
03-15-16 5.90 1,305,000(l) 1,320,339
03-15-37 6.45 2,460,000 2,446,667
Commercial Mtge Pass-Through Ctfs
Series 2006-CN2A Cl BFL
02-05-19 3.05 400,000(d,e,f) 372,621
Commercial Mtge Pass-Through Ctfs
Series 2007-C9 Cl A4
12-10-49 5.82 1,050,000(f) 1,049,735
Communications & Power Inds
02-01-12 8.00 15,000 14,775
Cott Beverages USA
12-15-11 8.00 280,000 235,900
Countrywide Alternative Loan Trust
Collateralized Mtge Obligation
Series 2005-64CB Cl 1A1
12-25-35 5.50 1,507,311(f) 1,413,349
Countrywide Alternative Loan Trust
Collateralized Mtge Obligation
Series 2005-6CB Cl 1A1
04-25-35 7.50 807,421(f) 769,243
Countrywide Alternative Loan Trust
Collateralized Mtge Obligation
Series 2006-22R Cl 1A2
05-25-36 6.00 1,542,200(f) 1,442,047
Coventry Health Care
Sr Unsecured
08-15-14 6.30 460,000 448,974
CPS Auto Trust
Series 2007-A Cl A3 (MBIA)
09-15-11 5.04 849,999(d,j) 808,417
Credit Suisse Mtge Capital Ctfs
Series 2006-C2 Cl A3
03-15-39 5.66 900,000(f) 902,084
Credit Suisse Mtge Capital Ctfs
Series 2007-C3 Cl A4
06-15-39 5.72 950,000(f) 943,134
Credit Suisse New York
Sub Nts
02-15-18 6.00 590,000 598,626
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
16 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
CS First Boston Mtge Securities
Series 2003-CPN1 Cl A2
03-15-35 4.60% $600,000(f) $579,448
CSC Holdings
Sr Unsecured Series B
07-15-09 8.13 166,000 169,320
CSX
Sr Unsecured
03-15-13 5.75 2,295,000 2,324,858
Dr Pepper Snapple Group
Sr Nts
05-01-18 6.82 590,000(d) 612,038
DRS Technologies
11-01-13 6.88 40,000 39,700
Dunkin Securitization
Series 2006-1 Cl A2 (AMBAC)
06-20-31 5.78 1,600,000(d,j) 1,439,936
EchoStar DBS
10-01-13 7.00 40,000 39,900
02-01-16 7.13 80,000 78,600
Erac USA Finance
10-15-17 6.38 2,395,000(d) 2,204,095
ERP Operating LP
Sr Unsecured
06-15-17 5.75 485,000 456,414
Exelon
Sr Unsecured
06-15-10 4.45 1,000,000 998,480
Federal Home Loan Mtge Corp
05-28-10 2.38 6,400,000(f) 6,344,992
Federal Home Loan Mtge Corp #A11799
08-01-33 6.50 211,049(f) 219,728
Federal Home Loan Mtge Corp #A15881
11-01-33 5.00 1,126,263(f) 1,111,620
Federal Home Loan Mtge Corp #E91486
09-01-17 6.50 216,328(f) 224,276
Federal Home Loan Mtge Corp #E99684
10-01-18 5.00 563,746(f) 570,629
Federal Home Loan Mtge Corp #G01535
04-01-33 6.00 1,411,744(f) 1,464,468
Federal Natl Mtge Assn
10-15-14 4.63 10,230,000(f) 10,660,345
11-15-30 6.63 3,350,000(f) 4,106,939
Federal Natl Mtge Assn #254686
04-01-18 5.50 1,316,383(f) 1,347,467
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Federal Natl Mtge Assn #254722
05-01-18 5.50% $683,478(f) $699,617
Federal Natl Mtge Assn #357850
07-01-35 5.50 3,107,885(f,l) 3,130,306
Federal Natl Mtge Assn #360800
01-01-09 5.74 1,118,805(f) 1,129,629
Federal Natl Mtge Assn #545874
08-01-32 6.50 226,040(f) 237,208
Federal Natl Mtge Assn #555528
04-01-33 6.00 1,011,591(f) 1,040,401
Federal Natl Mtge Assn #555734
07-01-23 5.00 855,799(f) 852,442
Federal Natl Mtge Assn #555740
08-01-18 4.50 1,220,945(f) 1,216,700
Federal Natl Mtge Assn #555851
01-01-33 6.50 1,169,110(f) 1,218,848
Federal Natl Mtge Assn #575487
04-01-17 6.50 556,458(f) 584,158
Federal Natl Mtge Assn #621581
12-01-31 6.50 252,555(f) 265,940
Federal Natl Mtge Assn #633966
03-01-17 6.00 139,458(f) 144,033
Federal Natl Mtge Assn #634749
03-01-17 5.50 601,844(f) 617,221
Federal Natl Mtge Assn #640996
05-01-32 7.50 446,570(f) 479,866
Federal Natl Mtge Assn #643381
06-01-17 6.00 326,358(f) 337,064
Federal Natl Mtge Assn #645053
05-01-32 7.00 793,286(f) 843,406
Federal Natl Mtge Assn #646147
06-01-32 7.00 352,216(f) 378,461
Federal Natl Mtge Assn #652284
08-01-32 6.50 350,698(f) 365,070
Federal Natl Mtge Assn #653145
07-01-17 6.00 212,711(f) 220,177
Federal Natl Mtge Assn #653730
09-01-32 6.50 164,870(f) 172,820
Federal Natl Mtge Assn #655589
08-01-32 6.50 1,371,045(f) 1,446,504
Federal Natl Mtge Assn #666424
08-01-32 6.50 235,852(f) 245,517
Federal Natl Mtge Assn #670461
11-01-32 7.50 168,406(f) 180,963
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 17
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Federal Natl Mtge Assn #677333
01-01-33 6.00% $3,819,631(f) $3,928,416
Federal Natl Mtge Assn #688034
03-01-33 5.50 468,570(f) 474,673
Federal Natl Mtge Assn #688691
03-01-33 5.50 755,170(f) 761,916
Federal Natl Mtge Assn #711503
06-01-33 5.50 999,156(f) 1,012,331
Federal Natl Mtge Assn #725594
07-01-34 5.50 4,136,801(f,l) 4,171,170
Federal Natl Mtge Assn #735029
09-01-13 5.32 630,867(f) 642,187
Federal Natl Mtge Assn #741850
09-01-33 5.50 1,741,529(f) 1,757,087
Federal Natl Mtge Assn #753507
12-01-18 5.00 2,134,122(f) 2,158,122
Federal Natl Mtge Assn #755498
11-01-18 5.50 1,022,096(f) 1,046,794
Federal Natl Mtge Assn #756236
01-01-34 6.00 3,798,547(f,l) 3,933,987
Federal Natl Mtge Assn #756788
11-01-33 6.50 218,030(f) 227,155
Federal Natl Mtge Assn #759336
01-01-34 6.00 3,623,400(f,l) 3,751,648
Federal Natl Mtge Assn #765946
02-01-34 5.50 3,762,864(f) 3,796,478
Federal Natl Mtge Assn #845229
11-01-35 5.50 1,620,037(f) 1,631,725
Federal Natl Mtge Assn #886292
07-01-36 7.00 3,559,347(f,l) 3,761,835
Federal Natl Mtge Assn #888174
06-01-35 5.50 9,890,273(f) 9,972,444
Federal Natl Mtge Assn #928019
01-01-37 5.50 2,227,652(f) 2,242,679
Federal Natl Mtge Assn #928831
10-01-37 6.00 2,607,727(f) 2,668,404
Federal Natl Mtge Assn #948012
11-01-37 6.00 5,273,473(f) 5,396,178
FedEx
04-01-09 3.50 720,000 718,008
General Electric Capital Assurance
Series 2003-1 Cl A4
05-12-35 5.25 450,000(d,f) 446,803
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
General Electric Capital
(British Pound) Sr Unsecured
12-15-08 4.50% 380,000 $748,931
General Electric Capital
(New Zealand Dollar) Sr Unsecured
02-04-10 6.63 3,450,000 2,584,921
Genworth Financial
(Japanese Yen) Sr Unsecured
06-20-11 1.60 198,000,000 1,811,600
GMAC Commercial Mtge Securities
Series 2004-C3 Cl A5
12-10-41 4.86 4,475,000(f) 4,211,243
Goldman Sachs Group
Sr Unsecured
04-01-18 6.15 400,000 405,576
Govt Natl Mtge Assn #604708
10-15-33 5.50 953,028(f) 968,368
Govt Natl Mtge Assn
Collateralized Mtge Obligation
Interest Only
Series 2002-80 Cl CI
01-20-32 58.78 556,345(f,h) 30,411
Greenwich Capital Commercial Funding
Series 2004-GG1 Cl A5
06-10-36 4.88 500,000(f) 497,982
Greenwich Capital Commercial Funding
Series 2007-GG9 Cl A4
03-10-39 5.44 950,000(f) 923,863
GS Mtge Securities II
Series 2004-GG2 Cl A4
08-10-38 4.96 950,000(f) 948,689
GS Mtge Securities II
Series 2007-EOP Cl J
03-06-20 3.59 1,250,000(d,e,f) 1,096,264
GS Mtge Securities II
Series 2007-GG10 Cl F
08-10-45 5.80 775,000(f) 484,166
GSR Mtge Loan Trust
Series 2004-10F Cl 6A1
09-25-34 5.00 4,349,197(f) 4,013,495
Harborview Mtge Loan Trust
Collateralized Mtge Obligation
Series 2004-1 Cl A4
04-19-34 4.78 2,350,917(f,k) 2,072,851
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
18 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Hershey
Sr Unsecured
04-01-13 5.00% $680,000 $684,663
Hertz Vehicle Financing LLC
Series 2004-1A Cl A3 (MBIA)
05-25-09 2.85 66,667(d,j) 66,667
HJ Heinz
Sr Unsecured
12-01-08 6.43 605,000(d) 612,393
Indiana Michigan Power
Sr Unsecured
03-15-37 6.05 850,000 761,829
JPMorgan Chase & Co
Sr Nts
01-15-18 6.00 965,000 999,962
JPMorgan Chase Bank
Sub Nts
10-01-17 6.00 340,000 352,985
JPMorgan Chase Commercial Mtge Securities
Series 2003-LN1 Cl A1
10-15-37 4.13 336,279(f) 330,736
JPMorgan Chase Commercial Mtge Securities
Series 2003-ML1A Cl A1
03-12-39 3.97 175,920(f) 171,259
JPMorgan Chase Commercial Mtge Securities
Series 2003-ML1A Cl A2
03-12-39 4.77 1,200,000(f) 1,165,440
JPMorgan Chase Commercial Mtge Securities
Series 2005-LDP4 Cl AM
10-15-42 5.00 2,425,000(f) 2,268,388
JPMorgan Chase Commercial Mtge Securities
Series 2005-LDP5 Cl A4
12-15-44 5.18 850,000(f) 839,066
JPMorgan Chase Commercial Mtge Securities
Series 2006-LDP6 Cl A4
04-15-43 5.48 825,000(f) 814,006
JPMorgan Chase Commercial Mtge Securities
Series 2006-LDP6 Cl ASB
04-15-43 5.49 1,150,000(f) 1,125,602
JPMorgan Chase Commercial Mtge Securities
Series 2007-CB20 Cl A4
02-12-51 5.79 3,037,000(f) 3,010,765
JPMorgan Chase Commercial Mtge Securities
Series 2007-CB20 Cl E
02-12-51 6.40 675,000(d,f) 462,665
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Kellogg
Sr Unsecured
03-06-13 4.25% $575,000 $564,368
Kohl's
Sr Unsecured
12-15-17 6.25 1,420,000 1,378,893
LB-UBS Commercial Mtge Trust
Series 2008-C1 Cl A2
04-15-41 6.15 1,000,000(f) 1,024,140
LB-UBS Commercial Mtge Trust
Series 2004-C2 Cl A3
03-15-29 3.97 750,000(f) 719,618
LB-UBS Commercial Mtge Trust
Series 2006-C4 Cl AAB
06-15-32 5.86 750,000(f) 753,788
LB-UBS Commercial Mtge Trust
Series 2006-C6 Cl A4
09-15-39 5.37 800,000(f) 778,796
LB-UBS Commercial Mtge Trust
Series 2007-C1 Cl A4
02-15-40 5.42 850,000(f) 821,801
LB-UBS Commercial Mtge Trust
Series 2007-C7 Cl A3
09-15-45 5.87 1,650,000(f) 1,637,843
Lehman Brothers Holdings
Sr Unsecured
05-02-18 6.88 1,440,000 1,472,749
Lincoln Natl
Sr Unsecured
10-09-37 6.30 220,000 210,305
Lockheed Martin
Sr Unsecured
03-14-13 4.12 1,035,000 1,019,320
Macys Retail Holdings
07-15-09 4.80 725,000 712,933
Manufacturers & Traders Trust
Sub Nts
12-01-21 5.63 1,500,000 1,165,309
Marathon Oil
Sr Unsecured
03-15-18 5.90 850,000 858,109
McDonald's
Sr Unsecured
03-01-18 5.35 1,690,000 1,714,360
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 19
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Merrill Lynch & Co
02-05-13 5.45% $225,000 $219,654
04-25-18 6.88 1,040,000 1,052,251
Metropolitan Life Global Funding I
Sr Secured
04-10-13 5.13 765,000(d) 768,098
Morgan Stanley Capital I
Series 2003-T11 Cl A2
06-13-41 4.34 382,416(f) 380,762
Morgan Stanley Capital I
Series 2004-HQ4 Cl A5
04-14-40 4.59 750,000(f) 730,020
Morgan Stanley Capital I
Series 2006-T23 Cl AAB
08-12-41 5.80 575,000(f) 574,963
Morgan Stanley
Sr Unsecured
04-01-18 6.63 1,265,000 1,311,576
NALCO
11-15-11 7.75 255,000 262,013
Natl Collegiate Student Loan Trust
Collateralized Mtge Obligation
Interest Only
Series 2006-3 Cl AIO
01-25-12 5.88 2,400,000(h) 558,720
Natl Collegiate Student Loan Trust
Collateralized Mtge Obligation
Interest Only
Series 2007-2 Cl AIO
07-25-12 1.50 1,050,000(h) 288,960
News America
12-15-35 6.40 420,000 420,302
11-15-37 6.65 895,000 925,154
Norfolk Southern
Sr Unsecured
04-01-18 5.75 180,000(d) 181,062
Northwest Pipeline
Sr Unsecured
04-15-17 5.95 1,070,000 1,048,600
Omnicare
12-15-13 6.75 455,000 423,150
12-15-15 6.88 60,000 54,750
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Overseas Private Investment
Series 1996A
(U.S. Govt Guaranty)
09-15-08 6.99% $416,666 $424,475
Owens-Brockway Glass Container
05-15-13 8.25 745,000 774,800
Pacific Life Global Funding
04-15-13 5.15 765,000(d) 770,607
Pricoa Global Funding I
Secured
10-18-12 5.40 1,210,000(d) 1,218,022
Principal Life Income Funding Trusts
Sr Secured
04-24-13 5.30 1,140,000 1,153,349
Principal Life Income Funding Trusts
Sr Secured
12-14-12 5.30 230,000 232,656
Prudential Financial
Sr Unsecured
12-01-37 6.63 945,000 953,855
Renaissance Home Equity Loan Trust
Series 2005-4 Cl A3
02-25-36 5.57 715,459 699,075
RH Donnelley
Sr Unsecured
01-15-13 6.88 185,000 118,400
RR Donnelley & Sons
Sr Unsecured
01-15-17 6.13 2,780,000 2,709,459
Sierra Pacific Power
Series M
05-15-16 6.00 2,935,000(l) 2,914,502
Smurfit-Stone Container Enterprises
Sr Unsecured
03-15-17 8.00 120,000 101,400
Southern Natural Gas
Sr Unsecured
04-01-17 5.90 2,290,000(d) 2,280,304
Toyota Motor Credit
(Japanese Yen) Sr Unsub
06-09-08 0.75 339,000,000 3,260,667
Transcontinental Gas Pipe Line
Sr Unsecured
04-15-16 6.40 3,015,000 3,060,225
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
20 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
U.S. Treasury
02-28-10 2.00% $600,000 $597,328
04-30-10 2.13 740,000 737,861
02-15-18 3.50 865,000 846,619
05-15-37 5.00 1,685,000 1,826,119
U.S. Treasury Inflation-Indexed Bond
01-15-14 2.00 11,747,820(i) 12,320,585
01-15-15 1.63 3,325,650(i) 3,423,162
UnitedHealth Group
Sr Unsecured
11-15-37 6.63 625,000 589,230
02-15-38 6.88 1,880,000 1,840,671
Verizon Communications
04-15-38 6.90 920,000 990,914
Verizon New York
Sr Unsecured Series A
04-01-12 6.88 2,050,000(l) 2,159,476
Verizon Pennsylvania
Sr Unsecured Series A
11-15-11 5.65 970,000(l) 981,194
Wachovia Bank Commercial Mtge Trust
Series 2003-C8 Cl A2
11-15-35 3.89 1,250,000(f) 1,244,907
Wachovia Bank Commercial Mtge Trust
Series 2005-C18 Cl A4
04-15-42 4.94 750,000(f) 732,637
Wachovia Bank Commercial Mtge Trust
Series 2005-C20 Cl A5
07-15-42 5.09 800,000(f) 790,101
Wachovia Bank Commercial Mtge Trust
Series 2006-C24 Cl APB
03-15-45 5.58 500,000(f) 498,874
Wachovia Bank Commercial Mtge Trust
Series 2006-C27 Cl APB
07-15-45 5.73 900,000(f) 902,057
Wachovia Bank Commercial Mtge Trust
Series 2006-C29 Cl A4
11-15-48 5.31 6,150,000(f) 5,958,174
Windstream
08-01-16 8.63 800,000 838,000
03-15-19 7.00 70,000 66,150
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
XTO Energy
Sr Unsecured
02-01-14 4.90% $1,885,000 $1,859,797
01-31-15 5.00 720,000 704,024
06-30-15 5.30 1,475,000 1,477,419
---------------
Total 267,871,104
- ------------------------------------------------------------------------------------
URUGUAY (0.1%)
Republica Orient Uruguay
Sr Unsecured
03-21-36 7.63 825,000 870,375
- ------------------------------------------------------------------------------------
VENEZUELA (0.1%)
Petroleos de Venezuela
04-12-17 5.25 770,000 508,200
Republic of Venezuela
Sr Unsecured
10-08-14 8.50 160,000 150,000
---------------
Total 658,200
- ------------------------------------------------------------------------------------
TOTAL BONDS
(Cost: $706,921,337) $756,927,329
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MUNICIPAL BONDS (0.1%)
NAME OF
ISSUER AND
TITLE OF COUPON PRINCIPAL
ISSUE RATE AMOUNT VALUE(A)
UNITED STATES
Tobacco Settlement Financing Corporation
Revenue Bonds
Series 2007A-1
06-01-46 6.71% $1,130,000 $998,208
- ------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost: $1,129,887) $998,208
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SENIOR LOANS (0.4%)(n)
COUPON PRINCIPAL
BORROWER RATE AMOUNT VALUE(A)
GERMANY (--%)
Celanese
Term Loan
04-02-14 4.19% $16(c) $16
- ------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 21
<Table>
<Caption>
SENIOR LOANS (CONTINUED)
COUPON PRINCIPAL
BORROWER RATE AMOUNT VALUE(A)
NETHERLANDS (0.1%)
Nielsen Finance
Term Loan
08-09-13 5.35% $516,500(c) $486,884
- ------------------------------------------------------------------------------------
UNITED STATES (0.3%)
Charter Communications
Term Loan
09-06-14 5.26 744,135 657,912
Community Health Systems
Delayed Draw Term Loan
TBD TBD 21,702(b,o,p) 20,757
Community Health Systems
Term Loan
07-25-14 5.34 424,328 406,116
HCA
Tranche B Term Loan
11-14-13 4.95 654,366 621,785
Idearc
Tranche B Term Loan
11-17-14 4.70-4.86 551,869 453,912
</Table>
<Table>
<Caption>
SENIOR LOANS (CONTINUED)
COUPON PRINCIPAL
BORROWER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
West Corp
Tranche B2 Term Loan
10-24-13 5.24-5.47% $237,006 $217,083
---------------
Total 2,377,565
- ------------------------------------------------------------------------------------
TOTAL SENIOR LOANS
(Cost: $3,144,168) $2,864,465
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (0.2%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund, 2.72% 1,819,551(m) $1,819,551
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $1,819,551) $1,819,551
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $713,014,943)(q) $762,609,553
===================================================================================
</Table>
INVESTMENTS IN DERIVATIVES
FUTURES CONTRACTS OUTSTANDING AT APRIL 30, 2008
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION
CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------
Euro-Bund, 10-year 158 $28,141,201 June 2008 $(509,216)
Japanese Govt Bond, 10-year 8 10,476,099 June 2008 (208,888)
United Kingdom Long GILT,
10-year 22 4,736,643 June 2008 (1,677)
U.S. Long Bond, 20-year 64 7,481,000 June 2008 100,231
U.S. Treasury Note, 2-year 40 8,507,500 June 2008 (33,554)
U.S. Treasury Note, 5-year (414) (46,361,533) June 2008 558,430
U.S. Treasury Note, 10-year (419) (48,525,438) June 2008 514,250
- ---------------------------------------------------------------------------------------------------
Total $419,576
- ---------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
22 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT APRIL 30, 2008
<Table>
<Caption>
EXCHANGE CURRENCY TO BE CURRENCY TO BE UNREALIZED UNREALIZED
DATE DELIVERED RECEIVED APPRECIATION DEPRECIATION
- -----------------------------------------------------------------------------------------------------------------
May 2, 2008 473,686 480,000 $2,978 $--
U.S. Dollar Canadian Dollar
- -----------------------------------------------------------------------------------------------------------------
May 2, 2008 4,203,360 2,700,000 12,419 --
U.S. Dollar European Monetary Unit
- -----------------------------------------------------------------------------------------------------------------
May 2, 2008 155,869 800,000 1,385 --
U.S. Dollar Norwegian Krone
- -----------------------------------------------------------------------------------------------------------------
May 5, 2008 365,707 235,000 1,222 --
U.S. Dollar European Monetary Unit
- -----------------------------------------------------------------------------------------------------------------
May 5, 2008 537,480 5,645,686 846 --
U.S. Dollar Mexican Peso
- -----------------------------------------------------------------------------------------------------------------
May 5, 2008 943,281 2,091,726 2,987 --
U.S. Dollar Polish Zloty
- -----------------------------------------------------------------------------------------------------------------
May 7, 2008 16,547,000 25,896,717 64,924 --
European Monetary Unit U.S. Dollar
- -----------------------------------------------------------------------------------------------------------------
May 7, 2008 1,362,095,000 13,324,089 219,005 --
Japanese Yen U.S. Dollar
- -----------------------------------------------------------------------------------------------------------------
May 9, 2008 39,268,000 3,707,676 -- (33,188)
Mexican Peso U.S. Dollar
- -----------------------------------------------------------------------------------------------------------------
May 9, 2008 3,430,000 326,365 -- (691)
Mexican Peso U.S. Dollar
- -----------------------------------------------------------------------------------------------------------------
May 9, 2008 1,522,843 2,100,000 26,283 --
U.S. Dollar Singapore Dollar
- -----------------------------------------------------------------------------------------------------------------
May 12, 2008 966,935 1,220,000 -- (15,213)
U.S. Dollar New Zealand Dollar
- -----------------------------------------------------------------------------------------------------------------
May 16, 2008 58,060,000 3,670,850 77,307 --
Czech Koruna U.S. Dollar
- -----------------------------------------------------------------------------------------------------------------
May 20, 2008 1,400,000 630,205 -- (3,136)
Polish Zloty U.S. Dollar
- -----------------------------------------------------------------------------------------------------------------
May 23, 2008 17,779,000 8,243,040 216,063 --
Polish Zloty U.S. Dollar
- -----------------------------------------------------------------------------------------------------------------
May 23, 2008 3,153,600 1,600,000 23,037 --
U.S. Dollar British Pound
- -----------------------------------------------------------------------------------------------------------------
May 29, 2008 9,650,000 1,921,086 29,658 --
Norwegian Krone U.S. Dollar
- -----------------------------------------------------------------------------------------------------------------
June 4, 2008 30,500,000 5,069,763 -- (16,276)
Swedish Krona U.S. Dollar
- -----------------------------------------------------------------------------------------------------------------
June 6, 2008 6,050,000 6,011,944 4,239 --
Canadian Dollar U.S. Dollar
- -----------------------------------------------------------------------------------------------------------------
Total $682,353 $(68,504)
- -----------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 23
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) At April 30, 2008, the cost of securities purchased, including interest
purchased, on a when-issued and/or other forward-commitment basis was
$4,721,477. See Note 1 to the financial statements.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in U.S. dollar currency unless otherwise
noted.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
may be determined to be liquid under guidelines established by the Fund's
Board of Directors. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At April 30,
2008, the value of these securities amounted to $30,633,914 or 3.9% of net
assets.
(e) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on April 30,
2008.
(f) Mortgage-backed securities represent direct or indirect participations in,
or are secured by and payable from, mortgage loans secured by real
property, and include single- and multi-class pass-through securities and
collateralized mortgage obligations. These securities may be issued or
guaranteed by U.S. government agencies or instrumentalities, or by private
issuers, generally originators and investors in mortgage loans, including
savings associations, mortgage bankers, commercial banks, investment
bankers and special purpose entities. The maturity dates shown represent
the original maturity of the underlying obligation. Actual maturity may
vary based upon prepayment activity on these obligations. Unless otherwise
noted, the coupon rates presented are fixed rates.
(g) This is a variable rate security that entitles holders to receive only
interest payments. Interest is paid annually. The interest payment is based
on the Gross Domestic Product (GDP) level of the previous year for the
respective country. To the extent that the previous year's GDP exceeds the
'base case GDP', an interest payment is made equal to 0.012225 of the
difference.
(h) Interest only represents securities that entitle holders to receive only
interest payments on the underlying mortgages. The yield to maturity of an
interest only is extremely sensitive to the rate of principal payments on
the underlying mortgage assets. A rapid (slow) rate of principal repayments
may have an adverse (positive) effect on yield to maturity. The principal
amount shown is the notional amount of the underlying mortgages. Interest
rate disclosed represents yield based upon the estimated timing and amount
of future cash flows at April 30, 2008.
(i) Inflation-indexed bonds are securities in which the principal amount is
adjusted for inflation and the semiannual interest payments equal a fixed
percentage of the inflation-adjusted principal amount.
(j) The following abbreviations are used in the portfolio security descriptions
to identify the insurer of the issue:
<Table>
AMBAC -- Ambac Assurance Corporation
FSA -- Financial Security Assurance
MBIA -- MBIA Insurance Corporation
</Table>
(k) Adjustable rate mortgage; interest rate varies to reflect current market
conditions; rate shown is the effective rate on April 30, 2008.
- --------------------------------------------------------------------------------
24 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(l) At April 30, 2008, investments in securities included securities valued at
$3,479,169 that were partially pledged as collateral to cover initial
margin deposits on open interest rate futures contracts.
(m) Affiliated Money Market Fund - See Note 5 to the financial statements. The
rate shown is the seven-day current annualized yield at April 30, 2008.
(n) Senior loans have rates of interest that float periodically based primarily
on the London Interbank Offered Rate ("LIBOR") and other short-term rates.
Remaining maturities of senior loans may be less than the stated maturities
shown as a result of contractual or optional prepayments by the borrower.
Such prepayments cannot be predicted with certainty.
(o) At April 30, 2008, the Fund had unfunded senior loan commitments pursuant
to the terms of the loan agreement. The Fund receives a stated coupon rate
until the borrower draws on the loan commitment, at which time the rate
will become the stated rate in the loan agreement.
<Table>
<Caption>
UNFUNDED
BORROWER COMMITMENT
- -----------------------------------------------------------------------------
Community Health Systems $21,702
</Table>
(p) Represents a senior loan purchased on a when-issued or delayed-delivery
basis. Certain details associated with this purchase are not known prior to
the settlement date of the transaction. In addition, senior loans typically
trade without accrued interest and therefore a weighted average coupon rate
is not available prior to settlement. At settlement, if still unknown, the
borrower or counterparty will provide the Fund with the final weighted
average coupon rate and maturity date.
(q) At April 30, 2008, the cost of securities for federal income tax purposes
was approximately $713,015,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $55,071,000
Unrealized depreciation (5,476,000)
- ------------------------------------------------------------------------------
Net unrealized appreciation $49,595,000
- ------------------------------------------------------------------------------
</Table>
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 25
FINANCIAL STATEMENTS -----------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2008 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value
Unaffiliated issuers (identified cost $711,195,392) $760,790,002
Affiliated money market fund (identified cost $1,819,551) 1,819,551
- ----------------------------------------------------------------------------
Total investments in securities (identified cost
$713,014,943) 762,609,553
Cash 4,985
Foreign currency holdings (identified cost $15,220,280) 15,302,909
Capital shares receivable 29,439,451
Dividends and accrued interest receivable 10,155,317
Receivable for investment securities sold 5,564,083
Unrealized appreciation on forward foreign currency
contracts 682,353
- ----------------------------------------------------------------------------
Total assets 823,758,651
- ----------------------------------------------------------------------------
LIABILITIES
Capital shares payable 877,986
Payable for investment securities purchased 26,959,864
Variation margin payable 204,885
Unrealized depreciation on forward foreign currency
contracts 68,504
Accrued investment management services fee 14,907
Accrued distribution fee 5,157
Accrued transfer agency fee 2,842
Accrued administrative services fee 1,683
Accrued plan administration services fee 1
Other accrued expenses 90,570
- ----------------------------------------------------------------------------
Total liabilities 28,226,399
- ----------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $795,532,252
============================================================================
</Table>
- --------------------------------------------------------------------------------
26 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
APRIL 30, 2008 (UNAUDITED)
<Table>
REPRESENTED BY
Capital stock - $.01 par value $ 1,135,552
Additional paid-in capital 748,988,222
Excess of distributions over net investment income (1,679,627)
Accumulated net realized gain (loss) (3,870,108)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies 50,958,213
- ----------------------------------------------------------------------------
Total - representing net assets applicable to outstanding
capital stock $795,532,252
============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $299,738,263
Class B $ 58,312,475
Class C $ 4,624,850
Class I $225,304,776
Class R4 $ 144,110
Class W $207,407,778
Net asset value per share of outstanding
capital stock: Class A shares(1) 42,773,883 $ 7.01
Class B shares 8,232,373 $ 7.08
Class C shares 657,842 $ 7.03
Class I shares 32,226,055 $ 6.99
Class R4 shares 20,556 $ 7.01
Class W shares 29,644,505 $ 7.00
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $7.36. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 4.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 27
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2008 (UNAUDITED)
<Table>
INVESTMENT INCOME
Income:
Interest $13,802,682
Income distributions from affiliated money market fund 550,396
Less foreign taxes withheld (189,419)
- ---------------------------------------------------------------------------
Total income 14,163,659
- ---------------------------------------------------------------------------
Expenses:
Investment management services fee 2,267,841
Distribution fee
Class A 341,636
Class B 259,844
Class C 16,370
Class W 136,643
Transfer agency fee
Class A 311,190
Class B 62,686
Class C 3,825
Class R4 32
Class W 109,314
Administrative services fee 255,899
Plan administration services fee - Class R4 160
Compensation of board members 7,082
Custodian fees 59,500
Printing and postage 41,610
Registration fees 69,165
Professional fees 17,473
Other 12,935
- ---------------------------------------------------------------------------
Total expenses 3,973,205
Expenses waived/reimbursed by the Investment Manager and
its affiliates (152,361)
Earnings and bank fee credits on cash balances (4,844)
- ---------------------------------------------------------------------------
Total net expenses 3,816,000
- ---------------------------------------------------------------------------
Investment income (loss) - net 10,347,659
- ---------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
28 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS (CONTINUED)
SIX MONTHS ENDED APRIL 30, 2008 (UNAUDITED)
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) - NET
Net realized gain (loss) on:
Security transactions $10,661,849
Foreign currency transactions (7,032,639)
Futures contracts (1,776,492)
Swap transactions (1,051,776)
- ---------------------------------------------------------------------------
Net realized gain (loss) on investments 800,942
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies 13,870,549
- ---------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 14,671,491
- ---------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $25,019,150
===========================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 29
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2008 OCT. 31, 2007
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) - net $ 10,347,659 $ 15,158,284
Net realized gain (loss) on investments 800,942 1,812,931
Net change in unrealized appreciation
(depreciation) on investments and on translation
of assets and liabilities in foreign currencies 13,870,549 22,918,455
- --------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 25,019,150 39,889,670
- --------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (5,650,138) (10,445,402)
Class B (869,863) (1,830,230)
Class C (52,370) (87,382)
Class I (4,943,017) (6,698,983)
Class R4 (2,821) (4,654)
Class W (1,935,151) (324,071)
- --------------------------------------------------------------------------------------
Total distributions (13,453,360) (19,390,722)
- --------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
30 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2008 OCT. 31, 2007
(UNAUDITED)
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 64,636,297 $ 41,925,593
Class B shares 18,538,307 8,520,931
Class C shares 2,462,026 420,509
Class I shares 91,546,637 35,313,664
Class R4 shares 57,770 71,093
Class W shares 160,878,114 57,650,812
Reinvestment of distributions at net asset value
Class A shares 5,301,684 9,776,138
Class B shares 816,688 1,714,958
Class C shares 47,779 79,537
Class I shares 4,942,785 6,698,564
Class R4 shares 2,821 4,654
Class W shares 1,935,040 323,864
Payments for redemptions
Class A shares (33,708,501) (79,932,025)
Class B shares (8,908,875) (28,554,355)
Class C shares (479,371) (1,185,971)
Class I shares (32,109,423) (35,536,448)
Class R4 shares (31,300) (48,411)
Class W shares (11,858,296) (5,063,418)
- --------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
share transactions 264,070,182 12,179,689
- --------------------------------------------------------------------------------------
Total increase (decrease) in net assets 275,635,972 32,678,637
Net assets at beginning of period 519,896,280 487,217,643
- --------------------------------------------------------------------------------------
Net assets at end of period $795,532,252 $519,896,280
======================================================================================
Undistributed (excess of distributions over) net
investment income $ (1,679,627) $ 1,426,074
- --------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 31
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS TO APRIL 30, 2008)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Global Bond Fund (the Fund) is a series of RiverSource Global
Series, Inc. and is registered under the Investment Company Act of 1940 (as
amended) as a non-diversified, open-end management investment company.
RiverSource Global Series, Inc. has 10 billion authorized shares of capital
stock that can be allocated among the separate series as designated by the Board
of Directors (the Board). The Fund invests primarily in debt obligations of U.S.
and foreign issuers.
The Fund offers Class A, Class B, Class C, Class I, Class R4 and Class W shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I and Class R4 shares are sold without a front-end sales charge or CDSC
and are offered to qualifying institutional investors.
- - Class W shares are sold without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts.
At April 30, 2008, RiverSource Investments, LLC (the Investment Manager) and the
RiverSource affiliated funds-of-funds owned 100% of Class I shares.
At April 30, 2008, the Investment Manager and the RiverSource affiliated funds-
of-funds owned approximately 28% of the total outstanding Fund shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ 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.
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
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
- --------------------------------------------------------------------------------
32 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
the last quoted sales price. Debt securities are generally traded in the
over-the-counter market and are valued at a price that reflects fair value as
quoted by dealers in these securities or by an independent pricing service.
Foreign securities are valued based on quotations from the principal market in
which such securities are normally traded. The procedures adopted by the Board
generally contemplate the use of fair valuation in the event that price
quotations or valuations are not readily available, price quotations or
valuations from other sources are not reflective of market value and thus deemed
unreliable, or a significant event has occurred in relation to a security or
class of securities (such as foreign securities) that is not reflected in price
quotations or valuations from other sources. A fair value price is a good faith
estimate of the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the New York Stock Exchange and therefore the closing prices for securities
in such markets or on such exchanges may not fully reflect events that occur
after such close but before the close of the New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial, Inc. (Ameriprise
Financial), parent company of the Investment Manager, as administrator to the
Fund, will fair value foreign securities pursuant to procedures adopted by the
Board, including utilizing a third party pricing service to determine these fair
values. These procedures take into account multiple factors, including movements
in the U.S. securities markets, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the New
York Stock Exchange. Swap transactions are valued through an authorized pricing
service, broker, or an internal model.
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.
SECURITIES PURCHASED ON A FORWARD-COMMITMENT BASIS AND UNFUNDED LOAN COMMITMENTS
Delivery and payment for securities that have been purchased by the Fund on a
forward-commitment basis, including when-issued securities and other forward-
commitments, can take place one month or more after the transaction date. During
this period, such securities are subject to market fluctuations, and they may
affect the Fund's net assets the same as owned securities. The Fund designates
cash or liquid securities at least equal to the amount of its
forward-commitments. At April 30, 2008, the Fund has outstanding when-issued
securities of $2,787,215 and other forward-commitments of $1,934,262.
The Fund may enter into certain credit agreements, all or a portion of which may
be unfunded. The Fund is obligated to fund these loan commitments at the
borrower's discretion. These commitments are disclosed in the "Portfolio of
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 33
Investments." At April 30, 2008, the Fund has entered into unfunded loan
commitments of $21,702.
The Fund also enters into transactions to sell purchase commitments to third
parties at current market values and concurrently acquires other purchase
commitments for similar securities at later dates. As an inducement for the Fund
to "roll over" its purchase commitments, the Fund receives negotiated amounts in
the form of reductions of the purchase price of the commitment. The Fund records
the incremental difference between the forward purchase and sale of each forward
roll as realized gain or loss. Losses may arise due to changes in the value of
the securities or if a counterparty does not perform under the terms of the
agreement. If a counterparty files for bankruptcy or becomes insolvent, the
Fund's right to repurchase or sell securities may be limited. The Fund did not
enter into any mortgage dollar roll transactions during the six months ended
April 30, 2008.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the Fund may buy and write options traded on any
U.S. or foreign exchange or in the over-the-counter market where completing the
obligation depends upon the credit standing of the other party. Cash collateral
may be collected by the Fund to secure certain over-the-counter options trades.
Cash collateral held by the Fund for such option trades must be returned to the
counterparty upon closure, exercise or expiration of the contract. The Fund also
may buy and sell put and call options and write covered call options on
portfolio securities as well as write cash-secured put options. The risk in
writing a call option is that the Fund gives up the opportunity for profit if
the market price of the security increases. The risk in writing a put option is
that the Fund 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 Fund pays a
premium whether or not the option is exercised. The Fund also has the additional
risk of being unable 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 Fund will
realize a gain or loss when the option transaction expires or closes. 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. At
April 30, 2008, and for the six months then ended, the Fund had no outstanding
option contracts.
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund 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 of an
- --------------------------------------------------------------------------------
34 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
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.
Futures are valued daily based upon the last sale price at the close of market
on the principal exchange on which they are traded. Upon entering into a futures
contract, the Fund 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 Fund 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 Fund recognizes a realized
gain or loss when the contract is closed or expires.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. 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, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes. At April 30, 2008, foreign currency holdings consisted of
multiple denominations, primarily European monetary units.
The Fund may enter into forward foreign currency contracts to produce
incremental earnings, for operational purposes, or to protect against adverse
exchange rate fluctuation. The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the Fund and the resulting
unrealized appreciation or depreciation are determined using foreign currency
exchange rates from an independent pricing service. The Fund is subject to the
credit risk that the other party will not complete its contract obligations.
CMBS TOTAL RETURN SWAP TRANSACTIONS
The Fund may enter into swap agreements to earn the total return on a specified
security or index of fixed income securities. CMBS total return swaps are
bilateral financial contracts designed to replicate synthetically the total
returns of commercial mortgage-backed securities. Under the terms of the swaps,
the Fund either receives or pays the total return on a reference security or
index applied to a notional principal amount. In return, the Fund agrees to pay
or receive from the counterparty a floating rate, which is reset periodically
based on short-term interest rates, applied to the same notional amount.
The notional amounts of swap contracts are not recorded in the financial
statements. Swaps are valued daily, and the change in value is recorded as
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 35
unrealized appreciation (depreciation) until the termination of the swap, at
which time realized gain (loss) is recorded. Payments received or made are
recorded as realized gains (losses).
Swap agreements may be subject to liquidity risk, which exists when a particular
swap is difficult to purchase or sell. It may not be possible for the Fund to
initiate a transaction or liquidate a position at an advantageous time or price,
which may result in significant losses. Total return swaps are subject to the
risk that the counterparty will default on its obligation to pay net amounts due
to the Fund. At April 30, 2008, the Fund had no outstanding CMBS total return
swap contracts.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income to the shareholders. No provision for income or excise
taxes is thus required.
The Fund has adopted Financial Accounting Standards Board (FASB) Interpretation
48 (FIN 48), "Accounting for Uncertainty in Income Taxes," which is effective
for fiscal periods beginning after Dec. 15, 2006. FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in accordance with FASB
Statement 109, "Accounting for Income Taxes." FIN 48 prescribes a two-step
process to recognize and measure a tax position taken or expected to be taken in
a tax return. The first step is to determine whether a tax position has met the
more-likely-than-not recognition threshold and the second step is to measure a
tax position that meets the threshold to determine the amount of benefit to
recognize. FIN 48 also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and
transition. Management of the Fund has concluded that there are no significant
uncertain tax positions that would require recognition in the financial
statements. Generally, the tax authorities can examine all the tax returns filed
for the last three years.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred 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
- --------------------------------------------------------------------------------
36 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
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.
RECENT ACCOUNTING PRONOUNCEMENTS
In March 2008, the FASB issued Statement on Financial Accounting Standards No.
161 (SFAS "161"), "Disclosures about Derivative Instruments and Hedging
Activities -- an amendment of FASB Statement No. 133," which requires enhanced
disclosures about a fund's derivative and hedging activities. Funds are required
to provide enhanced disclosures about (a) how and why a fund uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect a fund's financial
position, financial performance, and cash flows. SFAS 161 is effective for
financial statements issued for fiscal years and interim periods beginning after
Nov. 15, 2008. As of April 30, 2008, management does not believe the adoption of
SFAS 161 will impact the financial statement amounts; however, additional
footnote disclosures may be required about the use of derivative instruments and
hedging items.
On Sept. 20, 2006, the FASB released Statement of Financial Accounting Standards
No. 157 "Fair Value Measurements" (SFAS 157). SFAS 157 establishes an
authoritative definition of fair value, sets out a hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported in
the Statement of Operations for a fiscal period. The application of SFAS 157
will be effective for the Fund's fiscal year beginning Nov. 1, 2008. The
adoption of SFAS 157 is not anticipated to have a material impact on the Fund's
financial statements; however, additional disclosures will be required about the
inputs used to develop the measurements of fair value and the effect of certain
measurements reported in the Statement of Operations for a fiscal period.
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, declared and paid each calendar quarter,
when available, are reinvested in additional shares of the Fund at net asset
value or payable in cash. Capital gains, when available, are distributed along
with the last income dividend of the calendar year.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income, if any, is recognized on the ex-dividend date or upon
receipt of ex-dividend notification in the case of certain foreign securities.
Interest income, including amortization of premium, market discount and original
issue discount using the effective interest method, is accrued daily.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 37
2. EXPENSES AND SALES CHARGES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.72%
to 0.52% annually as the Fund's assets increase. The management fee for the six
months ended April 30, 2008 was 0.70% of the Fund's average daily net assets.
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.08% to 0.05% annually as the
Fund's assets increase. The fee for the six months ended April 30, 2008 was
0.08% of the Fund's average daily net assets.
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended
April 30, 2008, other expenses paid to this company were $1,268.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
Under a Deferred Compensation Plan (the Plan), non-interested board members may
defer receipt of their compensation. Deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of the Fund or other
RiverSource funds. The Fund's liability for these amounts is adjusted for market
value changes and remains in the Fund until distributed in accordance with the
Plan.
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual account-based fee at a rate equal to $20.50 for Class A, $21.50
for Class B and $21.00 for Class C for this service. The Fund also pays the
Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's
average daily net assets attributable to Class R4 shares and an annual
asset-based fee at a rate of 0.20% of the Fund's average daily net assets
attributable to Class W shares.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the Statement of Operations.
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
- --------------------------------------------------------------------------------
38 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
attributable to Class R4 shares for the provision of various administrative,
recordkeeping, communication and educational services.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund pays a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A and
Class W shares and a fee at an annual rate of up to 1.00% of the Fund's average
daily net assets attributable to Class B and Class C shares.
Sales charges received by the Distributor for distributing Fund shares were
$203,933 for Class A, $16,264 for Class B and $291 for Class C for the six
months ended April 30, 2008.
In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in which
it invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). Because the acquired funds have varied expense and fee levels and
the Fund may own different proportions of acquired funds at different times, the
amount of fees and expenses incurred indirectly by the Fund will vary.
For the six months ended April 30, 2008, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds) were 1.25% for Class A, 2.01%
for Class B, 2.01% for Class C, 0.82% for Class I, 0.87% for Class R4 and 1.27%
for Class W. Of these waived/reimbursed fees and expenses, the transfer agency
fees at the class level were $65,724, $13,578, $785 and $125 for Class A, Class
B, Class C and Class W, respectively, the plan administration services fee at
the class level was $160 for Class R4, and the management fees at the Fund level
were $71,989. In addition, the Investment Manager and its affiliates have
contractually agreed to waive certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds) will not exceed 1.25% for Class
A, 2.01% for Class B, 2.01% for Class C, 0.82% for Class I, 1.12% for Class R4
and 1.27% for Class W of the Fund's average daily net assets until Oct. 31,
2008, unless sooner terminated at the discretion of the Board.
During the six months ended April 30, 2008, the Fund's custodian and transfer
agency fees were reduced by $4,844 as a result of earnings and bank fee credits
from overnight cash balances. The Fund pays custodian fees to Ameriprise Trust
Company, a subsidiary of Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $459,690,519 and $216,280,532, respectively, for the six
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 39
months ended April 30, 2008. Realized gains and losses are determined on an
identified cost basis.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED APRIL 30, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ---------------------------------------------------------------------------------------------
Class A 9,274,103 778,208 (4,849,968) 5,202,343
Class B 2,634,372 118,795 (1,266,369) 1,486,798
Class C 351,706 6,977 (68,510) 290,173
Class I 13,212,527 726,689 (4,624,729) 9,314,487
Class R4 8,305 413 (4,473) 4,245
Class W 23,185,889 281,859 (1,701,217) 21,766,531
- ---------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ---------------------------------------------------------------------------------------------
Class A 6,327,232 1,485,288 (12,063,782) (4,251,262)
Class B 1,270,247 258,114 (4,278,499) (2,750,138)
Class C 63,080 12,039 (177,897) (102,778)
Class I 5,334,334 1,019,550 (5,397,430) 956,454
Class R4 10,779 707 (7,379) 4,107
Class W* 8,592,701 48,662 (763,389) 7,877,974
- ---------------------------------------------------------------------------------------------
</Table>
* For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
5. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. The cost of the
Fund's purchases and proceeds from sales of shares of the RiverSource Short-Term
Cash Fund aggregated $182,129,896 and $194,933,989, respectively, for the six
months ended April 30, 2008.
6. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
headed by JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the
temporary funding of shareholder redemptions or for other temporary or emergency
purposes. The credit facility agreement, which is a collective agreement between
the Fund and certain other RiverSource funds, severally and not jointly, permits
collective borrowings up to $500 million. Interest is charged to each Fund
- --------------------------------------------------------------------------------
40 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
based on its borrowings at a rate equal to the federal funds rate plus 0.30%.
Each borrowing under the credit facility matures no later than 60 days after the
date of borrowing. The Fund also pays a commitment fee equal to its pro rata
share of the amount of the credit facility at a rate of 0.06% per annum. The
Fund had no borrowings during the six months ended April 30, 2008.
7. CAPITAL LOSS CARRY-OVER
For federal income tax purposes, the Fund had a capital loss carry-over of
$4,163,824 at Oct. 31, 2007, that if not offset by capital gains will expire as
follows:
<Table>
<Caption>
2010 2014
$3,665,053 $498,771
</Table>
It is unlikely the Board will authorize a distribution of any net realized
capital gains until the available capital loss carry-over has been offset or
expires.
8. RISKS RELATING TO CERTAIN INVESTMENTS
DIVERSIFICATION RISK
The Fund is non-diversified. A non-diversified fund may invest more of its
assets in fewer companies than if it were a diversified fund. The Fund may be
more exposed to the risks of loss and volatility than a fund that invests more
broadly.
FOREIGN/EMERGING MARKETS RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities. Investing in
emerging markets may accentuate these risks.
9. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc., was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company mutual funds and
they purport to bring the action derivatively on behalf of those funds under the
Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid
to the defendants by the funds for investment advisory and administrative
services are excessive. The plaintiffs seek remedies including restitution and
rescission of investment advisory and distribution agreements. The plaintiffs
voluntarily agreed to transfer this case to the United States District Court for
the District of
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 41
Minnesota. In response to defendants' motion to dismiss the complaint, the Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals on August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
42 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
10. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of period $6.89 $6.60 $6.59 $7.02 $6.57
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .11(b) .20(b) .19 .16 .17
Net gains (losses) (both realized and
unrealized) .16 .35 .14 (.23) .52
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .27 .55 .33 (.07) .69
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.15) (.26) (.32) (.36) (.24)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.01 $6.89 $6.60 $6.59 $7.02
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $300 $259 $276 $353 $389
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.32%(e) 1.37% 1.39% 1.37% 1.34%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 1.25%(e) 1.25% 1.25% 1.35% 1.34%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.12%(e) 3.08% 2.77% 2.42% 2.66%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 77% 68% 73% 92%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 3.94%(i) 8.63% 5.17% (1.18%) 10.70%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(g) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 43
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of period $6.96 $6.67 $6.59 $7.02 $6.57
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .08(b) .15(b) .13 .10 .14
Net gains (losses) (both realized and
unrealized) .16 .35 .16 (.23) .50
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .24 .50 .29 (.13) .64
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.12) (.21) (.21) (.30) (.19)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.08 $6.96 $6.67 $6.59 $7.02
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $58 $47 $63 $111 $142
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 2.08%(e) 2.13% 2.16% 2.13% 2.10%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 2.01%(e) 2.01% 2.02% 2.12% 2.10%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.36%(e) 2.30% 1.98% 1.65% 1.90%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 77% 68% 73% 92%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 3.53%(i) 7.68% 4.45% (1.98%) 9.83%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(g) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
44 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of period $6.91 $6.62 $6.57 $6.99 $6.55
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .08(b) .15(b) .14 .11 .14
Net gains (losses) (both realized and
unrealized) .16 .35 .13 (.22) .49
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .24 .50 .27 (.11) .63
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.12) (.21) (.22) (.31) (.19)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.03 $6.91 $6.62 $6.57 $6.99
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $5 $3 $3 $4 $5
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 2.08%(e) 2.13% 2.16% 2.14% 2.09%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 2.01%(e) 2.01% 2.02% 2.12% 2.09%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.36%(e) 2.32% 2.00% 1.65% 1.91%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 77% 68% 73% 92%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 3.60%(i) 7.75% 4.25% (1.83%) 9.72%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(g) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 45
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(K) 2007 2006 2005 2004(B)
Net asset value, beginning of period $6.87 $6.59 $6.61 $7.03 $6.77
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .12(c) .23(c) .21 .19 .16
Net gains (losses) (both realized and
unrealized) .16 .34 .14 (.22) .24
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .28 .57 .35 (.03) .40
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.16) (.29) (.37) (.39) (.14)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.99 $6.87 $6.59 $6.61 $7.03
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $225 $157 $145 $89 $24
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) .84%(f) .87% .88% .91% .89%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .82%(f) .87% .88% .91% .89%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.55%(f) 3.47% 3.18% 2.87% 3.07%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 77% 68% 73% 92%
- -----------------------------------------------------------------------------------------------------------
Total return(i) 4.16%(j) 8.91% 5.52% (.56%) 6.06%(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from March 4, 2004 (inception date) to Oct. 31, 2004.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
46 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of period $6.89 $6.60 $6.61 $7.04 $6.59
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .12(b) .22(b) .20 .16 .18
Net gains (losses) (both realized and
unrealized) .17 .35 .13 (.22) .52
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .29 .57 .33 (.06) .70
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.17) (.28) (.34) (.37) (.25)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.01 $6.89 $6.60 $6.61 $7.04
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.14%(e) 1.17% 1.20% 1.20% 1.17%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) .87%(e) 1.08% 1.08% 1.18% 1.17%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.51%(e) 3.27% 2.95% 2.60% 2.83%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 77% 68% 73% 92%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 4.24%(i) 8.84% 5.29% (1.00%) 10.86%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(g) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 47
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(K) 2007(B)
Net asset value, beginning of period $6.88 $6.79
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .11 .20
Net gains (losses) (both realized and
unrealized) .16 .17
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .27 .37
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.15) (.28)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.00 $6.88
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $207 $54
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.30%(f) 1.35%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.27%(f) 1.26%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.10%(f) 3.34%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 77%
- -----------------------------------------------------------------------------------------------------------
Total return(i) 4.00%(j) 5.71%(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds).
(h) Expense ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
48 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT ----------------------------------------------------------------------
RiverSource Investments, LLC ("RiverSource Investments" or the "investment
manager"), a wholly-owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise
Financial"), serves as the investment manager to the Fund. Under an investment
management services agreement (the "IMS Agreement") RiverSource Investments
provides investment advice and other services to the Fund and all RiverSource
funds (collectively, the "Funds").
On an annual basis, the Fund's Board of Directors (the "Board"), including the
independent Board members (the "Independent Directors"), considers renewal of
the IMS Agreement. RiverSource Investments prepared detailed reports for the
Board and its Contracts Committee in March and April 2008, including reports
based on data provided by independent organizations to assist the Board in
making this determination. In addition, throughout the year, the Board (or its
committees) reviews information prepared by RiverSource Investments addressing
the services RiverSource Investments provides and Fund performance. The Board
accords particular weight to the work, deliberations and conclusions of the
Contracts, Investment Review and Compliance Committees in determining whether to
continue the IMS Agreement. At the April 9-10, 2008 in-person Board meeting,
independent legal counsel to the Independent Directors reviewed with the
Independent Directors various factors relevant to the Board's consideration of
advisory agreements and the Board's legal responsibilities related to such
consideration. Following an analysis and discussion of the factors identified
below, the Board, including all of the Independent Directors, approved renewal
of the IMS Agreement.
Nature, Extent and Quality of Services Provided by RiverSource Investments: The
Board analyzed various reports and presentations it had received detailing the
services performed by RiverSource Investments, as well as its expertise,
resources and capabilities. The Board specifically considered many developments
during the past year concerning the services provided by RiverSource
Investments, including, in particular, the continued investment in, and
resources dedicated to, the Fund's operations, particularly in the areas of
trading systems, new product initiatives, legal and compliance. Further, in
connection with the Board's evaluation of the overall package of services
provided by RiverSource Investments, the Board considered the quality of the
administrative and transfer agency services provided by RiverSource Investments'
affiliates to the Fund. The Board also reviewed the financial condition of
RiverSource Investments (and its affiliates) and each entity's ability to carry
out its responsibilities under the IMS Agreement. The Board also discussed the
acceptability of the terms of the IMS Agreement (including the relatively broad
scope of services required to be performed by RiverSource Investments). The
Board concluded that the services being performed under the IMS Agreement were
of a reasonably high quality, particularly in light of recent market conditions.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 49
Based on the foregoing, and based on other information received (both oral and
written, including the information on investment performance referenced below)
and other considerations, the Board concluded that RiverSource Investments and
its affiliates were in a position to continue to provide a high quality and
level of services to the Fund.
Investment Performance: For purposes of evaluating the nature, extent and
quality of services provided under the IMS Agreement, the Board carefully
reviewed the investment performance of the Fund. In this regard, the Board
considered: (i) detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index, the percentage ranking of the Fund among its
comparison group and the net assets of the Fund; and (ii) a report detailing the
Fund's performance over various periods (including since inception), recent Fund
inflows (and outflows) and a comparison of the Fund's net assets from December
2006 to December 2007. The Board observed that the Fund's investment performance
was appropriate in light of the particular management style and market
conditions involved.
Comparative Fees, Costs of Services Provided and the Profits Realized By
RiverSource Investments and its Affiliates from their Relationships with the
Fund: The Board reviewed comparative fees and the costs of services to be
provided under the IMS Agreement. The Board members considered detailed
comparative information set forth in an annual report on fees and expenses,
including, among other things, data (prepared by an independent organization)
showing a comparison of the Fund's expenses with median expenses paid by funds
in its peer group, as well as data showing the Fund's contribution to
RiverSource Investments' profitability.
The Board accorded particular weight to the notion that the level of fees should
reflect a rational pricing model applied consistently across the various product
lines in the Funds' family, while assuring that the overall fees for each fund
are generally in line with the "pricing philosophy" (i.e., that the total
expense ratio of each fund, with few exceptions, is at or below the median
expense ratio of funds in the same comparison group). The Board took into
account that the Fund's total expense ratio (after considering proposed expense
caps/waivers) approximated the peer group's median expense ratio. Based on its
review, the Board concluded that the Fund's management fee was fair and
reasonable in light of the extent and quality of services that the Fund
receives.
The Board also considered the expected profitability of RiverSource Investments
and its affiliates in connection with RiverSource Investments providing
investment management services to the Fund. In this regard, the Board referred
to a detailed
- --------------------------------------------------------------------------------
50 RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT
profitability report, discussing the profitability to RiverSource Investments
and Ameriprise Financial from managing and operating the Fund, including data
showing comparative profitability over the past two years. The Board also
considered the services acquired by the investment manager through the use of
commission dollars paid by the Funds on portfolio transactions. The Board noted
that the fees paid by the Fund should permit the investment manager to offer
competitive compensation to its personnel, make necessary investments in its
business and earn an appropriate profit. The Board concluded that profitability
levels were reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by RiverSource Investments as the Fund grows and
took note of the extent to which Fund shareholders might also benefit from such
growth. The Board considered that the IMS Agreement provides for lower fees as
assets increase at pre-established breakpoints and concluded that the IMS
Agreement satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees were fair and reasonable
in light of the extent and quality of services provided. In reaching this
conclusion, no single factor was determinative. On April 10, 2008, the Board,
including all of the Independent Directors, approved the renewal of the IMS
Agreement.
PROXY
VOTING ----------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling RiverSource Funds at (888) 791-3380; contacting your financial
institution; visiting riversource.com/funds; or searching the website of the
Securities and Exchange Commission (SEC) at http://www.sec.gov. Information
regarding how the Fund voted proxies relating to portfolio securities is filed
with the SEC by August 31 for the most recent 12-month period ending June 30 of
that year, and is available without charge by visiting riversource.com/funds; or
searching the website of the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2008 SEMIANNUAL REPORT 51
RIVERSOURCE GLOBAL BOND FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by
the Fund's current prospectus. RiverSource(R)
mutual funds are distributed by RiverSource
Distributors, Inc., Member FINRA, and managed by
RiverSource Investments, LLC. These companies are
part of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2008 RiverSource Distributors, Inc. S-6339 X (6/08)
</Table>
Semiannual Report
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE
GLOBAL TECHNOLOGY FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
APRIL 30, 2008
RIVERSOURCE GLOBAL TECHNOLOGY FUND
SEEKS TO PROVIDE SHAREHOLDERS WITH
LONG-TERM CAPITAL GROWTH.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance............... 2
Manager Commentary.................. 6
Fund Expenses Example............... 12
Portfolio of Investments............ 14
Financial Statements................ 16
Notes to Financial Statements....... 20
Approval of Investment Management
Services Agreement............... 36
Proxy Voting........................ 38
</Table>
(DALBAR LOGO)
The RiverSource mutual fund
shareholder reports have been
awarded the Communications Seal
from Dalbar Inc., an independent
financial services research firm.
The Seal recognizes communications
demonstrating a level of
excellence in the industry.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> RiverSource Global Technology Fund's (the Fund) Class A shares (excluding
sales charge) declined 16.12% for the six months ended April 30, 2008.
> The Fund underperformed its benchmark, the unmanaged S&P North American
Technology Sector Index(TM) (S&P NATS Index), formerly known as the S&P
GSTI(TM) Composite Index, which declined 14.80% for the semiannual period.
> The Fund also underperformed its peer group, represented by the Lipper Science
and Technology Funds Index, which declined 15.65% during the same period.
ANNUALIZED TOTAL RETURNS (for period ended April 30, 2008)
- --------------------------------------------------------------------------------
<Table>
<Caption>
6 months* 1 year 3 years 5 years 10 years
- -------------------------------------------------------------------------------------
RiverSource Global
Technology Fund Class
A (excluding sales
charge) -16.12% -1.92% +13.37% +15.70% +3.30%
- -------------------------------------------------------------------------------------
S&P NATS Index(1)
(unmanaged) -14.80% +1.68% +11.08% +11.39% +2.45%
- -------------------------------------------------------------------------------------
Lipper Science and
Technology Funds
Index(2) -15.65% +1.04% +10.62% +11.48% +2.78%
- -------------------------------------------------------------------------------------
</Table>
* Not annualized.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses. See the Average Annual Total Returns table for performance of other
share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
It is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
2 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
(1)The S&P NATS Index, formerly known as the S&P GSTI(TM) Composite Index, an
unmanaged index, is a market capitalization-weighted index of approximately
200 stocks designed to measure the performance of companies in the technology
sector. The index reflects reinvestment of all distributions and changes in
market prices.
(2)The Lipper Science and Technology Funds Index includes the 30 largest science
and technology funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
STYLE MATRIX
- ----------------------------------------
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
X MEDIUM SIZE
X SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund is designed to
generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
ANNUAL OPERATING EXPENSE RATIO
(as of the current prospectus)
- ----------------------------------------
<Table>
<Caption>
Total
- -------------------------------------
Class A 1.60%
- -------------------------------------
Class B 2.38%
- -------------------------------------
Class C 2.36%
- -------------------------------------
Class I 0.99%
- -------------------------------------
Class R4 1.34%
- -------------------------------------
</Table>
International investing involves increased risk and volatility due to potential
political and economic instability, currency fluctuations, and differences in
financial reporting and accounting standards and oversight. Risks are
particularly significant in emerging markets.
The RiverSource Global Technology Fund is a narrowly-focused sector fund and it
may exhibit higher volatility than funds with broader investment objectives. See
the Fund's prospectus for specific risks associated with the Fund.
- --------------------------------------------------------------------------------
4 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT APRIL 30, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION**
Class A (inception 11/13/96) -16.12% -1.92% +13.37% +15.70% +3.30% N/A
- ----------------------------------------------------------------------------------------------------
Class B (inception 11/13/96) -16.48% -2.68% +12.53% +14.87% +2.49% N/A
- ----------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) -16.79% -2.68% +12.28% +14.87% N/A -10.16%
- ----------------------------------------------------------------------------------------------------
Class I (inception 7/15/04) -16.08% -1.51% +14.04% N/A N/A +11.97%
- ----------------------------------------------------------------------------------------------------
Class R4 (inception 11/13/96) -15.96% -1.53% +13.60% +15.97% +3.42% N/A
- ----------------------------------------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 11/13/96) -21.05% -7.61% +11.09% +14.25% +2.77% N/A
- ----------------------------------------------------------------------------------------------------
Class B (inception 11/13/96) -20.65% -7.54% +11.46% +14.64% +2.49% N/A
- ----------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) -17.63% -3.65% +12.28% +14.87% N/A -10.16%
- ----------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
AT MARCH 31, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION**
Class A (inception 11/13/96) -17.71% -5.95% +9.20% +16.38% +2.64% N/A
- ----------------------------------------------------------------------------------------------------
Class B (inception 11/13/96) -17.81% -6.88% +8.48% +15.44% +1.85% N/A
- ----------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) -18.15% -6.88% +8.48% +15.44% N/A -11.08%
- ----------------------------------------------------------------------------------------------------
Class I (inception 7/15/04) -17.63% -5.45% +9.91% N/A N/A +10.11%
- ----------------------------------------------------------------------------------------------------
Class R4 (inception 11/13/96) -17.53% -5.51% +9.66% +16.67% +2.77% N/A
- ----------------------------------------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 11/13/96) -22.55% -11.24% +7.09% +14.97% +2.12% N/A
- ----------------------------------------------------------------------------------------------------
Class B (inception 11/13/96) -21.92% -11.54% +7.34% +15.22% +1.85% N/A
- ----------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) -18.96% -7.81% +8.48% +15.44% N/A -11.08%
- ----------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum sales charge of 5.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I and Class R4 shares. Class I and Class R4 shares are
available to institutional investors only.
* Not annualized.
** For classes with less than 10 years performance.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 5
MANAGER COMMENTARY -------------------------------------------------------------
(UNAUDITED)
Below, portfolio managers Bob Ewing and Nick Thakore discuss the Fund's results
and positioning for the semiannual period ended April 30, 2008. Mr. Ewing and
Mr. Thakore lead a team of research analysts in determining the allocation of
the portfolio among various sectors of the technology industry. Each research
analyst on the team covers one or more of these sectors and, under the oversight
of Mr. Ewing and Mr. Thakore, is responsible for selecting investments based on
the portfolio sector allocation determination.
DEAR SHAREHOLDERS,
RiverSource Global Technology Fund's Class A shares (excluding sales charge)
declined 16.12% for the six months ended April 30, 2008. The Fund underperformed
its benchmark, the unmanaged S&P North American Technology Sector Index(TM) (S&P
NATS Index), formerly known as the S&P GSTI(TM) Composite Index, which fell
14.80% and its peer group, represented by the Lipper Science and Technology
Funds Index, which declined 15.65% during the same period.
SECTOR DIVERSIFICATION(1) (at April 30, 2008; % of portfolio assets)
- -----------------------------------------------------------------
<Table>
Consumer Discretionary 0.9%
- -------------------------------------------------
Information Technology 87.5%
- -------------------------------------------------
Telecommunication Services 7.0%
- -------------------------------------------------
Other(2) 4.6%
- -------------------------------------------------
</Table>
(1) Sectors can be comprised of several industries. Please refer to the section
entitled "Portfolio of Investments" for a complete listing.
(2) Cash & Cash Equivalents.
The Global Industry Classification Standard (GICS) was developed by and is the
exclusive property of Morgan Stanley Capital International Inc. and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
- --------------------------------------------------------------------------------
6 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
SIGNIFICANT PERFORMANCE FACTORS
The first half of the Fund's fiscal year was a difficult time for the U.S.
equity market. Stocks declined amid fallout from last summer's subprime mortgage
crisis, fear of weaker economic growth and high energy prices. The technology
sector underperformed the broader stock market during the period.
Before the start of the current fiscal year, we had increased the Fund's
emphasis on large-cap stocks, which we found attractive based on free cash flow
yields and relatively low price-to-earnings multiples. This stance was
advantageous during the volatile six-month period, as was the Fund's cash
position. The Fund's sector allocations, which were generally similar to those
of the S&P NATS Index, had little impact on relative performance, but overall
stock selection was a negative factor.
Stock selection in the software sector, however, added to return relative to the
S&P NATS Index benchmark. The Fund's software holdings were larger than those of
the S&P NATS Index, another positive. Results in the semiconductor industry were
mixed, with some holdings adding to return and others detracting. Overall, stock
selection among semiconductors had a negative impact on performance.
TOP TEN HOLDINGS (at April 30, 2008; % of portfolio assets)
- -----------------------------------------------------------------
<Table>
Cisco Systems 7.5%
- -------------------------------------------------
Microsoft 6.0%
- -------------------------------------------------
Intel 6.0%
- -------------------------------------------------
Apple 5.4%
- -------------------------------------------------
Google CI A 5.3%
- -------------------------------------------------
Hewlett-Packard 4.8%
- -------------------------------------------------
Oracle 4.3%
- -------------------------------------------------
IBM 4.0%
- -------------------------------------------------
QUALCOMM 3.7%
- -------------------------------------------------
Nokia ADR 2.7%
- -------------------------------------------------
</Table>
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
Individual contributors to the return of the Fund included holdings in BEA
SYSTEMS, PMC-SIERRA and ON SEMICONDUCTOR. Software company BEA SYSTEMS benefited
from its acquisition by Oracle during the period. PMC-SIERRA is a small company
that produces semiconductors for computer storage, telecommunications equipment
and fiber optics for the home market. Of these, the home market is their fastest
growing business and PMC-SIERRA has the largest market share outside the United
States. Other investors generally avoided ON SEMICONDUCTOR due to concerns about
a recent acquisition. We anticipated significant cost savings from the purchase,
which we didn't think were reflected in earnings estimates. The stock price has
risen as the company has begun to realize its earnings potential.
Detractors from return included not holding Research in Motion or Corning and
having larger positions in MARVELL TECHNOLOGY GROUP and SPANSION than the S&P
NATS Index. Research in Motion performed well as the Blackberry(R) smartphone
continued to dominate the corporate market and the company also moved into the
consumer market. Though the Fund did not hold Research in Motion, the portfolio
includes other stocks with exposure to the mobile communications market, notably
companies that make infrastructure components for mobile devices. We favor these
companies because they are not dependent on the success of any specific mobile
device. The Fund also did not hold Corning, a manufacturer of LCD panels for
flat screen TVs, which outperformed in the first calendar quarter of 2008. We
are seeing TV manufacturers stock piling inventory, either intentionally in
anticipation of Olympic-related demand or due to slower consumer spending, and
are concerned the inventory bloating could ripple back through the supply chain,
cutting Corning's orders. We question whether two expected drivers of TV
sales - the Olympics and disbursement of the government's economic stimulus
payments - will have the anticipated impact.
Semiconductor company MARVELL TECHNOLOGY GROUP acquired a wireless semiconductor
business from Intel and was planning to bring manufacturing in-house, a
potential cost savings and earnings boost. However, we started to doubt the
product's strength and the magnitude of the cost savings. We sold the stock and
invested in smaller semiconductor companies. SPANSION, a company that makes
memory for cell phones, suffered as prices in the memory market fell faster than
expected in 2007.
- --------------------------------------------------------------------------------
8 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
We continue to focus on companies with visible earnings drivers and attractive
valuations.
Since then, prices have stabilized and we think much
of the negative news is behind the company. The
stock remains very inexpensive, with an improving
cash flow situation.
CHANGES TO THE FUND'S PORTFOLIO
Through much of the period, we continued to increase
the Fund's average market capitalization, as we had
been doing since mid-2007. Toward the end of the six
months, we began to identify opportunities among
small-cap stocks.
Because investors perceived large-cap stocks as a
safe haven, they held up better than smaller stocks
during the market's decline, which increased their
downside risk potential. Additionally, large-caps
may face a less favorable currency environment going
forward. Given how weak the U.S. dollar has been, a
reversal is possible, which would create a neutral
or negative currency situation for large-cap stocks.
We have started to uncover attractive alternatives
among stocks that suffered more significantly during
the market's decline, particularly stocks in the
small- and mid-cap segments.
To summarize the Fund's industry allocations, the
software, semiconductor and telecommunication
services positions were modestly larger than the
corresponding segments within the S&P NATS Index.
Positions in the internet, computers and peripherals
and communications equipment segments were smaller
than the benchmark weightings. We continue to
identify opportunities in the software sector, which
we think is ripe for consolidation.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 9
MANAGER COMMENTARY (continued) -------------------------------------------------
OUR FUTURE STRATEGY
Though we recognize that technology spending is slowing, we believe there are
technology themes that could be beneficial regardless of spending levels.
Examples include cost-saving technology, companies in the midst of new product
cycles and telecommunications equipment companies that provide infrastructure
for better and faster internet capabilities. We are cautiously optimistic about
personal computer sales. We believe PC growth will be relatively strong because
replacement rates are high and people are buying additional computers as prices
come down.
We also favor companies with exposure to emerging markets, a substantial growth
opportunity for technology companies. While emerging markets represent 20% or
less of total technology spending, they account for more than 30% of the
spending growth. In addition, these markets are not suffering from the economic
downturn affecting the United States.
Though the next several months could be indecisive if economic data worsens, the
second half of the year is traditionally stronger for the technology sector, as
companies tend to spend more. If people start to feel better about the business
environment, we could see increased investor interest in technology stocks,
which are typically among the first segments to respond to economic improvement.
We continue to focus on companies with visible earnings drivers and attractive
valuations.
- --------------------------------------------------------------------------------
10 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
(PHOTO - BOB EWING) (PHOTO - NICK THAKORE)
Bob Ewing, CFA(R) Nick Thakore
Portfolio Manager Portfolio Manager
</Table>
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource fund.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 11
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the expenses of the funds in which it invests (also
referred to as "acquired funds"), including affiliated and non-affiliated pooled
investment vehicles (including mutual funds and exchange traded funds). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the acquired funds' expense ratio as of the most recent shareholder
report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended April 30, 2008.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Expenses paid during the period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning
- --------------------------------------------------------------------------------
12 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
NOV. 1, 2007 APRIL 30, 2008 THE PERIOD(A) EXPENSE RATIO
- --------------------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 838.80 $ 6.54 1.43%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $ 1,017.75 $ 7.17 1.43%
- --------------------------------------------------------------------------------------------
Class B
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 835.20 $10.04 2.20%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $ 1,013.92 $11.02 2.20%
- --------------------------------------------------------------------------------------------
Class C
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 832.10 $ 9.98 2.19%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $ 1,013.97 $10.97 2.19%
- --------------------------------------------------------------------------------------------
Class I
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 839.20 $ 3.70 .81%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $ 1,020.84 $ 4.07 .81%
- --------------------------------------------------------------------------------------------
Class R4
- --------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 840.40 $ 5.12 1.12%
- --------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $ 1,019.29 $ 5.62 1.12%
- --------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the Fund's annualized expense ratio as indicated
above, multiplied by the average account value over the period, multiplied
by 182/366 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended April 30, 2008: -16.12%
for Class A, -16.48% for Class B, -16.79% for Class C, -16.08% for Class I
and -15.96% for Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 13
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
APRIL 30, 2008 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (92.9%)
ISSUER SHARES VALUE(A)
COMMUNICATIONS EQUIPMENT (17.7%)
Cisco Systems 411,951(b) $10,562,423
JDS Uniphase 94,689(b) 1,355,000
Juniper Networks 74,255(b) 2,050,923
Motorola 137,340 1,367,906
Nokia ADR 127,952(c) 3,847,517
QUALCOMM 120,892 5,221,325
Telefonaktiebolaget LM Ericsson ADR 52,539(c) 1,325,034
---------------
Total 25,730,128
- ------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (18.8%)
Apple 43,634(b) 7,590,134
Brocade Communications Systems 169,175(b) 1,211,293
Dell 163,453(b) 3,045,129
Hewlett-Packard 146,241 6,778,270
IBM 46,580 5,622,206
SanDisk 54,995(b) 1,489,815
Seagate Technology 91,678(c) 1,729,964
---------------
Total 27,466,811
- ------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (5.7%)
Cbeyond 90,489(b) 1,786,253
Global Crossing 150,933(b,c) 2,523,600
Qwest Communications Intl 417,738 2,155,527
Time Warner Telecom Cl A 89,921(b) 1,762,452
---------------
Total 8,227,832
- ------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.6%)
Amphenol Cl A 18,720 864,490
- ------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (7.3%)
eBay 64,984(b) 2,033,349
Google Cl A 13,146(b) 7,549,617
Yahoo! 36,373(b) 996,984
---------------
Total 10,579,950
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
IT SERVICES (4.5%)
Accenture Cl A 39,796(c) $1,494,340
Cognizant Technology Solutions Cl A 53,801(b) 1,735,082
Fiserv 27,614(b) 1,395,888
Satyam Computer Services ADR 75,577(c) 1,940,817
---------------
Total 6,566,127
- ------------------------------------------------------------------------------------
MEDIA (0.9%)
Virgin Media 98,276(d) 1,267,760
- ------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (18.5%)
Cypress Semiconductor 44,620(b) 1,254,714
Infineon Technologies ADR 134,012(b,c) 1,238,271
Intel 381,047 8,482,106
Intersil Cl A 53,670 1,434,062
MEMC Electronic Materials 29,770(b) 1,874,617
Micron Technology 147,240(b) 1,136,693
NVIDIA 74,165(b) 1,524,091
ON Semiconductor 265,447(b) 1,982,889
PMC-Sierra 284,966(b) 2,214,186
Samsung Electronics 2,056(c) 1,458,898
Spansion Cl A 257,159(b) 848,625
Texas Instruments 117,235 3,418,573
---------------
Total 26,867,725
- ------------------------------------------------------------------------------------
SOFTWARE (17.7%)
Adobe Systems 91,390(b) 3,407,933
Citrix Systems 36,400(b) 1,192,100
Electronic Arts 23,752(b) 1,222,515
Microsoft 298,344 8,508,770
Nintendo 4,300(c) 2,361,547
Oracle 295,082(b) 6,152,460
Synchronoss Technologies 93,233(b) 1,945,773
TIBCO Software 115,073(b) 882,610
---------------
Total 25,673,708
- ------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
14 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
WIRELESS TELECOMMUNICATION SERVICES (1.2%)
Vodafone Group 542,387(c) $1,728,632
- ------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $133,913,211) $134,973,163
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (4.5%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund, 2.72% 6,550,973(e) $6,550,973
- ------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $6,550,973) $6,550,973
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $140,464,184)(f) $141,524,136
====================================================================================
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At April 30, 2008, the
value of foreign securities represented 13.5% of net assets.
(d) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). These securities may be valued at fair
value according to procedures approved, in good faith, by the Fund's Board
of Directors. Information concerning such security holdings at April 30,
2008, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ----------------------------------------------------------------------------------
Virgin Media 01-16-08 thru 02-15-08 $1,371,748
</Table>
(e) Affiliated Money Market Fund - See Note 5 to the financial statements. The
rate shown is the seven-day current annualized yield at April 30, 2008.
(f) At April 30, 2008, the cost of securities for federal income tax purposes
was approximately $140,464,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $10,650,000
Unrealized depreciation (9,590,000)
- ------------------------------------------------------------------------------
Net unrealized appreciation $1,060,000
- ------------------------------------------------------------------------------
</Table>
The Global Industry Classification Standard (GICS) was developed by and is the
exclusive property of Morgan Stanley Capital International Inc. and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 15
FINANCIAL STATEMENTS -----------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2008 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value
Unaffiliated issuers (identified cost $133,913,211) $134,973,163
Affiliated money market fund (identified cost $6,550,973) 6,550,973
- ----------------------------------------------------------------------------
Total investments in securities (identified cost
$140,464,184) 141,524,136
Cash 31,015
Capital shares receivable 62,315
Dividends receivable 73,447
Receivable for investment securities sold 3,794,187
- ----------------------------------------------------------------------------
Total assets 145,485,100
- ----------------------------------------------------------------------------
LIABILITIES
Capital shares payable 142,124
Accrued investment management services fee 2,880
Accrued distribution fee 1,736
Accrued transfer agency fee 1,235
Accrued administrative services fee 240
Accrued plan administration services fee 1
Other accrued expenses 55,458
- ----------------------------------------------------------------------------
Total liabilities 203,674
- ----------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $145,281,426
============================================================================
</Table>
- --------------------------------------------------------------------------------
16 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
APRIL 30, 2008 (UNAUDITED)
<Table>
REPRESENTED BY
Capital stock - $.01 par value $ 594,332
Additional paid-in capital 479,607,884
Net operating loss (418,485)
Accumulated net realized gain (loss) (335,560,377)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies 1,058,072
- ----------------------------------------------------------------------------
Total - representing net assets applicable to outstanding
capital stock $145,281,426
============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $109,417,766
Class B $ 32,448,750
Class C $ 3,255,874
Class I $ 15,377
Class R4 $ 143,659
Net asset value per share of outstanding Class A
capital stock: shares(1) 42,967,976 $ 2.55
Class B shares 14,912,209 $ 2.18
Class C shares 1,491,539 $ 2.18
Class I shares 5,882 $ 2.61
Class R4 shares 55,601 $ 2.58
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $2.71. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 17
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2008 (UNAUDITED)
<Table>
INVESTMENT INCOME
Income:
Dividends $ 601,420
Income distributions from affiliated money market fund 184,748
Fee income from securities lending 36,015
Less foreign taxes withheld (23,547)
- ----------------------------------------------------------------------------
Total income 798,636
- ----------------------------------------------------------------------------
Expenses:
Investment management services fee 471,395
Distribution fee
Class A 142,996
Class B 173,212
Class C 16,930
Transfer agency fee
Class A 207,702
Class B 66,352
Class C 6,310
Class R4 38
Administrative services fee 45,778
Plan administration services fee - R4 191
Compensation of board members 1,586
Custodian fees 10,260
Printing and postage 30,644
Registration fees 43,585
Professional fees 15,380
Other 3,078
- ----------------------------------------------------------------------------
Total expenses 1,235,437
Expenses waived/reimbursed by the Investment Manager and
its affiliates (191)
Earnings and bank fee credits on cash balances (2,915)
- ----------------------------------------------------------------------------
Total net expenses 1,232,331
- ----------------------------------------------------------------------------
Investment income (loss) - net (433,695)
- ----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) - NET
Net realized gain (loss) on:
Security transactions (3,336,118)
Foreign currency transactions 18,598
- ----------------------------------------------------------------------------
Net realized gain (loss) on investments (3,317,520)
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies (26,857,770)
- ----------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (30,175,290)
- ----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $(30,608,985)
============================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
18 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2008 OCT. 31, 2007
(UNAUDITED)
OPERATIONS
Investment income (loss) - net $ (416,625) $ (1,731,686)
Net realized gain (loss) on investments (3,334,590) 32,284,685
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies (26,857,770) 8,992,097
- --------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (30,608,985) 39,545,096
- --------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares 8,902,421 21,370,119
Class B shares 1,431,977 3,823,491
Class C shares 362,324 784,042
Class R4 shares 33,980 221,867
Payments for redemptions
Class A shares (15,319,313) (35,029,639)
Class B shares (4,495,720) (13,037,111)
Class C shares (445,499) (989,760)
Class R4 shares (32,818) (653,020)
- --------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (9,562,648) (23,510,011)
- --------------------------------------------------------------------------------------
Total increase (decrease) in net assets (40,171,633) 16,035,085
Net assets at beginning of period 185,453,059 169,417,974
- --------------------------------------------------------------------------------------
Net assets at end of period $145,281,426 $185,453,059
======================================================================================
Excess of distributions over net investment income $ (418,485) $ (1,860)
- --------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 19
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS TO APRIL 30, 2008)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Global Technology Fund (the Fund) is a series of RiverSource Global
Series, Inc. and is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company. RiverSource
Global Series, Inc. has 10 billion authorized shares of capital stock that can
be allocated among the separate series as designated by the Board of Directors
(the Board). The Fund invests primarily in equity securities of companies in the
information technology industry throughout the world.
The Fund offers Class A, Class B, Class C, Class I and Class R4 shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I and Class R4 shares are sold without a front-end sales charge or CDSC
and are offered to qualifying institutional investors.
At April 30, 2008, RiverSource Investments, LLC (the Investment Manager) owned
100% of Class I shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ 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.
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
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 that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Foreign securities are valued based on quotations from the principal market in
which such securities are normally traded. The procedures adopted by the Board
generally contemplate
- --------------------------------------------------------------------------------
20 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
the use of fair valuation in the event that price quotations or valuations are
not readily available, price quotations or valuations from other sources are not
reflective of market value and thus deemed unreliable, or a significant event
has occurred in relation to a security or class of securities (such as foreign
securities) that is not reflected in price quotations or valuations from other
sources. A fair value price is a good faith estimate of the value of a security
at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the New York Stock Exchange and therefore the closing prices for securities
in such markets or on such exchanges may not fully reflect events that occur
after such close but before the close of the New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial, Inc. (Ameriprise
Financial), parent company of the Investment Manager, as administrator to the
Fund, will fair value foreign securities pursuant to procedures adopted by the
Board, including utilizing a third party pricing service to determine these fair
values. These procedures take into account multiple factors, including movements
in the U.S. securities markets, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the New
York Stock Exchange.
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.
ILLIQUID SECURITIES
At April 30, 2008, investments in securities included issues that are illiquid
which the Fund currently limits to 15% of net assets, at market value, at the
time of purchase. The aggregate value of such securities at April 30, 2008 was
$1,267,760 representing 0.87% of net assets. These securities may be valued at
fair value according to procedures approved, in good faith, by the Board.
According to Board guidelines, certain unregistered securities are determined to
be liquid and are not included within the 15% limitation specified above. Assets
are liquid if they can be sold or disposed of in the ordinary course of business
within seven days at approximately the value at which the asset is valued by the
Fund.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the fund may buy and write options traded on any
U.S. or foreign exchange or in the over-the-counter market where completing the
obligations depends upon the credit standing of the other party. Cash collateral
may be collected by the Fund to secure certain over-the-counter options trades.
Cash collateral held by the Fund for such option trades must be returned to the
counterparty upon closure, exercise or expiration of the contract. The Fund also
may buy and sell put and call options and write covered call options on
portfolio
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 21
securities as well as write cash-secured put options. The risk in writing a call
option is that the Fund gives up the opportunity for profit if the market price
of the security increases. The risk in writing a put option is that the Fund 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 Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of being
unable 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 Fund will
realize a gain or loss when the option transaction expires or closes. 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. During
the six months ended April 30, 2008, the Fund had no outstanding option
contracts.
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund 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 of 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.
Futures are valued daily based upon the last sale price at the close of market
on the principal exchange on which they are traded. Upon entering into a futures
contract, the Fund 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 Fund 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 Fund recognizes a realized
gain or loss when the contract is closed or expires. At April 30, 2008, the Fund
had no outstanding futures contracts.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. 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, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes.
- --------------------------------------------------------------------------------
22 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
The Fund 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 Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates from an
independent pricing service. The Fund is subject to the credit risk that the
other party will not complete its contract obligations. At April 30, 2008, the
Fund had no outstanding forward foreign currency contracts.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income to the shareholders. No provision for income or excise
taxes is thus required.
The Fund has adopted Financial Accounting Standards Board (FASB) Interpretation
48 (FIN 48), "Accounting for Uncertainty in Income Taxes," which is effective
for fiscal periods beginning after Dec. 15, 2006. FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in accordance with FASB
Statement 109, "Accounting for Income Taxes." FIN 48 prescribes a two-step
process to recognize and measure a tax position taken or expected to be taken in
a tax return. The first step is to determine whether a tax position has met the
more-likely-than-not recognition threshold and the second step is to measure a
tax position that meets the threshold to determine the amount of benefit to
recognize. FIN 48 also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and
transition. Management of the Fund has concluded that there are no significant
uncertain tax positions that would require recognition in the financial
statements. Generally, the tax authorities can examine all the tax returns filed
for the last three years.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred 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
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 23
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.
RECENT ACCOUNTING PRONOUNCEMENTS
In March 2008, the FASB issued Statement on Financial Accounting Standards No.
161 (SFAS "161"), "Disclosures about Derivative Instruments and Hedging
Activities -- an amendment of FASB Statement No. 133," which requires enhanced
disclosures about a fund's derivative and hedging activities. Funds are required
to provide enhanced disclosures about (a) how and why a fund uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect a fund's financial
position, financial performance, and cash flows. SFAS 161 is effective for
financial statements issued for fiscal years and interim periods beginning after
Nov. 15, 2008. As of April 30, 2008, management does not believe the adoption of
SFAS 161 will impact the financial statement amounts; however, additional
footnote disclosures may be required about the use of derivative instruments and
hedging items.
On Sept. 20, 2006, the FASB released Statement of Financial Accounting Standards
No. 157 "Fair Value Measurements" (SFAS 157). SFAS 157 establishes an
authoritative definition of fair value, sets out a hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported in
the Statement of Operations for a fiscal period. The application of SFAS 157
will be effective for the Fund's fiscal year beginning Nov. 1, 2008. The
adoption of SFAS 157 is not anticipated to have a material impact on the Fund's
financial statements; however, additional disclosures will be required about the
inputs used to develop the measurements of fair value and the effect of certain
measurements reported in the Statement of Operations for a fiscal period.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, 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.
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. Interest
income, including amortization of premium, market discount and original issue
discount using the effective interest method, is accrued daily.
- --------------------------------------------------------------------------------
24 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
2. EXPENSES AND SALES CHARGES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.72%
to 0.595% annually as the Fund's assets increase. The fee may be adjusted upward
or downward by a performance incentive adjustment determined monthly by
measuring the percentage difference over a rolling 12-month period between the
performance of one Class A share of the Fund and the change in the Lipper
Science and Technology Funds Index. In certain circumstances, the Board may
approve a change in the index. The maximum adjustment is 0.12% per year. If the
performance difference is less than 0.50%, the adjustment will be zero. The
adjustment decreased the fee by $77,943 for the six months ended April 30, 2008.
The management fee for the year ended April 30, 2008 was 0.62% of the Fund's
average daily net assets, including an adjustment under the terms of the
performance incentive arrangement.
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.06% to 0.03% annually as the
Fund's assets increase. The fee for the six months ended April 30, 2008 was
0.06% of the Fund's average daily net assets.
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended
April 30, 2008, other expenses paid to this company were $536.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
Under a Deferred Compensation Plan (the Plan), non-interested board members may
defer receipt of their compensation. Deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of the Fund or other
RiverSource funds. The Fund's liability for these amounts is adjusted for market
value changes and remains in the Fund until distributed in accordance with the
Plan.
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual account-based fee at a rate equal to $19.50 for Class A, $20.50
for Class B and $20.00 for Class C for this service. The Fund also pays the
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 25
Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's
average daily net assets attributable to Class R4 shares.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the Statement of Operations.
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Funds average daily net assets
attributable to Class R4 shares for the provision of various administrative
record keeping, communication and educational services.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund pays a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A shares
and a fee at an annual rate of up to 1.00% of the Fund's average daily net
assets attributable to Class B and Class C shares.
Sales charges received by the Distributor for distributing Fund shares were
$103,640 for Class A, $9,765 for Class B and $398 for Class C for the six months
ended April 30, 2008.
In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in which
it invests (also referred to as "acquired funds"), including affiliated and
nonaffiliated pooled investment vehicles (including mutual funds and exchange
traded funds). Because the acquired funds have varied expense and fee levels and
the Fund may own different proportions of acquired funds at different times, the
amount of fees and expenses incurred indirectly by the Fund will vary.
For the six months ended April 30, 2008, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds) were 0.87% for Class R4. Of
these waived/reimbursed fees and expenses, the plan administration services fee
at the class level was $191 for Class R4. In addition, the Investment Manager
and its affiliates have contractually agreed to waive certain fees and expenses
until Oct. 31, 2008, such that net expenses (excluding fees and expenses of
acquired funds), before giving effect to any performance incentive adjustment,
will not exceed 1.41% of the Fund's average daily net assets for Class R4,
unless sooner terminated at the discretion of the Board.
During the six months ended April 30, 2008, the Fund's transfer agency fees were
reduced by $2,915 as a result of bank fee credits from overnight cash balances.
The Fund pays custodian fees to Ameriprise Trust Company, a subsidiary of
Ameriprise Financial.
- --------------------------------------------------------------------------------
26 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $42,886,160 and $50,574,563 respectively, for the six
months ended April 30, 2008. Realized gains and losses are determined on an
identified cost basis.
Income from securities lending amounted to $36,015 for the six months ended
April 30, 2008. Expenses paid to the Investment Manager as securities lending
agent were $474 for the six months ended April 30, 2008, which are included in
other expenses on the Statement of Operations. The risks to the fund of
securities lending are that the borrower may not provide additional collateral
when required or return the securities when due. At April 30, 2008, the Fund had
no outstanding securities lending.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED APRIL 30, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- -----------------------------------------------------------------------------------------------
Class A 3,398,839 -- (6,000,980) (2,602,141)
Class B 642,390 -- (2,066,924) (1,424,534)
Class C 167,926 -- (209,037) (41,111)
Class R4 11,895 -- (11,843) 52
- -----------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- -----------------------------------------------------------------------------------------------
Class A 8,002,124 -- (13,306,617) (5,304,493)
Class B 1,671,730 -- (5,677,043) (4,005,313)
Class C 339,430 -- (436,868) (97,438)
Class R4 88,006 -- (256,250) (168,244)
- -----------------------------------------------------------------------------------------------
</Table>
5. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. The cost of the
Fund's purchases and proceeds from sales of shares of the RiverSource Short-Term
Cash Fund aggregated $25,176,530 and $30,219,672, respectively, for the six
months ended April 30, 2008.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 27
6. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
headed by JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the
temporary funding of shareholder redemptions or for other temporary or emergency
purposes. The credit facility became effective on Oct. 18, 2007, replacing a
prior credit facility. The credit facility agreement, which is a collective
agreement between the Fund and certain other RiverSource funds, severally and
not jointly permits collective borrowings up to $500 million. Interest is
charged to each Fund based on its borrowings at a rate equal to the federal
funds rate plus 0.30%. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.06% per annum. Under the prior credit facility, a Fund paid interest on its
outstanding borrowings at a rate equal to either the higher of the federal funds
effective rate plus 0.40% or the JPMCB Prime Commercial Lending Rate. The Fund
had no borrowings during the six months ended April 30, 2008.
7. CAPITAL LOSS CARRY-OVER
For federal income tax purposes the Fund had a capital loss carry-over of
$331,644,553 at Oct. 31, 2007, that if not offset by capital gains will expire
as follows:
<Table>
<Caption>
2009 2010
$250,345,326 $81,299,227
</Table>
It is unlikely the Board will authorize a distribution of any net realized
capital gains until the available capital loss carry-over has been offset or
expires.
8. RISKS RELATING TO CERTAIN INVESTMENTS
SECTOR RISK
The Fund invests a significant part of its total assets in securities of
companies primarily engaged in the technology, media or telecommunications
sectors. This may result in greater fluctuations in value than would be the case
for a fund invested in a wider variety of unrelated industries. As these sectors
increase or decrease in favor with the investing public, the price of securities
of companies that rely heavily on those sectors could become increasingly
sensitive to downswings in the economy.
FOREIGN RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities.
- --------------------------------------------------------------------------------
28 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
9. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc., was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company mutual funds and
they purport to bring the action derivatively on behalf of those funds under the
Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid
to the defendants by the funds for investment advisory and administrative
services are excessive. The plaintiffs seek remedies including restitution and
rescission of investment advisory and distribution agreements. The plaintiffs
voluntarily agreed to transfer this case to the United States District Court for
the District of Minnesota. In response to defendants' motion to dismiss the
complaint, the Court dismissed one of plaintiffs' four claims and granted
plaintiffs limited discovery. Defendants moved for summary judgment in April
2007. Summary judgment was granted in the defendants' favor on July 9, 2007. The
plaintiffs filed a notice of appeal with the Eighth Circuit Court of Appeals on
August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of Directors/
Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 29
and, as necessary, 8-K filings with the Securities and Exchange Commission on
legal and regulatory matters that relate to Ameriprise Financial and its
affiliates. Copies of these filings may be obtained by accessing the SEC website
at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
30 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
10. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(I) 2007 2006 2005 2004
Net asset value, beginning of period $3.04 $2.42 $1.99 $1.83 $1.72
- -------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .00(b),(c) (.02)(b) (.02) (.02) (.03)
Net gains (losses) (both realized
and unrealized) (.49) .64 .45 .18 .14
- -------------------------------------------------------------------------------------------------------------
Total from investment operations (.49) .62 .43 .16 .11
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.55 $3.04 $2.42 $1.99 $1.83
- -------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $109 $139 $123 $120 $146
- -------------------------------------------------------------------------------------------------------------
Total expenses(d),(e) 1.43%(f) 1.60% 1.69% 1.75% 1.74%
- -------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.36%)(f) (.80%) (.89%) (.92%) (1.48%)
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 167% 196% 115% 349%
- -------------------------------------------------------------------------------------------------------------
Total return(g) (16.12%)(h) 25.62% 21.61% 8.74% 6.40%
- -------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Rounds to zero.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
(i) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 31
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(H) 2007 2006 2005 2004
Net asset value, beginning of
period $2.61 $2.09 $1.74 $1.60 $1.53
- ------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)(b) (.04)(b) (.03) (.03) (.04)
Net gains (losses) (both realized
and unrealized) (.42) .56 .38 .17 .11
- ------------------------------------------------------------------------------------------------------------
Total from investment operations (.43) .52 .35 .14 .07
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.18 $2.61 $2.09 $1.74 $1.60
- ------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $32 $43 $42 $46 $59
- ------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 2.20%(e) 2.38% 2.47% 2.53% 2.52%
- ------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.12%)(e) (1.58%) (1.66%) (1.71%) (2.26%)
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 167% 196% 115% 349%
- ------------------------------------------------------------------------------------------------------------
Total return(f) (16.48%)(g) 24.88% 20.12% 8.75% 4.58%
- ------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
32 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2008(H) 2007 2006 2005 2004
Net asset value, beginning of
period $2.62 $2.10 $1.74 $1.61 $1.53
- ------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)(b) (.04)(b) (.03) (.03) (.04)
Net gains (losses) (both realized
and unrealized) (.43) .56 .39 .16 .12
- ------------------------------------------------------------------------------------------------------------
Total from investment operations (.44) .52 .36 .13 .08
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.18 $2.62 $2.10 $1.74 $1.61
- ------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $3 $4 $3 $3 $4
- ------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 2.19%(e) 2.36% 2.45% 2.52% 2.49%
- ------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.12%)(e) (1.56%) (1.66%) (1.69%) (2.23%)
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 167% 196% 115% 349%
- ------------------------------------------------------------------------------------------------------------
Total return(f) (16.79%)(g) 24.76% 20.69% 8.07% 5.23%
- ------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 33
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(J) 2007 2006 2005 2004(B)
Net asset value, beginning of
period $3.11 $2.46 $2.01 $1.83 $1.70
- ------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .00(c),(d) (.01)(c) (.01) (.01) (.02)
Net gains (losses) (both realized
and unrealized) (.50) .66 .46 .19 .15
- ------------------------------------------------------------------------------------------------------------
Total from investment operations (.50) .65 .45 .18 .13
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.61 $3.11 $2.46 $2.01 $1.83
- ------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------------
Total expenses(e),(f) .81%(g) .99% 1.01% 1.04% 1.03%(g)
- ------------------------------------------------------------------------------------------------------------
Net investment income (loss) .25%(g) (.19%) (.22%) (.21%) (.73%)(g)
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 167% 196% 115% 349%
- ------------------------------------------------------------------------------------------------------------
Total return(h) (16.08%)(i) 26.42% 22.39% 9.84% 7.65%(i)
- ------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from July 15, 2004 (inception date) to Oct. 31, 2004.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Rounds to zero.
(e) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(f) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(g) Adjusted to an annual basis.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
34 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(K) 2007 2006 2005 2004
Net asset value, beginning of
period $3.07 $2.43 $2.00 $1.83 $1.72
- ------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .00(b),(c) (.01)(b) (.02) (.02) (.02)
Net gains (losses) (both realized
and unrealized) (.49) .65 .45 .19 .13
- ------------------------------------------------------------------------------------------------------------
Total from investment operations (.49) .64 .43 .17 .11
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.58 $3.07 $2.43 $2.00 $1.83
- ------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $1 $-- $--
- ------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.12%(f) 1.34% 1.47% 1.54% 1.55%
- ------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) .87%(f) 1.34% 1.47% 1.54% 1.55%
- ------------------------------------------------------------------------------------------------------------
Net investment income (loss) .22%(f) (.52%) (.68%) (.73%) (1.28%)
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 167% 196% 115% 349%
- ------------------------------------------------------------------------------------------------------------
Total return(i) (15.96%)(j) 26.34% 21.50% 9.29% 6.40%
- ------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Rounds to zero.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 35
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT ----------------------------------------------------------------------
RiverSource Investments, LLC ("RiverSource Investments" or the "investment
manager"), a wholly-owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise
Financial"), serves as the investment manager to the Fund. Under an investment
management services agreement (the "IMS Agreement") RiverSource Investments
provides investment advice and other services to the Fund and all RiverSource
funds (collectively, the "Funds").
On an annual basis, the Fund's Board of Directors (the "Board"), including the
independent Board members (the "Independent Directors"), considers renewal of
the IMS Agreement. RiverSource Investments prepared detailed reports for the
Board and its Contracts Committee in March and April 2008, including reports
based on data provided by independent organizations to assist the Board in
making this determination. In addition, throughout the year, the Board (or its
committees) reviews information prepared by RiverSource Investments addressing
the services RiverSource Investments provides and Fund performance. The Board
accords particular weight to the work, deliberations and conclusions of the
Contracts, Investment Review and Compliance Committees in determining whether to
continue the IMS Agreement. At the April 9-10, 2008 in-person Board meeting,
independent legal counsel to the Independent Directors reviewed with the
Independent Directors various factors relevant to the Board's consideration of
advisory agreements and the Board's legal responsibilities related to such
consideration. Following an analysis and discussion of the factors identified
below, the Board, including all of the Independent Directors, approved renewal
of the IMS Agreement.
Nature, Extent and Quality of Services Provided by RiverSource Investments: The
Board analyzed various reports and presentations it had received detailing the
services performed by RiverSource Investments, as well as its expertise,
resources and capabilities. The Board specifically considered many developments
during the past year concerning the services provided by RiverSource
Investments, including, in particular, the continued investment in, and
resources dedicated to, the Fund's operations, particularly in the areas of
trading systems, new product initiatives, legal and compliance. Further, in
connection with the Board's evaluation of the overall package of services
provided by RiverSource Investments, the Board considered the quality of the
administrative and transfer agency services provided by RiverSource Investments'
affiliates to the Fund. The Board also reviewed the financial condition of
RiverSource Investments (and its affiliates) and each entity's ability to carry
out its responsibilities under the IMS Agreement. The Board also discussed the
acceptability of the terms of the IMS Agreement (including the
- --------------------------------------------------------------------------------
36 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
relatively broad scope of services required to be performed by RiverSource
Investments). The Board concluded that the services being performed under the
IMS Agreement were of a reasonably high quality, particularly in light of recent
market conditions.
Based on the foregoing, and based on other information received (both oral and
written, including the information on investment performance referenced below)
and other considerations, the Board concluded that RiverSource Investments and
its affiliates were in a position to continue to provide a high quality and
level of services to the Fund.
Investment Performance: For purposes of evaluating the nature, extent and
quality of services provided under the IMS Agreement, the Board carefully
reviewed the investment performance of the Fund. In this regard, the Board
considered: (i) detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index, the percentage ranking of the Fund among its
comparison group and the net assets of the Fund; and (ii) a report detailing the
Fund's performance over various periods (including since inception), recent Fund
inflows (and outflows) and a comparison of the Fund's net assets from December
2006 to December 2007. The Board observed that the Fund's investment performance
was appropriate in light of the particular management style and market
conditions involved.
Comparative Fees, Costs of Services Provided and the Profits Realized By
RiverSource Investments and its Affiliates from their Relationships with the
Fund: The Board reviewed comparative fees and the costs of services to be
provided under the IMS Agreement. The Board members considered detailed
comparative information set forth in an annual report on fees and expenses,
including, among other things, data (prepared by an independent organization)
showing a comparison of the Fund's expenses with median expenses paid by funds
in its peer group, as well as data showing the Fund's contribution to
RiverSource Investments' profitability.
The Board accorded particular weight to the notion that the level of fees should
reflect a rational pricing model applied consistently across the various product
lines in the Funds' family, while assuring that the overall fees for each fund
are generally in line with the "pricing philosophy" (i.e., that the total
expense ratio of each fund, with few exceptions, is at or below the median
expense ratio of funds in the same comparison group). The Board took into
account that the Fund's total expense ratio (after considering proposed expense
caps/waivers) was below the peer group's median expense ratio shown in the
reports. The Board also considered the Fund's performance incentive adjustment
and noted its continued appropriateness. Based on its review, the Board
concluded that the Fund's
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT 37
management fee was fair and reasonable in light of the extent and quality of
services that the Fund receives.
The Board also considered the expected profitability of RiverSource Investments
and its affiliates in connection with RiverSource Investments providing
investment management services to the Fund. In this regard, the Board referred
to a detailed profitability report, discussing the profitability to RiverSource
Investments and Ameriprise Financial from managing and operating the Fund,
including data showing comparative profitability over the past two years. The
Board also considered the services acquired by the investment manager through
the use of commission dollars paid by the Funds on portfolio transactions. The
Board noted that the fees paid by the Fund should permit the investment manager
to offer competitive compensation to its personnel, make necessary investments
in its business and earn an appropriate profit. The Board concluded that
profitability levels were reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by RiverSource Investments as the Fund grows and
took note of the extent to which Fund shareholders might also benefit from such
growth. The Board considered that the IMS Agreement provides for lower fees as
assets increase at pre-established breakpoints and concluded that the IMS
Agreement satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees were fair and reasonable
in light of the extent and quality of services provided. In reaching this
conclusion, no single factor was determinative. On April 10, 2008, the Board,
including all of the Independent Directors, approved the renewal of the IMS
Agreement.
PROXY
VOTING ----------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling RiverSource Funds at (888) 791-3380; contacting your financial
institution; visiting riversource.com/funds; or searching the website of the
Securities and Exchange Commission (SEC) at http://www.sec.gov. Information
regarding how the Fund voted proxies relating to portfolio securities is filed
with the SEC by August 31 for the most recent 12-month period ending June 30 of
that year, and is available without charge by visiting riversource.com/funds; or
searching the website of the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
38 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2008 SEMIANNUAL REPORT
RIVERSOURCE GLOBAL TECHNOLOGY FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by
the Fund's current prospectus. RiverSource(R)
mutual funds are distributed by RiverSource
Distributors, Inc., Member FINRA, and managed by
RiverSource Investments, LLC. These companies are
part of Ameriprise Financial, Inc.
(RIVERSOURCE INVESTMENTS LOGO) (C) 2008 RiverSource Distributors, Inc. S-6396 K (6/08)
</Table>
Semiannual Report
(THREADNEEDLE LOGO)
THREADNEEDLE
EMERGING MARKETS FUND
(FORMERLY RIVERSOURCE EMERGING MARKETS FUND)
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
APRIL 30, 2008
THREADNEEDLE EMERGING MARKETS FUND SEEKS TO PROVIDE SHAREHOLDERS WITH LONG-TERM
CAPITAL GROWTH.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance............... 2
Manager Commentary.................. 5
Fund Expenses Example............... 11
Portfolio of Investments............ 13
Financial Statements................ 17
Notes to Financial Statements....... 21
Approval of Investment Management
Services Agreement............... 36
Proxy Voting........................ 39
</Table>
RIVERSOURCE COMPLEX OF FUNDS
Threadneedle Funds are a part of
the RiverSource complex of funds
that includes funds branded
"RiverSource," "RiverSource
Partners," and "Threadneedle."
These funds share the same Board
of Directors/Trustees and
officers.
Please see the back of this report
for a list of mutual funds that
are included in the RiverSource
complex of funds.
(DALBAR LOGO)
The RiverSource mutual fund
shareholder reports have been
awarded the Communications Seal
from Dalbar Inc., an independent
financial services research firm.
The Seal recognizes communications
demonstrating a level of
excellence in the industry.
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> Threadneedle Emerging Markets Fund (the Fund) (formerly RiverSource Emerging
Markets Fund) Class A shares declined 11.91% (excluding sales charge) for the
six months ended April 30, 2008.
> The Fund underperformed its benchmark, the Morgan Stanley Capital
International (MSCI) Emerging Markets Index, which declined 10.18% during the
six-month period.
> The Fund's peer group, the Lipper Emerging Markets Funds Index, declined 9.84%
for the same period.
ANNUALIZED TOTAL RETURNS (for period ended April 30, 2008)
- --------------------------------------------------------------------------------
<Table>
<Caption>
6 months* 1 year 3 years 5 years 10 years
- -------------------------------------------------------------------------------
Threadneedle Emerging
Markets Fund Class
A (excluding sales
charge) -11.91% +24.57% +33.72% +33.60% +12.20%
- -------------------------------------------------------------------------------
MSCI Emerging Markets
Index(1)
(unmanaged) -10.18% +25.71% +34.27% +35.76% +13.54%
- -------------------------------------------------------------------------------
Lipper Emerging
Markets Funds
Index(2) -9.84% +21.02% +31.98% +34.20% +12.80%
- -------------------------------------------------------------------------------
</Table>
* Not annualized.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses. See the Average Annual Total Returns table for performance of other
share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
It is not possible to invest directly in an index.
(1) The Morgan Stanley Capital International (MSCI) Emerging Markets Index, an
unmanaged market capitalization-weighted index, is designed to measure
equity market performance in the global emerging markets. The index reflects
reinvestment of all distributions and changes in market prices.
(2) The Lipper Emerging Markets Funds Index includes the 30 largest emerging
markets funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
2 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
STYLE MATRIX
- ----------------------------------------
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund is designed to
generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
ANNUAL OPERATING EXPENSE RATIO
(as of the current prospectus)
- ----------------------------------------
<Table>
<Caption>
Total
- -------------------------------------
Class A 1.83%
- -------------------------------------
Class B 2.58%
- -------------------------------------
Class C 2.59%
- -------------------------------------
Class I 1.39%
- -------------------------------------
Class R4 1.64%
- -------------------------------------
</Table>
International investing involves increased risk and volatility due to potential
political and economic instability, currency fluctuations, and differences in
financial reporting and accounting standards and oversight. Risks are
particularly significant in emerging markets.
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT APRIL 30, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION**
Class A (inception 11/13/96) -11.91% +24.57% +33.72% +33.60% +12.20% N/A
- ---------------------------------------------------------------------------------------------------------
Class B (inception 11/13/96) -12.30% +23.50% +32.66% +32.57% +11.33% N/A
- ---------------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) -12.30% +23.56% +32.65% +32.60% N/A +13.94%
- ---------------------------------------------------------------------------------------------------------
Class I (inception 3/4/04) -11.78% +25.05% +34.34% N/A N/A +26.50%
- ---------------------------------------------------------------------------------------------------------
Class R4 (inception 11/13/96) -11.68% +24.93% +34.02% +33.88% +12.45% N/A
- ---------------------------------------------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 11/13/96) -16.95% +17.37% +31.10% +32.06% +11.63% N/A
- ---------------------------------------------------------------------------------------------------------
Class B (inception 11/13/96) -15.68% +18.74% +31.89% +32.44% +11.33% N/A
- ---------------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) -12.98% +22.61% +32.65% +32.60% N/A +13.94%
- ---------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
AT MARCH 31, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION**
Class A (inception 11/13/96) -6.26% +19.63% +29.56% +33.07% +11.34% N/A
- ---------------------------------------------------------------------------------------------------------
Class B (inception 11/13/96) -6.58% +18.79% +28.62% +32.02% +10.49% N/A
- ---------------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) -6.65% +18.72% +28.57% +32.02% N/A +13.07%
- ---------------------------------------------------------------------------------------------------------
Class I (inception 3/4/04) -6.03% +20.25% +30.17% N/A N/A +24.91%
- ---------------------------------------------------------------------------------------------------------
Class R4 (inception 11/13/96) -5.99% +20.18% +29.87% +33.35% +11.58% N/A
- ---------------------------------------------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 11/13/96) -11.65% +12.73% +27.02% +31.52% +10.77% N/A
- ---------------------------------------------------------------------------------------------------------
Class B (inception 11/13/96) -10.19% +14.21% +27.80% +31.89% +10.49% N/A
- ---------------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) -7.37% +17.81% +28.57% +32.02% N/A +13.07%
- ---------------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum sales charge of 5.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class I and Class R4 shares. Class I and Class R4 shares are
available to institutional investors only.
* Not annualized.
** For classes with less than 10 years performance.
- --------------------------------------------------------------------------------
4 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
MANAGER COMMENTARY -------------------------------------------------------------
(UNAUDITED)
Below, Threadneedle Emerging Markets Fund portfolio managers Julian Thompson and
Jules Mort of Threadneedle International Limited (Threadneedle) discuss the
Fund's results and positioning for the semiannual period ended April 30, 2008.
Threadneedle, an indirect wholly-owned subsidiary of Ameriprise Financial, Inc.,
acts as the subadvisor to the Fund.
Dear Shareholders,
The Fund's Class A shares declined 11.91% (excluding sales charge) for the six
months ended April 30, 2008. The Fund underperformed its benchmark, the Morgan
Stanley Capital International (MSCI) Emerging Markets Index, which fell 10.18%.
The Fund's peer group, the Lipper Emerging Markets Funds Index, declined 9.84%
for the period.
COUNTRY DIVERSIFICATION (at April 30, 2008; % of portfolio assets)
- -----------------------------------------------------------------
<Table>
Brazil 19.0%
- --------------------------------------------------------------
Canada 0.7%
- --------------------------------------------------------------
China 6.8%
- --------------------------------------------------------------
Egypt 0.3%
- --------------------------------------------------------------
Hong Kong 4.7%
- --------------------------------------------------------------
India 5.0%
- --------------------------------------------------------------
Indonesia 2.0%
- --------------------------------------------------------------
Israel 3.6%
- --------------------------------------------------------------
Malaysia 2.3%
- --------------------------------------------------------------
Mexico 7.7%
- --------------------------------------------------------------
Norway 0.3%
- --------------------------------------------------------------
Pakistan 0.6%
- --------------------------------------------------------------
Peru 0.8%
- --------------------------------------------------------------
Russia 16.3%
- --------------------------------------------------------------
South Africa 5.6%
- --------------------------------------------------------------
South Korea 13.3%
- --------------------------------------------------------------
Taiwan 8.0%
- --------------------------------------------------------------
Thailand 1.0%
- --------------------------------------------------------------
Turkey 1.0%
- --------------------------------------------------------------
United Kingdom 0.4%
- --------------------------------------------------------------
Other(1) 0.6%
- --------------------------------------------------------------
</Table>
(1) Cash & Cash Equivalents.
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 5
MANAGER COMMENTARY (continued) -------------------------------------------------
SIGNIFICANT PERFORMANCE FACTORS
During the semiannual period, emerging market equities underperformed global
equities, as represented by the MSCI World Index(1), and U.S. equities, as
represented by the S&P 500 Index(2). Increased risk aversion brought on by the
spreading credit crisis and slowing economic growth was primarily responsible
for the weakness in emerging markets. When the worst expectations for slower
growth failed to materialize, confidence improved and the emerging market
segment rebounded toward the end of the period.
Latin America was the best performing region in the emerging market universe,
fueled by favorable results in Brazil. Improving fundamentals, evidenced by an
upgrade to an investment grade credit rating and higher commodity prices,
contributed to Brazil's strong performance. Results were decidedly weaker in
Asia where markets in China, India and South Korea fell significantly. Eastern
Europe, the Mid East and Africa declined, but the Russian market was little
affected due to the cushioning provided by its oil exposure.
TOP TEN HOLDINGS (at April 30, 2008; % of portfolio assets)
- -----------------------------------------------------------------
<Table>
Petroleo Brasileiro ADR (Brazil) 5.8%
- ---------------------------------------------------------
Companhia Vale do Rio Doce ADR (Brazil) 4.2%
- ---------------------------------------------------------
Gazprom ADR (Russia) 4.0%
- ---------------------------------------------------------
China Mobile (Hong Kong) 3.7%
- ---------------------------------------------------------
Samsung Electronics (South Korea) 3.2%
- ---------------------------------------------------------
America Movil ADR Series L (Mexico) 3.1%
- ---------------------------------------------------------
CNOOC (China) 2.7%
- ---------------------------------------------------------
Banco Bradesco (Brazil) 2.7%
- ---------------------------------------------------------
KT Corp (South Korea) 2.3%
- ---------------------------------------------------------
Redecard (Brazil) 2.0%
- ---------------------------------------------------------
</Table>
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
(1) Morgan Stanley Capital International (MSCI) World Index is an unmanaged
index, compiled from a composite of more than 1,500 companies listed in the
stock exchanges of North America, Europe, Australia, New Zealand and the Far
East.
(2) Standard & Poor's 500 Index (S&P 500 Index) is an unmanaged index of common
stocks, frequently used as a general measure of market performance. The
index reflects reinvestment of all distributions and changes in market
prices.
- --------------------------------------------------------------------------------
6 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
Latin America was the best performing region in the emerging market universe,
fueled by favorable results in Brazil.
The Fund benefited from its allocation to Latin
America, which was larger than that of the MSCI
Emerging Markets Index. Having a smaller weighting
in Asia, including China, India and South Korea,
compared to the MSCI Emerging Markets Index, was
also advantageous. The Fund's allocations to Brazil
and Russia were the two largest overweights compared
to the MSCI Emerging Markets Index and both added to
relative performance. Conversely, the Fund had less
exposure to Taiwan than the MSCI Emerging Markets
Index, which was a disadvantage. The election of a
new government that favors stronger ties to mainland
China has raised hopes for an economic renaissance
in Taiwan.
Stock selection was primarily responsible for the
Fund's underperformance relative to the MSCI
Emerging Markets Index, largely due to holdings of
property stocks in Brazil, Mexico, China and India.
Property stocks, which are not a significant
component of the MSCI Emerging Markets Index, have
suffered from the contagion effect of the U.S.
subprime mortgage crisis. Examples of Fund holdings
that underperformed include CHINA OVERSEAS LAND AND
INVESTMENT and AGILE PROPERTY HOLDINGS, two Chinese
companies traded on the Hong Kong Stock Exchange,
and DLF in India. We continue to believe the
long-term supply and demand situation in emerging
markets is favorable for property developers. Though
risks have risen in the near term, particularly a
lack of available funding, we remain confident in
the business models of the property companies we
hold.
The Fund de-emphasized financial stocks, an
advantage since the sector performed poorly. Within
the MSCI Emerging Markets Index, consumer
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
staples, materials and energy were the strongest sectors, and the Fund benefited
from overweights in materials and energy. However, the positive effects were not
enough to offset the impact of the Fund's property exposure.
CHANGES TO THE FUND'S PORTFOLIO
We kept the Fund's country allocations broadly the same over the course of the
six months. Brazil and Russia remained the two largest overweights relative to
the MSCI Emerging Markets Index, although we slightly reduced holdings in Brazil
and increased the Fund's weighting in Russia. We added to the Fund's holdings in
Mexico and Taiwan, while keeping both positions smaller than those of the MSCI
Emerging Markets Index. We reduced the Fund's positions in China and India,
which also remained smaller than the MSCI Emerging Markets Index.
Looking more closely at China, we believe the market is still relatively
expensive, particularly consumer-related stocks. We also think China's central
bank could take further steps to tighten the money supply, which might restrain
enthusiasm for the Chinese market. Although we are not significantly underweight
in China, we are generally finding more attractive companies in other regions.
That said, we have been selectively adding to holdings in certain sectors within
China, including banks, property stocks and telecommunication services. Our
outlook for India is similar, since India is also a retail-driven market with a
central bank that may continue to restrain liquidity through a tighter monetary
policy.
We are attracted to countries where performance has been driven by strong
fundamentals, such as Brazil. We also see potential in Russia, where high oil
prices have been a major windfall. We increased exposure to Taiwan and South
Korea, two major industrialized economies in Asia. Both have experienced recent
changes in government -- Taiwan with a pro-mainland China government and South
Korea with a pro-business administration. In addition, South Korea will likely
be among the early beneficiaries of any improvement in the U.S. economy.
- --------------------------------------------------------------------------------
8 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
The Fund now has a larger energy position than it did at the start of the
period. We also increased exposure to the telecommunication services sector. In
general, we favor mobile telecommunications, an area that is not very
economically sensitive, has a business model that works well in emerging markets
and tends to have relatively high return on capital due to less competition.
OUR FUTURE STRATEGY
We believe the emerging markets are very well positioned for this economic
environment. We see three important growth drivers for this universe: relative
immunity to the continued credit problems in developed nations, high commodity
prices and infrastructure spending.
While credit concerns remain an issue in the developed world, emerging markets
tend to rely less on borrowing, particularly consumers. As large commodity
producers, emerging markets continue to benefit from a supply and demand balance
that generally favors producers. China's growth is still very solid, and we
believe that will continue to support commodity prices. Meanwhile,
infrastructure spending further reinforces commodity prices and is also a
positive for manufacturing companies in emerging markets.
One potential concern is higher inflation levels, but we believe emerging market
currencies will continue to appreciate against the U.S. dollar, helping to
offset inflationary pressures. In general, emerging market countries are not
being aggressive in tightening their money supply to stem inflation and that
reduces the risk that central banks will go too far and stifle the growth cycle.
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 9
MANAGER COMMENTARY (continued) -------------------------------------------------
Our expectations for individual companies are also favorable. We anticipate an
average of about 18% earnings growth from emerging market companies in 2008 and
approximately 12% earnings growth in 2009. We believe stocks are still
reasonably valued based on that growth forecast. Consequently, our outlook for
emerging markets, even in this period of high risk aversion, remains very
favorable.
<Table>
(PHOTO - Julian (PHOTO - Jules
Thompson) Mort)
Julian Thompson Jules Mort
Portfolio Manager Deputy Portfolio
Manager
</Table>
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource fund.
- --------------------------------------------------------------------------------
10 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the expenses of the funds in which it invests (also
referred to as "acquired funds"), including affiliated and non-affiliated pooled
investment vehicles (including mutual funds and exchange traded funds). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the acquired funds' expense ratio as of the most recent shareholder
report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended April 30, 2008.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Expenses paid during the period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 11
FUND EXPENSES EXAMPLE (continued) ----------------------------------------------
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
NOV. 1, 2007 APRIL 30, 2008 THE PERIOD(A) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 880.90 $ 8.56 1.83%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,015.76 $ 9.17 1.83%
- -------------------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 877.00 $12.09 2.59%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,011.98 $12.96 2.59%
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 877.00 $12.09 2.59%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,011.98 $12.96 2.59%
- -------------------------------------------------------------------------------------------
Class I
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 882.20 $ 6.65 1.42%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,017.80 $ 7.12 1.42%
- -------------------------------------------------------------------------------------------
Class R4
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 883.20 $ 8.01 1.71%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,016.36 $ 8.57 1.71%
- -------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the Fund's annualized expense ratio as indicated
above, multiplied by the average account value over the period, multiplied
by 182/366 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended April 30, 2008: -11.91%
for Class A, -12.30% for Class B, -12.30% for Class C, -11.78% for Class I
and -11.68% for Class R4.
- --------------------------------------------------------------------------------
12 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
APRIL 30, 2008 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (95.5%)(c)
ISSUER SHARES VALUE(A)
BRAZIL (16.1%)
Bradespar 253,500 $7,479,753
Companhia Vale do Rio Doce ADR 768,088 30,016,878
Cyrela Brazil Realty 498,400 8,263,176
Even Construtora e Incorporadora 533,900 3,402,540
MRV Engenharia e Participacoes 202,100 4,074,352
Multiplan Empreendimentos Imobiliarios 449,549(b) 5,681,247
Petroleo Brasileiro ADR 339,394 41,209,219
Positivo Informatica 115,700 1,469,140
Redecard 769,500 14,355,479
---------------
Total 115,951,784
- ------------------------------------------------------------------------------------
CANADA (0.7%)
Yamana Gold 371,847 4,767,079
- ------------------------------------------------------------------------------------
CHINA (6.8%)
China Construction Bank Series H 9,289,000 8,391,233
China Merchants Bank Series H 1,421,000 5,935,117
China Shenhua Energy Series H 681,500 3,130,640
CNOOC 11,001,000 19,423,825
Industrial & Commercial Bank of China Series
H 10,935,000 8,657,413
Minth Group 2,838,000 3,182,790
---------------
Total 48,721,018
- ------------------------------------------------------------------------------------
EGYPT (0.3%)
Orascom Construction Inds 25,499 2,090,444
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HONG KONG (4.6%)
China Mobile 1,517,500 $26,112,091
China Overseas Land & Investment 3,350,000 7,049,736
---------------
Total 33,161,827
- ------------------------------------------------------------------------------------
INDIA (4.9%)
Bharat Heavy Electricals 128,872 6,048,208
Bharti Airtel 438,239(b) 9,712,514
DLF 245,437 4,270,168
Larsen & Toubro 64,345 4,767,928
Reliance Inds 163,138(b) 10,523,669
---------------
Total 35,322,487
- ------------------------------------------------------------------------------------
INDONESIA (2.0%)
Bumi Resources 5,873,000 4,238,247
Intl Nickel Indonesia 7,731,500 5,579,433
Perusahaan Gas Negara 3,398,000 4,461,834
---------------
Total 14,279,514
- ------------------------------------------------------------------------------------
ISRAEL (3.6%)
Israel Chemicals 764,869 14,087,632
Teva Pharmaceutical Inds ADR 251,334 11,757,404
---------------
Total 25,845,036
- ------------------------------------------------------------------------------------
MALAYSIA (2.2%)
IOI 3,500,500 8,091,720
KNM Group 3,966,600 8,038,708
---------------
Total 16,130,428
- ------------------------------------------------------------------------------------
MEXICO (7.6%)
America Movil ADR Series L 387,263 22,445,763
Desarrolladora Homex ADR 145,409(b) 8,663,469
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 13
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MEXICO (CONT.)
Grupo Financiero Banorte Series O 2,101,000 $9,091,145
Grupo Mexico Series B 985,400 7,187,900
Urbi Desarrollos Urbanos 2,380,200(b) 7,637,066
---------------
Total 55,025,343
- ------------------------------------------------------------------------------------
NORWAY (0.3%)
Copeinca 308,200(b) 2,120,378
- ------------------------------------------------------------------------------------
PAKISTAN (0.6%)
United Bank GDR 492,437(d,e) 4,360,278
- ------------------------------------------------------------------------------------
PERU (0.8%)
Compania de Minas Buenaventura ADR 92,591 5,793,419
- ------------------------------------------------------------------------------------
RUSSIA (16.1%)
Eurasia Drilling GDR 266,036(b,d,e) 6,172,035
Gazprom ADR 541,880 28,692,546
Mechel ADR 60,314 8,793,782
MMC Norilsk Nickel ADR 315,731 8,518,422
Mobile Telesystems ADR 159,820 12,398,835
Novolipetsk Steel GDR 158,726(d,e) 7,050,609
Pharmstandard Cl S 74,180(b) 4,936,679
Rosneft Oil GDR 1,109,571(d,e) 10,818,317
Sberbank Cl S 2,721,077 8,857,106
Sibirskiy Cement 24,589 4,561,260
TMK GDR 154,534(d,e) 4,945,088
Vimpel-Communications ADR 360,173 10,862,818
---------------
Total 116,607,497
- ------------------------------------------------------------------------------------
SOUTH AFRICA (5.5%)
Aveng 907,638 6,851,843
Impala Platinum Holdings 265,982 10,840,319
MTN Group 523,874 10,016,910
Sasol 208,641 11,871,544
---------------
Total 39,580,616
- ------------------------------------------------------------------------------------
SOUTH KOREA (13.2%)
Daelim Industrial 49,931 6,752,146
Doosan Infracore 288,450 9,355,913
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SOUTH KOREA (CONT.)
Hyundai Motor 89,235 $7,534,213
Infopia 83,756 3,949,572
KT Corp 352,520 16,289,097
NHN 28,231(b) 6,564,693
Samsung Electronics 32,080 22,763,353
Shinhan Financial Group 186,834 10,796,096
SK Communications 105,351(b) 1,566,597
Yuhan 43,676 9,589,541
---------------
Total 95,161,221
- ------------------------------------------------------------------------------------
TAIWAN (7.9%)
Asustek Computer 2,498,485 8,102,751
Chinatrust Financial Holding 8,555,000(b) 8,915,846
Chunghwa Telecom 1,997,000 5,145,725
First Financial Holding 4,318,000 5,244,248
High Tech Computer 254,000 6,544,888
Taiwan Fertilizer 1,517,000 7,344,740
Taiwan Semiconductor Mfg ADR 1,075,624 12,090,014
Tripod Technology 1,067,920 3,628,089
---------------
Total 57,016,301
- ------------------------------------------------------------------------------------
THAILAND (1.0%)
Kasikornbank 2,603,000 7,251,155
- ------------------------------------------------------------------------------------
TURKEY (1.0%)
Turkcell 907,184(b) 7,263,739
- ------------------------------------------------------------------------------------
UNITED KINGDOM (0.4%)
Hochschild Mining 388,386 2,895,706
- ------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $589,519,282) $689,345,270
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
PREFERRED STOCKS (2.7%)(c)
ISSUER SHARES VALUE(A)
BRAZIL
Banco Bradesco 834,250 $19,328,775
- ------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost: $17,843,687) $19,328,775
- ------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
14 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
MONEY MARKET FUND (0.6%)
ISSUER SHARES VALUE(A)
RiverSource Short-Term Cash Fund, 2.72% 4,610,259(f) $4,610,259
- ------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $4,610,259) $4,610,259
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $611,973,228)(g) $713,284,304
====================================================================================
</Table>
SUMMARY OF INVESTMENTS IN SECURITIES BY INDUSTRY
The following table represents the portfolio investments of the Fund by industry
classifications as a percentage of net assets at April 30, 2008:
<Table>
<Caption>
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE
- -----------------------------------------------------------------------------------------
Auto Components 0.4% $3,182,790
Automobiles 1.0 7,534,213
Chemicals 3.0 21,432,372
Commercial Banks 13.4 96,828,412
Computers & Peripherals 2.2 16,116,779
Construction & Engineering 2.8 20,462,361
Diversified Financial Services 1.0 7,479,753
Diversified Telecommunication Services 3.0 21,434,822
Electrical Equipment 0.8 6,048,208
Electronic Equipment & Instruments 0.5 3,628,089
Energy Equipment & Services 2.7 19,155,831
Food Products 1.4 10,212,098
Gas Utilities 0.6 4,461,834
Health Care Equipment & Supplies 0.5 3,949,572
Household Durables 3.4 24,563,711
Internet Software & Services 1.1 8,131,290
IT Services 2.0 14,355,479
Machinery 1.3 9,355,913
Metals & Mining 12.7 91,443,547
Multi-Utilities 0.6 4,561,260
Oil, Gas & Consumable Fuels 18.0 129,908,007
Pharmaceuticals 3.6 26,283,624
Real Estate Investment Trusts (REITs) 3.4 24,478,043
Semiconductors & Semiconductor Equipment 4.8 34,853,367
Wireless Telecommunication Services 13.7 98,812,670
Other(1) 0.6 4,610,259
- -----------------------------------------------------------------------------------------
$713,284,304
- -----------------------------------------------------------------------------------------
</Table>
(1) Cash & Cash Equivalents.
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 15
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
may be determined to be liquid under guidelines established by the Fund's
Board of Directors. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At April 30,
2008, the value of these securities amounted to $33,346,327 or 4.6% of net
assets.
(e) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). These securities may be valued at fair
value according to procedures approved, in good faith, by the Fund's Board
of Directors. Information concerning such security holdings at April 30,
2008, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ----------------------------------------------------------------------------------
Eurasia Drilling GDR* 11-02-07 thru 04-15-08 $6,267,169
Novolipetsk Steel GDR* 06-06-07 thru 04-15-08 4,404,564
Rosneft Oil GDR* 04-07-08 thru 04-15-08 10,540,818
TMK GDR* 04-07-08 thru 04-17-08 4,949,515
United Bank GDR* 06-25-07 5,089,277
</Table>
* Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended.
(f) Affiliated Money Market Fund - See Note 5 to the financial statements. The
rate shown is the seven-day current annualized yield at April 30, 2008.
(g) At April 30, 2008, the cost of securities for federal income tax purposes
was approximately $611,973,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $125,950,000
Unrealized depreciation (24,639,000)
- ------------------------------------------------------------------------------
Net unrealized appreciation $101,311,000
- ------------------------------------------------------------------------------
</Table>
The Global Industry Classification Standard (GICS) was developed by and is the
exclusive property of Morgan Stanley Capital International Inc. and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
16 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
FINANCIAL STATEMENTS -----------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2008 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value
Unaffiliated issuers (identified cost $607,362,969) $708,674,045
Affiliated money market fund (identified cost $4,610,259) 4,610,259
- ----------------------------------------------------------------------------
Total investments in securities (identified cost
$611,973,228) 713,284,304
Foreign currency holdings (identified cost $8,153,230) 8,105,283
Capital shares receivable 619,760
Dividends receivable 826,444
Receivable for investment securities sold 1,615,727
- ----------------------------------------------------------------------------
Total assets 724,451,518
- ----------------------------------------------------------------------------
LIABILITIES
Capital shares payable 1,012,393
Payable for investment securities purchased 1,503,059
Accrued investment management services fee 21,050
Accrued distribution fee 6,114
Accrued transfer agency fee 2,361
Accrued administrative services fee 1,529
Accrued plan administration services fee 12
Other accrued expenses 348,715
- ----------------------------------------------------------------------------
Total liabilities 2,895,233
- ----------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $721,556,285
============================================================================
</Table>
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 17
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
APRIL 30, 2008 (UNAUDITED)
<Table>
REPRESENTED BY
Capital stock -- $.01 par value $ 704,668
Additional paid-in capital 552,201,225
Excess of distributions over net investment income (5,642,783)
Accumulated net realized gain (loss) 73,029,469
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies 101,263,706
- ----------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $721,556,285
============================================================================
</Table>
<Table>
Net assets applicable to outstanding Class A
shares: $556,867,072
$ 80,469,095
Class B
$ 6,837,200
Class C
$ 75,546,847
Class I
$ 1,836,071
Class R4
Net asset value per share of outstanding Class A shares(1)
capital stock: 53,814,851 $ 10.35
8,658,997 $ 9.29
Class B shares
734,282 $ 9.31
Class C shares
7,087,152 $ 10.66
Class I shares
171,561 $ 10.70
Class R4 shares
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $10.98. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
18 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2008 (UNAUDITED)
<Table>
INVESTMENT INCOME
Income:
Dividends $ 10,368,822
Interest 63,407
Income distributions from affiliated money market fund 244,724
Less foreign taxes withheld (464,282)
- -----------------------------------------------------------------------------
Total income 10,212,671
- -----------------------------------------------------------------------------
Expenses:
Investment management services fee 4,044,432
Distribution fee
Class A 704,401
Class B 406,184
Class C 33,400
Transfer agency fee
Class A 473,965
Class B 72,684
Class C 5,825
Class R4 485
Administrative services fee 276,368
Plan administration services fee -- Class R4 2,424
Compensation of board members 7,371
Custodian fees 328,600
Printing and postage 54,600
Registration fees 48,899
Professional fees 49,414
Other 152,498
- -----------------------------------------------------------------------------
Total expenses 6,661,550
Expenses waived/reimbursed by the Investment Manager and
its affiliates (2,490)
Earnings and bank fee credits on cash balances (10,102)
- -----------------------------------------------------------------------------
Total net expenses 6,648,958
- -----------------------------------------------------------------------------
Investment income (loss) - net 3,563,713
- -----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions 64,918,996
Foreign currency transactions (101,584)
- -----------------------------------------------------------------------------
Net realized gain (loss) on investments 64,817,412
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies (166,871,156)
- -----------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (102,053,744)
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $ (98,490,031)
=============================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 19
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2008 OCT. 31, 2007
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) - net $ 3,563,713 $ 1,517,079
Net realized gain (loss) on investments 64,817,412 156,013,553
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies (166,871,156) 189,936,461
- ----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (98,490,031) 347,467,093
- ----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (7,733,482) --
Class B (584,169) --
Class C (60,487) --
Class I (828,121) --
Class R4 (23,143) --
Net realized gain
Class A (117,775,823) (98,239,230)
Class B (18,510,075) (18,762,771)
Class C (1,520,014) (1,196,069)
Class I (9,800,247) (9,664,518)
Class R4 (416,434) (1,447,673)
- ----------------------------------------------------------------------------------------
Total distributions (157,251,995) (129,310,261)
- ----------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares 50,831,229 91,841,700
Class B shares 8,498,357 12,086,529
Class C shares 1,465,695 1,969,066
Class I shares 28,950,852 5,204,952
Class R4 shares 415,260 3,407,128
Reinvestment of distributions at net asset value
Class A shares 124,102,492 97,170,044
Class B shares 18,787,330 18,551,177
Class C shares 1,531,576 1,147,176
Class I shares 10,623,826 9,658,984
Class R4 shares 439,576 1,447,453
Payments for redemptions
Class A shares (73,929,504) (127,473,312)
Class B shares (9,824,406) (38,310,114)
Class C shares (1,329,911) (2,015,974)
Class I shares (3,258,381) (16,607,477)
Class R4 shares (582,397) (9,169,513)
- ----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 156,721,594 48,907,819
- ----------------------------------------------------------------------------------------
Total increase (decrease) in net assets (99,020,432) 267,064,651
Net assets at beginning of period 820,576,717 553,512,066
- ----------------------------------------------------------------------------------------
Net assets at end of period $ 721,556,285 $ 820,576,717
========================================================================================
Undistributed (excess of distributions over) net
investment income $ (5,642,783) $ 22,906
- ----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
20 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS TO APRIL 30, 2008)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Threadneedle Emerging Markets Fund (the Fund) (formerly RiverSource Emerging
Markets Fund) is a series of RiverSource Global Series, Inc. and is registered
under the Investment Company Act of 1940 (as amended) as a diversified, open-
end management investment company. RiverSource Global Series, Inc. has 10
billion authorized shares of capital stock that can be allocated among the
separate series as designated by the Board of Directors (the Board). The Fund
invests primarily in equity securities of emerging markets companies.
The Fund offers Class A, Class B, Class C, Class I and Class R4 shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I and Class R4 shares are sold without a front-end sales charge or CDSC
and are offered to qualifying institutional investors.
At April 30, 2008, RiverSource Investments, LLC (the Investment Manager) and the
RiverSource affiliated funds-of-funds owned 100% of Class I shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ 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.
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
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 that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Foreign securities are valued based on quotations from the principal market in
which such securities
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 21
are normally traded. The procedures adopted by the Board generally contemplate
the use of fair valuation in the event that price quotations or valuations are
not readily available, price quotations or valuations from other sources are not
reflective of market value and thus deemed unreliable, or a significant event
has occurred in relation to a security or class of securities (such as foreign
securities) that is not reflected in price quotations or valuations from other
sources. A fair value price is a good faith estimate of the value of a security
at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the New York Stock Exchange and therefore the closing prices for securities
in such markets or on such exchanges may not fully reflect events that occur
after such close but before the close of the New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial, Inc. (Ameriprise
Financial), parent company of the Investment Manager, as administrator to the
Fund, will fair value foreign securities pursuant to procedures adopted by the
Board, including utilizing a third party pricing service to determine these fair
values. These procedures take into account multiple factors, including movements
in the U.S. securities markets, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the New
York Stock Exchange.
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.
ILLIQUID SECURITIES
At April 30, 2008, investments in securities included issues that are illiquid
which the Fund currently limits to 15% of net assets, at market value, at the
time of purchase. The aggregate value of such securities at April 30, 2008 was
$33,346,327 representing 4.62% of net assets. These securities may be valued at
fair value according to procedures approved, in good faith, by the Board.
According to Board guidelines, certain unregistered securities are determined to
be liquid and are not included within the 15% limitation specified above. Assets
are liquid if they can be sold or disposed of in the ordinary course of business
within seven days at approximately the value at which the asset is valued by the
Fund.
OPTION TRANSACTIONS
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the Fund may buy and write options traded on any
U.S. or foreign exchange or in the over-the-counter market where completing the
obligation depends upon the credit standing of the other party. Cash collateral
may be collected by the Fund to secure certain over-the-counter options trades.
Cash collateral held by the Fund for such option trades must be returned to the
counterparty upon closure, exercise or expiration of the contract. The Fund also
- --------------------------------------------------------------------------------
22 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
may buy and sell put and call options and write covered call options on
portfolio securities as well as write cash-secured put options. The risk in
writing a call option is that the Fund gives up the opportunity for profit if
the market price of the security increases. The risk in writing a put option is
that the Fund 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 Fund pays a
premium whether or not the option is exercised. The Fund also has the additional
risk of being unable 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 Fund will
realize a gain or loss when the option transaction expires or closes. 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. At
April 30, 2008, and for the six months then ended, the Fund had no outstanding
option contracts.
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund 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 of 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.
Futures are valued daily based upon the last sale price at the close of market
on the principal exchange on which they are traded. Upon entering into a futures
contract, the Fund 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 Fund 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 Fund recognizes a realized
gain or loss when the contract is closed or expires. At April 30, 2008, the Fund
had no outstanding futures contracts.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. 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, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 23
dividends, interest income and foreign withholding taxes. At April 30, 2008,
foreign currency holdings consisted of multiple denominations.
The Fund may enter into forward foreign currency 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 Fund and the resulting unrealized appreciation or depreciation are
determined using foreign currency exchange rates from an independent pricing
service. The Fund is subject to the credit risk that the other party will not
complete its contract obligations. At April 30, 2008, the Fund had no
outstanding forward foreign currency contracts.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income to shareholders. No provision for income or excise
taxes is thus required.
The Fund has adopted Financial Accounting Standards Board (FASB) Interpretation
48 (FIN 48), "Accounting for Uncertainty in Income Taxes," which is effective
for fiscal periods beginning after Dec. 15, 2006. FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in accordance with FASB
Statement 109, "Accounting for Income Taxes." FIN 48 prescribes a two-step
process to recognize and measure a tax position taken or expected to be taken in
a tax return. The first step is to determine whether a tax position has met the
more-likely-than-not recognition threshold and the second step is to measure a
tax position that meets the threshold to determine the amount of benefit to
recognize. FIN 48 also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and
transition. Management of the Fund has concluded that there are no significant
uncertain tax positions that would require recognition in the financial
statements. Generally, the tax authorities can examine all the tax returns filed
for the last three years.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred 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"
- --------------------------------------------------------------------------------
24 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
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.
RECENT ACCOUNTING PRONOUNCEMENT
In March 2008, the FASB issued Statement on Financial Accounting Standards No.
161 (SFAS "161"), "Disclosures about Derivative Instruments and Hedging
Activities -- an amendment of FASB Statement No. 133," which requires enhanced
disclosures about a fund's derivative and hedging activities. Funds are required
to provide enhanced disclosures about (a) how and why a fund uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect a fund's financial
position, financial performance, and cash flows. SFAS 161 is effective for
financial statements issued for fiscal years and interim periods beginning after
Nov. 15, 2008. As of April 30, 2008, management does not believe the adoption of
SFAS 161 will impact the financial statement amounts; however, additional
footnote disclosures may be required about the use of derivative instruments and
hedging items.
On Sept. 20, 2006, the FASB released Statement of Financial Accounting Standards
No. 157 "Fair Value Measurements" (SFAS 157). SFAS 157 establishes an
authoritative definition of fair value, sets out a hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported in
the Statement of Operations for a fiscal period. The application of SFAS 157
will be effective for the Fund's fiscal year beginning Nov. 1, 2008. The
adoption of SFAS 157 is not anticipated to have a material impact on the Fund's
financial statements; however, additional disclosures will be required about the
inputs used to develop the measurements of fair value and the effect of certain
measurements reported in the Statement of Operations for a fiscal period.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, 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.
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. Interest
income,
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 25
including amortization of premium, market discount and original issue discount
using the effective interest method, is accrued daily.
2. EXPENSES AND SALES CHARGES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 1.10%
to 0.90% annually as the Fund's assets increase. The fee may be adjusted upward
or downward by a performance incentive adjustment determined monthly by
measuring the percentage difference over a rolling 12-month period between the
performance of one Class A share of the Fund and the change in the Lipper
Emerging Markets Funds Index. In certain circumstances, the Board may approve a
change in the index. The maximum adjustment is 0.12% per year. If the
performance difference is less than 0.50%, the adjustment will be zero. The
adjustment increased the management fee by $240,150 for the six months ended
April 30, 2008. The management fee for the six months ended April 30, 2008 was
1.15% of the Fund's average daily net assets, including the adjustment under the
terms of the performance incentive arrangement.
The Investment Manager has a Subadvisory Agreement with Threadneedle
International Limited (Threadneedle), an affiliate of the Investment Manager and
an indirect wholly-owned subsidiary of Ameriprise Financial, to subadvise the
assets of the Fund. The Investment Manager contracts with and compensates
Threadneedle to manage the investment of the Fund's assets.
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines 0.08% to 0.05% annually as the Fund's
assets increase. The fee for the six months ended April 30, 2008 was 0.08% of
the Fund's average daily net assets.
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended
April 30, 2008, other expenses paid to this company were $2,409.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
Under a Deferred Compensation Plan (the Plan), non-interested board members may
defer receipt of their compensation. Deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of the Fund or other
- --------------------------------------------------------------------------------
26 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
RiverSource funds. The Fund's liability for these amounts is adjusted for market
value changes and remains in the Fund until distributed in accordance with the
Plan.
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual account-based fee at a rate equal to $19.50 for Class A, $20.50
for Class B and $20.00 for Class C for this service. The Fund also pays the
Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's
average net assets attributable to Class R4 shares.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the Statement of Operations.
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares for the provision of various administrative,
recordkeeping, communication and educational services.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund pays a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A shares
and a fee at an annual rate of up to 1.00% of the Fund's average daily net
assets attributable to Class B and Class C shares.
Sales charges received by the Distributor for distributing Fund shares were
$480,426 for Class A, $19,903 for Class B and $587 for Class C for the six
months ended April 30, 2008.
In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in which
it invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). Because the acquired funds have varied expense and fee levels and
the Fund may own different proportions of acquired funds at different times, the
amount of fees and expenses incurred indirectly by the Fund will vary.
For the six months ended April 30, 2008, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds) were 1.46% for Class R4. Of
these waived/reimbursed fees and expenses, the transfer agency fee at the class
level was $66 for Class R4 and the plan administration services fee was $2,424
for Class R4. In addition, the Investment Manager and its affiliates have
contractually agreed to waive certain fees and expenses until Oct. 31, 2008,
such that net expenses (excluding fees and expenses of acquired funds), before
giving effect to any
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 27
performance incentive adjustment, will not exceed 1.64% of the Fund's average
daily net assets for Class R4, unless sooner terminated at the discretion of the
Board.
During the six months ended April 30, 2008, the Fund's custodian and transfer
agency fees were reduced by $10,102 as a result of earnings and bank fee credits
from overnight cash balances. The Fund pays custodian fees to Ameriprise Trust
Company, a subsidiary of Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $490,170,681 and $484,256,536, respectively, for the six
months ended April 30, 2008. Realized gains and losses are determined on an
identified cost basis.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED APRIL 30, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 4,617,996 11,944,424 (6,851,400) 9,711,020
Class B 856,083 2,007,193 (1,033,432) 1,829,844
Class C 148,156 163,281 (134,817) 176,620
Class I 2,779,849 993,810 (296,091) 3,477,568
Class R4 34,574 40,967 (54,358) 21,183
- ----------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 8,019,411 9,935,587 (11,422,639) 6,532,359
Class B 1,163,544 2,056,671 (3,595,546) (375,331)
Class C 179,156 126,760 (198,413) 107,503
Class I 463,963 966,865 (1,397,671) 33,157
Class R4 313,574 145,035 (806,884) (348,275)
- ----------------------------------------------------------------------------------------------
</Table>
5. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. The cost of the
Fund's purchases and proceeds from sales of the shares of the RiverSource
Short-Term
- --------------------------------------------------------------------------------
28 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
Cash Fund aggregated $250,810,221 and $253,871,051, respectively, for the six
months ended April 30, 2008.
6. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
headed by JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the
temporary funding of shareholder redemptions or for other temporary or emergency
purposes. The credit facility became effective on Oct. 18, 2007, replacing a
prior credit facility. The credit facility agreement, which is a collective
agreement between the Fund and certain other RiverSource funds, severally and
not jointly, permits collective borrowings up to $500 million. Interest is
charged to each Fund based on its borrowings at a rate equal to the federal
funds rate plus 0.30%. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.06% per annum. Under the prior credit facility, a Fund paid interest on its
outstanding borrowings at a rate equal to either the higher of the federal funds
effective rate plus 0.40% or the JPMBC Prime Commercial Lending Rate. The Fund
had no borrowings during the six months ended April 30, 2008.
7. RISKS RELATING TO CERTAIN INVESTMENTS
FOREIGN/EMERGING MARKETS RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities. Investing in
emerging markets may accentuate these risks.
8. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc., was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company mutual funds and
they purport to bring the action derivatively on behalf of those funds under the
Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid
to the defendants by the funds for investment advisory and administrative
services are excessive. The plaintiffs seek remedies including restitution and
rescission of investment advisory and distribution agreements. The plaintiffs
voluntarily agreed to transfer this case to the United States District Court for
the District of Minnesota. In response to defendants' motion to dismiss the
complaint, the Court
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 29
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals on August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
30 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
9. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of
period $14.99 $11.32 $8.23 $6.27 $5.46
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .06(b) .04(b) .01 .04 .03
Net gains (losses) (both realized
and unrealized) (1.83) 6.27 3.10 1.95 .84
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations (1.77) 6.31 3.11 1.99 .87
- ----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.18) -- (.02) (.03) (.06)
Distributions from realized gains (2.69) (2.64) -- -- --
- ----------------------------------------------------------------------------------------------------------------
Total distributions (2.87) (2.64) (.02) (.03) (.06)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.35 $14.99 $11.32 $8.23 $6.27
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $557 $661 $425 $295 $191
- ----------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.83%(e) 1.83% 1.81% 1.79% 1.83%
- ----------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 1.83%(e) 1.82% 1.81% 1.79% 1.83%
- ----------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.08%(e) .31% .19% .54% .41%
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 69% 125% 145% 124% 128%
- ----------------------------------------------------------------------------------------------------------------
Total return(h) (11.91%)(i) 68.21% 37.85% 31.83% 16.09%
- ----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 31
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of
period $13.73 $10.63 $7.77 $5.95 $5.19
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .02(b) (.05)(b) (.05) (.01) (.02)
Net gains (losses) (both realized
and unrealized) (1.69) 5.79 2.91 1.83 .81
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations (1.67) 5.74 2.86 1.82 .79
- ----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.08) -- -- -- (.03)
Distributions from realized gains (2.69) (2.64) -- -- --
- ----------------------------------------------------------------------------------------------------------------
Total distributions (2.77) (2.64) -- -- (.03)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.29 $13.73 $10.63 $7.77 $5.95
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $80 $94 $77 $74 $73
- ----------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 2.59%(e) 2.58% 2.57% 2.55% 2.59%
- ----------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 2.59%(e) 2.57% 2.57% 2.55% 2.59%
- ----------------------------------------------------------------------------------------------------------------
Net investment income (loss) .34%(e) (.48%) (.55%) (.24%) (.32%)
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 69% 125% 145% 124% 128%
- ----------------------------------------------------------------------------------------------------------------
Total return(h) (12.30%)(i) 66.95% 36.81% 30.59% 15.18%
- ----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
32 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of
period $13.78 $10.66 $7.79 $5.97 $5.20
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .02(b) (.05)(b) (.06) -- (.01)
Net gains (losses) (both realized
and unrealized) (1.69) 5.81 2.93 1.82 .81
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations (1.67) 5.76 2.87 1.82 .80
- ----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.11) -- -- -- (.03)
Distributions from realized gains (2.69) (2.64) -- -- --
- ----------------------------------------------------------------------------------------------------------------
Total distributions (2.80) (2.64) -- -- (.03)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.31 $13.78 $10.66 $7.79 $5.97
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $7 $8 $5 $3 $1
- ----------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 2.59%(e) 2.59% 2.58% 2.56% 2.60%
- ----------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 2.59%(e) 2.58% 2.58% 2.56% 2.60%
- ----------------------------------------------------------------------------------------------------------------
Net investment income (loss) .35%(e) (.48%) (.57%) (.19%) (.34%)
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 69% 125% 145% 124% 128%
- ----------------------------------------------------------------------------------------------------------------
Total return(h) (12.30%)(i) 67.03% 36.84% 30.54% 15.37%
- ----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 33
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(K) 2007 2006 2005 2004(B)
Net asset value, beginning of
period $15.38 $11.50 $8.35 $6.36 $6.54
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .08(c) .09(c) .03 .06 .01
Net gains (losses) (both realized
and unrealized) (1.88) 6.43 3.16 1.98 (.19)
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations (1.80) 6.52 3.19 2.04 (.18)
- ----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.23) -- (.04) (.05) --
Distributions from realized gains (2.69) (2.64) -- -- --
- ----------------------------------------------------------------------------------------------------------------
Total distributions (2.92) (2.64) (.04) (.05) --
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.66 $15.38 $11.50 $8.35 $6.36
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $76 $56 $41 $19 $13
- ----------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.42%(f) 1.39% 1.35% 1.30% 1.35%(f)
- ----------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.42%(f) 1.38% 1.35% 1.30% 1.35%(f)
- ----------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.48%(f) .75% .63% .97% .79%(f)
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 69% 125% 145% 124% 128%
- ----------------------------------------------------------------------------------------------------------------
Total return(i) (11.78%)(j) 69.07% 38.36% 32.32% (2.75%)(i)
- ----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from March 4, 2004 (inception date) to Oct. 31, 2004.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
34 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of
period $15.32 $11.50 $8.33 $6.35 $5.52
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .08(b) .05(b) .03 .05 .04
Net gains (losses) (both realized
and unrealized) (1.86) 6.41 3.14 1.97 .86
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations (1.78) 6.46 3.17 2.02 .90
- ----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.15) -- -- (.04) (.07)
Distributions from realized gains (2.69) (2.64) -- -- --
- ----------------------------------------------------------------------------------------------------------------
Total distributions (2.84) (2.64) -- (.04) (.07)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.70 $15.32 $11.50 $8.33 $6.35
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $2 $2 $6 $2 $18
- ----------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.72%(e) 1.65% 1.63% 1.59% 1.65%
- ----------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(f),(g) 1.46%(e) 1.64%(e) 1.63% 1.59% 1.65%
- ----------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.36%(e) .45% .41% .81% .61%
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 69% 125% 145% 124% 128%
- ----------------------------------------------------------------------------------------------------------------
Total return(h) (11.68%)(i) 68.51% 38.06% 31.87% 16.50%
- ----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 35
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT ----------------------------------------------------------------------
RiverSource Investments, LLC ("RiverSource Investments" or the "investment
manager"), a wholly-owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise
Financial"), serves as the investment manager to the Fund. Under an investment
management services agreement (the "IMS Agreement") RiverSource Investments
provides investment advice and other services to the Fund and all RiverSource
funds (collectively, the "Funds"). In addition, under the subadvisory agreement
(the "Subadvisory Agreement") between RiverSource Investments and the subadviser
(the "Subadviser"), the Subadviser performs portfolio management and related
services for the Fund.
On an annual basis, the Fund's Board of Directors (the "Board"), including the
independent Board members (the "Independent Directors"), considers renewal of
the IMS Agreement and the Subadvisory Agreement (together, the "Advisory
Agreements"). RiverSource Investments prepared detailed reports for the Board
and its Contracts Committee in March and April 2008, including reports based on
data provided by independent organizations to assist the Board in making this
determination. In addition, throughout the year, the Board (or its committees)
reviews information prepared by RiverSource Investments addressing the services
RiverSource Investments provides and Fund performance. The Board accords
particular weight to the work, deliberations and conclusions of the Contracts,
Investment Review and Compliance Committees in determining whether to continue
the Advisory Agreements. At the April 9-10, 2008 in-person Board meeting,
independent legal counsel to the Independent Directors reviewed with the
Independent Directors various factors relevant to the Board's consideration of
advisory agreements and the Board's legal responsibilities related to such
consideration. Following an analysis and discussion of the factors identified
below, the Board, including all of the Independent Directors, approved renewal
of the Advisory Agreements.
Nature, Extent and Quality of Services Provided by RiverSource Investments and
the Subadviser: The Board analyzed various reports and presentations it had
received detailing the services performed by RiverSource Investments and the
Subadviser, as well as their expertise, resources and capabilities. The Board
specifically considered many developments during the past year concerning the
services provided by RiverSource Investments, including, in particular, the
continued investment in, and resources dedicated to, the Fund's operations,
particularly in the areas of trading systems, new product initiatives, legal and
compliance. Further, in connection with the Board's evaluation of the overall
package of services provided by RiverSource Investments, the Board considered
the quality of the administrative and transfer agency services provided by
RiverSource Investments' affiliates to the Fund. The Board also reviewed the
- --------------------------------------------------------------------------------
36 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
financial condition of RiverSource Investments (and its affiliates) and the
Subadviser, and each entity's ability to carry out its responsibilities under
the Advisory Agreements. The Board also discussed the acceptability of the terms
of the Advisory Agreements (including the relatively broad scope of services
required to be performed by RiverSource Investments and the Subadviser). The
Board concluded that the services being performed under the Advisory Agreements
were of a reasonably high quality, particularly in light of recent market
conditions.
Based on the foregoing, and based on other information received (both oral and
written, including the information on investment performance referenced below)
and other considerations, the Board concluded that RiverSource Investments, its
affiliates and the Subadviser were in a position to continue to provide a high
quality and level of services to the Fund.
Investment Performance: For purposes of evaluating the nature, extent and
quality of services provided under the Advisory Agreements, the Board carefully
reviewed the investment performance of the Fund. In this regard, the Board
considered: (i) detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index, the percentage ranking of the Fund among its
comparison group and the net assets of the Fund; and (ii) a report detailing the
Fund's performance over various periods (including since inception), recent Fund
inflows (and outflows) and a comparison of the Fund's net assets from December
2006 to December 2007. The Board observed that the Fund's investment performance
met expectations. Additionally, the Board reviewed the performance of the
Subadviser and considered management's rationale for recommending the continued
retention of the Subadviser.
Comparative Fees, Costs of Services Provided and the Profits Realized By
RiverSource Investments and its Affiliates from their Relationships with the
Fund: The Board reviewed comparative fees and the costs of services to be
provided under the Advisory Agreements. The Board members considered detailed
comparative information set forth in an annual report on fees and expenses,
including, among other things, data (prepared by an independent organization)
showing a comparison of the Fund's expenses with median expenses paid by funds
in its peer group, as well as data showing the Fund's contribution to
RiverSource Investments' profitability.
The Board accorded particular weight to the notion that the level of fees should
reflect a rational pricing model applied consistently across the various product
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 37
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT (continued) ----------------------------------------------------------
lines in the Funds' family, while assuring that the overall fees for each fund
are generally in line with the "pricing philosophy" (i.e., that the total
expense ratio of each fund, with few exceptions, is at or below the median
expense ratio of funds in the same comparison group). The Board took into
account that the Fund's total expense ratio (after considering proposed expense
caps/waivers) was slightly below the peer group's median expense ratio shown in
the reports. The Board also considered the Fund's performance incentive
adjustment and noted its continued appropriateness. Based on its review, the
Board concluded that the Fund's management fee was fair and reasonable in light
of the extent and quality of services that the Fund receives.
The Board also considered the expected profitability of RiverSource Investments
and its affiliates in connection with RiverSource Investments providing
investment management services to the Fund. In this regard, the Board referred
to a detailed profitability report, discussing the profitability to RiverSource
Investments and Ameriprise Financial from managing and operating the Fund,
including data showing comparative profitability over the past two years. The
Board also considered the services acquired by the investment manager through
the use of commission dollars paid by the Funds on portfolio transactions. The
Board noted that the fees paid by the Fund should permit the investment manager
to offer competitive compensation to its personnel, make necessary investments
in its business and earn an appropriate profit. The Board concluded that
profitability levels were reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by RiverSource Investments as the Fund grows and
took note of the extent to which Fund shareholders might also benefit from such
growth. The Board considered that the IMS Agreement provides for lower fees as
assets increase at pre-established breakpoints and concluded that the IMS
Agreement satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees and subadvisory fees were
fair and reasonable in light of the extent and quality of services provided. In
reaching this conclusion, no single factor was determinative. On April 10, 2008,
the Board, including all of the Independent Directors, approved the renewal of
the Advisory Agreements.
- --------------------------------------------------------------------------------
38 THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT
PROXY
VOTING ----------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling RiverSource Funds at (888) 791-3380; contacting your financial
institution; visiting riversource.com/funds; or searching the website of the
Securities and Exchange Commission (SEC) at http://www.sec.gov. Information
regarding how the Fund voted proxies relating to portfolio securities is filed
with the SEC by August 31 for the most recent 12-month period ending June 30 of
that year, and is available without charge by visiting riversource.com/funds; or
searching the website of the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
THREADNEEDLE EMERGING MARKETS FUND -- 2008 SEMIANNUAL REPORT 39
THREADNEEDLE EMERGING MARKETS FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by
the Fund's current prospectus. Threadneedle(R)
mutual funds are distributed by RiverSource
Distributors, Inc., Member FINRA, managed by
RiverSource Investments, LLC, and subadvised by
Threadneedle International Limited. These
companies are part of Ameriprise Financial, Inc.
(THREADNEEDLE LOGO) (C) 2008 RiverSource Distributors, Inc. S-6344 N (6/08)
</Table>
Semiannual Report
(THREADNEEDLE LOGO)
THREADNEEDLE
GLOBAL EQUITY FUND
(FORMERLY RIVERSOURCE GLOBAL EQUITY FUND)
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
APRIL 30, 2008
THREADNEEDLE GLOBAL EQUITY FUND
SEEKS TO PROVIDE SHAREHOLDERS WITH
LONG-TERM CAPITAL GROWTH.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance............... 2
Manager Commentary.................. 6
Fund Expenses Example............... 12
Portfolio of Investments............ 14
Financial Statements................ 19
Notes to Financial Statements....... 24
Approval of Investment Management
Services Agreement............... 43
Proxy Voting........................ 46
</Table>
RIVERSOURCE COMPLEX OF FUNDS
Threadneedle Funds are a part of
the RiverSource complex of funds
that includes funds branded
"RiverSource," "RiverSource
Partners," and "Threadneedle."
These funds share the same Board
of Directors/Trustees and
officers.
Please see the back of this report
for a list of mutual funds that
are included in the RiverSource
complex of funds.
(DALBAR LOGO)
The RiverSource mutual fund
shareholder reports have been
awarded the Communications Seal
from Dalbar Inc., an independent
financial services research firm.
The Seal recognizes communications
demonstrating a level of
excellence in the industry.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> Threadneedle Global Equity Fund's (formerly RiverSource Global Equity Fund)
(the Fund) Class A shares declined 11.90% (excluding sales charge) for the six
months ended April 30, 2008.
> The Fund underperformed its benchmark, the Morgan Stanley Capital
International All Country World Index (MSCI Index), which fell 9.24% for the
six-month period.
> The Lipper Global Funds Index, representing the Fund's peer group, declined
9.49% over the same time frame.
ANNUALIZED TOTAL RETURNS (for period ended April 30, 2008)
- --------------------------------------------------------------------------------
<Table>
<Caption>
6 months* 1 year 3 years 5 years 10 years
- ---------------------------------------------------------------------------------------
Threadneedle Global Equity
Fund Class A (excluding
sales charge) -11.90% +1.64% +15.94% +16.63% +3.70%
- ---------------------------------------------------------------------------------------
MSCI All Country World
Index(1) (unmanaged) -9.24% +0.43% +14.52% +17.01% +6.01%
- ---------------------------------------------------------------------------------------
Lipper Global Funds Index(2) -9.49% -1.92% +12.88% +15.72% +5.80%
- ---------------------------------------------------------------------------------------
</Table>
* Not annualized.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial institution or
visiting riversource.com/funds.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses. See the Average Annual Total Returns table for performance of other
share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes.
It is not possible to invest directly in an index.
(1) The Morgan Stanley Capital International (MSCI) All Country World Index, an
unmanaged index of equity securities, is designed to measure equity market
performance in the global developed and emerging markets. The index
reflects reinvestment of all distributions and changes in market prices.
(2) The Lipper Global Funds Index includes the 30 largest global funds tracked
by Lipper Inc. The index's returns include net reinvested dividends. The
Fund's performance is currently measured against this index for purposes of
determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
2 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
STYLE MATRIX
- ----------------------------------------
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund is designed to
generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
ANNUAL OPERATING EXPENSE RATIO
(as of the current prospectus)
- ----------------------------------------
<Table>
<Caption>
Total
- -------------------------------------
Class A 1.39%
- -------------------------------------
Class B 2.15%
- -------------------------------------
Class C 2.15%
- -------------------------------------
Class R2 1.74%
- -------------------------------------
Class R3 1.49%
- -------------------------------------
Class R4 1.24%
- -------------------------------------
Class R5 0.99%
- -------------------------------------
Class W 1.39%
- -------------------------------------
</Table>
International investing involves increased risk and volatility due to potential
political and economic instability, currency fluctuations, and differences in
financial reporting and accounting standards and oversight. Risks are
particularly significant in emerging markets.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT APRIL 30, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION**
Class A (inception 5/29/90) -11.90% +1.64% +15.94% +16.63% +3.70% N/A
- --------------------------------------------------------------------------------------------------------
Class B (inception 3/20/95) -12.31% +0.76% +15.02% +15.74% +2.90% N/A
- --------------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) -12.21% +0.77% +15.05% +15.74% N/A +0.09%
- --------------------------------------------------------------------------------------------------------
Class R2 (inception 12/11/06) -11.81% +1.48% N/A N/A N/A +6.31%
- --------------------------------------------------------------------------------------------------------
Class R3 (inception 12/11/06) -11.79% +1.70% N/A N/A N/A +6.57%
- --------------------------------------------------------------------------------------------------------
Class R4 (inception 3/20/95) -11.88% +1.76% +16.05% +16.83% +3.87% N/A
- --------------------------------------------------------------------------------------------------------
Class R5 (inception 12/11/06) -11.81% +1.98% N/A N/A N/A +6.89%
- --------------------------------------------------------------------------------------------------------
Class W (inception 12/1/06) -11.94% +1.63% N/A N/A N/A +6.96%
- --------------------------------------------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 5/29/90) -16.99% -4.22% +13.71% +15.28% +3.17% N/A
- --------------------------------------------------------------------------------------------------------
Class B (inception 3/20/95) -16.69% -4.24% +14.01% +15.52% +2.90% N/A
- --------------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) -13.08% -0.23% +15.05% +15.74% N/A +0.09%
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
4 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT MARCH 31, 2008
SINCE
WITHOUT SALES CHARGE 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION**
Class A (inception 5/29/90) -11.18% +0.56% +13.06% +17.13% +3.41% N/A
- --------------------------------------------------------------------------------------------------------
Class B (inception 3/20/95) -11.61% -0.26% +12.20% +16.27% +2.61% N/A
- --------------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) -11.49% -0.27% +12.21% +16.26% N/A -0.53%
- --------------------------------------------------------------------------------------------------------
Class R2 (inception 12/11/06) -11.08% +0.41% N/A N/A N/A +2.83%
- --------------------------------------------------------------------------------------------------------
Class R3 (inception 12/11/06) -10.97% +0.75% N/A N/A N/A +3.10%
- --------------------------------------------------------------------------------------------------------
Class R4 (inception 3/20/95) -11.07% +0.69% +13.25% +17.33% +3.58% N/A
- --------------------------------------------------------------------------------------------------------
Class R5 (inception 12/11/06) -11.01% +1.03% N/A N/A N/A +3.42%
- --------------------------------------------------------------------------------------------------------
Class W (inception 12/1/06) -11.24% +0.43% N/A N/A N/A +3.47%
- --------------------------------------------------------------------------------------------------------
WITH SALES CHARGE
Class A (inception 5/29/90) -16.25% -5.23% +10.87% +15.74% +2.88% N/A
- --------------------------------------------------------------------------------------------------------
Class B (inception 3/20/95) -16.03% -5.25% +11.13% +16.05% +2.61% N/A
- --------------------------------------------------------------------------------------------------------
Class C (inception 6/26/00) -12.38% -1.26% +12.21% +16.26% N/A -0.53%
- --------------------------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum sales charge of 5.75%. Class B
share performance reflects a contingent deferred sales charge (CDSC) applied as
follows: first year 5%; second and third years 4%; fourth year 3%; fifth year
2%; sixth year 1%; no sales charge thereafter. Class C shares may be subject to
a 1% CDSC if shares are sold within one year after purchase. Sales charges do
not apply to Class R2, Class R3, Class R4, Class R5 and Class W shares. Class
R2, Class R3, Class R4 and Class R5 are available to institutional investors
only. Class W shares are offered through qualifying discretionary accounts.
* Not annualized.
** For classes with less than 10 years performance.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 5
MANAGER COMMENTARY -------------------------------------------------------------
(UNAUDITED)
Below, Threadneedle Global Equity Fund portfolio managers Dominic Rossi and
Stephen Thornber of Threadneedle International Limited (Threadneedle) discuss
the Fund's results and positioning for the six months ended April 30, 2008.
Threadneedle, an indirect wholly-owned subsidiary of Ameriprise Financial, Inc.,
acts as the subadvisor to the Fund.
Dear Shareholders,
The Fund's Class A shares declined 11.90% (excluding sales charge) for the six
months ended April 30, 2008. The Fund underperformed its benchmark, the Morgan
Stanley Capital International All Country World Index (MSCI Index), which fell
9.24% for the period. The Lipper Global Funds Index, representing the Fund's
peer group, declined 9.49% over the same time frame.
COUNTRY DIVERSIFICATION (at April 30, 2008; % of portfolio assets)
- -----------------------------------------------------------------
<Table>
Australia 2.2%
- ---------------------------------------------------------
Bermuda 1.0%
- ---------------------------------------------------------
Brazil 5.2%
- ---------------------------------------------------------
Canada 1.8%
- ---------------------------------------------------------
Denmark 0.4%
- ---------------------------------------------------------
Finland 0.8%
- ---------------------------------------------------------
Germany 5.6%
- ---------------------------------------------------------
Greece 0.5%
- ---------------------------------------------------------
Hong Kong 4.1%
- ---------------------------------------------------------
India 1.3%
- ---------------------------------------------------------
Ireland 0.5%
- ---------------------------------------------------------
Japan 9.1%
- ---------------------------------------------------------
Mexico 1.8%
- ---------------------------------------------------------
Netherlands 0.7%
- ---------------------------------------------------------
Portugal 1.0%
- ---------------------------------------------------------
Russia 0.8%
- ---------------------------------------------------------
Singapore 1.0%
- ---------------------------------------------------------
South Africa 1.1%
- ---------------------------------------------------------
South Korea 0.5%
- ---------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
6 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
Spain 1.1%
- ---------------------------------------------------------
Sweden 0.2%
- ---------------------------------------------------------
Switzerland 8.1%
- ---------------------------------------------------------
Taiwan 1.9%
- ---------------------------------------------------------
United Kingdom 11.4%
- ---------------------------------------------------------
United States 36.2%
- ---------------------------------------------------------
Other(1) 1.7%
- ---------------------------------------------------------
</Table>
(1) Cash & Cash Equivalents.(2)
(2) Of the 1.7%, 1.0% is due to security lending activity and 0.7% is the Fund's
cash equivalent position.
SIGNIFICANT PERFORMANCE FACTORS
As the credit crisis broadened over the course of the six months, investors
generally sought to reduce their investment risk. This had a negative effect on
the Fund's results in the latter part of the period, as investors rotated out of
many stocks and sectors that had performed well for the Fund last year.
Positioning in the materials sector hampered the Fund's results. At the start of
the period, the Fund had a significantly larger materials position than the MSCI
Index, which was advantageous. However, stock selection detracted, as some
individual holdings that had previously performed well for the Fund suffered
from profit-taking.
TOP TEN HOLDINGS (at April 30, 2008; % of portfolio assets)
- -----------------------------------------------------------------
<Table>
Microsoft (United States) 2.2%
- ---------------------------------------------------------
Nestle (Switzerland) 2.2%
- ---------------------------------------------------------
IBM (United States) 1.9%
- ---------------------------------------------------------
Google Cl A (United States) 1.8%
- ---------------------------------------------------------
Roche Holding (Switzerland) 1.7%
- ---------------------------------------------------------
Exxon Mobil (United States) 1.7%
- ---------------------------------------------------------
Johnson & Johnson (United States) 1.6%
- ---------------------------------------------------------
PepsiCo (United States) 1.6%
- ---------------------------------------------------------
Petroleo Brasileiro ADR (Brazil) 1.5%
- ---------------------------------------------------------
Devon Energy (United States) 1.5%
- ---------------------------------------------------------
</Table>
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
In the consumer discretionary sector, stock selection detracted from return.
Within the sector, retail stocks were a particularly weak segment and the Fund
had a larger allocation than the MSCI Index. South African retailer Massmart was
a notable detractor. The company was negatively affected by economic turmoil and
political uncertainty in South Africa, as well as the weakening of the Rand,
South Africa's currency.
On the positive side, the Fund's energy holdings favorably affected performance.
Contributors included BG GROUP in the U.K. and PETROLEO BRASILEIRO in Brazil.
Both companies benefited from news of a significant oil find in a field off the
coast of Brazil. Another U.K. contributor, TULLOW OIL, announced a potentially
large oil find in Ghana.
Health care positioning was beneficial, primarily due to a larger weighting than
the MSCI Index, while a smaller-than-benchmark weighting in financials proved to
be also advantageous. During the period, we moved the Fund's financial weighting
closer to that of the MSCI Index, but maintained an underweight.
The Fund had meaningfully larger positions in Asia and Latin America relative to
the MSCI Index and a smaller position in the United States. As concern about the
economic situation took center stage, investors moved away from riskier
investments, and areas that had previously performed well suffered from profit-
taking. Asian markets declined sharply, while the United States, where many of
the economic concerns originated, performed well due to investors' belief in its
stability and defensive nature. Consequently, the Fund's overweight in Asia and
underweight in the United States detracted.
Positioning in the U.K. was advantageous, as the Fund benefited from investors'
preference for lower risk investments, including oil stocks. Holdings of
financial and insurance stocks within the U.K. also had a favorable impact. The
Fund began the period underweight in U.K. equities, but ended the period with a
larger position than the MSCI Index. Positioning in Latin America was a
significant contributor to return. The Fund had a larger weighting in Latin
America than the MSCI Index throughout the period. We believe there are stronger
fundamental drivers in Latin America than in other regions.
Additional individual contributors to return included NESTLE, a well run food
company with strong global brands, and HIGH TECH COMPUTER, an Asian technology
company. In a period when higher costs could have hampered earnings results,
Nestle stood out due to effective cost controls. HIGH TECH COMPUTER has a
particularly strong and well-received new product pipeline.
Detractors included AGILE PROPERTY HOLDINGS, CHINA GRAND FORESTRY RESOURCES
GROUP, WELLPOINT and BEAR STEARNS. Given the reversal in the Asian equity
markets, property stocks such as AGILE PROPERTY performed poorly. Forestry,
- --------------------------------------------------------------------------------
8 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
WE BELIEVE THERE ARE STRONGER FUNDAMENTAL DRIVERS IN LATIN AMERICA THAN IN OTHER
REGIONS.
paper and pulp company CHINA GRAND FORESTRY
RESOURCES had previously performed very well,
leaving it vulnerable to profit-taking. U.S. health
provider WELLPOINT reported only marginally
disappointing earnings figures, but the news
elicited a sharp response from investors. We
eliminated WELLPOINT from the Fund's portfolio. The
Federal Reserve brokered a deal for JP Morgan to
acquire cash-strapped investment bank BEAR STEARNS.
Though we sold BEAR STEARNS before the very end of
the period, it still had a negative impact.
CHANGES TO THE FUND'S PORTFOLIO
Over the course of the six months, we positioned the
Fund more defensively. Initially, the Fund was very
underweight in large-cap stocks and favored emerging
markets and growth-oriented sectors. By the end of
the period, the Fund had a more substantial
weighting in large-cap stocks than the MSCI Index.
As part of the strategy shift, we increased the
Fund's holdings in the U.K., moving from an
underweight to an overweight relative to the MSCI
Index. We reduced holdings in Asia, moving from a
weighting larger than the MSCI Index, to one similar
to that of the benchmark.
We increased the Fund's holdings in Japan.
Previously, the Fund's exposure was smaller than the
MSCI Index, but we moved to a neutral weighting. We
have begun to see individual opportunities in Japan,
and since the Japanese market performed so poorly
leading up to 2008, we feel a reversal is possible.
We added to the U.S. allocation, but kept it smaller
than that of the MSCI Index. Given our continued
confidence in the fundamentals driving Latin
American markets, we increased the Fund's holdings
there.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 9
MANAGER COMMENTARY (continued) -------------------------------------------------
We took profits in the materials sector, reducing the Fund's overweight relative
to the MSCI Index. We moved the Fund's consumer discretionary position from an
overweight to a weighting similar to the benchmark. The Fund had a substantial
underweight in financial stocks, which we moved to a small underweight.
OUR FUTURE STRATEGY
We believe the credit crisis will continue to unfold and are concerned that the
worst is not yet over. We doubt that consumers - who have so far continued to
spend - can escape the current squeeze on credit. Therefore, we expect continued
pressure on consumer spending and on companies that depend on consumers.
Though we anticipate economic slowing in developed countries, we remain positive
on emerging markets and the Pacific region, where we believe domestic demand
dynamics can offset sluggishness in export markets such as the United States. We
think China will continue its massive infrastructure spending, which will
trickle through to the domestic economy.
Our outlook for commodity-related stocks, including energy and metals, remains
positive, partly due to demand from China, India and Latin America. We would
have expected to see commodity demand falling as prices have risen, but that has
not been evident. Declines in gasoline sales in the United States and U.K. have
been more than offset by continued growth in China, India, Russia and Latin
America. Even more telling, there has been virtually no growth in production of
commodities such as oil, coal, copper, iron ore or gold over the last five
years, and we see little indication that supplies will increase measurably over
the next five years. As long as domestic demand in emerging markets holds, it
seems unlikely to us that commodity prices will fall with no excess capacity to
be tapped and no visible supply growth.
- --------------------------------------------------------------------------------
10 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
We still see equities as offering good value. In our view, stocks were already
inexpensively valued before the sell-off during the six-month period. Though we
think there may be some downward earning revisions, we do not think they will be
as large as prices currently seem to forecast. At this point, we find equity
valuations extremely compelling.
<Table>
(PHOTO - DOMINIC ROSSI) (PHOTO - STEPHEN THORNBER)
Dominic Rossi Stephen Thornber
Portfolio Manager Portfolio Manager
</Table>
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource fund.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 11
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments; and (2) ongoing
costs, which may include management fees; distribution and service (12b-1) fees;
and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the expenses of the funds in which it invests (also
referred to as "acquired funds"), including affiliated and non-affiliated pooled
investment vehicles (including mutual funds and exchange traded funds). The
Fund's indirect expense from investing in the acquired funds is based on the
Fund's pro rata portion of the cumulative expenses charged by the acquired funds
using the acquired funds' expense ratio as of the most recent shareholder
report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended April 30, 2008.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Expenses paid during the period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
12 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
NOV. 1, 2007 APRIL 30, 2008 THE PERIOD(A) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 881.00 $ 6.97 1.49%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,017.45 $ 7.47 1.49%
- -------------------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 876.90 $10.50 2.25%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,013.67 $11.27 2.25%
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 877.90 $10.51 2.25%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,013.67 $11.27 2.25%
- -------------------------------------------------------------------------------------------
Class R2
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 881.90 $ 8.61 1.84%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,015.71 $ 9.22 1.84%
- -------------------------------------------------------------------------------------------
Class R3
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 882.10 $ 7.49 1.60%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,016.91 $ 8.02 1.60%
- -------------------------------------------------------------------------------------------
Class R4
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 881.20 $ 6.27 1.34%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,018.20 $ 6.72 1.34%
- -------------------------------------------------------------------------------------------
Class R5
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 881.90 $ 5.10 1.09%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,019.44 $ 5.47 1.09%
- -------------------------------------------------------------------------------------------
Class W
- -------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 880.60 $ 6.92 1.48%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before
expenses) $1,000 $1,017.50 $ 7.42 1.48%
- -------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the Fund's annualized expense ratio as indicated
above, multiplied by the average account value over the period, multiplied
by 182/366 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended April 30, 2008: -11.90%
for Class A, -12.31% for Class B, -12.21% for Class C, -11.81% for Class
R2, -11.79% for Class R3, -11.88% for Class R4, -11.81% for Class R5 and
-11.94% for Class W.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 13
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
APRIL 30, 2008 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (98.2%)(c)
ISSUER SHARES VALUE(A)
AUSTRALIA (2.2%)
Boart Longyear Group 1,018,360 $1,811,151
CSL 252,566 9,481,803
Oxiana 1,810,470 5,602,827
---------------
Total 16,895,781
- ------------------------------------------------------------------------------------
BERMUDA (1.0%)
PartnerRe 99,529 7,363,155
- ------------------------------------------------------------------------------------
BRAZIL (5.2%)
Aracruz Celulose ADR 52,008 4,191,844
Braskem Series A 1,101,800 9,382,241
Cia Vale do Rio Doce ADR 242,910 7,734,254
Cyrela Brazil Realty 393,100 6,517,365
Petroleo Brasileiro ADR 93,651 11,371,104
---------------
Total 39,196,808
- ------------------------------------------------------------------------------------
CANADA (1.7%)
Barrick Gold 151,249 5,841,236
Eastern Platinum 1,091,100(b) 3,142,195
Research In Motion 34,540(b) 4,201,100
---------------
Total 13,184,531
- ------------------------------------------------------------------------------------
DENMARK (0.4%)
Vestas Wind Systems 30,400(b) 3,333,250
- ------------------------------------------------------------------------------------
FINLAND (0.8%)
Nokia 203,305 6,259,924
- ------------------------------------------------------------------------------------
GERMANY (5.6%)
Allianz 44,810 9,160,690
Daimler 19,809 1,544,323
Deutsche Boerse 46,194 6,795,834
E.ON 37,158(d) 7,583,597
MTU Aero Engines Holding 104,594 4,814,468
Munich Re Group 21,727 4,206,642
RWE 36,846 4,253,867
Siemens 34,250 4,041,328
---------------
Total 42,400,749
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
GREECE (0.5%)
Piraeus Bank 120,000 $4,092,116
- ------------------------------------------------------------------------------------
HONG KONG (4.1%)
China Mobile 351,500 6,048,369
China Overseas Land & Investment 2,198,000 4,625,468
Esprit Holdings 591,900 7,283,684
Great Eagle Holdings 1,424,607 4,103,889
Hang Lung Properties 1,033,000 4,201,881
Hongkong & Shanghai Hotels 2,548,000 4,368,075
---------------
Total 30,631,366
- ------------------------------------------------------------------------------------
INDIA (1.3%)
Bharti Airtel 303,173(b) 6,719,101
DLF 175,461 3,052,710
---------------
Total 9,771,811
- ------------------------------------------------------------------------------------
IRELAND (0.5%)
Bank of Ireland 262,201 3,664,135
- ------------------------------------------------------------------------------------
JAPAN (9.2%)
AMADA 707,000 5,875,233
Asahi Glass 361,000 4,302,001
Canon 222,800 11,143,214
Chiba Bank 412,000 3,245,437
GOLDCREST 308,020 8,887,756
Mitsubishi Estate 382,000 11,095,893
Mitsubishi UFJ Financial Group 260,700 2,868,527
Mizuho Financial Group 999 5,188,613
Nintendo 7,600 4,173,896
Sony Financial Holdings 1,500 6,333,558
Trend Micro 147,000 5,528,230
---------------
Total 68,642,358
- ------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
14 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MEXICO (1.8%)
America Movil ADR Series L 148,208 $8,590,135
CEMEX ADR 186,902(b) 5,167,840
---------------
Total 13,757,975
- ------------------------------------------------------------------------------------
NETHERLANDS (0.7%)
ASML Holding 196,899 5,635,339
- ------------------------------------------------------------------------------------
PORTUGAL (1.0%)
Galp Energia Series B 301,512 7,325,348
- ------------------------------------------------------------------------------------
RUSSIA (0.8%)
Gazprom ADR 118,670 6,283,577
- ------------------------------------------------------------------------------------
SINGAPORE (1.0%)
DBS Group Holdings 529,000 7,747,743
- ------------------------------------------------------------------------------------
SOUTH AFRICA (1.1%)
First Uranium 625,000(b) 4,071,500
Massmart Holdings 459,574 4,302,501
---------------
Total 8,374,001
- ------------------------------------------------------------------------------------
SOUTH KOREA (0.4%)
Hyundai Department Store 32,000 3,385,230
- ------------------------------------------------------------------------------------
SPAIN (1.1%)
Inditex 150,000 8,192,664
- ------------------------------------------------------------------------------------
SWEDEN (0.2%)
Holmen Series B 54,400 1,745,105
- ------------------------------------------------------------------------------------
SWITZERLAND (8.1%)
Nestle 34,043 16,333,016
Novartis 73,682 3,748,471
Petroplus Holdings 104,424(b) 6,537,211
Roche Holding 78,300 13,061,338
Sika 2,040 3,544,744
Syngenta 29,351 8,769,316
Xstrata 113,931 8,938,376
---------------
Total 60,932,472
- ------------------------------------------------------------------------------------
TAIWAN (1.9%)
Asustek Computer 1,763,000 5,717,525
High Tech Computer 137,500 3,543,000
Hon Hai Precision Industry 908,370 5,262,672
---------------
Total 14,523,197
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
UNITED KINGDOM (11.4%)
Anglo American 76,072 $4,944,238
Autonomy 168,171(b) 2,863,770
BG Group 372,092 9,106,847
Carphone Warehouse Group 1,020,227 5,512,213
Drax Group 247,726 2,965,021
HSBC Holdings 400,927 7,010,691
Intl Power 637,047 5,563,433
Lloyds TSB Group 1,253,509 10,778,870
Prudential 605,562 8,307,443
Standard Chartered 184,753 6,589,820
Tesco 547,994 4,674,043
Tullow Oil 632,070 9,475,370
Vodafone Group 2,498,637 7,963,360
---------------
Total 85,755,119
- ------------------------------------------------------------------------------------
UNITED STATES (36.2%)
Abercrombie & Fitch Cl A 39,950 2,968,685
Adobe Systems 164,158(b) 6,121,452
American Express 111,457 5,352,165
American Intl Group 52,288 2,415,706
Arch Coal 95,587 5,482,870
AT&T 210,958 8,166,184
Automatic Data Processing 160,513 7,094,675
Bank of America 109,559 4,112,845
Cisco Systems 292,428(b) 7,497,854
Comcast Cl A 459,022 9,432,902
Devon Energy 98,611 11,182,487
Diamond Offshore Drilling 47,842 5,999,866
DST Systems 53,487(b) 3,200,662
eBay 68,235(b) 2,135,073
Expedia 71,728(b) 1,811,849
Exxon Mobil 135,343 12,596,374
Freeport-McMoRan Copper & Gold 55,969 6,366,475
Gilead Sciences 150,991(b) 7,815,294
Goldman Sachs Group 32,606 6,239,810
Google Cl A 23,662(b) 13,588,850
IBM 115,713 13,966,559
Johnson & Johnson 184,878 12,403,465
JPMorgan Chase & Co 133,333 6,353,317
Laboratory Corp of America Holdings 49,844(b) 3,769,203
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 15
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
UNITED STATES (CONT.)
Macy's 211,909 $5,359,178
Merck & Co 80,417 3,059,063
Microsoft 584,936 16,682,374
Newmont Mining 78,548 3,472,607
Norfolk Southern 78,893 4,700,445
Oracle 255,638(b) 5,330,052
PepsiCo 180,936 12,399,544
Philip Morris Intl 116,017(b) 5,920,348
Plum Creek Timber 185,993 7,595,954
Procter & Gamble 110,000 7,375,500
Republic Services 161,173 5,123,690
Schlumberger 21,217 2,133,369
St. Jude Medical 152,190(b) 6,662,878
Thermo Fisher Scientific 138,839(b) 8,034,613
Travelers Companies 90,000 4,536,000
Wal-Mart Stores 145,096 8,412,666
---------------
Total 272,872,903
- ------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $689,913,434) $741,966,657
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (1.7%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund, 2.72% 12,881,046(f) $12,881,046
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $12,881,046) $12,881,046
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $702,794,480)(g) $754,847,703
===================================================================================
</Table>
SUMMARY OF INVESTMENTS IN SECURITIES BY INDUSTRY
The following table represents the portfolio investments of the Fund by industry
classifications as a percentage of net assets at April 30, 2008:
<Table>
<Caption>
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE
- -----------------------------------------------------------------------------------------
Aerospace & Defense 0.6% $4,814,468
Automobiles 0.2 1,544,323
Beverages 1.6 12,399,544
Biotechnology 2.3 17,297,097
Building Products 0.6 4,302,001
Capital Markets 0.8 6,239,810
Chemicals 2.9 21,696,301
Commercial Banks 6.8 51,185,952
Commercial Services & Supplies 0.7 5,123,690
Communications Equipment 2.4 17,958,878
Computers & Peripherals 3.1 23,227,084
Construction & Engineering 0.2 1,811,151
Construction Materials 0.7 5,167,840
Consumer Finance 0.7 5,352,165
Diversified Financial Services 2.3 17,261,996
Diversified Telecommunication Services 1.1 8,166,184
Electric Utilities 1.0 7,583,597
Electrical Equipment 0.4 3,333,250
Electronic Equipment & Instruments 0.7 5,262,672
Energy Equipment & Services 1.1 8,133,235
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
16 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
<Table>
<Caption>
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE
- -----------------------------------------------------------------------------------------
Food & Staples Retailing 2.3% $17,389,210
Food Products 2.2 16,333,016
Health Care Equipment & Supplies 0.9 6,662,878
Health Care Providers & Services 0.5 3,769,203
Hotels, Restaurants & Leisure 0.6 4,368,075
Household Durables 2.0 15,405,121
Household Products 1.0 7,375,500
Independent Power Producers & Energy Traders 1.1 8,528,454
Industrial Conglomerates 0.5 4,041,328
Insurance 5.6 42,323,194
Internet & Catalog Retail 0.2 1,811,849
Internet Software & Services 2.1 15,723,923
IT Services 1.4 10,295,337
Life Sciences Tools & Services 1.1 8,034,613
Machinery 0.8 5,875,233
Media 1.2 9,432,902
Metals & Mining 6.6 50,113,708
Multiline Retail 1.2 8,744,408
Multi-Utilities 0.6 4,253,867
Office Electronics 1.5 11,143,214
Oil, Gas & Consumable Fuels 10.5 79,361,188
Paper & Forest Products 0.8 5,936,949
Pharmaceuticals 4.3 32,272,337
Real Estate Investment Trusts (REITs) 1.0 7,595,954
Real Estate Management & Development 3.6 27,079,841
Road & Rail 0.6 4,700,445
Semiconductors & Semiconductor Equipment 0.7 5,635,339
Software 5.4 40,699,774
Specialty Retail 3.2 23,957,246
Tobacco 0.8 5,920,348
Wireless Telecommunication Services 3.9 29,320,965
Other(1) 1.7 12,881,046
- -----------------------------------------------------------------------------------------
Total $754,847,703
- -----------------------------------------------------------------------------------------
(1) Cash & Cash Equivalents.
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(d) At April 30, 2008, security was partially or fully on loan. See Note 5 to
the financial statements.
(e) Cash collateral received from security lending activity is invested in an
affiliated money market fund and represents 1.0% of net assets. See Note 5
to the financial statements. The Fund's cash equivalent position is 0.7% of
net assets.
(f) Affiliated Money Market Fund - See Note 6 to the financial statements. The
rate shown is the seven-day current annualized yield at April 30, 2008.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 17
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(g) At April 30, 2008, the cost of securities for federal income tax purposes
was approximately $702,794,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $83,136,000
Unrealized depreciation (31,082,000)
- ------------------------------------------------------------------------------
Net unrealized appreciation $52,054,000
- ------------------------------------------------------------------------------
</Table>
The Global Industry Classification Standard (GICS) was developed by and is the
exclusive property of Morgan Stanley Capital International Inc. and Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as disclosed in its
annual and semiannual shareholder reports and in its filings on Form N-Q,
can be found at riversource.com/funds.
- --------------------------------------------------------------------------------
18 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
FINANCIAL STATEMENTS -----------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2008 (UNAUDITED)
<Table>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $689,913,434) $ 741,966,657
Affiliated money market fund (identified cost
$12,881,046) 12,881,046
- ------------------------------------------------------------------------------
Total investments in securities (identified cost
$702,794,480) 754,847,703
Cash 94,111
Foreign currency holdings (identified cost $5,638,388) 5,670,873
Capital shares receivable 711,613
Dividends receivable 2,376,775
Receivable for investment securities sold 2,412,383
- ------------------------------------------------------------------------------
Total assets 766,113,458
- ------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 495,383
Payable for investment securities purchased 2,191,765
Payable upon return of securities loaned 7,344,750
Accrued investment management services fee 15,879
Accrued distribution fee 7,122
Accrued transfer agency fee 3,143
Accrued administrative services fee 1,605
Accrued plan administration services fee 59
Other accrued expenses 145,400
- ------------------------------------------------------------------------------
Total liabilities 10,205,106
- ------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 755,908,352
==============================================================================
</Table>
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 19
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
APRIL 30, 2008 (UNAUDITED)
<Table>
REPRESENTED BY
Capital stock -- $.01 par value $ 904,765
Additional paid-in capital 1,040,051,224
Undistributed net investment income 1,282,815
Accumulated net realized gain (loss) (338,494,426)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies 52,163,974
- ------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $ 755,908,352
==============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $ 645,891,505
Class B $ 93,237,899
Class C $ 8,085,577
Class R2 $ 5,362
Class R3 $ 5,369
Class R4 $ 8,671,856
Class R5 $ 5,374
Class W $ 5,410
Net asset value per share of outstanding
capital stock: Class A 76,641,089 $ 8.43
shares(1)
Class B shares 11,780,941 $ 7.91
Class C shares 1,031,700 $ 7.84
Class R2 shares 634 $ 8.46
Class R3 shares 634 $ 8.47
Class R4 shares 1,020,194 $ 8.50
Class R5 shares 634 $ 8.48
Class W shares 639 $ 8.47
- -------------------------------------------------------------------------------------------
* Including securities on loan, at value $ 7,143,150
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $8.94. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
20 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2008 (UNAUDITED)
<Table>
INVESTMENT INCOME
Income:
Dividends $ 7,817,510
Interest 7,507
Income distributions from affiliated money market fund 168,093
Fee income from securities lending 36,042
Less foreign taxes withheld (461,645)
- -----------------------------------------------------------------------------
Total income 7,567,507
- -----------------------------------------------------------------------------
Expenses:
Investment management services fee 3,311,655
Distribution fee
Class A 808,809
Class B 461,256
Class C 37,833
Class R2 13
Class R3 7
Class W 7
Transfer agency fee
Class A 654,511
Class B 99,410
Class C 7,882
Class R2 2
Class R3 2
Class R4 2,224
Class R5 2
Class W 5
Administrative services fee 295,861
Plan administration services fee
Class R2 7
Class R3 7
Class R4 11,118
Compensation of board members 7,957
Custodian fees 122,780
Printing and postage 86,260
Registration fees 60,550
Professional fees 18,440
Other 12,832
- -----------------------------------------------------------------------------
Total expenses 5,999,430
Expenses waived/reimbursed by the Investment Manager and
its affiliates (955)
Earnings and bank fee credits on cash balances (12,653)
- -----------------------------------------------------------------------------
Total net expenses 5,985,822
- -----------------------------------------------------------------------------
Investment income (loss) -- net 1,581,685
- -----------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 21
STATEMENT OF OPERATIONS (CONTINUED)
SIX MONTHS ENDED APRIL 30, 2008 (UNAUDITED)
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $ 6,547,457
Foreign currency transactions (19,614)
- -----------------------------------------------------------------------------
Net realized gain (loss) on investments 6,527,843
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies (111,715,297)
- -----------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (105,187,454)
- -----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $(103,605,769)
=============================================================================
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
22 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2008 OCT. 31, 2007
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 1,581,685 $ 1,375,121
Net realized gain (loss) on investments 6,527,843 130,447,745
Net change in unrealized appreciation
(depreciation) on investments and on
translation of assets and liabilities in
foreign currencies (111,715,297) 67,887,744
- ------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations (103,605,769) 199,710,610
- ------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (2,895,413) (5,052,007)
Class B -- (46,137)
Class C -- (24,579)
Class R2 (16) (60)
Class R3 (28) (61)
Class R4 (51,464) (77,098)
Class R5 (43) (61)
Class W (24) (61)
- ------------------------------------------------------------------------------------------
Total distributions (2,946,988) (5,200,064)
- ------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A 64,976,232 103,394,162
Class B 13,513,665 16,189,120
Class C 1,557,420 2,137,681
Class R2 -- 5,000
Class R3 -- 5,000
Class R4 1,488,296 2,445,834
Class R5 -- 5,000
Class W -- 5,000
Reinvestment of distributions at net asset value
Class A 2,842,401 4,972,629
Class B -- 45,360
Class C -- 23,936
Class R4 51,464 77,098
Payments for redemptions
Class A (67,274,329) (141,986,972)
Class B (11,351,706) (50,692,015)
Class C (696,292) (1,286,730)
Class R4 (1,451,700) (4,449,426)
- ------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
share transactions 3,655,451 (69,109,323)
- ------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (102,897,306) 125,401,223
Net assets at beginning of period 858,805,658 733,404,435
- ------------------------------------------------------------------------------------------
Net assets at the end of period $ 755,908,352 $ 858,805,658
==========================================================================================
Undistributed net investment income $ 1,282,815 $ 2,648,118
- ------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 23
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS TO APRIL 30, 2008)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Threadneedle Global Equity Fund (the Fund) (formerly RiverSource Global Equity
Fund) is a series of RiverSource Global Series, Inc. and is registered under the
Investment Company Act of 1940 (as amended) as a diversified, open-end
management investment company. RiverSource Global Series, Inc. has 10 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the Board of Directors (the Board). Under normal market
conditions, at least 80% of the Fund's net assets will be invested in equity
securities, including companies located in developed and emerging countries.
The Fund offers Class A, Class B, Class C, Class R2, Class R3, Class R4, Class
R5 and Class W shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class R2, Class R3, Class R4 and Class R5 shares are sold without a front-end
sales charge or CDSC and are offered to qualifying institutional investors.
- - Class W shares are sold without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts.
At April 30, 2008, RiverSource Investments, LLC (the Investment Manager) owned
100% of Class R2, Class R3, Class R5 and Class W shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ 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.
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
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
- --------------------------------------------------------------------------------
24 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
the last quoted sales price. Debt securities are generally traded in the
over-the-counter market and are valued at a price that reflects fair value as
quoted by dealers in these securities or by an independent pricing service.
Foreign securities are valued based on quotations from the principal market in
which such securities are normally traded. The procedures adopted by the Board
generally contemplate the use of fair valuation in the event that price
quotations or valuations are not readily available, price quotations or
valuations from other sources are not reflective of market value and thus deemed
unreliable, or a significant event has occurred in relation to a security or
class of securities (such as foreign securities) that is not reflected in price
quotations or valuations from other sources. A fair value price is a good faith
estimate of the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the New York Stock Exchange and therefore the closing prices for securities
in such markets or on such exchanges may not fully reflect events that occur
after such close but before the close of the New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial, Inc. (Ameriprise
Financial), parent company of the Investment Manager, as administrator to the
Fund, will fair value foreign equity securities pursuant to procedures adopted
by the Board, including utilizing a third party pricing service to determine
these fair values. These procedures take into account multiple factors,
including movements in the U.S. securities markets, to determine a good faith
estimate that reasonably reflects the current market conditions as of the close
of the New York Stock Exchange.
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
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the Fund may buy and write options traded on any
U.S. or foreign exchange or in the over-the-counter market where completing the
obligation depends upon the credit standing of the other party. Cash collateral
may be collected by the Fund to secure certain over-the-counter options trades.
Cash collateral held by the Fund for such option trades must be returned to the
counterparty upon closure, exercise or expiration of the contract. The Fund also
may buy and sell put and call options and write covered call options on
portfolio securities as well as write cash-secured put options. The risk in
writing a call option is that the Fund gives up the opportunity for profit if
the market price of the security increases. The risk in writing a put option is
that the Fund 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 Fund pays a
premium whether or not the option
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 25
is exercised. The Fund also has the additional risk of being unable 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 Fund will
realize a gain or loss when the option transaction expires or closes. 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. During
the six months ended April 30, 2008, the Fund had no outstanding option
contracts.
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund also may buy and write put and call options on these future contracts.
Risks of entering into futures contracts and related options include the
possibility of 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.
Futures are valued daily based upon the last sale price at the close of market
on the principal exchange on which they are traded. Upon entering into a futures
contract, the Fund 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 Fund 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 Fund recognizes a realized
gain or loss when the contract is closed or expires. At April 30, 2008, the Fund
had no outstanding futures contracts.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. 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, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes. At April 30, 2008, foreign currency holdings consisted of
multiple denominations.
The Fund may enter into forward foreign currency 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 Fund and the resulting unrealized appreciation or depreciation are
determined
- --------------------------------------------------------------------------------
26 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
using foreign currency exchange rates from an independent pricing service. The
Fund is subject to the credit risk that the other party will not complete its
contract obligations. At April 30, 2008, the Fund had no outstanding forward
foreign currency contracts.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income to the shareholders. No provision for income or excise
taxes is thus required.
The Fund has adopted Financial Accounting Standards Board (FASB) Interpretation
48 (FIN 48), "Accounting for Uncertainty in Income Taxes," which is effective
for fiscal periods beginning after Dec. 15, 2006. FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in accordance with FASB
Statement 109, "Accounting for Income Taxes." FIN 48 prescribes a two-step
process to recognize and measure a tax position taken or expected to be taken in
a tax return. The first step is to determine whether a tax position has met the
more-likely-than-not recognition threshold and the second step is to measure a
tax position that meets the threshold to determine the amount of benefit to
recognize. FIN 48 also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and
transition. Management of the Fund has concluded that there are no significant
uncertain tax positions that would require recognition in the financial
statements. Generally, the tax authorities can examine all the tax returns filed
for the last three years.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred 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.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 27
RECENT ACCOUNTING PRONOUNCEMENTS
In March 2008, the FASB issued Statement on Financial Accounting Standards No.
161 (SFAS "161"), "Disclosures about Derivative Instruments and Hedging
Activities - an amendment of FASB Statement No. 133," which requires enhanced
disclosures about a fund's derivative and hedging activities. Funds are required
to provide enhanced disclosures about (a) how and why a fund uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect a fund's financial
position, financial performance, and cash flows. SFAS 161 is effective for
financial statements issued for fiscal years and interim periods beginning after
Nov. 15, 2008. As of April 30, 2008, management does not believe the adoption of
SFAS 161 will impact the financial statement amounts; however, additional
footnote disclosures may be required about the use of derivative instruments and
hedging items.
On Sept. 20, 2006, the FASB released Statement of Financial Accounting Standards
No. 157 "Fair Value Measurements" (SFAS 157). SFAS 157 establishes an
authoritative definition of fair value, sets out a hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported in
the Statement of Operations for a fiscal period. The application of SFAS 157
will be effective for the Fund's fiscal year beginning Nov. 1, 2008. The
adoption of SFAS 157 is not anticipated to have a material impact on the Fund's
financial statements; however, additional disclosures will be required about the
inputs used to develop the measurements of fair value and the effect of certain
measurements reported in the Statement of Operations for a fiscal period.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, 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.
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. Interest
income, including amortization of premium, market discount and original issue
discount using the effective interest method, is accrued daily.
2. EXPENSES AND SALES CHARGES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets that declines from 0.80%
to
- --------------------------------------------------------------------------------
28 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
0.57% annually as the Fund's assets increase. The fee may be adjusted upward or
downward by a performance incentive adjustment determined monthly by measuring
the percentage difference over a rolling 12-month period between the annualized
performance of one Class A share of the Fund and the annualized performance of
the Lipper Global Funds Index. In certain circumstances, the Board may approve a
change in the index. The maximum adjustment is 0.12% per year. If the
performance difference is less than 0.50%, the adjustment will be zero. The
adjustment increased the fee by $386,870 for the six months ended April 30,
2008. The management fee for the six months ended April 30, 2008 was 0.88% of
the Fund's average daily net assets, including an adjustment under the terms of
the performance incentive arrangement.
The Investment Manager has a Subadvisory Agreement with Threadneedle
International Limited (Threadneedle), an affiliate of the Investment Manager and
an indirect wholly-owned subsidiary of Ameriprise Financial, to subadvise the
assets of the Fund. The Investment Manager contracts with and compensates
Threadneedle to manage the investment of the Fund's assets.
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial a
fee for administration and accounting services at a percentage of the Fund's
average daily net assets that declines from 0.08% to 0.05% annually as the
Fund's assets increase. The fee for the six months ended April 30, 2008 was
0.08% of the Fund's average daily net assets.
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended
April 30, 2008, other expenses paid to this company were $2,529.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of a former Board Chair's
compensation, including health benefits and payment of certain other expenses,
are included under other expenses.
Under a Deferred Compensation Plan (the Plan), non-interested board members may
defer receipt of their compensation. Deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of the Fund or other
RiverSource funds. The Fund's liability for these amounts is adjusted for market
value changes and remains in the Fund until distributed in accordance with the
Plan.
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual account-based fee at a rate equal to $19.50 for Class A,
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 29
$20.50 for Class B and $20.00 for Class C for this service. The Fund also pays
the Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's
average daily net assets attributable to Class R2, Class R3, Class R4 and Class
R5 shares and an annual asset-based fee at a rate of 0.20% of the Fund's average
daily net assets attributable to Class W shares.
The Transfer Agent charges an annual fee of $5 per inactive account, charged on
a pro rata basis for 12 months from the date the account becomes inactive. These
fees are included in the transfer agency fees on the Statement of Operations.
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund pays a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A, Class
R3 and Class W shares, a fee at an annual rate of up to 0.50% of the Fund's
average daily net assets attributable to Class R2 shares and a fee at an annual
rate of up to 1.00% of the Fund's average daily net assets attributable to Class
B and Class C shares.
Sales charges received by the Distributor for distributing Fund shares were
$455,305 for Class A, $23,865 for Class B and $497 for Class C for the six
months ended April 30, 2008.
In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in which
it invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). Because the acquired funds have varied expense and fee levels and
the Fund may own different proportions of acquired funds at different times, the
amount of fees and expenses incurred indirectly by the Fund will vary.
For the six months ended April 30, 2008, the Investment Manager and its
affiliates waived/reimbursed certain fees and expenses such that net expenses
(excluding fees and expenses of acquired funds) were 1.59% for Class R2, 1.34%
for Class R3 and 1.32% for Class R4. Of these waived/reimbursed fees and
expenses, the plan administration services fees were $7, $7 and $941 for Class
R2, Class R3 and Class R4, respectively. In addition, the Investment Manager and
its affiliates have contractually agreed to waive certain fees and expenses
until Oct. 31, 2008, such that net expenses (excluding fees and expenses of
acquired funds), before giving effect to any performance incentive adjustment,
will not exceed 1.27% of the Fund's average daily net assets for Class R4,
unless sooner terminated at the discretion of the Board.
- --------------------------------------------------------------------------------
30 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
During the six months ended April 30, 2008, the Fund's transfer agency fees were
reduced by $12,653 as a result of bank fee credits from overnight cash balances.
The Fund pays custodian fees to Ameriprise Trust Company, a subsidiary of
Ameriprise Financial.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $356,585,861 and $353,144,605, respectively, for the six
months ended April 30, 2008. Realized gains and losses are determined on an
identified cost basis.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
SIX MONTHS ENDED APRIL 30, 2008
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ---------------------------------------------------------------------------------------
Class A 7,685,857 328,601 (8,025,325) (10,867)
Class B 1,712,357 -- (1,440,701) 271,656
Class C 199,005 -- (90,132) 108,873
Class R4 174,907 5,909 (173,759) 7,057
- ---------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ---------------------------------------------------------------------------------------
Class A 12,264,903 636,700 (17,108,766) (4,207,163)
Class B 2,095,921 6,146 (6,192,934) (4,090,867)
Class C 276,396 3,279 (164,135) 115,540
Class R2* 634 -- -- 634
Class R3* 634 -- -- 634
Class R4 288,576 9,796 (531,402) (233,030)
Class R5* 634 -- -- 634
Class W** 639 -- -- 639
- ---------------------------------------------------------------------------------------
</Table>
* For the period from Dec. 11, 2006 (inception date) to Oct. 31, 2007.
** For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
5. LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, the Fund may lend securities
representing up to one-third of the value of its total assets (which includes
collateral for securities on loan) to broker-dealers, banks, or other
institutional borrowers of securities. The Fund receives collateral in the form
of cash and U.S. government securities, equal to at least 100% of the value of
securities loaned, which is marked
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 31
to the market value of the loaned securities daily until the securities are
returned, e.g., if the value of the securities on loan increases, additional
cash collateral is provided by the borrower. The Investment Manager serves as
securities lending agent for the Fund under the Investment Management Services
Agreement pursuant to which the Fund has agreed to reimburse the Investment
Manager for expenses incurred by it in connection with the lending program, and
pursuant to guidelines adopted by and under the oversight of the Board. At April
30, 2008, securities valued at $7,143,150 were on loan to brokers. For
collateral, the Fund received $7,344,750 in cash. Cash collateral received is
invested in an affiliated money market fund and short-term securities, including
U.S. government securities or other high-grade debt obligations, which are
included in the "Portfolio of Investments." Income from securities lending
amounted to $36,042 for the six months ended April 30, 2008. Expenses paid to
the Investment Manager were $455 for the six months ended April 30, 2008, which
are included in other expenses on the Statement of Operations. The risks to the
Fund of securities lending are that the borrower may not provide additional
collateral when required or return the securities when due.
6. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the RiverSource funds
and other institutional clients of RiverSource Investments. The cost of the
Fund's purchases and proceeds from sales of shares of the RiverSource Short-Term
Cash Fund aggregated $168,079,284 and $167,850,840, respectively, for the six
months ended April 30, 2008.
7. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
headed by JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund may borrow for the
temporary funding of shareholder redemptions or for other temporary or emergency
purposes. The credit facility agreement, which is a collective agreement between
the Fund and certain other RiverSource funds, severally and not jointly, permits
collective borrowings up to $500 million. Interest is charged to each Fund based
on its borrowings at a rate equal to the federal funds rate plus 0.30%. Each
borrowing under the credit facility matures no later than 60 days after the date
of borrowing. The Fund also pays a commitment fee equal to its pro rata share of
the amount of the credit facility at a rate of 0.06% per annum. The Fund had no
borrowings during the six months ended April 30, 2008.
- --------------------------------------------------------------------------------
32 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
8. CAPITAL LOSS CARRY-OVER
For federal income tax purposes, the Fund had a capital loss carry-over of
$344,634,903 at Oct. 31, 2007, that if not offset by capital gains will expire
as follows:
<Table>
<Caption>
2009 2010 2011
$170,490,067 $143,634,885 $30,509,951
</Table>
It is unlikely the Board will authorize a distribution of any net realized
capital gains until the available capital loss carry-over has been offset or
expires.
9. RISKS RELATING TO CERTAIN INVESTMENTS
FOREIGN/EMERGING MARKETS RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities. Investing in
emerging markets may accentuate these risks.
10. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc., was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company mutual funds and
they purport to bring the action derivatively on behalf of those funds under the
Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid
to the defendants by the funds for investment advisory and administrative
services are excessive. The plaintiffs seek remedies including restitution and
rescission of investment advisory and distribution agreements. The plaintiffs
voluntarily agreed to transfer this case to the United States District Court for
the District of Minnesota. In response to defendants' motion to dismiss the
complaint, the Court dismissed one of plaintiffs' four claims and granted
plaintiffs limited discovery. Defendants moved for summary judgment in April
2007. Summary judgment was granted in the defendants' favor on July 9, 2007. The
plaintiffs filed a notice of appeal with the Eighth Circuit Court of Appeals on
August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 33
censured and ordered to cease and desist from committing or causing any
violations of certain provisions of the Investment Advisers Act of 1940, the
Investment Company Act of 1940, and various Minnesota laws. AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to retain an independent distribution consultant to assist in developing
a plan for distribution of all disgorgement and civil penalties ordered by the
SEC in accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of Directors/
Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
34 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
11. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating the
Fund's results.
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(H) 2007 2006 2005 2004
Net asset value, beginning of
period $9.61 $7.52 $6.23 $5.16 $4.62
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .02(b) .02(b) .01 .02 --
Net gains (losses) (both
realized and unrealized) (1.16) 2.13 1.30 1.08 .54
- ----------------------------------------------------------------------------------------------------------------
Total from investment
operations (1.14) 2.15 1.31 1.10 .54
- ----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.04) (.06) (.02) (.03) --
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.43 $9.61 $7.52 $6.23 $5.16
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $646 $737 $608 $446 $364
- ----------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 1.49%(e) 1.39% 1.51% 1.57% 1.41%
- ----------------------------------------------------------------------------------------------------------------
Net investment income (loss) .52%(e) .28% .23% .33% .07%
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 100% 112% 93% 104%
- ----------------------------------------------------------------------------------------------------------------
Total return(f) (11.90%)(g) 28.82% 21.01% 21.48% 11.72%
- ----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 35
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(I) 2007 2006 2005 2004
Net asset value, beginning of
period $9.02 $7.06 $5.88 $4.87 $4.40
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) (.01)(b) (.04)(b) (.01) (.02) (.03)
Net gains (losses) (both
realized and unrealized) (1.10) 2.00 1.19 1.03 .50
- ----------------------------------------------------------------------------------------------------------------
Total from investment
operations (1.11) 1.96 1.18 1.01 .47
- ----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income -- .00(c) -- -- --
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.91 $9.02 $7.06 $5.88 $4.87
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $93 $104 $110 $102 $104
- ----------------------------------------------------------------------------------------------------------------
Total expenses(d),(e) 2.25%(f) 2.15% 2.28% 2.34% 2.18%
- ----------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.24%)(f) (.45%) (.54%) (.41%) (.66%)
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 100% 112% 93% 104%
- ----------------------------------------------------------------------------------------------------------------
Total return(g) (12.31%)(h) 27.81% 20.07% 20.74% 10.68%
- ----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Rounds to zero.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
(i) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
36 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(H) 2007 2006 2005 2004
Net asset value, beginning
of period $8.93 $7.02 $5.85 $4.85 $4.38
- --------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) (.01)(b) (.04)(b) (.01) (.02) (.02)
Net gains (losses) (both
realized and unrealized) (1.08) 1.98 1.18 1.03 .49
- --------------------------------------------------------------------------------------------------
Total from investment
operations (1.09) 1.94 1.17 1.01 .47
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- (.03) -- (.01) --
- --------------------------------------------------------------------------------------------------
Net asset value, end of
period $7.84 $8.93 $7.02 $5.85 $4.85
- --------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period
(in millions) $8 $8 $6 $2 $1
- --------------------------------------------------------------------------------------------------
Total expenses(c),(d) 2.25%(e) 2.15% 2.27% 2.33% 2.19%
- --------------------------------------------------------------------------------------------------
Net investment income (loss) (.22%)(e) (.48%) (.50%) (.53%) (.69%)
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 100% 112% 93% 104%
- --------------------------------------------------------------------------------------------------
Total return(f) (12.21%)(g) 27.76% 20.03% 20.89% 10.73%
- --------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 37
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(K) 2007(B)
Net asset value, beginning of
period $9.62 $7.89
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(c) .02 (.01)
Net gains (losses) (both
realized and unrealized) (1.16) 1.84
- ------------------------------------------------------------------------------------------------------
Total from investment
operations (1.14) 1.83
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.02) (.10)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of
period $8.46 $9.62
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- ------------------------------------------------------------------------------------------------------
Gross expenses prior to
expense
waiver/reimbursement(d),(e) 1.84%(f) 1.74%(f)
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement
(e),(g),(h) 1.59%(f) 1.74%(f)
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) .42%(f) (.13%)(f)
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 100%
- ------------------------------------------------------------------------------------------------------
Total return(i) (11.81%)(j) 23.41%(j)
- ------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11,2006 (inception date) to Oct. 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have waived/reimbursed certain
fees and expenses.
(h) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
38 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(K) 2007(B)
Net asset value, beginning of
period $9.65 $7.89
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(c) .03 .01
Net gains (losses) (both
realized and unrealized) (1.17) 1.85
- ------------------------------------------------------------------------------------------------------
Total from investment
operations (1.14) 1.86
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.04) (.10)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of
period $8.47 $9.65
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- ------------------------------------------------------------------------------------------------------
Gross expenses prior to
expense
waiver/reimbursement(d),(e) 1.60%(f) 1.49%(f)
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement
(e),(g),(h) 1.34%(f) 1.49%(f)
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) .66%(f) .12%(f)
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 100%
- ------------------------------------------------------------------------------------------------------
Total return(i) (11.79%)(j) 23.80%(j)
- ------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to Oct. 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have waived/reimbursed certain
fees and expenses.
(h) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 39
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(J) 2007 2006 2005 2004
Net asset value, beginning of
period $9.70 $7.60 $6.29 $5.20 $4.65
- ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) .03(b) .04(b) .02 .04 .01
Net gains (losses) (both
realized and unrealized) (1.18) 2.13 1.31 1.09 .54
- ----------------------------------------------------------------------------------------------------
Total from investment
operations (1.15) 2.17 1.33 1.13 .55
- ----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.05) (.07) (.02) (.04) --
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $8.50 $9.70 $7.60 $6.29 $5.20
- ----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $9 $10 $9 $6 $4
- ----------------------------------------------------------------------------------------------------
Gross expenses prior to
expense waiver/reimbursement
(c),(d) 1.34%(e) 1.23% 1.32% 1.38% 1.23%
- ----------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement
(d),(f),(g) 1.32%(e) 1.23% 1.32% 1.38% 1.23%
- ----------------------------------------------------------------------------------------------------
Net investment income (loss) .69%(e) .45% .44% .49% .25%
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 100% 112% 93% 104%
- ----------------------------------------------------------------------------------------------------
Total return(h) (11.88%)(i) 28.85% 21.26% 21.90% 11.88%
- ----------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratio.
(e) Adjusted to an annual basis.
(f) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(g) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
(j) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
40 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(I) 2007(B)
Net asset value, beginning of
period $9.69 $7.89
- --------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .04 .05
Net gains (losses) (both realized
and unrealized) (1.18) 1.85
- --------------------------------------------------------------------------------------------------------
Total from investment operations (1.14) 1.90
- --------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.07) (.10)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.48 $9.69
- --------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- --------------------------------------------------------------------------------------------------------
Total expenses (d),(e) 1.09%(f) .99%(f)
- --------------------------------------------------------------------------------------------------------
Net investment income (loss) .92%(f) .62%(f)
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 100%
- --------------------------------------------------------------------------------------------------------
Total return(g) (11.81%)(h) 24.33%(h)
- --------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to Oct. 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
(i) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 41
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2008(I) 2007(B)
Net asset value, beginning of
period $9.66 $7.83
- --------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .02 .02
Net gains (losses) (both realized
and unrealized) (1.17) 1.91
- --------------------------------------------------------------------------------------------------------
Total from investment operations (1.15) 1.93
- --------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.04) (.10)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.47 $9.66
- --------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- --------------------------------------------------------------------------------------------------------
Total expenses (d),(e) 1.48%(f) 1.39%(f)
- --------------------------------------------------------------------------------------------------------
Net investment income (loss) .92%(f) .20%(f)
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate 46% 100%
- --------------------------------------------------------------------------------------------------------
Total return(g) (11.94%)(h) 24.87%(h)
- --------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the six months ended April 30,
2008 were less than 0.01% of average net assets.
(e) In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Total return does not reflect payment of a sales charge.
(h) Not annualized.
(i) Six months ended April 30, 2008 (Unaudited).
- --------------------------------------------------------------------------------
42 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT ----------------------------------------------------------------------
RiverSource Investments, LLC ("RiverSource Investments" or the "investment
manager"), a wholly-owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise
Financial"), serves as the investment manager to the Fund. Under an investment
management services agreement (the "IMS Agreement") RiverSource Investments
provides investment advice and other services to the Fund and all RiverSource
funds (collectively, the "Funds"). In addition, under the subadvisory agreement
(the "Subadvisory Agreement") between RiverSource Investments and the subadviser
(the "Subadviser"), the Subadviser performs portfolio management and related
services for the Fund.
On an annual basis, the Fund's Board of Directors (the "Board"), including the
independent Board members (the "Independent Directors"), considers renewal of
the IMS Agreement and the Subadvisory Agreement (together, the "Advisory
Agreements"). RiverSource Investments prepared detailed reports for the Board
and its Contracts Committee in March and April 2008, including reports based on
data provided by independent organizations to assist the Board in making this
determination. In addition, throughout the year, the Board (or its committees)
reviews information prepared by RiverSource Investments addressing the services
RiverSource Investments provides and Fund performance. The Board accords
particular weight to the work, deliberations and conclusions of the Contracts,
Investment Review and Compliance Committees in determining whether to continue
the Advisory Agreements. At the April 9-10, 2008 in-person Board meeting,
independent legal counsel to the Independent Directors reviewed with the
Independent Directors various factors relevant to the Board's consideration of
advisory agreements and the Board's legal responsibilities related to such
consideration. Following an analysis and discussion of the factors identified
below, the Board, including all of the Independent Directors, approved renewal
of the Advisory Agreements.
Nature, Extent and Quality of Services Provided by RiverSource Investments and
the Subadviser: The Board analyzed various reports and presentations it had
received detailing the services performed by RiverSource Investments and the
Subadviser, as well as their expertise, resources and capabilities. The Board
specifically considered many developments during the past year concerning the
services provided by RiverSource Investments, including, in particular, the
continued investment in, and resources dedicated to, the Fund's operations,
particularly in the areas of trading systems, new product initiatives, legal and
compliance. Further, in connection with the Board's evaluation of the overall
package of services provided by RiverSource Investments, the Board considered
the quality of the administrative and transfer agency services provided by
RiverSource Investments' affiliates to the Fund. The Board also reviewed the
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 43
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT (continued) ----------------------------------------------------------
financial condition of RiverSource Investments (and its affiliates) and the
Subadviser, and each entity's ability to carry out its responsibilities under
the Advisory Agreements. The Board also discussed the acceptability of the terms
of the Advisory Agreements (including the relatively broad scope of services
required to be performed by RiverSource Investments and the Subadviser). The
Board concluded that the services being performed under the Advisory Agreements
were of a reasonably high quality, particularly in light of recent market
conditions.
Based on the foregoing, and based on other information received (both oral and
written, including the information on investment performance referenced below)
and other considerations, the Board concluded that RiverSource Investments, its
affiliates and the Subadviser were in a position to continue to provide a high
quality and level of services to the Fund.
Investment Performance: For purposes of evaluating the nature, extent and
quality of services provided under the Advisory Agreements, the Board carefully
reviewed the investment performance of the Fund. In this regard, the Board
considered: (i) detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index, the percentage ranking of the Fund among its
comparison group and the net assets of the Fund; and (ii) a report detailing the
Fund's performance over various periods (including since inception), recent Fund
inflows (and outflows) and a comparison of the Fund's net assets from December
2006 to December 2007. The Board observed that the Fund's investment performance
met expectations. Additionally, the Board reviewed the performance of the
Subadviser and considered management's rationale for recommending the continued
retention of the Subadviser.
Comparative Fees, Costs of Services Provided and the Profits Realized By
RiverSource Investments and its Affiliates from their Relationships with the
Fund: The Board reviewed comparative fees and the costs of services to be
provided under the Advisory Agreements. The Board members considered detailed
comparative information set forth in an annual report on fees and expenses,
including, among other things, data (prepared by an independent organization)
showing a comparison of the Fund's expenses with median expenses paid by funds
in its peer group, as well as data showing the Fund's contribution to
RiverSource Investments' profitability.
The Board accorded particular weight to the notion that the level of fees should
reflect a rational pricing model applied consistently across the various product
lines in the Funds' family, while assuring that the overall fees for each fund
are
- --------------------------------------------------------------------------------
44 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
generally in line with the "pricing philosophy" (i.e., that the total expense
ratio of each fund, with few exceptions, is at or below the median expense ratio
of funds in the same comparison group). The Board took into account that the
Fund's total expense ratio (after considering proposed expense caps/waivers) was
below the peer group's median expense ratio shown in the reports. The Board also
considered the Fund's performance incentive adjustment and noted its continued
appropriateness. Based on its review, the Board concluded that the Fund's
management fee was fair and reasonable in light of the extent and quality of
services that the Fund receives.
The Board also considered the expected profitability of RiverSource Investments
and its affiliates in connection with RiverSource Investments providing
investment management services to the Fund. In this regard, the Board referred
to a detailed profitability report, discussing the profitability to RiverSource
Investments and Ameriprise Financial from managing and operating the Fund,
including data showing comparative profitability over the past two years. The
Board also considered the services acquired by the investment manager through
the use of commission dollars paid by the Funds on portfolio transactions. The
Board noted that the fees paid by the Fund should permit the investment manager
to offer competitive compensation to its personnel, make necessary investments
in its business and earn an appropriate profit. The Board concluded that
profitability levels were reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by RiverSource Investments as the Fund grows and
took note of the extent to which Fund shareholders might also benefit from such
growth. The Board considered that the IMS Agreement provides for lower fees as
assets increase at pre-established breakpoints and concluded that the IMS
Agreement satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees and subadvisory fees were
fair and reasonable in light of the extent and quality of services provided. In
reaching this conclusion, no single factor was determinative. On April 10, 2008,
the Board, including all of the Independent Directors, approved the renewal of
the Advisory Agreements.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT 45
PROXY
VOTING ----------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling RiverSource Funds at (888) 791-3380; contacting your financial
institution; visiting riversource.com/funds; or searching the website of the
Securities and Exchange Commission (SEC) at http://www.sec.gov. Information
regarding how the Fund voted proxies relating to portfolio securities is filed
with the SEC by August 31 for the most recent 12-month period ending June 30 of
that year, and is available without charge by visiting riversource.com/funds; or
searching the website of the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
46 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 SEMIANNUAL REPORT
THREADNEEDLE GLOBAL EQUITY FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by
the Fund's current prospectus. Threadneedle(R)
mutual funds are distributed by RiverSource
Distributors, Inc., Member FINRA, managed by
RiverSource Investments, LLC, and subadvised by
Threadneedle International Limited. These
companies are part of Ameriprise Financial, Inc.
(THREADNEEDLE LOGO) (C) 2008 RiverSource Distributors, Inc. S-6451 W (6/08)
</Table>
Item 2. Code of Ethics. Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert. Not applicable for semi-annual
reports.
Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual
reports.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. The complete schedule of investments is included in Item 1 of this
Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not
applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers. Not applicable.
Item 10. Submission of matters to a vote of security holders. Not applicable.
Item 11. Controls and Procedures.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form N-CSR,
the registrant's Principal Financial Officer and Principal Executive Officer
have concluded that those disclosure controls and procedures provide reasonable
assurance that the material information required to be disclosed by the
registrant on this report is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's last fiscal half-year (the
registrant's second fiscal half-year in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable for semi-annual reports.
(a)(2) Separate certification for the Registrant's principal executive officer
and principal financial officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of
1940, are attached as EX.99.CERT.
(a)(3) Not applicable.
(b) A certification by the Registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940, is attached
as EX.99.906 CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) RiverSource Global Series, Inc.
By /s/ Patrick T. Bannigan
----------------------------------
Patrick T. Bannigan
President and Principal Executive
Officer
Date July 3, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By /s/ Patrick T. Bannigan
----------------------------------
Patrick T. Bannigan
President and Principal Executive
Officer
Date July 3, 2008
By /s/ Jeffrey P. Fox
----------------------------------
Jeffrey P. Fox
Treasurer and Principal Financial
Officer
Date July 3, 2008