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: 10/31
Annual Report
and Prospectus
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE(R)
ABSOLUTE RETURN CURRENCY AND INCOME FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
OCTOBER 31, 2007
(Prospectus also enclosed)
RIVERSOURCE ABSOLUTE RETURN
CURRENCY AND INCOME FUND SEEKS TO
PROVIDE SHAREHOLDERS WITH POSITIVE
ABSOLUTE RETURN.
This annual report includes a prospectus that
describes in detail the Fund's objective,
investment strategy, risks, sales charges, fees
and other matters of interest. Please read the
prospectus carefully before you invest or send
money.
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 3
Performance Summary................. 5
Questions & Answers
with Portfolio Management........ 7
The Fund's Long-term Performance ... 10
Fund Expenses Example............... 12
Investments in Securities........... 15
Financial Statements................ 20
Notes to Financial Statements....... 25
Report of Independent Registered
Public Accounting Firm........... 47
Federal Income Tax Information...... 48
Board Members and Officers.......... 52
Proxy Voting........................ 55
Change in Independent Registered
Public Accounting Firm........... 56
</Table>
- --------------------------------------------------------------------------------
2 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
FUND SNAPSHOT AT OCT. 31, 2007
FUND OBJECTIVE
RiverSource Absolute Return Currency and Income Fund seeks to provide
shareholders with positive absolute return.
FOREIGN CURRENCY EXPOSURE BREAKDOWN*
Percentage of portfolio exposure: short forward currency contracts
(PIE CHART)
<Table>
Japanese Yen 50.0%
European Monetary Unit 30.0%
Canadian Dollar 20.0%
</Table>
Percentage of portfolio exposure: long forward currency contracts
(PIE CHART)
<Table>
New Zealand Dollar 49.9%
Norwegian Krone 30.1%
Australian Dollar 20.0%
</Table>
* The Fund does not actually take ownership of foreign currencies or sell
actual foreign currencies. Rather, through forward currency contracts, the
Fund gains the exposure that it would have if it had bought or sold the
currencies directly. See Notes 1 and 5 in the Notes to Financial Statements
of this report for more detail on these financial instruments.
SECTOR BREAKDOWN
Percentage of bond and cash & cash equivalents portfolio assets
(PIE CHART)
<Table>
Cash & Cash Equivalents 63.5%
Asset-Backed 16.1%
Corporate Bonds(1) 15.3%
Commercial Mortgage-Backed 2.7%
Mortgage-Backed 2.4%
</Table>
(1) Includes Financials 10.2%, Consumer Discretionary 1.5%, Telecommunication
1.1%, Industrials 0.8%, Energy 0.6%, Health Care 0.6% and Consumer Staples
0.5%.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 3
FUND SNAPSHOT AT OCT. 31, 2007
QUALITY BREAKDOWN
Percentage of bond portfolio assets
(PIE CHART)
<Table>
AAA bonds 61.7%
AA bonds 16.8%
A bonds 13.1%
BBB bonds 8.4%
</Table>
Bond ratings apply to 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.
PORTFOLIO MANAGER
<Table>
<Caption>
YEARS IN INDUSTRY
Nicholas Pifer, CFA 17
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A RARAX 06/15/06
Class B -- 06/15/06
Class C RARCX 06/15/06
Class I RVAIX 06/15/06
Class R4(1) -- 06/15/06
Class R5 RARRX 10/18/07
Class W RACWX 12/01/06
(1) Effective Dec. 11, 2006, Class Y was renamed Class
R4.
Total net assets $131.1 million
Number of holdings 74
</Table>
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.
- --------------------------------------------------------------------------------
4 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the year ended Oct. 31, 2007
(BAR CHART)
<Table>
RiverSource Absolute Return Currency and Income
Fund Class A (excluding sales charge) +9.96%
Citigroup 3-month U.S. Treasury Bill Index
(unmanaged) +4.95%
</Table>
(see "The Fund's Long-term Performance" for Index descriptions)
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 bar chart. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The index does not reflect the effects of sales charges, expenses and taxes.
It is not possible to invest directly in an index.
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(a) 1.39% 1.35%(b)
Class R5(c) 1.06% 1.06%
Class W(d) 1.54% 1.54%
</Table>
(a) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(b) 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.
(c) Inception date for Class R5 was Oct. 18, 2007.
(d) Inception date for Class W was Dec. 1, 2006.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 5
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT OCT. 31, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR INCEPTION
Class A (inception 6/15/06) +9.96% +8.97%
Class B (inception 6/15/06) +9.38% +8.40%
Class C (inception 6/15/06) +9.37% +8.38%
Class I (inception 6/15/06) +10.49% +9.50%
Class R4* (inception 6/15/06) +10.27% +9.23%
Class R5 (inception 10/18/07) N/A +0.44%**
Class W (inception 12/1/06) N/A +9.21%**
WITH SALES CHARGE
Class A (inception 6/15/06) +4.77% +5.17%
Class B (inception 6/15/06) +4.38% +5.57%
Class C (inception 6/15/06) +2.77% +8.38%
</Table>
<Table>
<Caption>
AT SEPT. 30, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR INCEPTION
Class A (inception 6/15/06) +10.19% +8.81%
Class B (inception 6/15/06) +9.64% +8.28%
Class C (inception 6/15/06) +9.64% +8.28%
Class I (inception 6/15/06) +10.74% +9.37%
Class R4* (inception 6/15/06) +10.52% +9.10%
Class W (inception 12/1/06) N/A +8.36%**
WITH SALES CHARGE
Class A (inception 6/15/06) +4.96% +4.79%
Class B (inception 6/15/06) +4.64% +5.24%
Class C (inception 6/15/06) +3.11% +8.28%
</Table>
Class A share performance reflects the maximum sales charge of 3.00%. 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.
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
** Not annualized.
- --------------------------------------------------------------------------------
6 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Nic Pifer, portfolio manager for RiverSource Absolute Return Currency and
Income Fund, discusses the Fund's results and positioning for the 12-month
period ended Oct. 31, 2007.
At Oct. 31, 2007, approximately 94% 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 34, 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 of the Fund's
expenses, see the discussions beginning on pages 12 and 31.
Q: How did RiverSource Absolute Return Currency and Income Fund perform for the
year ended Oct. 31, 2007?
A: RiverSource Absolute Return Currency and Income Fund's Class A shares
increased 9.96% (excluding sales charge) for the year ended Oct. 31, 2007.
The Fund outperformed its benchmark, the Citigroup 3-Month U.S. Treasury Bill
Index (Citigroup Index), which increased 4.95% during the same period.
Q: What factors most significantly affected the Fund's performance?
A: We use a two-part investment process. The first part includes investments in
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
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.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 7
QUESTIONS & ANSWERS
During the period, we were able to generate positive total return from the
Fund's investment in short-term fixed income securities, and we were able to
add additional value through the use of our proprietary quantitative model.
For the year ended Oct. 31, 2007, the Fund's positioning in the Australian
dollar, New Zealand dollar, British pound, Norwegian krone and Japanese yen
benefited the Fund's results. Positioning in the Swedish krona, euro, Swiss
franc and Canadian dollar detracted from the Fund's performance.
IN OUR VIEW, REMAINING NEUTRAL TO THE U.S. DOLLAR HELPS CONTROL OVERALL
VOLATILITY OF THE FUND'S INVESTMENT STRATEGY.
Q: How would you describe your current investment strategy?
A: 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
Fund's 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.
Q: What is the Fund's tactical view and strategy for the months ahead?
A: 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 ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
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
short-term U.S. dollar-denominated corporate debt securities rated investment
grade, or, if unrated, determined to be of comparable quality.
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 ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 9
THE FUND'S LONG-TERM PERFORMANCE
The chart on the facing page illustrates the total value of an assumed $10,000
investment in RiverSource Absolute Return Currency and Income Fund Class A
shares (from 07/01/06 to 10/31/07)* as compared to the performance of a widely
cited performance index, the Citigroup 3-month U.S. Treasury Bill Index. In
comparing the Fund's Class A shares to this index, you should take into account
the fact that the Fund's performance reflects the maximum sales charge of 3.00%,
while such charges are not reflected in the performance of the index. Returns
for the Fund include the reinvestment of any distribution paid during each
period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. 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. Also
see "Past Performance" in the Fund's current prospectus.
* Fund data is from June 15, 2006. Citigroup 3-month U.S. Treasury Bill Index
data is from July 1, 2006.
COMPARATIVE RESULTS
<Table>
<Caption>
SINCE
Results at Oct. 31, 2007 1 YEAR INCEPTION(2)
RIVERSOURCE ABSOLUTE RETURN AND CURRENCY INCOME FUND (INCLUDES
SALES CHARGE)
Class A Cumulative value of $10,000 $10,477 $10,723
Average annual total return +4.77% +5.17%
CITIGROUP 3-MONTH U.S. TREASURY BILL INDEX(1)
Cumulative value of $10,000 $10,495 $10,670
Average annual total return +4.95% +4.98%
</Table>
Results for other share classes can be found on page 6.
- --------------------------------------------------------------------------------
10 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN RIVERSOURCE ABSOLUTE RETURN
CURRENCY AND INCOME FUND LINE GRAPH)
<Table>
<Caption>
RIVERSOURCE ABSOLUTE RETURN
CURRENCY AND INCOME FUND CLASS A CITIGROUP 3-MONTH U.S. TREASURY
(INCLUDES SALES CHARGE) BILL INDEX(1)
--------------------------------- -------------------------------
7/1/06 $ 9,525 $10,000
10/31/06 9,751 10,167
4/30/07 10,324 10,421
10/31/07 10,723 10,670
</Table>
(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) Fund data is from June 15, 2006. Citigroup 3-month U.S. Treasury Bill Index
data is from July 1, 2006.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL 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 Oct. 31, 2007.
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 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2007(A) OCT. 31, 2007 THE PERIOD(B) EXPENSE RATIO
Class A
Actual(c) $1,000 $1,038.60 $ 7.35(d) 1.43%
Hypothetical
(5% return before
expenses) $1,000 $1,018.00 $ 7.27(d) 1.43%
Class B
Actual(c) $1,000 $1,037.90 $10.79(d) 2.10%
Hypothetical
(5% return before
expenses) $1,000 $1,014.62 $10.66(d) 2.10%
Class C
Actual(c) $1,000 $1,037.70 $10.99(d) 2.14%
Hypothetical
(5% return before
expenses) $1,000 $1,014.42 $10.87(d) 2.14%
Class I
Actual(c) $1,000 $1,042.20 $ 5.46(d) 1.06%
Hypothetical
(5% return before
expenses) $1,000 $1,019.86 $ 5.40(d) 1.06%
Class R4*
Actual(c) $1,000 $1,042.00 $ 6.79(d) 1.32%
Hypothetical
(5% return before
expenses) $1,000 $1,018.55 $ 6.72(d) 1.32%
Class R5
Actual(e) $1,000 $1,004.40 $ 0.38(d) 1.06%
Hypothetical
(5% return before
expenses) $1,000 $1,019.86 $ 5.40(d) 1.06%
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 13
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2007(A) OCT. 31, 2007 THE PERIOD(B) EXPENSE RATIO
Class W
Actual(c) $1,000 $1,039.80 $ 7.92(d) 1.54%
Hypothetical
(5% return before
expenses) $1,000 $1,017.44 $ 7.83(d) 1.54%
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(a) The beginning account value for Class R5 is as of Oct. 18, 2007 (when Class
R5 shares became publicly available) for actual expense calculations and as
of May 1, 2007 for hypothetical expense calculations.
(b) Expenses are equal to the Fund's annualized expense ratio as indicated
above, multiplied by the average account value over the period, multiplied
by 184/365 (to reflect the one-half year period). The actual expense paid
for Class R5 is equal to the Class R5 expense ratio as indicated above,
multiplied by the average account value over the period, multiplied by
13/365 to reflect the number of days in the period from Oct. 18, 2007 to
Oct. 31, 2007.
(c) Based on the actual return for the six months ended Oct. 31, 2007: +3.86%
for Class A, +3.79% for Class B, +3.77% for Class C, +4.22% for Class I,
+4.20% for Class R4 and +3.98% for Class W.
(d) 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, 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. Any
amounts waived will not be reimbursed by the Fund. This change was
effective Nov. 1, 2007. If this change had been in place for the entire six
month period ended Oct. 31, 2007, the actual expense paid would have been
$6.95 for Class R4 and the hypothetical expense paid would have been $6.87
for Class R4. The actual and hypothetical expenses for Class A, Class B,
Class C, Class I, Class R5 and Class W would have been the same as those
expenses presented in the table above.
(e) Based on the actual return on Class R5 of +0.44% for the period from Oct.
18, 2007 to Oct. 31, 2007.
- --------------------------------------------------------------------------------
14 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
INVESTMENTS IN SECURITIES
OCT. 31, 2007
(Percentages represent value of investments compared to net assets)
<Table>
<Caption>
BONDS (36.1%)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
ASSET-BACKED (15.9%)
Capital Auto Receivables Asset Trust
Series 2006-SN1A Cl A4B
03-20-10 5.20% $1,500,000(d,e) $1,492,943
Citibank Credit Card Issuance Trust
Series 2003-A9 Cl A9
11-22-10 5.59 455,000(e) 454,579
Citibank Credit Card Issuance Trust
Series 2007-A1 Cl A1
03-22-12 5.20 1,000,000(e) 994,531
College Loan Corp Trust
Series 2003-2 Cl A3
07-25-13 5.28 965,607(e) 962,589
College Loan Corp Trust
Series 2004-1 Cl A2
04-25-16 5.19 2,500,000(e) 2,497,500
Countrywide Asset-backed Ctfs
Series 2007-7 Cl 2A2
10-25-37 5.03 1,000,000(e) 984,531
Countrywide Home Equity Loan Trust
Series 2005-H Cl 2A (FGIC)
12-15-35 5.33 218,119(e,g) 211,131
Countrywide Home Equity Loan Trust
Series 2005-M Cl A2 (MBIA)
02-15-36 5.21 288,356(e,g) 288,307
Ford Credit Floorplan Master Owner Trust
Series 2006-3 Cl A
06-15-11 5.27 900,000(e) 894,859
Keycorp Student Loan Trust
Series 2003-A Cl 2A2 (MBIA)
10-25-25 5.39 895,134(e,g) 889,679
Nissan Auto Receivables Owner Trust
Series 2003-C Cl A5
03-16-09 3.21 68,156 68,099
Northstar Education Finance
Series 2007-1 Cl A2
01-29-46 5.03 750,000(e) 746,719
Providian Master Note Trust
Series 2006-A1A Cl A
01-15-13 5.12 1,000,000(d,e) 989,810
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
ASSET-BACKED (CONT.)
Residential Asset Securities
Series 2006-KS2 Cl A2
03-25-36 5.00% $800,000(e) $793,250
SLM Student Loan Trust
Series 2003-10A Cl A2
12-16-19 5.85 1,000,000(d,e) 1,000,469
SLM Student Loan Trust
Series 2004-3 Cl A3
04-25-16 5.17 829,594(e) 829,255
SLM Student Loan Trust
Series 2005-5 Cl A1
01-25-18 5.08 95,656(e) 95,667
SLM Student Loan Trust
Series 2005-5 Cl A2
10-25-21 5.16 1,000,000(e) 981,563
SLM Student Loan Trust
Series 2005-B Cl A1
12-16-19 5.73 843,108(e) 837,707
SLM Student Loan Trust
Series 2006-2 Cl A2
01-25-17 5.08 164,653(e) 164,652
SLM Student Loan Trust
Series 2006-5 Cl A2
07-25-17 5.07 939,905(e) 934,325
SLM Student Loan Trust
Series 2006-A Cl A1
03-16-20 5.71 1,798,075(e) 1,798,075
SLM Student Loan Trust
Series 2006-C Cl A2
09-15-20 5.74 1,000,000(e) 982,969
SLM Student Loan Trust
Series 2007-2 Cl A2
07-25-17 5.08 1,000,000(e) 968,125
Structured Asset Investment Loan Trust
Series 2006-1 Cl A1
01-25-36 4.95 90,113(e) 89,860
---------------
Total 20,951,194
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 15
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
COMMERCIAL MORTGAGE-BACKED (2.7%)(f)
Commercial Mtge Pass-Through Ctfs
Series 2007-FL14 Cl MKL1
06-15-22 5.67% $250,000(d,e) $249,053
First Union-Lehman Brothers-
Bank of America
Series 1998-C2 Cl A2
11-18-35 6.56 974,553 975,439
Morgan Stanley Capital I
Series 2003-IQ6 Cl A1
12-15-41 2.80 482,252 479,557
TrizecHahn Office Properties Trust
Series 2001-TZHA Cl C3
03-15-13 6.52 1,363,412(d) 1,364,694
Wachovia Bank Commercial Mtge Trust
Series 2005-C17 Cl A1
03-15-42 4.43 454,512 453,014
---------------
Total 3,521,757
- -----------------------------------------------------------------------------------
MORTGAGE-BACKED (2.4%)(f)
Deutsche Bank Alternate Mtge Loan Trust
Collateralized Mtge Obligation
Series 2006-AR6 Cl A3
02-25-37 4.96 519,399(e) 515,976
Downey Savings & Loan Assn
Mtge Loan Trust Collateralized
Mtge Obligation
Series 2006-AR2 Cl 2AB1
11-19-37 5.11 720,616(k) 709,040
Harborview Mtge Loan Trust
Collateralized Mtge Obligation
Series 2006-12 Cl 2A11
01-19-38 5.11 862,679(k) 859,400
Harborview Mtge Loan Trust
Collateralized Mtge Obligation
Series 2006-8 Cl 2A1B
08-21-36 5.25 1,066,964(k) 1,019,537
---------------
Total 3,103,953
- -----------------------------------------------------------------------------------
AUTOMOTIVE (0.3%)
American Honda Finance
07-11-08 5.33 400,000(d,e) 400,302
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
BANKING (4.7%)
ANZ Natl Intl
08-07-09 5.40% $750,000(c,d,e) $747,420
Bank of America
Sr Nts
02-17-09 5.67 640,000(e) 640,673
Citigroup
06-09-09 5.86 640,000(e) 640,449
JPMorgan Chase & Co
Sr Nts
12-22-08 5.26 400,000(e) 399,324
03-09-09 5.90 250,000(e) 249,985
Rabobank Nederland
Sr Nts
01-15-09 5.26 600,000(c,d,e) 599,242
Santander US Debt Unipersonal
Bank Guaranteed
09-19-08 5.30 640,000(c,d,e) 639,624
Wachovia
Sr Nts
10-28-08 5.03 640,000(e) 639,493
Washington Mutual
Sr Unsecured
01-15-10 5.54 750,000(e) 736,020
Wells Fargo & Co
03-10-08 5.76 640,000(e) 640,316
World Savings Bank FSB
Sr Nts
03-02-09 5.75 400,000(e) 401,181
---------------
Total 6,333,727
- -----------------------------------------------------------------------------------
BROKERAGE (2.5%)
Bear Stearns Companies
03-30-09 5.29 750,000(e) 743,516
Credit Suisse First Boston USA
12-09-08 5.85 640,000(e) 639,723
Lehman Brothers Holdings
10-22-08 5.27 640,000(e) 636,749
Merrill Lynch & Co
08-22-08 5.59 640,000(e) 638,188
Morgan Stanley
Sr Unsecured
02-09-09 5.47 640,000(e) 637,987
---------------
Total 3,296,163
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
16 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
CONSTRUCTION MACHINERY (0.8%)
Caterpillar Financial Services
10-28-08 5.08% $400,000(e) $399,153
John Deere Capital
06-10-08 5.85 640,000(e) 641,186
---------------
Total 1,040,339
- -----------------------------------------------------------------------------------
FOOD AND BEVERAGE (0.5%)
Diageo Capital
11-10-08 5.48 640,000(c,e) 638,532
- -----------------------------------------------------------------------------------
HEALTH CARE (0.6%)
Cardinal Health
Sr Unsecured
10-02-09 5.50 750,000(d,e) 751,332
- -----------------------------------------------------------------------------------
INDEPENDENT ENERGY (0.6%)
Anadarko Petroleum
Sr Unsecured
09-15-09 6.09 750,000(e) 746,774
- -----------------------------------------------------------------------------------
LIFE INSURANCE (1.3%)
ING Security Life Institutional Funding
01-14-08 5.32 640,000(d,e) 640,492
Pacific Life Global Funding
11-13-08 5.59 400,000(d,e) 400,080
Pricoa Global Funding 1
09-12-08 5.71 640,000(d,e) 639,748
---------------
Total 1,680,320
- -----------------------------------------------------------------------------------
MEDIA CABLE (0.6%)
Comcast
07-14-09 5.54 750,000(e) 746,994
- -----------------------------------------------------------------------------------
NON CAPTIVE DIVERSIFIED (0.5%)
General Electric Capital
12-01-08 5.73 640,000(e) 640,086
- -----------------------------------------------------------------------------------
OTHER FINANCIAL INSTITUTIONS (0.5%)
Berkshire Hathaway Finance
01-11-08 5.30 640,000(e) 640,632
- -----------------------------------------------------------------------------------
PROPERTY & CASUALTY (0.5%)
Allstate Life Global Funding Trusts
Secured
11-14-07 5.60 640,000(e) 639,985
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
RETAILERS (0.6%)
Home Depot
Sr Unsecured
12-16-09 5.82% $750,000(e) $740,744
- -----------------------------------------------------------------------------------
WIRELINES (1.1%)
BellSouth Sr Unsecured
08-15-08 5.66 750,000(e) 749,307
Telefonica Emisiones
06-19-09 5.89 750,000(c,e) 750,383
---------------
Total 1,499,690
- -----------------------------------------------------------------------------------
TOTAL BONDS
(Cost: $47,585,964) $47,372,524
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (45.7%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 59,906,480(h) $59,906,480
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $59,906,480) $59,906,480
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
FLOATING RATE NOTES (2.3%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(A)
WhistleJacket Capital LLC
02-25-08 5.15% $3,000,000(b) $2,998,860
- -----------------------------------------------------------------------------------
TOTAL FLOATING RATE NOTES
(Cost: $3,000,154) $2,998,860
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SHORT-TERM SECURITIES (14.8%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(A)
ASSET-BACKED (3.0%)
Cullinan Finance
11-21-07 4.96% $4,000,000(b) $3,988,614
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 17
<Table>
<Caption>
SHORT-TERM SECURITIES (CONTINUED)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(A)
COMMERCIAL PAPER (11.8%)
Alpine Securitization
01-02-08 4.67% $4,000,000(j) $3,967,998
Cheyne Finance LLC
11-20-07 4.99 2,000,000(b,i) 1,994,546
12-11-07 4.91 2,000,000(b,i) 1,989,040
Grampian Funding LLC
12-14-07 5.06 4,000,000(j) 3,975,740
</Table>
<Table>
<Caption>
SHORT-TERM SECURITIES (CONTINUED)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(A)
COMMERCIAL PAPER (CONT.)
Sigma Finance
11-29-07 5.08% $3,500,000(b) $3,485,929
---------------
Total 15,413,253
- -----------------------------------------------------------------------------------
TOTAL SHORT-TERM SECURITIES
(Cost: $19,396,606) $19,401,867
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $129,889,204)(l) $129,679,731
===================================================================================
</Table>
NOTES TO INVESTMENTS IN SECURITIES
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) Denotes investments in structured investment vehicles ("SIVs"). See Note 8
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. At Oct. 31, 2007, the value of foreign securities represented 2.6%
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
has been 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 Oct. 31,
2007, the value of these securities amounted to $9,915,209 or 7.6% 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 Oct. 31,
2007.
(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) The following abbreviations are used in the portfolio security descriptions
to identify the insurer of the issue:
FGIC - Financial Guaranty Insurance Company
MBIA - MBIA Insurance Corporation
(h) Affiliated Money Market Fund - See Note 6 to the financial statements.
- --------------------------------------------------------------------------------
18 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
NOTES TO INVESTMENTS IN SECURITIES (CONTINUED)
(i) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). These securities have been fair valued
according to procedures approved, in good faith, by the Fund's Board of
Directors. Information concerning such security holdings at Oct. 31, 2007,
is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ---------------------------------------------------------------------------------
Cheyne Finance LLC
4.99% Commercial Paper 2007 05-22-07 $1,994,527
4.91% Commercial Paper 2007 06-11-07 1,988,411
</Table>
(j) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under Section 4(2) of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program or other
"accredited investors." This security has been 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 Oct. 31, 2007, the value of these
securities amounted to $7,943,738 or 6.1% of net assets.
(k) Adjustable rate mortgage; interest rate varies to reflect current market
conditions; rate shown is the effective rate on Oct. 31, 2007.
(l) At Oct. 31, 2007, the cost of securities for federal income tax purposes
was $129,889,204 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $29,455
Unrealized depreciation (238,928)
- ------------------------------------------------------------------------------
Net unrealized depreciation $(209,473)
- ------------------------------------------------------------------------------
</Table>
See Notes 1 and 5 in the Notes to Financial Statements of this report for more
detail on open forward foreign currency exchange contracts.
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 ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 19
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCT. 31, 2007
<Table>
ASSETS
Investments in securities, at value (Note 1)
Unaffiliated issuers (identified cost $69,982,724) $ 69,773,251
Affiliated money market fund (identified cost
$59,906,480) (Note 6) 59,906,480
- ----------------------------------------------------------------------------
Total investments in securities (identified cost
$129,889,204) 129,679,731
Capital shares receivable 1,382,872
Dividends and accrued interest receivable 251,308
Unrealized appreciation on forward foreign currency
contracts (Note 5) 438,850
- ----------------------------------------------------------------------------
Total assets 131,752,761
- ----------------------------------------------------------------------------
LIABILITIES
Disbursements in excess of cash 316,463
Capital shares payable 4,775
Unrealized depreciation on forward foreign currency
contracts (Note 5) 273,350
Accrued investment management services fee 3,154
Accrued distribution fee 57
Accrued transfer agency fee 17
Accrued administrative services fee 284
Other accrued expenses 48,548
- ----------------------------------------------------------------------------
Total liabilities 646,648
- ----------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $131,106,113
============================================================================
</Table>
- --------------------------------------------------------------------------------
20 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
OCT. 31, 2007
<Table>
REPRESENTED BY
Capital stock -- $.01 par value (Note 1) $ 123,788
Additional paid-in capital 125,349,872
Undistributed net investment income 86,566
Accumulated net realized gain (loss) 5,589,860
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (Note 5) (43,973)
- ----------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $131,106,113
============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $ 8,851,115
Class B $ 10,579
Class C $ 220,172
Class I $121,969,554
Class R4 $ 39,493
Class R5 $ 9,975
Class W $ 5,225
Net asset value per share of outstanding
capital stock: Class A shares(1) 836,275 $ 10.58
Class B shares 1,000 $ 10.58
Class C shares 20,826 $ 10.57
Class I shares 11,515,491 $ 10.59
Class R4 shares 3,733 $ 10.58
Class R5 shares 942 $ 10.59
Class W shares 494 $ 10.58
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $10.91. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 3.00%.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 21
STATEMENT OF OPERATIONS
YEAR ENDED OCT. 31, 2007
<Table>
INVESTMENT INCOME
Income:
Interest $4,419,836
Income distributions from affiliated money market fund (Note
6) 940,092
Less foreign taxes withheld (6,342)
- --------------------------------------------------------------------------
Total income 5,353,586
- --------------------------------------------------------------------------
Expenses (Note 2):
Investment management services fee 887,341
Distribution fee
Class A 12,511
Class B 103
Class C 121
Class W 12
Transfer agency fee
Class A 196
Class B 3
Class C 4
Class R4 4
Class W 10
Service fee -- Class R4 1
Administrative services fee 79,761
Plan administration services fee -- Class R4 23
Compensation of board members 1,630
Custodian fees 9,487
Printing and postage 22,625
Registration fees 32,330
Professional fees 34,028
Other 3,328
- --------------------------------------------------------------------------
Total expenses 1,083,518
Expenses waived/reimbursed by the Investment Manager and
its affiliates (Note 2) (5)
- --------------------------------------------------------------------------
1,083,513
Earnings and bank fee credits on cash balances (Note 2) (304)
- --------------------------------------------------------------------------
Total net expenses 1,083,209
- --------------------------------------------------------------------------
Investment income (loss) -- net 4,270,377
- --------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (Note 3) $ 27,635
Foreign currency transactions 5,627,397
Payment from affiliate (Note 1) 44,795
- --------------------------------------------------------------------------
Net realized gain (loss) on investments 5,699,827
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies (119,494)
- --------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 5,580,333
- --------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $9,850,710
==========================================================================
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
22 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE PERIOD
YEAR ENDED FROM JUNE 15, 2006*
OCT. 31, 2007 TO OCT. 31, 2006
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 4,270,377 $ 846,221
Net realized gain (loss) on investments 5,699,827 738,569
Net change in unrealized appreciation
(depreciation) on
investments and on translation of assets and
liabilities in
foreign currencies (119,494) 107,402
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 9,850,710 1,692,192
- -----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (203,734) (124,233)
Class B (336) (95)
Class C (605) (95)
Class I (4,073,834) (684,162)
Class R4 (464) (130)
Class R5 (35) N/A
Class W (179) N/A
Net realized gain
Class A (98,464) --
Class B (99) --
Class C (99) --
Class I (704,931) --
Class R4 (99) --
Class W (49) N/A
- -----------------------------------------------------------------------------------------
Total distributions (5,082,928) (808,715)
- -----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 23
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
FOR THE PERIOD
YEAR ENDED FROM JUNE 15, 2006*
OCT. 31, 2007 TO OCT. 31, 2006
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Proceeds from sales
Class A shares (Note 2) $ 8,607,654 $ --
Class C shares 209,110 --
Class I shares 46,377,881 67,145,518
Class R4 shares 28,800 --
Class R5 shares 10,000 N/A
Class W shares 5,000 N/A
Reinvestment of distributions at net asset value
Class A shares 20,454 --
Class C shares 261 --
Class I shares 4,778,225 684,028
Class R4 shares 44 --
Payments for redemptions
Class A shares (10,093,640) --
Class I shares (1,818,898) (475,083)
- -----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
share transactions 48,124,891 67,354,463
- -----------------------------------------------------------------------------------------
Total increase (decrease) in net assets 52,892,673 68,237,940
Net assets at beginning of year (Note 1) 78,213,440 9,975,500**
- -----------------------------------------------------------------------------------------
Net assets at end of year $131,106,113 $ 78,213,440
=========================================================================================
Undistributed net investment income $ 86,566 $ 50,581
- -----------------------------------------------------------------------------------------
</Table>
* When shares became publicly available.
** Initial capital of $10,000,000 was contributed on June 8, 2006. The Fund had
a decrease in net assets resulting from operations of $24,500 during the
period from June 8, 2006 to June 15, 2006 (when shares became publicly
available).
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
24 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
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. The Fund invests primarily in short-term debt obligations and forward
foreign currency contracts. On June 8, 2006, Ameriprise Financial, Inc.
(Ameriprise Financial), the parent company of RiverSource Investments, LLC (the
Investment Manager) invested $10,000,000 in the Fund (996,000 shares for Class
A, 1,000 shares for Class B, 1,000 shares for Class C, 1,000 shares for Class I
and 1,000 shares for Class R4), which represented the initial capital for each
class at $10 per share. On or about Aug. 31, 2007, Ameriprise Financial
transferred its ownership interest in invested initial capital in the Fund to
the Investment Manager. Operations commenced on June 15, 2006.
Prior to October 18, 2007, the Fund had not engaged in a broad public offering
of its shares and was only available to certain limited institutional investors
and to investors purchasing class W shares in authorized investment programs
managed by investment professionals, including discretionary managed account
programs.
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 have no sales charge and are offered only to
qualifying institutional investors.
Effective Dec. 1, 2006, the Fund offers an additional class of shares, Class W,
offered through qualifying discretionary accounts. Class W shares are sold
without a front-end sales charge or CDSC. At Oct. 31, 2007, the Investment
Manager owned 100% of Class W shares.
Effective Dec. 11, 2006, the Board approved renaming Class Y as Class R4,
terminating the shareholder servicing agreement, revising the fee structure
under the transfer agent agreement from account-based to asset-based, and
adopting a plan administration services agreement.
Effective Oct. 18, 2007, the Fund offers an additional class of shares, Class
R5, to certain institutional investors. These shares are sold without a
front-end sales
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 25
charge or CDSC. At Oct. 31, 2007, the Investment Manager owned 100% of Class R5
shares.
At Oct. 31, 2007, the Investment Manager owned 100% of Class B shares and the
Investment Manager and the affiliated funds-of-funds owned 100% of Class I
shares.
At Oct. 31, 2007, the Investment Manager and the affiliated funds-of-funds owned
approximately 94% 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 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
of Directors of the funds 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 equities) 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, as administrator to the
Fund, will fair value foreign equity securities pursuant to procedures adopted
by the Board of Directors of the funds, including utilizing a third party
pricing service to determine these fair values. These procedures take
- --------------------------------------------------------------------------------
26 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
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 Oct. 31, 2007, 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. Prior to July 12, 2007, the Fund limited the percent held in
securities and other instruments that were illiquid to 10% of the Fund's net
assets. The aggregate value of such securities at Oct. 31, 2007 was $3,983,586
representing 3.04% 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.
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 Oct. 31, 2007, 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 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 year ended Oct. 31,
2007.
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
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 27
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. During
the year ended Oct. 31, 2007, 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 Oct. 31, 2007, 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
- --------------------------------------------------------------------------------
28 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
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.
PAYMENT FROM AFFILIATE
During the year ended Oct. 31, 2007, Ameriprise Financial voluntarily reimbursed
the Fund $44,795 for a loss on a trading error.
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.
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.
On the Statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by $44,795
and accumulated net realized gain has been decreased by $44,795.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 29
The tax character of distributions paid for the periods indicated is as follows:
<Table>
<Caption>
FOR THE PERIOD FROM
YEAR ENDED JUNE 15, 2006(A)
OCT. 31, 2007 TO OCT. 31, 2006
- ---------------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income.................... $ 243,304 $124,233
Long-term capital gain............. 58,894 --
CLASS B
Distributions paid from:
Ordinary income.................... 376 95
Long-term capital gain............. 59 --
CLASS C
Distributions paid from:
Ordinary income.................... 645 95
Long-term capital gain............. 59 --
CLASS I
Distributions paid from:
Ordinary income.................... 4,357,132 684,162
Long-term capital gain............. 421,633 --
CLASS R4(B)
Distributions paid from:
Ordinary income.................... 504 130
Long-term capital gain............. 59 --
CLASS R5(C)
Distributions paid from:
Ordinary income.................... 35 N/A
Long-term capital gain............. -- N/A
CLASS W(D)
Distributions paid from:
Ordinary income.................... 199 N/A
Long-term capital gain............. 29 N/A
</Table>
(a) When shares became publicly available.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) For the period from Oct. 18, 2007 (inception date) to Oct. 31, 2007.
(d) For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
At Oct. 31, 2007, the components of distributable earnings on a tax basis are as
follows:
<Table>
Undistributed ordinary income............................... $2,406,327
Undistributed accumulated long-term gain.................... $3,436,365
Unrealized appreciation (depreciation)...................... $ (210,239)
</Table>
- --------------------------------------------------------------------------------
30 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
RECENT ACCOUNTING PRONOUNCEMENTS
On Sept. 20, 2006, the Financial Accounting Standards Board (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 framework for measuring fair value, and requires additional disclosures
about fair-value measurements. The application of SFAS 157 is required for
fiscal years beginning after Nov. 15, 2007 and interim periods within those
fiscal years. The impact of SFAS 157 on the Fund's financial statements is being
evaluated.
In June 2006, the FASB issued FASB Interpretation 48 (FIN 48), "Accounting for
Uncertainty in Income Taxes." 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. FIN 48 is effective for fiscal
years beginning after Dec. 15, 2006. Recent SEC guidance allows implementing FIN
48 in fund NAV calculations as late as the fund's last NAV calculation in the
first required financial statement reporting period. As a result, the Fund will
adopt FIN 48 in its semiannual report for the period ending April 30, 2008. Tax
positions of the Fund are being evaluated to determine the impact, if any, to
the Fund. The adoption of FIN 48 is not anticipated to have a material impact on
the Fund.
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 year
ended Oct. 31, 2007, was 0.89% of the Fund's average daily net assets.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 31
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 year ended Oct. 31, 2007, was 0.08% of
the Fund's average daily net assets.
Other expenses in the amount of $1,004 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.
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 fee per shareholder account for this service as follows:
- - Class A $20.50
- - Class B $21.50
- - Class C $21.00
Effective Dec. 11, 2006, as part of the Board's approval to rename Class Y as
Class R4, the fee structure under the Transfer Agency Agreement was revised from
an account-based fee for Class Y to an asset-based fee for Class R4. The Fund
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. Prior to Dec.
11, 2006, the Fund paid the Transfer Agent an annual account-based fee of $18.50
per shareholder account.
In addition, the Fund pays the Transfer Agent an annual asset-based fee at a
rate of 0.05% of the Funds average daily net assets attributable to 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.
Prior to Dec. 11, 2006, Class I paid a transfer agency fee at an annual rate per
shareholder account of $1. Effective Dec. 11, 2006, this fee was eliminated.
- --------------------------------------------------------------------------------
32 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
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.
The Fund has agreements with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Prior to Oct. 1, 2007, Ameriprise
Financial Services, Inc. also served as a principal underwriter and distributor
to the Fund. 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.
Effective Dec. 11, 2006, under Plan Administration Services Agreement, a fee for
the provision of various administrative, recordkeeping, communication and
educational services was adopted for the restructured Class R4. The fee is
calculated at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares.
Prior to Dec. 11, 2006, under a Shareholder Service Agreement, the Fund paid the
Distributor a fee for service provided to shareholders by the Distributor and
other servicing agents with respect to Class Y shares. The fee was calculated at
a rate of 0.10% of the Fund's average daily net assets attributable to Class Y
shares. Effective Dec. 11, 2006, this agreement was terminated.
Sales charges received by the Distributor for distributing Fund shares were
$10,519 for Class A for the year ended Oct. 31, 2007.
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 year ended Oct. 31, 2007, the Investment Manager and its affiliates
waived certain fees and expenses such that net expenses (excluding fees and
expenses of acquired funds) were 1.31% for Class R4. Of these waived fees and
expenses, the transfer agency fees waived at the class level were $5 for Class
R4. Under an agreement, which was effective until Oct. 31, 2007, the Investment
Manager and its affiliates contractually agreed to waive certain fees and
expenses such that net expenses (excluding fees and expenses of acquired funds)
would not exceed 1.47% for Class A, 2.23% for Class B, 2.23% for Class C, 1.12%
for Class I, 1.31% for Class R4, 1.22% for Class R5 and 1.57% for Class W of the
Fund's average daily net assets. Effective Nov. 1, 2007, the Investment Manager
and its affiliates have
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 33
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 year ended Oct. 31, 2007, the Fund's custodian fees were reduced by
$304 as a result of earnings 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 $26,903,970 and $13,726,682, respectively, for the year
ended Oct. 31, 2007. 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>
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 B -- -- -- --
Class C 19,801 25 -- 19,826
Class I 4,483,439 462,890 (173,987) 4,772,342
Class R4(a) 2,729 4 -- 2,733
Class R5(b) 942 -- -- 942
Class W(c) 494 -- -- 494
- --------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
JUNE 15, 2006(D) TO OCT. 31, 2006
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- --------------------------------------------------------------------------------------
Class A -- -- -- --
Class B -- -- -- --
Class C -- -- -- --
Class I 6,721,344 67,960 (47,155) 6,742,149
Class R4(a) -- -- -- --
- --------------------------------------------------------------------------------------
</Table>
(a) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(b) For the period from Oct. 18, 2007 (inception date) to Oct. 31, 2007.
(c) For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
(d) When shares became publicly available.
- --------------------------------------------------------------------------------
34 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
5. FORWARD FOREIGN CURRENCY CONTRACTS
At Oct. 31, 2007, the Fund had forward foreign currency exchange contracts that
obligate it to deliver currencies at specified future dates. The unrealized
appreciation and/or depreciation on these contracts is included in the
accompanying financial statements. See "Summary of significant accounting
policies." The terms of the open contracts are as follows:
<Table>
<Caption>
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED
EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION
- ------------------------------------------------------------------------------------------------
Dec. 05, 2007 11,866,000 12,428,775 $ -- $133,236
Canadian Dollar U.S. Dollar
Dec. 05, 2007 119,000 125,356 -- 622
Canadian Dollar U.S. Dollar
Dec. 05, 2007 12,922,000 18,622,540 -- 105,583
European Monetary Unit U.S. Dollar
Dec. 05, 2007 161,000 233,048 -- 287
European Monetary Unit U.S. Dollar
Dec. 05, 2007 3,557,087,000 31,135,058 179,597 --
Japanese Yen U.S. Dollar
Dec. 05, 2007 78,092,000 680,185 838 --
Japanese Yen U.S. Dollar
Dec. 05, 2007 12,395,510 13,481,000 137,320 --
U.S. Dollar Australian Dollar
Dec. 05, 2007 125,827 136,000 629 --
U.S. Dollar Australian Dollar
Dec. 05, 2007 30,877,899 40,329,000 116,943 --
U.S. Dollar New Zealand Dollar
Dec. 05, 2007 544,718 711,000 1,895 --
U.S. Dollar New Zealand Dollar
Dec. 05, 2007 18,650,734 99,967,000 -- 33,622
U.S. Dollar Norwegian Krone
Dec. 05, 2007 382,590 2,063,000 1,628 --
U.S. Dollar Norwegian Krone
- ------------------------------------------------------------------------------------------------
Total $438,850 $273,350
- ------------------------------------------------------------------------------------------------
</Table>
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 $176,020,297 and $131,900,941, respectively, for the year
ended Oct. 31, 2007.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 35
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 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 year ended Oct. 31, 2007.
8. SUBSEQUENT EVENTS
In the third and fourth calendar quarters of 2007 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 in the markets for the collateral underlying these
investment structures. As of Oct. 31, 2007, on an aggregate basis, 11.1% of the
Fund's total net assets were invested in four SIVs. These investments, which
were fair valued on Oct. 31, 2007, were in the most senior debt issued by these
vehicles, which offered the greatest protection from non-performance.
Subsequent to Oct. 31, 2007, the Fund's holdings in Cullinan Finance and Sigma
Finance matured and all interest and principal payments were received by the
Fund on a timely basis. As a result, at Dec. 17, 2007, the Fund's holdings in
SIVs have significantly declined. The two remaining investments, WhistleJacket
Capital LLC and Cheyne Finance, LLC, constitute 1.8% and 2.1% of the Fund's
total net assets, respectively. WhistleJacket has continued to meet its payment
obligations to senior debt holders and it is still believed that the Fund will
receive full payment on this investment.
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 on their respective maturity
dates of Nov. 20, 2007 and Dec. 11, 2007. The receivers are currently developing
a restructuring plan which will likely result in the Fund receiving less than
full payment on its investment. Accordingly, the value of the holdings have been
reduced through fair valuation procedures.
- --------------------------------------------------------------------------------
36 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
9. CONCENTRATION OF RISK
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.
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. Because each
investment has a greater effect on the Fund's performance, the Fund may be more
exposed to the risks of loss and volatility than a fund that invests more
broadly.
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)), the parent company of RiverSource Investments, LLC
(RiverSource Investments), entered into settlement agreements with the
Securities and Exchange Commission (SEC) and Minnesota Department of Commerce
(MDOC) related to market timing activities. In connection with these matters,
the SEC and MDOC issued orders (the Orders) alleging that AEFC violated certain
provisions of the federal and Minnesota securities laws by failing to adequately
disclose market timing activities by allowing certain identified market timers
to continue to market time contrary to disclosures in mutual fund
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 37
and variable annuity product prospectuses. The Orders also alleged that AEFC
failed to implement procedures to detect and prevent market timing in 401(k)
plans for employees of AEFC and related companies and failed to adequately
disclose that there were no such procedures. Pursuant to the MDOC Order, the
MDOC also alleged that AEFC allowed inappropriate market timing to occur by
failing to have written policies and procedures and failing to properly
supervise its employees.
As a result of the Orders, 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. Pursuant to the terms of the Orders, AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to make presentations at least annually to its board of directors and the
relevant mutual funds' board that include an overview of policies and procedures
to prevent market timing, material changes to these policies and procedures and
whether disclosures related to market timing are consistent with the SEC order
and federal securities laws. 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. In
addition, AEFC agreed to complete and submit to the MDOC a compliance review of
its procedures regarding market timing within one year of the MDOC Order,
including a summary of actions taken to ensure compliance with applicable laws
and regulations and certification by a senior officer regarding compliance and
supervisory procedures.
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.
- --------------------------------------------------------------------------------
38 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
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 ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 39
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, 2007 2006(B)
Net asset value, beginning of period $10.09 $9.98
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .41(c) .12
Net gains (losses) (both realized and
unrealized) .57 .11
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .98 .23
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.39) (.12)
Distributions from realized gains (.10) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.49) (.12)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.58 $10.09
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $9 $10
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.36% 1.59%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 1.36% 1.37%(f),(g)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.98% 3.89%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 12%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 9.96%(i) 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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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 certain fees
and expenses (excluding fees and expenses of acquired funds).
(h) Total return does not reflect payment of a sales charge.
(i) 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%.
(j) Not annualized.
- --------------------------------------------------------------------------------
40 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006(B)
Net asset value, beginning of period $10.09 $9.97
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .34(c) .09
Net gains (losses) (both realized and
unrealized) .59 .12
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .93 .21
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.34) (.09)
Distributions from realized gains (.10) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.44) (.09)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $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) 2.10% 2.38%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 2.10% 2.16%(f),(g)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.26% 3.11%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 12%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 9.38%(i) 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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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 certain fees
and expenses (excluding fees and expenses of acquired funds).
(h) Total return does not reflect payment of a sales charge.
(i) 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%.
(j) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 41
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006(B)
Net asset value, beginning of period $10.09 $9.97
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .34(c) .09
Net gains (losses) (both realized and
unrealized) .58 .12
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .92 .21
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.34) (.09)
Distributions from realized gains (.10) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.44) (.09)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.57 $10.09
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 2.12% 2.38%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 2.12% 2.16%(f),(g)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.42% 3.11%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 12%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 9.37%(i) 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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is and before reduction of 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 certain fees
and expenses (excluding fees and expenses of acquired funds).
(h) Total return does not reflect payment of a sales charge.
(i) 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%.
(j) Not annualized.
- --------------------------------------------------------------------------------
42 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006(B)
Net asset value, beginning of period $10.10 $9.98
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .44(c) .13
Net gains (losses) (both realized and
unrealized) .59 .12
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.03 .25
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.44) (.13)
Distributions from realized gains (.10) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.54) (.13)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.59 $10.10
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $122 $68
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.07% 1.34%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 1.07% 1.12%(f),(g)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 4.30% 4.37%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 12%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 10.49%(i) 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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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 certain fees
and expenses (excluding fees and expenses of acquired funds).
(h) Total return does not reflect payment of a sales charge.
(i) 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%.
(j) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 43
CLASS R4*
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006(B)
Net asset value, beginning of period $10.09 $9.98
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .42(c) .13
Net gains (losses) (both realized and
unrealized) .59 .11
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.01 .24
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.42) (.13)
Distributions from realized gains (.10) --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.52) (.13)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $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% 1.45%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(g) 1.31% 1.23%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 4.13% 4.04%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36% 12%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 10.27%(i) 2.42%(j)
- -----------------------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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 certain fees
and expenses (excluding fees and expenses of acquired funds).
(h) Total return does not reflect payment of a sales charge.
(i) 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%.
(j) Not annualized.
- --------------------------------------------------------------------------------
44 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT 31, 2007(B)
Net asset value, beginning of period $10.58
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .02
Net gains (losses) (both realized and
unrealized) .03
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .05
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04)
Distributions from realized gains --
- -----------------------------------------------------------------------------------------------------------
Total distributions (.04)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $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) 1.06%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 1.06%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 4.43%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36%
- -----------------------------------------------------------------------------------------------------------
Total return(g) .44%(h)
- -----------------------------------------------------------------------------------------------------------
</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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 45
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT 31, 2007(B)
Net asset value, beginning of period $10.13
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .36
Net gains (losses) (both realized and
unrealized) .55
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .91
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.36)
Distributions from realized gains (.10)
- -----------------------------------------------------------------------------------------------------------
Total distributions (.46)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.58
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.54%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 1.54%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.88%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 36%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 9.21%(h),(i)
- -----------------------------------------------------------------------------------------------------------
</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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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) Total return does not reflect payment of a sales charge.
(h) 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%.
(i) Not annualized.
- --------------------------------------------------------------------------------
46 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of RiverSource Absolute Return
Currency and Income Fund (the Fund) (one of the portfolios constituting the
RiverSource Global Series, Inc.) as of October 31, 2007, and the related
statements of operations, changes in net assets, and financial highlights for
the year then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit. The financial statements and financial highlights of the Fund for the
periods presented through October 31, 2006, were audited by other auditors whose
report dated December 20, 2006, expressed an unqualified opinion on those
financial statements and financial highlights.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2007, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the 2007 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
RiverSource Absolute Return Currency and Income Fund of the RiverSource Global
Series, Inc. at October 31, 2007, the results of its operations, changes in its
net assets and the financial highlights for the year then ended, in conformity
with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 17, 2007
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 47
FEDERAL INCOME TAX INFORMATION
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal period ended Oct. 31, 2007
CLASS A
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Nov. 27, 2006............................................... $0.03488
Dec. 18, 2006............................................... 0.08457
Jan. 23, 2007............................................... 0.01889
Feb. 23, 2007............................................... 0.03846
March 26, 2007.............................................. 0.03430
April 25, 2007.............................................. 0.03255
May 25, 2007................................................ 0.01232
June 25, 2007............................................... 0.03499
July 25, 2007............................................... 0.03368
Aug. 24, 2007............................................... 0.03468
Sept. 24, 2007.............................................. 0.03536
Oct. 26, 2007............................................... 0.03643
Total....................................................... $0.43111
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 18, 2006............................................... $0.05913
Total distributions......................................... $0.49024
</Table>
- --------------------------------------------------------------------------------
48 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
CLASS B
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Nov. 27, 2006............................................... $0.02793
Dec. 18, 2006............................................... 0.08004
Jan. 23, 2007............................................... 0.01130
Feb. 23, 2007............................................... 0.03191
March 26, 2007.............................................. 0.02807
April 25, 2007.............................................. 0.02724
May 25, 2007................................................ 0.03001
June 25, 2007............................................... 0.02830
July 25, 2007............................................... 0.02709
Aug. 24, 2007............................................... 0.02826
Sept. 24, 2007.............................................. 0.02880
Oct. 26, 2007............................................... 0.02699
Total....................................................... $0.37594
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 18, 2006............................................... $0.05913
Total distributions......................................... $0.43507
</Table>
CLASS C
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Nov. 27, 2006............................................... $0.02794
Dec. 18, 2006............................................... 0.08005
Jan. 23, 2007............................................... 0.01132
Feb. 23, 2007............................................... 0.03194
March 26, 2007.............................................. 0.02812
April 25, 2007.............................................. 0.02727
May 25, 2007................................................ 0.03005
June 25, 2007............................................... 0.02834
July 25, 2007............................................... 0.02714
Aug. 24, 2007............................................... 0.02830
Sept. 24, 2007.............................................. 0.02883
Oct. 26, 2007............................................... 0.03504
Total....................................................... $0.38434
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 18, 2006............................................... $0.05913
Total distributions......................................... $0.44347
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 49
CLASS I
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Nov. 27, 2006............................................... $0.03711
Dec. 18, 2006............................................... 0.08604
Jan. 23, 2007............................................... 0.02138
Feb. 23, 2007............................................... 0.04063
March 26, 2007.............................................. 0.03679
April 25, 2007.............................................. 0.03571
May 25, 2007................................................ 0.03850
June 25, 2007............................................... 0.03746
July 25, 2007............................................... 0.03609
Aug. 24, 2007............................................... 0.03706
Sept. 24, 2007.............................................. 0.03785
Oct. 26, 2007............................................... 0.03690
Total....................................................... $0.48152
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 18, 2006............................................... $0.05913
Total distributions......................................... $0.54065
</Table>
CLASS R4*
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Nov. 27, 2006............................................... $0.03620
Dec. 18, 2006............................................... 0.08507
Jan. 23, 2007............................................... 0.01961
Feb. 23, 2007............................................... 0.03899
March 26, 2007.............................................. 0.03487
April 25, 2007.............................................. 0.03401
May 25, 2007................................................ 0.03527
June 25, 2007............................................... 0.03469
July 25, 2007............................................... 0.03425
Aug. 24, 2007............................................... 0.03506
Sept. 24, 2007.............................................. 0.03574
Oct. 26, 2007............................................... 0.03585
Total....................................................... $0.45961
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 18, 2006............................................... $0.05913
Total distributions......................................... $0.51874
</Table>
- --------------------------------------------------------------------------------
50 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
CLASS R5
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Oct. 26, 2007............................................... $0.03673
Total distributions......................................... $0.03673
</Table>
CLASS W
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 18, 2006............................................... $0.08433
Jan. 23, 2007............................................... 0.01694
Feb. 23, 2007............................................... 0.03684
March 26, 2007.............................................. 0.03302
April 25, 2007.............................................. 0.03182
May 25, 2007................................................ 0.03443
June 25, 2007............................................... 0.03325
July 25, 2007............................................... 0.03193
Aug. 24, 2007............................................... 0.03307
Sept. 24, 2007.............................................. 0.03382
Oct. 26, 2007............................................... 0.03248
Total....................................................... $0.40193
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 18, 2006............................................... $0.05913
Total distributions......................................... $0.46106
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 51
BOARD MEMBERS AND OFFICERS
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board.
The following is a list of the Fund's Board members. Each member oversees 104
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme
901 S. Marquette Ave. since 2006 Court, 1998-2005
Minneapolis, MN 55402
Age 53
- -----------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, RiverSource Funds,
901 S. Marquette Ave. since 1999 1999-2006; former Governor of
Minneapolis, MN 55402 Minnesota
Age 73
- -----------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member President, Springboard -- Partners
901 S. Marquette Ave. since 2007 in Cross Cultural Leadership
Minneapolis, MN 55402 (consulting company)
Age 52
- -----------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and
901 S. Marquette Ave. since 2004 Management, Bentley College; former
Minneapolis, MN 55402 Dean, McCallum Graduate School of
Age 56 Business, Bentley College
- -----------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member Former Managing Director, Shikiar American Progressive
901 S. Marquette Ave. since 2005 Asset Management Insurance
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Professor of Valmont Industries,
901 S. Marquette Ave. since 2002 and Economics, Carleton College Inc. (manufactures
Minneapolis, MN 55402 Chair of the irrigation systems)
Age 68 Board since 2007
- -----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
52 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset Strategic
901 S. Marquette Ave. since 2004 Management, Inc. (private real Distribution, Inc.
Minneapolis, MN 55402 estate and asset management (transportation,
Age 55 company) distribution and
logistics
consultants)
- -----------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer, RiboNovix, Hybridon, Inc.
901 S. Marquette Ave. since 2002 Inc. since 2003 (biotechnology); (biotechnology);
Minneapolis, MN 55402 former President, Forester Biotech American Healthways,
Age 63 Inc. (health
management programs)
- -----------------------------------------------------------------------------------------------------
</Table>
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
William F. Truscott Board member President -- U.S. Asset Management
53600 Ameriprise since 2001, and Chief Investment Officer,
Financial Center Vice President Ameriprise Financial, Inc. and
Minneapolis, MN 55474 since 2002 President, Chairman of the Board
Age 47 and Chief Investment Officer,
RiverSource Investments, LLC since
2005; President, Ameriprise
Certificate Company since 2006;
Senior Vice President -- Chief
Investment Officer, Ameriprise
Financial, Inc. and Chairman of the
Board and Chief Investment Officer,
RiverSource Investments, LLC,
2001-2005
- -----------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 53
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Patrick T. Bannigan President since Senior Vice President -- Asset Management,
172 Ameriprise 2006 RiverSource Investments, LLC since 2006;
Financial Center Managing Director and Global Head of Product,
Minneapolis, MN 55474 Morgan Stanley Investment Management,
Age 41 2004-2006; President, Touchstone Investments,
2002-2004; Director of Strategic Planning,
Evergreen Investments, 1995-2002
- ------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President -- Equity and Fixed
172 Ameriprise since 2004 Income, Ameriprise Financial, Inc. and
Financial Center RiverSource Investments, LLC since 2006; Vice
Minneapolis, MN 55474 President -- Investments, Ameriprise
Age 43 Certificate Company since 2003; Senior Vice
President -- Fixed Income, Ameriprise
Financial, Inc., 2002-2006 and RiverSource
Investments, LLC, 2004-2006; Managing
Director, Zurich Global Assets, 2001-2002
- ------------------------------------------------------------------------------------------
Amy K. Johnson Vice President Vice President -- Asset Management and Trust
5228 Ameriprise since 2006 Company Services, RiverSource Investments, LLC
Financial Center since 2006; Vice President -- Operations and
Minneapolis, MN 55474 Compliance, RiverSource Investments, LLC,
Age 42 2004-2006; Director of Product
Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- ------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Vice President -- Investment Accounting,
105 Ameriprise 2002 Ameriprise Financial, Inc. since 2002; Vice
Financial Center President -- Finance, American Express
Minneapolis, MN 55474 Company, 2000-2002
Age 52
- ------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset
5228 Ameriprise General Counsel Management, Ameriprise Financial, Inc. since
Financial Center and Secretary 2005; Vice President, General Counsel and
Minneapolis, MN 55474 since 2006 Secretary, Ameriprise Certificate Company
Age 48 since 2005; Vice President -- Asset Management
Compliance, Ameriprise Financial, Inc.,
2004-2005; Senior Vice President and Chief
Compliance Officer, U.S. Bancorp Asset
Management, 2002-2004; Second Vice President
and Assistant General Counsel, Hartford Life,
2001-2002
- ------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance
172 Ameriprise Officer since Officer, RiverSource Investments, LLC since
Financial Center 2006 2006; Director -- Mutual Funds, Voyageur Asset
Minneapolis, MN 55474 Management, 2003-2006; Director of Finance,
Age 46 Voyageur Asset Management, 2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
54 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Compliance Director and Anti-Money Laundering
2934 Ameriprise Prevention Officer, Ameriprise Financial, Inc. since
Financial Center Officer since 2004; Manager Anti-Money Laundering,
Minneapolis, MN 55474 2004 Ameriprise Financial, Inc., 2003-2004;
Age 43 Compliance Director and Bank Secrecy Act
Officer, American Express Centurion Bank,
2000-2003
- ------------------------------------------------------------------------------------------
</Table>
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 ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT 55
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On April 12, 2007, Ernst & Young LLP was selected as the Fund's independent
registered public accounting firm for the 2007 fiscal year. A majority of the
Fund's Board of Directors, including a majority of the Independent Directors,
approved the appointment of Ernst & Young LLP. The predecessor independent
registered public accounting firm's reports on the Fund's financial statements
for the year ended Oct. 31, 2006 contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principles. During such fiscal periods and through April 12, 2007
there were no disagreements between the Fund and the predecessor independent
registered public accounting firm on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedures,
which such disagreements, if not resolved to the satisfaction of the predecessor
independent registered public accounting firm, would have caused them to make
reference to the subject matter of the disagreement in connection with their
reports on the financial statements for such fiscal periods.
- --------------------------------------------------------------------------------
56 RIVERSOURCE ADVANCED ALPHA(SM) STRATEGIES -- 2007 ANNUAL REPORT
RIVERSOURCE(R) 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) 2007 RiverSource Distributors, Inc. S-6502 D (12/07)
</Table>
Annual Report
and Prospectus
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE(R)
EMERGING MARKETS FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
OCTOBER 31, 2007
(Prospectus also enclosed)
RIVERSOURCE EMERGING MARKETS FUND
SEEKS TO PROVIDE SHAREHOLDERS WITH
LONG-TERM CAPITAL GROWTH.
This annual report includes a prospectus that
describes in detail the Fund's objective,
investment strategy, risks, sales charges, fees
and other matters of interest. Please read the
prospectus carefully before you invest or send
money.
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 3
Performance Summary................. 5
Questions & Answers
with Portfolio Management........ 7
The Fund's Long-term Performance ... 12
Fund Expenses Example............... 14
Investments in Securities........... 16
Financial Statements................ 21
Notes to Financial Statements....... 26
Report of Independent Registered
Public Accounting Firm........... 43
Federal Income Tax Information...... 44
Board Members and Officers.......... 46
Proxy Voting........................ 50
Change in Independent Registered
Public Accounting Firm........... 50
</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.
- --------------------------------------------------------------------------------
2 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
FUND SNAPSHOT AT OCT. 31, 2007
FUND OBJECTIVE
RiverSource Emerging Markets Fund seeks to provide shareholders with long-term
capital growth.
COUNTRY BREAKDOWN
Percentage of portfolio assets
PIE CHART
Brazil 20.2%
Russia 14.5%
Hong Kong 11.1%
South Africa 9.1%
South Korea 8.4%
China 7.2%
Other(1) 29.5%
(1) Includes Taiwan 6.4%, India 5.6%, Mexico 4.6%, Indonesia 2.5%, Malaysia
2.1%, Turkey 1.3%, Philippine Islands 1.2%, Singapore 1.2%, Peru 1.1%,
Israel 0.9%, Egypt 0.7%, Pakistan 0.6%, Norway 0.4% and Cash & Cash
Equivalents 0.9%.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
China Mobile (Hong Kong) 5.2%
Petroleo Brasileiro ADR (Brazil) 4.6%
Companhia Vale do Rio Doce ADR
(Brazil) 4.1%
Gazprom ADR (Russia) 3.3%
America Movil ADR Series L (Mexico) 3.1%
CNOOC (China) 3.0%
China Construction Bank Series H
(China) 2.7%
Sberbank Cl S (Russia) 2.7%
Impala Platinum Holdings (South
Africa) 2.2%
Hyundai Heavy Inds (South Korea) 1.8%
</Table>
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
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.
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 FUND -- 2007 ANNUAL REPORT 3
FUND SNAPSHOT AT OCT. 31, 2007
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 generally
invests.
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 serves 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 MANAGERS
THREADNEEDLE INTERNATIONAL LIMITED
<Table>
<Caption>
YEARS IN INDUSTRY
Julian Thompson 14
Jules Mort 10
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A IDEAX 11/13/96
Class B IEMBX 11/13/96
Class C RMCEX 06/26/00
Class I RSRIX 03/04/04
Class R4(1) -- 11/13/96
(1) Effective Dec. 11, 2006, Class Y was renamed Class
R4.
Total net assets $820.6 million
Number of holdings 90
</Table>
- --------------------------------------------------------------------------------
4 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the year ended Oct. 31, 2007
(BAR CHART)
<Table>
RiverSource Emerging Markets Fund Class A
(excluding sales charge) +68.21%
Morgan Stanley Capital International (MSCI)
Emerging Markets Index (unmanaged) +68.33%
Lipper Emerging Markets Funds Index +60.31%
</Table>
(see "The Fund's Long-term Performance" for Index descriptions)
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 bar chart. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
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.
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(a) 1.64%
</Table>
(a) Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 5
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT OCT. 31, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 11/13/96) +68.21% +45.13% +37.10% +14.09% +13.46%
Class B (inception 11/13/96) +66.95% +43.97% +36.03% +13.21% +12.58%
Class C (inception 6/26/00) +67.03% +43.96% +36.05% N/A +17.02%
Class I (inception 3/4/04) +69.07% +45.75% N/A N/A +35.14%
Class R4* (inception 11/13/96) +68.51% +45.30% +37.32% +14.31% +13.66%
WITH SALES CHARGE
Class A (inception 11/13/96) +58.55% +42.31% +35.51% +13.50% +13.46%
Class B (inception 11/13/96) +61.95% +43.32% +35.91% +13.21% +12.58%
Class C (inception 6/26/00) +66.03% +43.96% +36.05% N/A +17.02%
</Table>
<Table>
<Caption>
AT SEPT. 30, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 11/13/96) +57.53% +40.26% +34.80% +10.84% +12.19%
Class B (inception 11/13/96) +56.50% +39.18% +33.76% +9.99% +11.33%
Class C (inception 6/26/00) +56.43% +39.24% +33.77% N/A +15.12%
Class I (inception 3/4/04) +58.22% +40.87% N/A N/A +31.10%
Class R4* (inception 11/13/96) +57.93% +40.48% +35.08% +11.06% +12.39%
WITH SALES CHARGE
Class A (inception 11/13/96) +48.48% +37.51% +33.22% +10.18% +11.58%
Class B (inception 11/13/96) +51.50% +38.49% +33.64% +9.99% +11.33%
Class C (inception 6/26/00) +55.43% +39.24% +33.77% N/A +15.12%
</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.
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
6 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, RiverSource Emerging Markets Fund portfolio managers Julian Thompson and
Jules Mort of Threadneedle International Limited (Threadneedle) discuss the
Fund's results and positioning for the fiscal year ended Oct. 31, 2007.
Threadneedle, an indirect wholly-owned subsidiary of Ameriprise Financial, Inc.,
acts as the subadviser to the Fund.
Q: How did RiverSource Emerging Markets Fund perform for the period?
A: The Fund increased 68.21% (Class A shares excluding sales charge) for the
12-month period ended Oct. 31, 2007. The Fund performed in line with its
benchmark, the Morgan Stanley Capital International Emerging Markets Index
(MSCI Index), which increased 68.33%. The Fund outperformed its peer group,
the Lipper Emerging Markets Funds Index, which increased 60.31% for the
12-month time frame.
Q: What factors most significantly affected performance?
A: Emerging market equities performed extremely well, as investors became more
confident that robust economic growth would continue in countries such as
India and China. Also supporting strong results were the economic recovery in
Brazil and higher commodity prices, which drove earnings growth in
commodity-producing countries. In addition, as earnings growth slowed in
developed nations, emerging markets became more appealing and investors were
willing to pay more for emerging market shares. Furthermore, the weak U.S.
dollar made emerging market currencies relatively strong, which added to
return for dollar-based investors.
For the Fund, significant exposure to Latin America and Asia, the top
performing regions, was advantageous. However, the Fund's position in Asia
was smaller than that of the MSCI Index and consequently detracted from
performance. Within Latin America, the Fund emphasized Brazil over Mexico,
which was beneficial, as Brazil advanced sharply due to strong commodity
prices, a recovering economic cycle and declining domestic interest rates.
Throughout the period, the Fund had smaller weightings in Korea and Taiwan
than the MSCI Index. This positioning added to return as Taiwan and Korea
advanced, but not as much as the overall MSCI Index advanced.
On the detracting side, the Fund was underexposed to large-cap stocks in
China. For example, the Fund did not hold China Life or PetroChina, two
stocks that were very strong performers for the year.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 7
QUESTIONS & ANSWERS
From a sector perspective, the Fund benefited from its emphasis on materials
stocks. The Fund's allocations to health care and information technology,
both smaller than the MSCI Index, were also advantageous, as these sectors
lagged. Conversely, the Fund was hampered by its weighting in the industrials
sector, which was smaller than that of the MSCI Index. Industrials was the
best performing index sector.
Individual contributors to the Fund's results included Companhia Vale do Rio
Doce (CVRD), a Brazilian iron ore producer and one of the Fund's largest
positions during the period. China Mobile, China's largest wireless firm,
also performed well, as did Hong Kong Exchanges and Clearing. Mechel, a
Russian steel producer, added to return. Because Mechel has its own iron ore
and coal supplies, the company did not face higher input costs as iron and
coal prices rose. Consequently, as steel prices moved higher, Mechel's added
revenue increased its profit margins. In addition, an acquisition of coal
assets was advantageous.
Additional detractors included Prime Success Intl Group, a Hong Kong-based
shoemaker with outlets in China, which performed poorly following a profits
warning. UltraPetrol in Argentina also underperformed after its earnings fell
short of expectations.
THE WEAK U.S. DOLLAR MADE EMERGING MARKET CURRENCIES RELATIVELY STRONG,
WHICH ADDED TO RETURN FOR DOLLAR-BASED INVESTORS.
Q: What changes did you make to the Fund?
A: We maintained the Fund's regional positioning throughout the year, with
overweights in Latin America and Russia and an underweight in Asia,
particularly Korea and Taiwan. We did make changes to the Fund's sector
positioning. We reduced the Fund's energy position from a significant
overweight to an underweight relative to the MSCI Index. We increased
exposure to materials because we believe mining stocks look relatively
inexpensive compared to energy stocks and can benefit from a favorable
operating environment, particularly less cost pressure.
We increased the Fund's exposure to telecommunications, an attractive growth
sector in our view. We have focused on wireless companies, which benefit from
reduced competition in emerging markets and continue to add
- --------------------------------------------------------------------------------
8 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
subscribers. Holdings within this sector included China Mobile and America
Movil, which operates in Latin America, as well as two Russian companies,
Vimpel-Communications and Mobile Telesystems.
We reduced the Fund's exposure to information technology over the course of
the year because we believe pricing is increasingly under pressure. With the
U.S. economy looking relatively weak, technology is not a preferred sector
for the Fund at this time. We also reduced consumer staples exposure, largely
because we see better growth prospects in other sectors.
We have increased the Fund's exposure to infrastructure, including the
construction sector, and also the real estate sector, particularly
residential construction. There is strong demand for housing in emerging
markets, growing access to mortgages and not enough suppliers of affordable
housing. This combination is a strong growth driver in the property sector
and something we see as a long-term opportunity. Overall, the Fund's
portfolio turnover rate for the annual period was 125%.
EMERGING MARKETS STILL REPRESENT RELATIVELY GOOD VALUE AT CURRENT LEVELS
AND WILL LIKELY ATTRACT INVESTORS SEEKING TO TAKE ADVANTAGE OF POTENTIALLY
HIGHER GROWTH LEVELS.
Q: How are you positioning the Fund for the coming months?
A: We continue to anticipate strong earnings from emerging market companies.
We expect the U.S. dollar to remain relatively weak, which tends to push up
commodity prices, and strong commodity prices translate into high earnings
growth for emerging market companies active in that sector. A weak dollar
tends to be beneficial for emerging market economies, which suggests that
consumer demand will continue to be well supported.
We believe more foreign capital is likely to come into emerging markets.
Emerging markets still represent relatively good value at current levels and
will likely attract investors seeking to take advantage of potentially higher
growth levels. We also remain optimistic about the earnings potential and
overall liquidity for that asset class.
We currently anticipate maintaining the Fund's overweight in Latin America.
We are also maintaining the Fund's allocation to China, although we have
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 9
QUESTIONS & ANSWERS
become a little more cautious in our outlook as valuations on Chinese
equities seem a bit on the expensive side. We have sold some of the Fund's
stronger performers within the materials sector to lock in profits.
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 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
THIS PAGE LEFT BLANK INTENTIONALLY
THE FUND'S LONG-TERM PERFORMANCE
The chart on the facing page illustrates the total value of an assumed $10,000
investment in RiverSource Emerging Markets Fund Class A shares (from 11/1/97 to
10/31/07) as compared to the performance of two widely cited performance
indices, the Morgan Stanley Capital International (MSCI) Emerging Markets Index
and the Lipper Emerging Markets Funds Index. In comparing the Fund's Class A
shares to these indices, you should take into account the fact that the Fund's
performance reflects the maximum sales charge of 5.75%, while such charges are
not reflected in the performance of the indices. Returns for the Fund include
the reinvestment of any distribution paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. 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. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
<Table>
<Caption>
SINCE
Results at Oct. 31, 2007 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION(3)
RIVERSOURCE EMERGING MARKETS FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $15,855 $28,821 $45,694 $35,212 $39,932
Average annual total return +58.55% +42.31% +35.51% +13.50% +13.46%
MORGAN STANLEY CAPITAL INTERNATIONAL
(MSCI) EMERGING MARKETS INDEX(1)
Cumulative value of $10,000 $16,833 $30,625 $54,380 $41,084 $37,362
Average annual total return +68.33% +45.22% +40.31% +15.18% +12.73%
LIPPER EMERGING MARKETS FUNDS INDEX(2)
Cumulative value of $10,000 $16,031 $28,693 $51,758 $37,640 $35,719
Average annual total return +60.31% +42.10% +38.93% +14.17% +12.27%
</Table>
Results for other share classes can be found on page 6.
- --------------------------------------------------------------------------------
12 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN RIVERSOURCE EMERGING MARKETS FUND
LINE GRAPH)
<Table>
<Caption>
RIVERSOURCE EMERGING MORGAN STANLEY CAPITAL
MARKETS FUND CLASS A INTERNATIONAL (MSCI) LIPPER EMERGING MARKETS
(INCLUDES SALES CHARGE) EMERGING MARKETS INDEX(1) FUNDS INDEX(2)
----------------------- ------------------------- -----------------------
10/97 $9,425 $10,000 $10,000
10/98 6,245 6,901 6,683
10/99 9,067 9,981 9,116
10/00 8,741 9,102 8,726
10/01 6,706 6,966 6,788
10/02 7,269 7,554 7,272
10/03 9,922 11,236 10,790
10/04 11,519 13,416 13,118
10/05 15,185 18,023 17,443
10/06 20,933 24,407 23,480
10/07 35,212 41,084 37,640
</Table>
(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.
(3) Fund data is from Nov. 13, 1996. MSCI Emerging Markets Index and Lipper
peer group data is from Dec. 1, 1996.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 13
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 Oct. 31, 2007.
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.
- --------------------------------------------------------------------------------
14 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2007 OCT. 31, 2007 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $1,414.20 $11.20 1.84%
Hypothetical (5% return
before expenses) $1,000 $1,015.93 $ 9.35 1.84%
Class B
Actual(b) $1,000 $1,408.20 $15.66 2.58%
Hypothetical (5% return
before expenses) $1,000 $1,012.20 $13.09 2.58%
Class C
Actual(b) $1,000 $1,409.00 $15.79 2.60%
Hypothetical (5% return
before expenses) $1,000 $1,012.10 $13.19 2.60%
Class I
Actual(b) $1,000 $1,417.50 $ 8.59 1.41%
Hypothetical (5% return
before expenses) $1,000 $1,018.10 $ 7.17 1.41%
Class R4*
Actual(b) $1,000 $1,414.60 $ 9.92 1.63%
Hypothetical (5% return
before expenses) $1,000 $1,016.99 $ 8.29 1.63%
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(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 184/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Oct. 31, 2007: +41.42%
for Class A, +40.82% for Class B, +40.90% for Class C, +41.75% for Class I
and +41.46% for Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 15
INVESTMENTS IN SECURITIES
OCT. 31, 2007
(Percentages represent value of investments compared to net assets)
<Table>
<Caption>
COMMON STOCKS (95.6%)(c)
ISSUER SHARES VALUE(A)
BRAZIL (17.7%)
COMMERCIAL BANKS (0.8%)
Banco do Brasil 354,200 $6,414,694
- -----------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (0.7%)
Positivo Informatica 211,869 5,619,640
- -----------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.6%)
Bovespa Holding 259,502(b) 4,941,110
- -----------------------------------------------------------------------------------
HOUSEHOLD DURABLES (2.5%)
Cyrela Brazil Realty 776,100 13,306,493
Rossi Residencial 216,800 7,316,452
---------------
Total 20,622,945
- -----------------------------------------------------------------------------------
IT SERVICES (1.6%)
Redecard 616,700 13,043,178
- -----------------------------------------------------------------------------------
METALS & MINING (4.1%)
Companhia Vale do Rio Doce ADR 883,610 33,294,425
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (4.6%)
Petroleo Brasileiro ADR 387,413 37,048,305
- -----------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.7%)
Aracruz Celulose ADR 74,335 5,715,618
- -----------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (1.2%)
Even Construtora e Incorporadora 393,800(b) 3,572,759
Multiplan Empreendimentos Imobiliarios 435,249(b) 6,355,818
---------------
Total 9,928,577
- -----------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.9%)
Tim Participacoes 419,808 2,911,122
Tim Participacoes ADR 100,941 4,683,662
---------------
Total 7,594,784
- -----------------------------------------------------------------------------------
CHINA (7.1%)
AUTO COMPONENTS (0.5%)
Minth Group 2,748,000 4,195,553
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
CHINA (CONT.)
COMMERCIAL BANKS (2.7%)
China Construction Bank Series H 19,488,000 $22,155,365
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (3.9%)
China Shenhua Energy Series H 1,206,500 7,775,176
CNOOC 11,252,000 24,316,992
---------------
Total 32,092,168
- -----------------------------------------------------------------------------------
EGYPT (0.7%)
CONSTRUCTION & ENGINEERING
Orascom Construction Inds 64,918 5,929,859
- -----------------------------------------------------------------------------------
HONG KONG (10.9%)
CONSTRUCTION MATERIALS (1.3%)
China Natl Building Material Series H 2,354,000 10,435,234
- -----------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (1.1%)
Hong Kong Exchanges and Clearing 267,000 8,913,178
- -----------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.6%)
China Grand Forestry Resources Group 14,976,000(b) 5,322,360
- -----------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (2.2%)
Agile Property Holdings 3,092,000 7,504,463
China Overseas Land & Investment 4,558,000 10,910,111
---------------
Total 18,414,574
- -----------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (0.5%)
Prime Success Intl Group 5,420,973 4,029,673
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
16 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HONG KONG (CONT.)
WIRELESS TELECOMMUNICATION SERVICES (5.2%)
China Mobile 2,051,500 $42,411,893
- -----------------------------------------------------------------------------------
INDIA (5.6%)
COMMERCIAL BANKS (1.2%)
ICICI Bank ADR 137,445 9,544,181
- -----------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (1.0%)
Bharat Heavy Electricals 124,766 8,318,288
- -----------------------------------------------------------------------------------
METALS & MINING (1.1%)
Steel Authority of India 1,343,455 8,976,684
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (1.4%)
Reliance Inds 157,940 11,229,370
- -----------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.9%)
Bharti Airtel 292,220(b) 7,519,847
- -----------------------------------------------------------------------------------
INDONESIA (2.5%)
DIVERSIFIED TELECOMMUNICATION SERVICES (0.8%)
Telekomunikasi Indonesia 5,609,000 6,768,938
- -----------------------------------------------------------------------------------
GAS UTILITIES (1.1%)
Perusahaan Gas Negara 5,886,500 9,230,261
- -----------------------------------------------------------------------------------
METALS & MINING (0.6%)
Intl Nickel Indonesia 462,000 4,660,867
- -----------------------------------------------------------------------------------
ISRAEL (0.9%)
CHEMICALS
Israel Chemicals 663,571 7,348,333
- -----------------------------------------------------------------------------------
MALAYSIA (2.0%)
COMMERCIAL BANKS (0.6%)
Bumiputra-Commerce Holdings 1,448,700 5,042,049
- -----------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (0.7%)
KNM Group 3,448,300 6,108,270
- -----------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (0.7%)
Genting Group 2,241,000 5,582,055
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MEXICO (4.5%)
HOUSEHOLD DURABLES (0.5%)
Corporacion GEO Series B 1,115,600(b) $4,112,859
- -----------------------------------------------------------------------------------
METALS & MINING (0.9%)
Grupo Mexico Series B 856,100 7,790,028
- -----------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (3.1%)
America Movil ADR Series L 383,374 25,068,826
- -----------------------------------------------------------------------------------
NORWAY (0.4%)
FOOD PRODUCTS
Copeinca 308,200(b) 3,141,203
- -----------------------------------------------------------------------------------
PAKISTAN (0.6%)
COMMERCIAL BANKS
United Bank GDR 393,950(b,d,e) 4,844,424
- -----------------------------------------------------------------------------------
PERU (1.1%)
METALS & MINING
Hochschild Mining 890,067 8,688,842
- -----------------------------------------------------------------------------------
PHILIPPINE ISLANDS (1.2%)
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.5%)
Aboitiz Power 32,720,720(b) 4,282,620
- -----------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (0.7%)
Filinvest Land 122,749,000(b) 5,402,377
- -----------------------------------------------------------------------------------
RUSSIA (14.4%)
COMMERCIAL BANKS (2.6%)
Sberbank Cl S 4,996,916 21,603,382
- -----------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (--%)
TMK Series S 1 11
- -----------------------------------------------------------------------------------
METALS & MINING (2.7%)
Mechel ADR 94,574 7,958,402
MMC Norilsk Nickel ADR 19,801 6,237,315
Novolipetsk Steel GDR 201,226(d,e) 8,323,780
---------------
Total 22,519,497
- -----------------------------------------------------------------------------------
MULTI-UTILITIES (0.2%)
Sibirskiy Cement 15,854 1,514,057
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 17
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
RUSSIA (CONT.)
OIL, GAS & CONSUMABLE FUELS (5.1%)
Gazprom ADR 537,831 $26,773,227
LUKOIL ADR 155,349 14,059,085
---------------
Total 40,832,312
- -----------------------------------------------------------------------------------
PHARMACEUTICALS (1.2%)
Pharmstandard Cl S 116,638(b) 10,175,499
- -----------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (2.6%)
Mobile Telesystems ADR 154,727 12,842,341
Vimpel-Communications ADR 245,928 8,132,839
---------------
Total 20,975,180
- -----------------------------------------------------------------------------------
SINGAPORE (1.2%)
FOOD PRODUCTS (0.4%)
China Fishery Group 2,214,000 3,041,239
- -----------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (0.8%)
Keppel Land 1,218,000 7,047,136
- -----------------------------------------------------------------------------------
SOUTH AFRICA (9.0%)
CONSTRUCTION & ENGINEERING (1.6%)
Aveng 869,189 8,584,307
Group Five 441,711 4,394,558
---------------
Total 12,978,865
- -----------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (0.9%)
Massmart Holdings 589,312 7,396,687
- -----------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (0.9%)
Murray & Roberts Holdings 472,540 7,275,131
- -----------------------------------------------------------------------------------
MEDIA (1.6%)
Naspers Series N 410,075 13,044,211
- -----------------------------------------------------------------------------------
METALS & MINING (4.0%)
Anglo Platinum 55,157 9,503,603
Impala Platinum Holdings 463,504 17,518,591
Kumba Iron Ore 160,140 6,280,712
---------------
Total 33,302,906
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SOUTH KOREA (8.3%)
COMMERCIAL BANKS (1.8%)
Kookmin Bank 71,584 $5,846,632
Shinhan Financial Group 142,886 9,323,896
---------------
Total 15,170,528
- -----------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.9%)
Daelim Industrial 32,952 7,232,363
- -----------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.7%)
Infopia 81,087(b) 5,493,919
- -----------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (1.0%)
NHN 24,960(b) 8,015,910
- -----------------------------------------------------------------------------------
MACHINERY (2.4%)
Daewoo Shipbuilding & Marine Engineering 78,556 4,983,674
Hyundai Heavy Inds 26,100 14,656,776
---------------
Total 19,640,450
- -----------------------------------------------------------------------------------
METALS & MINING (0.6%)
POSCO ADR 28,487 5,234,486
- -----------------------------------------------------------------------------------
PHARMACEUTICALS (0.9%)
Yuhan 34,517 7,378,118
- -----------------------------------------------------------------------------------
TAIWAN (6.3%)
COMPUTERS & PERIPHERALS (1.0%)
Asustek Computer 1,852,485 6,577,865
High Tech Computer 91,000 1,875,037
---------------
Total 8,452,902
- -----------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (2.6%)
Delta Electronics 1,736,400 7,029,817
Hon Hai Precision Industry 1,427,526 10,945,272
Tripod Technology 772,920 3,151,143
---------------
Total 21,126,232
- -----------------------------------------------------------------------------------
HOUSEHOLD DURABLES (0.6%)
Chong Hong Construction 2,243,664 4,759,330
- -----------------------------------------------------------------------------------
INSURANCE (1.0%)
Cathay Financial Holding 3,289,000 8,603,440
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
18 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
TAIWAN (CONT.)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (1.1%)
MediaTek 454,020 $8,985,289
- -----------------------------------------------------------------------------------
TURKEY (1.3%)
COMMERCIAL BANKS (0.8%)
Turkiye Is Bankasi Series C 1,023,638 7,058,888
- -----------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.5%)
Turkcell 395,531 3,876,210
- -----------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $521,567,364) $784,517,633
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
PREFERRED STOCKS & OTHER (2.5%)(c)
ISSUER SHARES VALUE(A)
BRAZIL (2.5%)
Braskem Series A 647,900 $6,140,168
Banco Daycoval 336,900(b) 3,971,546
Bradespar 308,600 9,656,567
---------------
Total 19,768,281
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
PREFERRED STOCKS & OTHER (CONTINUED)
ISSUER SHARES VALUE(A)
HONG KONG (--%)
China Overseas Land & Investment
Warrants 418,000(b,e) $347,875
- -----------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS & OTHER
(Cost: $14,962,464) $20,116,156
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (0.9%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 7,671,089(f) $7,671,089
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $7,671,089) $7,671,089
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $544,200,917)(g) $812,304,878
===================================================================================
</Table>
NOTES TO INVESTMENTS IN SECURITIES
(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) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been 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 Oct. 31,
2007, the value of these securities amounted to $13,168,204 or 1.6% 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 Oct. 31,
2007, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ----------------------------------------------------------------------------------
China Overseas Land & Investment
Warrants 08-14-07 $--
Novolipetsk Steel GDR* 06-06-07 thru 06-07-07 5,472,853
United Bank GDR* 06-25-07 5,089,282
</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.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 19
NOTES TO INVESTMENTS IN SECURITIES (CONTINUED)
(g) At Oct. 31, 2007, the cost of securities for federal income tax purposes
was $553,787,999 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $260,520,194
Unrealized depreciation (2,003,315)
- -------------------------------------------------------------------------------
Net unrealized appreciation $258,516,879
- -------------------------------------------------------------------------------
</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.
(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.
- --------------------------------------------------------------------------------
20 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCT. 31, 2007
<Table>
ASSETS
Investments in securities, at value (Note 1)
Unaffiliated issuers (identified cost $536,529,828) $804,633,789
Affiliated money market fund (identified cost $7,671,089)
(Note 5) 7,671,089
- ----------------------------------------------------------------------------
Total investments in securities (identified cost
$544,200,917) 812,304,878
Foreign currency holdings (identified cost $1,995,089) (Note
1) 2,010,770
Capital shares receivable 1,929,120
Dividends receivable 645,537
Receivable for investment securities sold 5,311,804
- ----------------------------------------------------------------------------
Total assets 822,202,109
- ----------------------------------------------------------------------------
LIABILITIES
Disbursements in excess of cash 7,432
Capital shares payable 1,164,097
Accrued investment management services fee 23,703
Accrued distribution fee 7,150
Accrued transfer agency fee 869
Accrued administrative services fee 1,719
Accrued plan administration services fee 15
Other accrued expenses 420,407
- ----------------------------------------------------------------------------
Total liabilities 1,625,392
- ----------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $820,576,717
============================================================================
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 21
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
OCT. 31, 2007
<Table>
REPRESENTED BY
Capital stock -- $.01 par value (Note 1) $ 552,506
Additional paid-in capital 395,631,793
Undistributed net investment income 22,906
Accumulated net realized gain (loss) 156,234,650
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies 268,134,862
- ----------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $820,576,717
============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $661,299,345
Class B $ 93,786,732
Class C $ 7,684,286
Class I $ 55,502,715
Class R4 $ 2,303,639
Net asset value per share of outstanding
capital stock: Class A shares(1) 44,103,831 $ 14.99
Class B shares 6,829,153 $ 13.73
Class C shares 557,662 $ 13.78
Class I shares 3,609,584 $ 15.38
Class R4 shares 150,378 $ 15.32
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $15.90. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
22 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
STATEMENT OF OPERATIONS
YEAR ENDED OCT. 31, 2007
<Table>
INVESTMENT INCOME
Income:
Dividends $ 14,502,622
Interest 47,436
Income distributions from affiliated money market fund (Note
5) 432,173
Fee income from securities lending (Note 3) 23,617
Less foreign taxes withheld (1,468,599)
- ----------------------------------------------------------------------------
Total income 13,537,249
- ----------------------------------------------------------------------------
Expenses (Note 2):
Investment management services fee 7,106,815
Distribution fee
Class A 1,243,096
Class B 824,011
Class C 54,847
Transfer agency fee
Class A 909,481
Class B 161,317
Class C 10,431
Class R4 3,653
Service fee -- Class R4 701
Administrative services fee 503,279
Plan administration services fee -- Class R4 12,280
Compensation of board members 11,274
Custodian fees 708,910
Printing and postage 119,516
Registration fees 70,450
Professional fees 55,153
Other 283,976
- ----------------------------------------------------------------------------
Total expenses 12,079,190
Expenses waived/reimbursed by the Investment Manager and
its affiliates (Note 2) (29,486)
- ----------------------------------------------------------------------------
12,049,704
Earnings and bank fee credits on cash balances (Note 2) (29,534)
- ----------------------------------------------------------------------------
Total net expenses 12,020,170
- ----------------------------------------------------------------------------
Investment income (loss) -- net 1,517,079
- ----------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 23
STATEMENT OF OPERATIONS (CONTINUED)
YEAR ENDED OCT. 31, 2007
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (Note 3) $157,746,910
Foreign currency transactions (1,733,357)
- ----------------------------------------------------------------------------
Net realized gain (loss) on investments 156,013,553
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies 189,936,461
- ----------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 345,950,014
- ----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $347,467,093
============================================================================
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
24 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007 2006
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 1,517,079 $ 429,653
Net realized gain (loss) on investments 156,013,553 128,956,749
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and
liabilities in foreign currencies 189,936,461 19,880,782
- ---------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 347,467,093 149,267,184
- ---------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A -- (740,974)
Class B -- --
Class C -- --
Class I -- (108,672)
Net realized gain
Class A (98,239,230) --
Class B (18,762,771) --
Class C (1,196,069) --
Class I (9,664,518) --
Class R4 (1,447,673) --
- ---------------------------------------------------------------------------------------
Total distributions (129,310,261) (849,646)
- ---------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Proceeds from sales
Class A shares (Note 2) 91,841,700 119,913,683
Class B shares 12,086,529 21,718,034
Class C shares 1,969,066 1,820,806
Class I shares 5,204,952 18,275,459
Class R4 shares 3,407,128 3,740,915
Reinvestment of distributions at net asset value
Class A shares 97,170,044 733,024
Class B shares 18,551,177 --
Class C shares 1,147,176 --
Class I shares 9,658,984 108,604
Class R4 shares 1,447,453 --
Payments for redemptions
Class A shares (127,473,312) (102,794,692)
Class B shares (Note 2) (38,310,114) (43,209,233)
Class C shares (Note 2) (2,015,974) (758,449)
Class I shares (16,607,477) (5,997,277)
Class R4 shares (9,169,513) (1,609,906)
- ---------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 48,907,819 11,940,968
- ---------------------------------------------------------------------------------------
Total increase (decrease) in net assets 267,064,651 160,358,506
Net assets at beginning of year 553,512,066 393,153,560
- ---------------------------------------------------------------------------------------
Net assets at end of year $ 820,576,717 $ 553,512,066
=======================================================================================
Undistributed net investment income $ 22,906 $ --
- ---------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 25
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Emerging Markets 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. 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 have no sales charge and are offered only to
qualifying institutional investors.
Effective Dec. 11, 2006, the Board approved renaming Class Y as Class R4,
terminating the shareholder servicing agreement, revising the fee structure
under the transfer agent agreement from account-based to asset-based, and
adopting a plan administration services agreement.
At Oct. 31, 2007, RiverSource Investments, LLC (the Investment Manager) and the
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 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
- --------------------------------------------------------------------------------
26 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
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 of
Directors of the funds 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), as administrator to the Fund and the parent company of the
Investment Manager, will fair value foreign securities pursuant to procedures
adopted by the Board of Directors of the funds, 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 Oct. 31, 2007, 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. Prior to July 12, 2007, the Fund limited the percent held in
securities and other instruments that were illiquid to 10% of the Fund's net
assets. The aggregate value of such securities at Oct. 31, 2007 was $13,516,079
representing 1.65% 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.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 27
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. During
the year ended Oct. 31, 2007, 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 Oct. 31, 2007, 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
- --------------------------------------------------------------------------------
28 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
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 Oct. 31, 2007, foreign currency holdings consisted of
multiple denominations, primarily Taiwan dollars.
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 Oct. 31, 2007, 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.
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.
On the Statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been decreased by
$1,494,173 and accumulated net realized gain has been increased by $1,494,173.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 29
The tax character of distributions paid for the years indicated is as follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007 2006
- ----------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income............................ $43,124,323 $740,974
Long-term capital gain..................... 55,114,907 --
CLASS B
Distributions paid from:
Ordinary income............................ 8,236,390 --
Long-term capital gain..................... 10,526,381 --
CLASS C
Distributions paid from:
Ordinary income............................ 523,272 --
Long-term capital gain..................... 672,797 --
CLASS I
Distributions paid from:
Ordinary income............................ 4,243,012 108,672
Long-term capital gain..................... 5,421,506 --
CLASS R4*
Distributions paid from:
Ordinary income............................ 635,576 --
Long-term capital gain..................... 812,097 --
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
At Oct. 31, 2007, the components of distributable earnings on a tax basis are as
follows:
<Table>
Undistributed ordinary income............................. $ 96,003,258
Undistributed accumulated long-term gain.................. $ 69,849,036
Unrealized appreciation (depreciation).................... $258,540,124
</Table>
RECENT ACCOUNTING PRONOUNCEMENTS
On Sept. 20, 2006, the Financial Accounting Standards Board (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 framework for measuring fair value, and requires additional disclosures
about fair-value measurements. The application of SFAS 157 is required for
fiscal years beginning after Nov. 15, 2007 and interim periods within those
fiscal years. The impact of SFAS 157 on the Fund's financial statements is being
evaluated.
In June 2006, the FASB issued FASB Interpretation 48 (FIN 48), "Accounting for
Uncertainty in Income Taxes." 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
- --------------------------------------------------------------------------------
30 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
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. FIN 48 is effective
for fiscal years beginning after Dec. 15, 2006. Recent SEC guidance allows
implementing FIN 48 in fund NAV calculations as late as the fund's last NAV
calculation in the first required financial statement reporting period. As a
result, the Fund will adopt FIN 48 in its semiannual report for the period
ending April 30, 2008. Tax positions of the Fund are being evaluated to
determine the impact, if any, to the Fund. The adoption of FIN 48 is not
anticipated to have a material impact on the Fund.
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, 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 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 based on a comparison of the
performance of Class A shares of the Fund to 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 fee by
$197,327 for the year ended Oct. 31, 2007. The management fee for the year ended
Oct. 31, 2007, was 1.11% 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.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 31
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 year ended Oct. 31, 2007, was 0.08% of the
Fund's average daily net assets.
Other expenses in the amount of $4,159 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.
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 fee per shareholder account for this service as follows:
- - Class A $19.50
- - Class B $20.50
- - Class C $20.00
Effective Dec. 11, 2006, as part of the Board's approval to rename Class Y as
Class R4, the fee structure under the Transfer Agency Agreement was revised from
an account-based fee for Class Y to an asset-based fee for Class R4. The Fund
pays the Transfer Agent an annual asset-based fee of 0.05% of the Fund's average
daily net assets attributable to Class R4 shares. Prior to Dec. 11, 2006, the
Fund paid the Transfer Agent an annual account-based fee of $17.50 per
shareholder account.
Prior to Dec. 11, 2006, Class I paid a transfer agency fee at an annual rate per
shareholder account of $1. Effective Dec. 11, 2006, this fee was eliminated.
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.
- --------------------------------------------------------------------------------
32 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Prior to Oct. 1, 2007, Ameriprise
Financial Services, Inc. also served as a principal underwriter and distributor
to the Fund. 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.
Beginning Dec. 11, 2006, under a Plan Administration Services Agreement, a fee
for the provision of various administrative, recordkeeping, communication and
educational services was adopted for the restructured Class R4. The fee is
calculated at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares.
Prior to Dec. 11, 2006, under a Shareholder Service Agreement, the Fund paid the
Distributor a fee for service provided to shareholders by the Distributor and
other servicing agents with respect to Class Y shares. The fee was calculated at
a rate of 0.10% of the Fund's average daily net assets attributable to Class Y
shares. Effective Dec. 11, 2006, this agreement was terminated.
Sales charges received by the Distributor for distributing Fund shares were
$840,886 for Class A, $44,209 for Class B and $967 for Class C for the year
ended Oct. 31, 2007.
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.
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), before giving effect to any performance incentive adjustment,
will not exceed 1.64% for Class R4 of the Fund's average daily net assets until
Oct. 31, 2008, unless sooner terminated at the discretion of the Board. For the
year ended Oct. 31, 2007, the waiver was not invoked since the Fund's expenses
were below the cap amount.
During the year ended Oct. 31, 2007, the Fund's custodian and transfer agency
fees were reduced by $29,534 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.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 33
It was determined during the Fund's fiscal year 2007 that a taxable event in
India was not recognized and taxes were not paid during fiscal year 2006. The
taxes, interest and penalty totaling $125,539 were paid by the Fund in September
2007 and are included under other expenses. Ameriprise Financial reimbursed the
Fund for the interest and penalty which totaled $29,486.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $791,958,954 and $868,839,367, respectively, for the
year ended Oct. 31, 2007. Realized gains and losses are determined on an
identified cost basis.
Income from securities lending amounted to $23,617 for the year ended Oct. 31,
2007. Expenses paid to the Investment Manager were $117 for the year ended Oct.
31, 2007, 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 Oct. 31, 2007, the Fund had no outstanding security lending.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
<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>
<Table>
<Caption>
YEAR ENDED OCT. 31, 2006
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 11,771,328 78,315 (10,104,721) 1,744,922
Class B 2,262,284 -- (4,559,033) (2,296,749)
Class C 187,493 -- (78,887) 108,606
Class I 1,795,660 11,456 (553,008) 1,254,108
Class R4* 359,853 -- (155,126) 204,727
- ----------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
34 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
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 $398,784,092 and $394,114,617, respectively, for the year
ended Oct. 31, 2007.
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 year ended Oct. 31, 2007.
7. CONCENTRATION OF RISK
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.
GEOGRAPHIC CONCENTRATION/SECTOR RISK
Investments that are concentrated in a particular issuer, geographic region, or
sector will be more susceptible to changes in price.
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
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 35
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)), the parent company of RiverSource Investments, LLC
(RiverSource Investments), entered into settlement agreements with the
Securities and Exchange Commission (SEC) and Minnesota Department of Commerce
(MDOC) related to market timing activities. In connection with these matters,
the SEC and MDOC issued orders (the Orders) alleging that AEFC violated certain
provisions of the federal and Minnesota securities laws by failing to adequately
disclose market timing activities by allowing certain identified market timers
to continue to market time contrary to disclosures in mutual fund and variable
annuity product prospectuses. The Orders also alleged that AEFC failed to
implement procedures to detect and prevent market timing in 401(k) plans for
employees of AEFC and related companies and failed to adequately disclose that
there were no such procedures. Pursuant to the MDOC Order, the MDOC also alleged
that AEFC allowed inappropriate market timing to occur by failing to have
written policies and procedures and failing to properly supervise its employees.
As a result of the Orders, 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. Pursuant to the terms of the Orders, AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to make presentations at least annually to its board of directors and the
relevant mutual funds' board that include an overview of policies and procedures
to prevent market timing, material changes to these policies and procedures and
whether disclosures related to market timing are consistent with the SEC order
and federal securities laws. 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. In
addition, AEFC
- --------------------------------------------------------------------------------
36 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
agreed to complete and submit to the MDOC a compliance review of its procedures
regarding market timing within one year of the MDOC Order, including a summary
of actions taken to ensure compliance with applicable laws and regulations and
certification by a senior officer regarding compliance and supervisory
procedures.
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 EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 37
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, 2007 2006 2005 2004 2003
Net asset value, beginning of period $11.32 $8.23 $6.27 $5.46 $4.00
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04(b) .01 .04 .03 .02
Net gains (losses) (both realized and
unrealized) 6.27 3.10 1.95 .84 1.44
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 6.31 3.11 1.99 .87 1.46
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.02) (.03) (.06) --
Distributions from realized gains (2.64) -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Total distributions (2.64) (.02) (.03) (.06) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.99 $11.32 $8.23 $6.27 $5.46
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $661 $425 $295 $191 $155
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.83% 1.81% 1.79% 1.83% 2.02%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c),(d) 1.82%(e) 1.81% 1.79% 1.83% 2.02%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .31% .19% .54% .41% .39%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 125% 145% 124% 128% 174%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 68.21% 37.85% 31.83% 16.09% 36.50%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
38 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $10.63 $7.77 $5.95 $5.19 $3.83
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.05)(b) (.05) (.01) (.02) (.02)
Net gains (losses) (both realized and
unrealized) 5.79 2.91 1.83 .81 1.38
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 5.74 2.86 1.82 .79 1.36
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- -- (.03) --
Distributions from realized gains (2.64) -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Total distributions (2.64) -- -- (.03) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.73 $10.63 $7.77 $5.95 $5.19
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $94 $77 $74 $73 $72
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 2.58% 2.57% 2.55% 2.59% 2.80%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c),(d) 2.57%(e) 2.57% 2.55% 2.59% 2.80%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.48%) (.55%) (.24%) (.32%) (.39%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 125% 145% 124% 128% 174%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 66.95% 36.81% 30.59% 15.18% 35.51%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 39
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $10.66 $7.79 $5.97 $5.20 $3.84
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.05)(b) (.06) -- (.01) (.02)
Net gains (losses) (both realized and
unrealized) 5.81 2.93 1.82 .81 1.38
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 5.76 2.87 1.82 .80 1.36
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- -- (.03) --
Distributions from realized gains (2.64) -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Total distributions (2.64) -- -- (.03) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.78 $10.66 $7.79 $5.97 $5.20
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $8 $5 $3 $1 $1
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 2.59% 2.58% 2.56% 2.60% 2.80%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c),(d) 2.58%(e) 2.58% 2.56% 2.60% 2.80%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.48%) (.57%) (.19%) (.34%) (.41%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 125% 145% 124% 128% 174%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 67.03% 36.84% 30.54% 15.37% 35.42%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
40 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004(B)
Net asset value, beginning of period $11.50 $8.35 $6.36 $6.54
- -------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .09(c) .03 .06 .01
Net gains (losses) (both realized and
unrealized) 6.43 3.16 1.98 (.19)
- -------------------------------------------------------------------------------------------------
Total from investment operations 6.52 3.19 2.04 (.18)
- -------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.04) (.05) --
Distributions from realized gains (2.64) -- -- --
- -------------------------------------------------------------------------------------------------
Total distributions (2.64) (.04) (.05) --
- -------------------------------------------------------------------------------------------------
Net asset value, end of period $15.38 $11.50 $8.35 $6.36
- -------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $56 $41 $19 $13
- -------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.39% 1.35% 1.30% 1.35%(g)
- -------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 1.38%(f) 1.35% 1.30% 1.35%(g)
- -------------------------------------------------------------------------------------------------
Net investment income (loss) .75% .63% .97% .79%(g)
- -------------------------------------------------------------------------------------------------
Portfolio turnover rate 125% 145% 124% 128%
- -------------------------------------------------------------------------------------------------
Total return(h) 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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(g) Adjusted to an annual basis.
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 41
CLASS R4*
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $11.50 $8.33 $6.35 $5.52 $4.04
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .05(b) .03 .05 .04 .03
Net gains (losses) (both realized and
unrealized) 6.41 3.14 1.97 .86 1.45
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 6.46 3.17 2.02 .90 1.48
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- (.04) (.07) --
Distributions from realized gains (2.64) -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Total distributions (2.64) -- (.04) (.07) --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.32 $11.50 $8.33 $6.35 $5.52
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $2 $6 $2 $18 $18
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.65% 1.63% 1.59% 1.65% 1.87%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c),(d) 1.64%(e) 1.63% 1.59% 1.65% 1.87%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .45% .41% .81% .61% .54%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 125% 145% 124% 128% 174%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 68.51% 38.06% 31.87% 16.50% 36.63%
- -----------------------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds), before giving
effect to any performance incentive adjustment.
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
42 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
RIVERSOURCE EMERGING MARKETS FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of RiverSource Emerging Markets Fund
(the Fund) (one of the portfolios constituting the RiverSource Global Series,
Inc.) as of October 31, 2007, and the related statements of operations, changes
in net assets, and financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The financial statements
and financial highlights of the Fund for the periods presented through October
31, 2006, were audited by other auditors whose report dated December 20, 2006,
expressed an unqualified opinion on those financial statements and financial
highlights.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2007, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the 2007 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
RiverSource Emerging Markets Fund of the RiverSource Global Series, Inc. at
October 31, 2007, the results of its operations, changes in its net assets and
the financial highlights for the year then ended, in conformity with U.S.
generally accepted accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 17, 2007
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 43
FEDERAL INCOME TAX INFORMATION
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended Oct. 31, 2007
CLASS A
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 12.81%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $1.16038
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $1.48317
Total distributions......................................... $2.64355
</Table>
CLASS B
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 12.81%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $1.16038
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $1.48317
Total distributions......................................... $2.64355
</Table>
CLASS C
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 12.81%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $1.16038
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $1.48317
Total distributions......................................... $2.64355
</Table>
- --------------------------------------------------------------------------------
44 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
CLASS I
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 12.81%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $1.16038
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $1.48317
Total distributions......................................... $2.64355
</Table>
CLASS R4*
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 12.81%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $1.16038
</Table>
<Table>
<Caption>
CAPITAL GAIN DISTRIBUTION - taxable as long-term capital gain.
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $1.48317
Total distributions......................................... $2.64355
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 45
BOARD MEMBERS AND OFFICERS
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board.
The following is a list of the Fund's Board members. Each member oversees 104
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme
901 S. Marquette Ave. since 2006 Court, 1998-2005
Minneapolis, MN 55402
Age 53
- -----------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, RiverSource Funds,
901 S. Marquette Ave. since 1999 1999-2006; former Governor of
Minneapolis, MN 55402 Minnesota
Age 73
- -----------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member President, Springboard -- Partners
901 S. Marquette Ave. since 2007 in Cross Cultural Leadership
Minneapolis, MN 55402 (consulting company)
Age 52
- -----------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and
901 S. Marquette Ave. since 2004 Management, Bentley College; former
Minneapolis, MN 55402 Dean, McCallum Graduate School of
Age 56 Business, Bentley College
- -----------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member Former Managing Director, Shikiar American Progressive
901 S. Marquette Ave. since 2005 Asset Management Insurance
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Professor of Valmont Industries,
901 S. Marquette Ave. since 2002 and Economics, Carleton College Inc. (manufactures
Minneapolis, MN 55402 Chair of the irrigation systems)
Age 68 Board since 2007
- -----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
46 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset Strategic
901 S. Marquette Ave. since 2004 Management, Inc. (private real Distribution, Inc.
Minneapolis, MN 55402 estate and asset management (transportation,
Age 55 company) distribution and
logistics
consultants)
- -----------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer, RiboNovix, Hybridon, Inc.
901 S. Marquette Ave. since 2002 Inc. since 2003 (biotechnology); (biotechnology);
Minneapolis, MN 55402 former President, Forester Biotech American Healthways,
Age 63 Inc. (health
management programs)
- -----------------------------------------------------------------------------------------------------
</Table>
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
William F. Truscott Board member President -- U.S. Asset Management
53600 Ameriprise since 2001, and Chief Investment Officer,
Financial Center Vice President Ameriprise Financial, Inc. and
Minneapolis, MN 55474 since 2002 President, Chairman of the Board
Age 47 and Chief Investment Officer,
RiverSource Investments, LLC since
2005; President, Ameriprise
Certificate Company since 2006;
Senior Vice President -- Chief
Investment Officer, Ameriprise
Financial, Inc. and Chairman of the
Board and Chief Investment Officer,
RiverSource Investments, LLC,
2001-2005
- -----------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 47
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Patrick T. Bannigan President since Senior Vice President -- Asset Management,
172 Ameriprise 2006 RiverSource Investments, LLC since 2006;
Financial Center Managing Director and Global Head of Product,
Minneapolis, MN 55474 Morgan Stanley Investment Management,
Age 41 2004-2006; President, Touchstone Investments,
2002-2004; Director of Strategic Planning,
Evergreen Investments, 1995-2002
- ------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President -- Equity and Fixed
172 Ameriprise since 2004 Income, Ameriprise Financial, Inc. and
Financial Center RiverSource Investments, LLC since 2006; Vice
Minneapolis, MN 55474 President -- Investments, Ameriprise
Age 43 Certificate Company since 2003; Senior Vice
President -- Fixed Income, Ameriprise
Financial, Inc., 2002-2006 and RiverSource
Investments, LLC, 2004-2006; Managing
Director, Zurich Global Assets, 2001-2002
- ------------------------------------------------------------------------------------------
Amy K. Johnson Vice President Vice President -- Asset Management and Trust
5228 Ameriprise since 2006 Company Services, RiverSource Investments, LLC
Financial Center since 2006; Vice President -- Operations and
Minneapolis, MN 55474 Compliance, RiverSource Investments, LLC,
Age 42 2004-2006; Director of Product
Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- ------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Vice President -- Investment Accounting,
105 Ameriprise 2002 Ameriprise Financial, Inc. since 2002; Vice
Financial Center President -- Finance, American Express
Minneapolis, MN 55474 Company, 2000-2002
Age 52
- ------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset
5228 Ameriprise General Counsel Management, Ameriprise Financial, Inc. since
Financial Center and Secretary 2005; Vice President, General Counsel and
Minneapolis, MN 55474 since 2006 Secretary, Ameriprise Certificate Company
Age 48 since 2005; Vice President -- Asset Management
Compliance, Ameriprise Financial, Inc.,
2004-2005; Senior Vice President and Chief
Compliance Officer, U.S. Bancorp Asset
Management, 2002-2004; Second Vice President
and Assistant General Counsel, Hartford Life,
2001-2002
- ------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance
172 Ameriprise Officer since Officer, RiverSource Investments, LLC since
Financial Center 2006 2006; Director -- Mutual Funds, Voyageur Asset
Minneapolis, MN 55474 Management, 2003-2006; Director of Finance,
Age 46 Voyageur Asset Management, 2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
48 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Compliance Director and Anti-Money Laundering
2934 Ameriprise Prevention Officer, Ameriprise Financial, Inc. since
Financial Center Officer since 2004; Manager Anti-Money Laundering,
Minneapolis, MN 55474 2004 Ameriprise Financial, Inc., 2003-2004;
Age 43 Compliance Director and Bank Secrecy Act
Officer, American Express Centurion Bank,
2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT 49
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.
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On April 12, 2007, Ernst & Young LLP was selected as the Fund's independent
registered public accounting firm for the 2007 fiscal year. A majority of the
Fund's Board of Directors, including a majority of the Independent Directors,
approved the appointment of Ernst & Young LLP. The predecessor independent
registered public accounting firm's reports on the Fund's financial statements
for the year ended Oct. 31, 2006 and the year ended Oct. 31, 2005 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During such fiscal periods
and through April 12, 2007 there were no disagreements between the Fund and the
predecessor independent registered public accounting firm on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which such disagreements, if not resolved to the
satisfaction of the predecessor independent registered public accounting firm,
would have caused them to make reference to the subject matter of the
disagreement in connection with their reports on the financial statements for
such fiscal periods.
- --------------------------------------------------------------------------------
50 RIVERSOURCE EMERGING MARKETS FUND -- 2007 ANNUAL REPORT
RIVERSOURCE(R) 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. 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) 2007 RiverSource Distributors, Inc. S-6354 T (12/07)
</Table>
Annual Report
and Prospectus
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE(R)
EMERGING MARKETS BOND FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
OCTOBER 31, 2007
(Prospectus also enclosed)
RIVERSOURCE EMERGING MARKETS BOND
FUND SEEKS TO PROVIDE SHAREHOLDERS
WITH HIGH TOTAL RETURN THROUGH
CURRENT INCOME AND CAPITAL
APPRECIATION.
This annual report includes a prospectus that
describes in detail the Fund's objective,
investment strategy, risks, sales charges, fees
and other matters of interest. Please read the
prospectus carefully before you invest or send
money.
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 3
Performance Summary................. 5
Questions & Answers
with Portfolio Management........ 7
The Fund's Long-term Performance ... 12
Fund Expenses Example............... 14
Investments in Securities........... 16
Financial Statements................ 21
Notes to Financial Statements....... 26
Report of Independent Registered
Public Accounting Firm........... 45
Federal Income Tax Information...... 46
Board Members and Officers.......... 50
Proxy Voting........................ 54
Change in Independent Registered
Public Accounting Firm........... 55
</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.
- --------------------------------------------------------------------------------
2 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
FUND SNAPSHOT AT OCT. 31, 2007
FUND OBJECTIVE
RiverSource Emerging Markets Bond Fund seeks to provide shareholders with high
total return through current income and capital appreciation.
COUNTRY BREAKDOWN
Percentage of portfolio assets
(PIE CHART)
<Table>
Brazil 13.0%
Mexico 10.2%
Philippine Islands 7.8%
Turkey 7.5%
Colombia 7.1%
Argentina 6.6%
Other(1) 47.8%
</Table>
(1) Includes Luxembourg 6.0%, Venezuela 5.8%, Indonesia 5.5%, Russia 3.8%,
Uruguay 3.6%, Panama 2.8%, Peru 2.4%, Netherlands 2.2%, Dominican Republic
2.1%, Ukraine 1.8%, El Salvador 1.4%, Kazakhstan 1.4%, Cayman Islands 1.3%,
Jamaica 1.0%, British Virgin Islands 0.6%, India 0.6%, United Kingdom 0.5%,
Pakistan 0.4%, Costa Rica 0.3%, Malaysia 0.1%, United States 0.1% and Cash
& Cash Equivalents 4.1%.
QUALITY BREAKDOWN
Percentage of portfolio assets excluding cash equivalents and equities
(PIE CHART)
<Table>
AA bonds 2.6%
A bonds 1.0%
BBB bonds 17.6%
BB bonds 58.2%
B bonds 18.7%
Non-rated bonds 1.9%
</Table>
Bond ratings apply to the number of 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.
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 EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 3
FUND SNAPSHOT AT OCT. 31, 2007
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 generally
invests.
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 serves 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 MANAGER
<Table>
<Caption>
YEARS IN INDUSTRY
Nicholas Pifer, CFA* 17
</Table>
* The Fund is managed by a team of portfolio managers led by Nicholas Pifer.
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A REBAX 02/16/06
Class B -- 02/16/06
Class C REBCX 02/16/06
Class I RSMIX 02/16/06
Class R4(1) -- 02/16/06
Class W REMWX 12/01/06
(1) Effective Dec. 11, 2006, Class Y was renamed Class
R4.
Total net assets $191.0 million
Number of holdings 139
Weighted average life(2) 13 years
Effective duration(3) 7.4 years
Weighted average bond rating(4) BB
</Table>
(2) 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.
(3) 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.
(4) WEIGHTED AVERAGE BOND RATING represents the average credit quality of the
underlying bonds in the portfolio.
- --------------------------------------------------------------------------------
4 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the year ended Oct. 31, 2007
(BAR CHART)
<Table>
RiverSource Emerging Markets Bond Fund Class A
(excluding sales charge) +9.94%
J.P. Morgan Emerging Markets Bond Index-Global
(unmanaged) +8.07%
Lipper Emerging Markets Deb Funds Index +9.84%
</Table>
(see "The Fund's Long-term Performance" for Index descriptions)
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 bar chart. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
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.
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(a) 1.25%
Class W(b) 1.33%
</Table>
(a) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(b) Inception date for Class W was Dec. 1, 2006.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 5
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT OCT. 31, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR INCEPTION
Class A (inception 2/16/06) +9.94% +8.94%
Class B (inception 2/16/06) +8.94% +8.15%
Class C (inception 2/16/06) +8.94% +8.06%
Class I (inception 2/16/06) +10.38% +9.31%
Class R4* (inception 2/16/06) +9.97% +9.03%
Class W (inception 12/1/06) N/A +8.49%**
WITH SALES CHARGE
Class A (inception 2/16/06) +4.69% +5.86%
Class B (inception 2/16/06) +3.94% +5.91%
Class C (inception 2/16/06) +7.94% +8.06%
</Table>
<Table>
<Caption>
AT SEPT. 30, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR INCEPTION
Class A (inception 2/16/06) +9.78% +7.91%
Class B (inception 2/16/06) +8.89% +7.12%
Class C (inception 2/16/06) +8.89% +7.09%
Class I (inception 2/16/06) +10.20% +8.26%
Class R4* (inception 2/16/06) +9.91% +8.05%
Class W (inception 12/1/06) N/A +6.14%**
WITH SALES CHARGE
Class A (inception 2/16/06) +4.57% +4.71%
Class B (inception 2/16/06) +3.89% +4.74%
Class C (inception 2/16/06) +0.51% +7.09%
</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.
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
** Not annualized.
- --------------------------------------------------------------------------------
6 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Nic Pifer, portfolio manager for RiverSource Emerging Markets Bond Fund,
discusses the Fund's results and positioning for the 12 months ended Oct. 31,
2007.
At Oct. 31, 2007, approximately 77% 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 35, 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 14
and 32.
Q: How did RiverSource Emerging Markets Bond Fund perform for the 12 months
ended Oct. 31, 2007?
A: RiverSource Emerging Markets Bond Fund's Class A shares gained 9.94%
(excluding sales charge) for the 12 months ended Oct. 31, 2007. The Fund
outperformed both its benchmark, the J.P. Morgan Emerging Markets Bond
Index-Global (J.P. Morgan EMBI-Global), which rose 8.07%, and the Lipper
Emerging Markets Debt Funds Index, representing the Fund's peer group, which
advanced 9.84%, during the same period.
HAVING POSITIONS IN BONDS DENOMINATED IN LOCAL CURRENCIES WAS A PRIMARY
CONTRIBUTOR TO THE FUND'S OUTPERFORMANCE, AS SEVERAL EMERGING MARKET
CURRENCIES STRENGTHENED AGAINST THE U.S. DOLLAR DURING THE PERIOD.
Q: What factors most significantly affected the Fund's performance?
A: Having positions in bonds denominated in local currencies was a primary
contributor to the Fund's outperformance, as several emerging market
currencies strengthened against the U.S. dollar during the period. Fund
holdings of bonds denominated in the Brazilian real helped the most. The Fund
portfolio's holdings of assets with average yields higher than the J.P.
Morgan EMBI-Global also contributed significantly to the Fund's
outperformance.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 7
QUESTIONS & ANSWERS
Also benefiting the Fund's return during the period was effective country
selection. Specifically, sizable allocations to the bonds of Colombia,
Uruguay and El Salvador and only modest exposure to the bonds of Venezuela,
Lebanon and Russia boosted results.
Detracting somewhat from the Fund's results was the combined effect of
holding a percentage of assets in cash and maintaining a duration shorter
than that of the J.P. Morgan EMBI-Global during a period when U.S. Treasury
rates rallied. Duration is a measure of the Fund's sensitivity to changes in
interest rates. Also, while the effect of stronger local currencies was
positive, non-U.S. interest rates generally trended higher and hurt Fund
performance modestly because increased rates caused the prices of these bonds
to decline.
Q: What changes did you make to the Fund's portfolio during the period and how
is it currently positioned?
A: During the period, we gradually and opportunistically increased the
portfolio's foreign currency exposure, especially in Brazil, Indonesia and
Uruguay. We carried out this strategy as fundamentals supported the ongoing
strengthening of these foreign currencies relative to the U.S. dollar.
Also during the reporting period, we increased the Fund's allocation to
corporate debt, as we saw attractive value in select corporate bonds. We
particularly found opportunities to invest in certain corporate bonds within
Colombia, Mexico, Brazil and Russia.
During the last months of the fiscal year we shifted the Fund's duration,
which was shorter than that of the J.P. Morgan EMBI-Global, to a neutral
position and also reduced the Fund's allocation to cash.
As of Oct. 31, 2007, approximately 73% of the Fund's net assets were invested
in sovereign debt and approximately 27% 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 Colombia, Uruguay, Argentina, Indonesia
and the Philippines. Conversely, it had its most modest exposures relative to
the Index in the bond markets of Russia, Venezuela, Brazil, China and
Lebanon. Compared to the Index, the Fund had relatively neutral allocations
to Peru, Turkey and Pakistan.
- --------------------------------------------------------------------------------
8 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
DURING THE PERIOD, WE GRADUALLY AND OPPORTUNISTICALLY INCREASED THE
PORTFOLIO'S FOREIGN CURRENCY EXPOSURE, ESPECIALLY IN BRAZIL, INDONESIA AND
URUGUAY.
Q: What is the Fund's tactical view and strategy for the months ahead?
A: Our view for the months ahead is rather uncertain; a tug-of-war currently
exists between concerns about the direction of the U.S. economy and the
potential ripple effects of the financial and credit market turmoil on the
one hand and continued solid fundamentals in the emerging markets on the
other.
Historically, the U.S. economy has had a dominating effect on the health of
the emerging markets. However, the primary question at the end of the annual
period was whether or not the spillover effect of the U.S. on emerging
markets would manifest itself this time as well.
We believe the emerging markets will weather the U.S. economic storm well.
Many developing countries have low budget deficits, healthy current account
balances and their lowest debt load in ten years. With flexible exchange
rates and lower reliance on international capital, many of the
vulnerabilities that triggered past periods of volatility in the sector are
less of an issue today.
Given this view and based on our value analysis, we continue to seek
opportunities to invest in local currency-denominated bonds, particularly in
countries that are benefiting from higher commodity prices and that have
demonstrated strength in their internal and external balance sheets. We also
continue to seek opportunities in U.S. dollar-denominated corporate bonds in
emerging markets. That said, we see continued robust levels of corporate debt
issuance, which means careful issue selection remains important in the months
ahead.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 9
QUESTIONS & ANSWERS
Looking forward, 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
re-evaluate these factors to determine individual securities and local
currency investments that present attractive value opportunities.
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 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
THIS PAGE LEFT BLANK INTENTIONALLY
THE FUND'S LONG-TERM PERFORMANCE
The chart on the facing page illustrates the total value of an assumed $10,000
investment in RiverSource Emerging Markets Bond Fund Class A shares (from
2/16/06 to 10/31/07)* as compared to the performance of two widely cited
performance indices, the J.P. Morgan EMBI-Global and the Lipper Emerging Markets
Debt Funds Index. In comparing the Fund's Class A shares to these indices, you
should take into account the fact that the Fund's performance reflects the
maximum sales charge of 4.75%, while such charges are not reflected in the
performance of the indices. Returns for the Fund include the reinvestment of any
distribution paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. 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. Also
see "Past Performance" in the Fund's current prospectus.
* Fund data is from Feb. 16, 2006. J.P. Morgan EMBI-Global Index and Lipper peer
group data is from Mar. 1, 2006.
COMPARATIVE RESULTS
<Table>
<Caption>
SINCE
Results at Oct. 31, 2007 1 YEAR INCEPTION(3)
RIVERSOURCE EMERGING MARKETS BOND FUND (INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,469 $11,021
Average annual total return +4.69% +5.86%
J.P. MORGAN EMBI-GLOBAL INDEX(1)
Cumulative value of $10,000 $10,807 $11,260
Average annual total return +8.07% +7.36%
LIPPER EMERGING MARKETS DEBT FUNDS INDEX(2)
Cumulative value of $10,000 $10,984 $11,461
Average annual total return +9.84% +8.52%
</Table>
Results for other share classes can be found on page 6.
- --------------------------------------------------------------------------------
12 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN RIVERSOURCE DIVERSIFIED BOND FUND
LINE GRAPH)
<Table>
<Caption>
RIVERSOURCE EMERGING J.P. MORGAN EMERGING
MARKETS BOND FUND CLASS A MARKETS BOND INDEX- LIPPER EMERGING MARKETS
(INCLUDES SALES CHARGE) GLOBAL(1) DEBT FUNDS INDEX(2)
------------------------- -------------------- -----------------------
3/1/06 $ 9,525 $10,000 $10,000
4/30/06 9,446 9.802 9,864
10/31/06 10,025 10,420 10,434
4/30/07 10,762 10,971 11,154
10/31/07 11,021 11,260 11,461
</Table>
(1) The J.P. Morgan Emerging Markets Bond Index-Global (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.
(3) Fund data is from Feb. 16, 2006. J.P. Morgan EMBI-Global Index and Lipper
peer group data is from March 1, 2006.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 13
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 Oct. 31, 2007.
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.
- --------------------------------------------------------------------------------
14 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2007 OCT. 31, 2007 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $1,024.10 $ 6.79 1.33%
Hypothetical $1,000 $1,018.50 $ 6.77 1.33%
(5% return before
expenses)
Class B
Actual(b) $1,000 $1,019.70 $10.89 2.14%
Hypothetical $1,000 $1,014.42 $10.87 2.14%
(5% return before
expenses)
Class C
Actual(b) $1,000 $1,020.30 $10.90 2.14%
Hypothetical $1,000 $1,014.42 $10.87 2.14%
(5% return before
expenses)
Class I
Actual(b) $1,000 $1,026.60 $ 4.55 .89%
Hypothetical $1,000 $1,020.72 $ 4.53 .89%
(5% return before
expenses)
Class R4*
Actual(b) $1,000 $1,024.70 $ 6.07 1.19%
Hypothetical $1,000 $1,019.21 $ 6.06 1.19%
(5% return before
expenses)
Class W
Actual(b) $1,000 $1,023.70 $ 6.78 1.33%
Hypothetical $1,000 $1,018.50 $ 6.77 1.33%
(5% return before
expenses)
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(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 184/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Oct. 31, 2007: +2.41%
for Class A, +1.97% for Class B, +2.03% for Class C, +2.66% for Class I,
+2.47% for Class R4 and +2.37% for Class W.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 15
INVESTMENTS IN SECURITIES
OCT. 31, 2007
(Percentages represent value of investments compared to net assets)
<Table>
<Caption>
BONDS (94.4%)(c)
COUPON
ISSUER RATE PRINCIPAL AMOUNT VALUE(A)
ARGENTINA (6.5%)
Province of Mendoza
09-04-18 5.50% $310,842(d) $242,457
Republic of Argentina
08-03-12 5.39 150,000(g) 86,550
09-12-13 7.00 3,300,000 2,978,250
04-17-17 7.00 3,040,000 2,546,000
12-31-33 8.28 301,850 305,623
12-15-35 5.00 6,550,000(b) 900,625
Republic of Argentina
(Argentine Peso)
06-12-12 10.50 3,700,000 978,025
Alto Palermo
Sr Unsecured
05-11-17 7.88 500,000(d) 505,855
Banco Hipotecario
Sr Unsecured
04-27-16 9.75 975,000(d) 982,313
Banco Macro
02-01-17 8.50 300,000(d) 313,458
Industrias Metalurgicas Pescarmona
Sr Unsecured
10-22-14 11.25 2,250,000(d) 2,247,772
Transportadora de Gas del Sur
Sr Unsecured
05-14-17 7.88 300,000(d) 273,750
---------------
Total 12,360,678
- --------------------------------------------------------------------------------------
BRAZIL (12.8%)
Federative Republic of Brazil
03-07-15 7.88 150,000 170,400
01-17-17 6.00 2,600,000 2,657,200
10-14-19 8.88 2,538,000 3,204,225
04-15-24 8.88 312,000 408,720
01-20-34 8.25 358,000 463,968
08-17-40 11.00 744,000 999,564
Federative Republic of Brazil
(Brazilian Real)
01-10-28 10.25 1,500,000 855,966
Merrill Lynch & Co
(Brazilian Real)
03-08-17 10.71 3,600,000 2,023,115
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON
ISSUER RATE PRINCIPAL AMOUNT VALUE(A)
BRAZIL (CONT.)
Morgan Stanley
(Brazilian Real) Sr Unsecured
05-03-17 10.09% 4,900,000(d) $2,685,727
Banco ABN AMRO Real
(Brazilian Real)
02-22-10 16.20 1,350,000 850,332
Banco BMG
01-15-16 9.15 $950,000(d) 1,008,236
Banco Bradesco
(Brazilian Real)
01-04-10 14.80 800,000(d) 496,966
Bertin Ltda
Sr Unsub
10-05-16 10.25 1,780,000(d) 1,966,900
BIE Bank & Trust
(Brazilian Real) Sr Nts
02-02-09 14.10 250,000 149,523
Centrais Eletricas Brasileiras
Sr Nts
11-30-15 7.75 486,000(d) 523,665
Eletropaulo Metropolitana de Sao Paulo
(Brazilian Real) Sr Unsecured
06-28-10 19.13 2,400,000(d) 1,581,046
ISA Capital do Brasil
01-30-17 8.80 1,050,000(d) 1,092,000
JBS
02-07-11 9.38 1,000,000 1,040,000
JBS
Sr Unsub
08-04-16 10.50 600,000(d) 632,250
Marfrig Overseas
11-16-16 9.63 1,530,000(d) 1,606,500
---------------
Total 24,416,303
- --------------------------------------------------------------------------------------
BRITISH VIRGIN ISLANDS (0.6%)
GTL Trade Finance
10-20-17 7.25 1,100,000(d) 1,114,011
- --------------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
16 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON
ISSUER RATE PRINCIPAL AMOUNT VALUE(A)
CAYMAN ISLANDS (1.3%)
Peru Enhanced Pass-Thru
Zero Coupon
05-31-18 3.78% $1,084,000(d,h) $742,540
Odebrecht Finance
10-18-17 7.50 1,100,000(d) 1,114,630
Petrobras Intl Finance
03-01-18 5.88 630,000(e) 617,484
---------------
Total 2,474,654
- --------------------------------------------------------------------------------------
COLOMBIA (7.0%)
Santa Fe de Bogota
(Colombian Peso) Sr Nts
07-26-28 9.75 1,377,000,000(d) 681,994
Republic of Colombia
01-27-17 7.38 1,500,000 1,658,250
09-18-37 7.38 2,350,000 2,683,701
Republic of Colombia
(Colombian Peso)
03-01-10 11.75 1,000,000,000 530,761
10-22-15 12.00 4,218,000,000 2,414,236
06-28-27 9.85 966,000,000 500,710
BanColombia
05-25-17 6.88 1,795,000 1,741,150
EEB Intl
10-31-14 8.75 1,850,000(d) 1,833,211
TGI Intl
10-03-17 9.50 1,300,000(d) 1,360,060
---------------
Total 13,404,073
- --------------------------------------------------------------------------------------
COSTA RICA (0.3%)
Republic of Costa Rica
02-01-12 8.11 290,000(d) 316,825
03-20-14 6.55 180,000(d) 184,500
---------------
Total 501,325
- --------------------------------------------------------------------------------------
DOMINICAN REPUBLIC (2.0%)
Dominican Republic
01-23-18 9.04 278,709(d) 320,515
04-20-27 8.63 450,000(d) 517,500
Aes Dominicana Energia Finance
12-13-15 11.00 1,050,000(d) 1,081,500
Cerveceria Nacional Dominicana
Sr Unsecured
03-27-12 16.00 1,450,000(d,g) 1,522,500
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON
ISSUER RATE PRINCIPAL AMOUNT VALUE(A)
DOMINICAN REPUBLIC (CONT.)
EGE Haina Finance
04-26-17 9.50% $450,000(d) $440,438
---------------
Total 3,882,453
- --------------------------------------------------------------------------------------
EL SALVADOR (1.4%)
Republic of El Salvador
06-15-35 7.65 2,260,000(d) 2,621,600
- --------------------------------------------------------------------------------------
INDIA (0.6%)
ICICI Bank
10-03-12 6.63 1,150,000(d) 1,153,761
- --------------------------------------------------------------------------------------
INDONESIA (5.4%)
Republic of Indonesia
10-12-35 8.50 1,340,000(d) 1,633,125
02-17-37 6.63 2,450,000(d) 2,394,875
Republic of Indonesia
(Indonesian Rupiah)
10-15-14 11.00 13,000,000,000 1,581,274
07-15-17 10.00 15,000,000,000 1,729,139
07-15-22 10.25 26,900,000,000 3,050,858
---------------
Total 10,389,271
- --------------------------------------------------------------------------------------
JAMAICA (0.9%)
Govt of Jamaica
03-15-39 8.00 1,830,000 1,793,400
- --------------------------------------------------------------------------------------
KAZAKHSTAN (1.4%)
Kazkommerts Intl
11-03-15 8.00 650,000(d) 578,500
11-29-16 7.50 200,000(d) 170,000
Temir Capital for JSC TemirBank
05-21-14 9.50 850,000(d) 870,016
TuranAlem Finance
04-25-13 7.75 300,000(d) 267,000
02-10-15 8.50 100,000(d) 93,000
01-22-37 8.25 800,000(d) 736,000
---------------
Total 2,714,516
- --------------------------------------------------------------------------------------
LUXEMBOURG (5.9%)
Gaz Capital
Sr Unsecured
08-16-37 7.29 1,650,000(d) 1,742,813
Gaz Capital for Gazprom
Sr Nts
11-22-16 6.21 3,000,000(d) 2,964,000
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 17
<Table>
<Caption>
BONDS (CONTINUED)
COUPON
ISSUER RATE PRINCIPAL AMOUNT VALUE(A)
LUXEMBOURG (CONT.)
Gaz Capital for Gazprom
Sr Unsecured
03-07-22 6.51% $1,800,000(d) $1,764,000
MHP
11-30-11 10.25 1,650,000(d) 1,699,500
TNK-BP Finance
07-18-16 7.50 800,000(d) 776,999
03-20-17 6.63 800,000(d) 729,841
03-13-18 7.88 1,150,000(d) 1,134,556
UBS (Vimplecom)
05-23-16 8.25 500,000(d) 517,500
---------------
Total 11,329,209
- --------------------------------------------------------------------------------------
MALAYSIA (0.1%)
TNB Capital
05-05-15 5.25 117,000(d) 114,667
- --------------------------------------------------------------------------------------
MEXICO (10.0%)
Pemex Project Funding Master Trust
12-15-15 5.75 2,343,000 2,385,174
03-01-18 5.75 2,600,000(d) 2,622,100
06-15-35 6.63 5,079,000 5,429,451
Mexican Fixed Rate Bonds
(Mexican Peso)
12-20-12 9.00 9,600,000 944,330
12-18-14 9.50 9,500,000 969,874
Controladora Comerical Mexicana
(Mexican Peso)
03-30-27 8.70 26,700,000(d) 2,495,037
GRUPO KUO
10-17-17 9.75 1,350,000(d) 1,380,051
Vitro
02-01-17 9.13 2,920,000 2,883,500
---------------
Total 19,109,517
- --------------------------------------------------------------------------------------
NETHERLANDS (2.1%)
Intergas Finance
05-14-17 6.38 500,000(d) 473,715
Majapahit Holding
10-17-16 7.75 1,900,000(d) 1,959,470
06-28-17 7.25 1,450,000(d) 1,464,935
06-29-37 7.88 200,000(d) 197,024
---------------
Total 4,095,144
- --------------------------------------------------------------------------------------
PAKISTAN (0.4%)
Islamic Republic of Pakistan
06-01-17 6.88 850,000(d) 791,563
- --------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON
ISSUER RATE PRINCIPAL AMOUNT VALUE(A)
PANAMA (2.8%)
Republic of Panama
03-15-15 7.25% $503,000 $550,785
01-29-26 7.13 400,000 441,000
09-30-27 8.88 1,700,000 2,205,750
04-28-34 8.13 575,000 701,500
01-26-36 6.70 1,300,000 1,365,000
---------------
Total 5,264,035
- --------------------------------------------------------------------------------------
PERU (2.3%)
Republic of Peru
05-03-16 8.38 1,145,000 1,348,238
07-21-25 7.35 209,000 239,828
03-14-37 6.55 1,956,000 2,058,689
Banco de Credito del Peru
Sub Nts
11-07-21 6.95 800,000(d) 803,240
---------------
Total 4,449,995
- --------------------------------------------------------------------------------------
PHILIPPINE ISLANDS (7.7%)
Republic of Philippines
01-15-14 8.25 150,000 168,930
03-17-15 8.88 2,137,000 2,510,975
01-15-16 8.00 950,000 1,075,875
10-07-16 8.75 400,000(d) 470,520
01-18-17 9.38 500,000 618,750
01-15-19 9.88 550,000 715,000
10-21-24 9.50 2,221,000 2,909,510
01-14-31 7.75 4,606,000 5,250,840
Natl Power
11-02-16 6.88 900,000(d) 930,816
---------------
Total 14,651,216
- --------------------------------------------------------------------------------------
RUSSIA (3.8%)
Russian Federation
03-31-10 8.25 127,783(d) 132,895
03-31-30 7.50 3,208,590(d) 3,615,439
Russian Ministry of Finance
05-14-11 3.00 220,000 202,552
Alfa MTN Markets/ABH Financial
06-25-12 8.20 1,050,000(d) 974,984
Gazstream
07-22-13 5.63 792,902(d) 785,964
RSHB Capital for OJSC Russian Agricultural Bank
05-15-17 6.30 250,000(d) 236,850
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
18 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON
ISSUER RATE PRINCIPAL AMOUNT VALUE(A)
RUSSIA (CONT.)
Russian Standard Finance
Sr Unsub
05-05-11 8.63% $1,350,000(d) $1,248,750
---------------
Total 7,197,434
- --------------------------------------------------------------------------------------
TURKEY (7.4%)
Republic of Turkey
01-15-14 9.50 290,000 340,750
03-15-15 7.25 2,329,000 2,465,945
09-26-16 7.00 2,180,000 2,280,934
02-05-25 7.38 2,750,000 2,918,575
02-14-34 8.00 700,000 784,840
03-17-36 6.88 5,400,000 5,353,020
---------------
Total 14,144,064
- --------------------------------------------------------------------------------------
UKRAINE (1.8%)
Credit Suisse First Boston Intl for City of Kiev Ukraine
11-06-15 8.00 100,000(d) 99,500
Govt of Ukraine
06-26-12 6.39 1,900,000(d) 1,916,050
11-21-16 6.58 900,000(d) 913,500
CS Intl
02-09-16 8.40 300,000 299,250
Standard Bank London Holdings for NAK Naftogaz
Ukrainy
09-30-09 8.13 200,000 178,400
---------------
Total 3,406,700
- --------------------------------------------------------------------------------------
UNITED KINGDOM (0.5%)
UK SPV Credit Finance for JSC Commercial Bank
Privatbank
02-06-12 8.00 1,100,000(d) 1,001,939
- --------------------------------------------------------------------------------------
UNITED STATES (0.1%)
Freeport-McMoRan Copper & Gold
Sr Unsecured
04-01-15 8.25 240,000 259,200
- --------------------------------------------------------------------------------------
URUGUAY (3.6%)
Republica Orient Uruguay
(Uruguay Peso)
04-05-27 4.25 71,864,931(j) 3,340,458
06-26-37 3.70 14,667,826(j) 616,304
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON
ISSUER RATE PRINCIPAL AMOUNT VALUE(A)
URUGUAY (CONT.)
Republic of Uruguay
05-17-17 9.25% $700,000 $847,000
11-18-22 8.00 355,000 404,700
Republic of Uruguay
Pay-in-kind
01-15-33 7.88 500(f) 568
Republica Orient Uruguay
03-21-36 7.63 1,483,939 1,658,301
---------------
Total 6,867,331
- --------------------------------------------------------------------------------------
VENEZUELA (5.7%)
Republic of Venezuela
10-08-14 8.50 2,994,000 3,076,335
02-26-16 5.75 5,130,000 4,411,800
12-09-20 6.00 200,000 168,400
04-21-25 7.65 1,850,000 1,757,500
09-15-27 9.25 270,000 295,920
01-13-34 9.38 1,031,000 1,138,740
---------------
Total 10,848,695
- --------------------------------------------------------------------------------------
TOTAL BONDS
(Cost: $175,641,688) $180,356,754
- --------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (4.0%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 7,697,539(i) $7,697,539
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $7,697,539) $7,697,539
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $183,339,227)(k) $188,054,293
===================================================================================
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 19
NOTES TO INVESTMENTS IN SECURITIES
(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 GDP level of the previous year. 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
has been 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 Oct. 31,
2007, the value of these securities amounted to $73,865,214 or 38.7% of net
assets.
(e) At Oct. 31, 2007, the cost of securities purchased, including interest
purchased, on a when-issued and/or other forward-commitment basis was
$621,256.
(f) 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.
(g) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Oct. 31,
2007.
(h) For zero coupon bonds, the interest rate disclosed represents the
annualized effective yield on the date of acquisition.
(i) Affiliated Money Market Fund -- See Note 5 to the financial statements.
(j) 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.
(k) At Oct. 31, 2007, the cost of securities for federal income tax purposes
was $183,409,110 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $5,929,756
Unrealized depreciation (1,284,573)
- ------------------------------------------------------------------------------
Net unrealized appreciation $4,645,183
- ------------------------------------------------------------------------------
</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.
- --------------------------------------------------------------------------------
20 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCT. 31, 2007
<Table>
ASSETS
Investments in securities, at value (Note 1)
Unaffiliated issuers (identified cost $175,641,688) $180,356,754
Affiliated money market fund (identified cost $7,697,539)
(Note 5) 7,697,539
- ----------------------------------------------------------------------------
Total investments in securities (identified cost
$183,339,227) 188,054,293
Cash 18,318
Foreign currency holdings (identified cost $373,320) (Note
1) 379,005
Capital shares receivable 1,155,664
Accrued interest receivable 2,847,258
- ----------------------------------------------------------------------------
Total assets 192,454,538
- ----------------------------------------------------------------------------
LIABILITIES
Capital shares payable 261,585
Payable for investment securities purchased 1,097,831
Accrued investment management services fee 3,754
Accrued distribution fee 325
Accrued transfer agency fee 131
Accrued administrative services fee 417
Other accrued expenses 53,428
- ----------------------------------------------------------------------------
Total liabilities 1,417,471
- ----------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $191,037,067
============================================================================
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 21
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
OCT. 31, 2007
<Table>
REPRESENTED BY
Capital stock -- $.01 par value (Note 1) $ 180,855
Additional paid-in capital 184,072,676
Undistributed net investment income 402,006
Accumulated net realized gain (loss) 1,616,452
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 4,765,078
- -----------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding capital
stock $191,037,067
===================================================================================
</Table>
<Table>
Net assets applicable to outstanding shares: Class A $ 4,674,402
Class B $ 1,147,001
Class C $ 169,420
Class I $147,109,195
Class R4 $ 16,211
Class W $ 37,920,838
Net asset value per share of outstanding Class A
capital stock: shares(1) 442,408 $ 10.57
Class B shares 108,670 $ 10.55
Class C shares 16,069 $ 10.54
Class I shares 13,923,740 $ 10.57
Class R4 shares 1,535 $ 10.56
Class W shares 3,593,104 $ 10.55
- ------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $11.10. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 4.75%.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
22 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
STATEMENT OF OPERATIONS
YEAR ENDED OCT. 31, 2007
<Table>
INVESTMENT INCOME
Income:
Interest $ 6,752,015
Income distributions from affiliated money market fund (Note
5) 459,287
Less foreign taxes withheld (127,193)
- ---------------------------------------------------------------------------
Total income 7,084,109
- ---------------------------------------------------------------------------
Expenses (Note 2):
Investment management services fee 706,943
Distribution fee
Class A 23,088
Class B 6,858
Class C 967
Class W 43,590
Transfer agency fee
Class A 9,448
Class B 1,278
Class C 191
Class R4 7
Class W 34,873
Service fee -- Class R4 2
Administrative services fee 78,549
Plan administration services fee -- Class R4 34
Compensation of board members 1,774
Custodian fees 21,192
Printing and postage 22,690
Registration fees 34,590
Professional fees 35,805
Other 4,240
- ---------------------------------------------------------------------------
Total expenses 1,026,119
Earnings and bank fee credits on cash balances (Note 2) (247)
- ---------------------------------------------------------------------------
Total net expenses 1,025,872
- ---------------------------------------------------------------------------
Investment income (loss) -- net 6,058,237
- ---------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (Note 3) 1,771,434
Foreign currency transactions 32,383
- ---------------------------------------------------------------------------
Net realized gain (loss) on investments 1,803,817
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies 2,593,776
- ---------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 4,397,593
- ---------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $10,455,830
===========================================================================
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 23
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE PERIOD FROM
YEAR ENDED FEB. 16, 2006*
OCT. 31, 2007 TO OCT. 31, 2006
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 6,058,237 $ 1,472,122
Net realized gain (loss) on investments 1,803,817 (24,286)
Net change in unrealized appreciation (depreciation)
on
investments and on translation of assets and
liabilities in
foreign currencies 2,593,776 2,200,317
- -------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 10,455,830 3,648,153
- -------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (501,538) (361,037)
Class B (32,727) (9,533)
Class C (4,490) (927)
Class I (4,198,103) (1,064,373)
Class R4 (838) (456)
Class W (1,049,016) N/A
Net realized gain
Class A (18,393) --
Class B (880) --
Class C (83) --
Class I (59,853) --
Class R4 (22) --
Class W (8) N/A
- -------------------------------------------------------------------------------------------
Total distributions (5,865,951) (1,436,326)
- -------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
24 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
FOR THE PERIOD FROM
YEAR ENDED FEB. 16, 2006*
OCT. 31, 2007 TO OCT. 31, 2006
9x
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Proceeds from sales
Class A shares (Note 2) $ 3,695,695 $ 1,661,325
Class B shares 934,159 633,827
Class C shares 131,955 50,525
Class I shares 105,338,850 48,766,475
Class R4 shares 6,989 3,950
Class W shares 73,570,698 N/A
Reinvestment of distributions at net asset value
Class A shares 167,200 33,503
Class B shares 28,622 8,237
Class C shares 3,686 483
Class I shares 4,257,340 1,064,028
Class R4 shares 273 119
Class W shares 1,048,760 N/A
Payments for redemptions
Class A shares (11,436,832) (199,501)
Class B shares (Note 2) (358,088) (152,644)
Class C shares (Note 2) (7,430) (23,086)
Class I shares (13,150,244) (4,452,607)
Class R4 shares (6,001) --
Class W shares (37,405,273) N/A
- -------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 126,820,359 47,394,634
- -------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 131,410,238 49,606,461
Net assets at beginning of year 59,626,829 10,020,368**
- -------------------------------------------------------------------------------------------
Net assets at end of year $191,037,067 $59,626,829
===========================================================================================
Undistributed net investment income $ 402,006 $ 52,106
- -------------------------------------------------------------------------------------------
</Table>
* When shares became publicly available.
** Initial capital of $10,045,040 was contributed on Feb. 9, 2006. The Fund had
a decrease in net assets resulting from operations of $24,672 during the
period from Feb. 9, 2006 to Feb. 16, 2006 (when shares became publicly
available).
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 25
NOTES TO FINANCIAL STATEMENTS
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. The Fund invests primarily in fixed income securities of emerging market
issuers. On Feb. 9, 2006, Ameriprise Financial, Inc. (Ameriprise Financial), the
parent company of RiverSource Investments, LLC (the Investment Manager),
invested $10,045,040* in the Fund (996,000 shares for Class A, 1,000 shares for
Class B, 1,000 shares for Class C, 5,504** shares for Class I and 1,000 shares
for Class R4), which represented the initial capital for each class at $10 per
share. On or about Aug. 31, 2007, Ameriprise Financial transferred its ownership
interest in invested initial capital in the Fund to the Investment Manager.
Shares of the Fund were first offered to the public on Feb. 16, 2006.
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 have no sales charge and are offered only to
qualifying institutional investors.
Effective Dec. 11, 2006, the Board approved renaming Class Y as Class R4,
terminating the shareholder servicing agreement, revising the fee structure
under the transfer agent agreement from account-based to asset-based, and
adopting a plan administration services agreement.
At Oct. 31, 2007, the Investment Manager and the affiliated funds-of-funds owned
100% of Class I shares.
Effective Dec. 1, 2006, the Fund offers an additional class of shares, Class W,
through qualifying discretionary accounts. Class W shares are sold without a
front-end sales charge or CDSC.
* Includes $45,040 invested by the RiverSource Income Builder Funds.
** Includes 4,504 shares purchased by the RiverSource Income Builder Funds.
- --------------------------------------------------------------------------------
26 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
At Oct. 31, 2007, the Investment Manager and the affiliated funds-of-funds owned
approximately 77% 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 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
of Directors of the funds 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, as administrator to the
Fund, will fair value foreign securities pursuant to procedures adopted by the
Board of Directors of the funds, 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.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 27
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 Oct. 31, 2007, the Fund has entered into outstanding
when-issued securities of $621,256.
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 the counterparty does not perform under the terms of the
agreement. If the counterparty files for bankruptcy or becomes insolvent, a
fund's right to repurchase or sell securities may be limited. The Fund did not
enter into any mortgage dollar roll transactions during the year ended Oct. 31,
2007.
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
- --------------------------------------------------------------------------------
28 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
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 year
ended Oct. 31, 2007, 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 Oct. 31, 2007, 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 Oct. 31, 2007, foreign currency holdings were comprised of
Indonesian rupahs and Mexican pesos.
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
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 29
other party will not complete its contract obligations. At Oct. 31, 2007, 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.
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.
On the Statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by $78,375
and accumulated net realized gain has been decreased by $78,375.
- --------------------------------------------------------------------------------
30 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
The tax character of distributions paid for the periods indicated is as follows:
<Table>
<Caption>
FOR THE PERIOD FROM
YEAR ENDED FEB. 16, 2006(A)
YEAR ENDED OCT. 31, OCT. 31, 2007 TO OCT. 31, 2006
- ---------------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income.................... $ 519,931 $ 361,037
Long-term capital gain............. -- --
CLASS B
Distributions paid from:
Ordinary income.................... 33,607 9,533
Long-term capital gain............. -- --
CLASS C
Distributions paid from:
Ordinary income.................... 4,573 927
Long-term capital gain............. -- --
CLASS I
Distributions paid from:
Ordinary income.................... 4,257,956 1,064,373
Long-term capital gain............. -- --
CLASS R4(B)
Distributions paid from:
Ordinary income.................... 860 456
Long-term capital gain............. -- --
CLASS W(C)
Distributions paid from:
Ordinary income.................... 1,049,024 N/A
Long-term capital gain............. -- N/A
</Table>
(a) When shares became publicly available.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
At Oct. 31, 2007, the components of distributable earnings on a tax basis are as
follows:
<Table>
Undistributed ordinary income............................... $1,466,605
Undistributed accumulated long-term gain.................... $ 623,714
Unrealized appreciation (depreciation)...................... $4,693,217
</Table>
RECENT ACCOUNTING PRONOUNCEMENTS
On Sept. 20, 2006, the Financial Accounting Standards Board (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 framework for measuring fair value, and requires additional disclosures
about
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 31
fair-value measurements. The application of SFAS 157 is required for fiscal
years beginning after Nov. 15, 2007 and interim periods within those fiscal
years. The impact of SFAS 157 on the Fund's financial statements is being
evaluated.
In June 2006, the FASB issued FASB Interpretation 48 (FIN 48), "Accounting for
Uncertainty in Income Taxes." 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. FIN 48 is effective for fiscal
years beginning after Dec. 15, 2006. Recent SEC guidance allows implementing FIN
48 in fund NAV calculations as late as the fund's last NAV calculation in the
first required financial statement reporting period. As a result, the Fund will
adopt FIN 48 in its semiannual report for the period ending April 30, 2008. Tax
positions of the Fund are being evaluated to determine the impact, if any, to
the Fund. The adoption of FIN 48 is not anticipated to have a material impact on
the Fund.
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 year
ended Oct. 31, 2007, 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
- --------------------------------------------------------------------------------
32 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
assets increase. The fee for the year ended Oct. 31, 2007, was 0.08% of the
Fund's average daily net assets.
Other expenses in the amount of $1,402 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.
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 fee per shareholder account for this service as follows:
- - Class A $20.50
- - Class B $21.50
- - Class C $21.00
Effective Dec. 11, 2006, as part of the Board's approval to rename Class Y as
Class R4, the fee structure under the Transfer Agency Agreement was revised from
an account-based fee for Class Y to an asset-based fee for Class R4. The Fund
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. Prior to Dec.
11, 2006, the Fund paid the Transfer Agent an annual account-based fee of $18.50
per shareholder account.
In addition, the Fund pays the Transfer Agent an annual asset-based fee at a
rate of 0.20% of the Fund's average daily net assets attributable to Class W
shares.
Prior to Dec. 11, 2006, Class I paid a transfer agency fee at an annual rate per
shareholder account of $1. Effective Dec. 11, 2006, this fee was eliminated.
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.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 33
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Prior to Oct. 1, 2007, Ameriprise
Financial Services, Inc. also served as a principal underwriter and distributor
to the Fund. 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.
Effective Dec. 11, 2006, under a Plan Administration Services Agreement, a fee
for the provision of various administrative, recordkeeping, communication and
educational services was adopted for the restructured Class R4. The fee is
calculated at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares.
Prior to Dec. 11, 2006, under a Shareholder Service Agreement, the Fund paid the
Distributor a fee for service provided to shareholders by the Distributor and
other servicing agents with respect to Class Y shares. The fee was calculated at
a rate of 0.10% of the Fund's average daily net assets attributable to Class Y
shares. Effective Dec. 11, 2006, this agreement was terminated.
Sales charges received by the Distributor for distributing Fund shares were
$24,360 for Class A, $1,334 for Class B and $49 for Class C for the year ended
Oct. 31, 2007.
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.
Under an agreement, which was effective until Oct. 31, 2007, the Investment
Manager and its affiliates contractually agreed to waive certain fees and
expenses such that net expenses (excluding fees and expenses of acquired funds),
would not exceed 1.45% for Class A, 2.21% for Class B, 2.21% for Class C, 1.10%
for Class I, 1.29% for Class R4 and 1.45% for Class W of the Fund's average
daily net assets. For the year ended Oct. 31, 2007, the waiver was not invoked
since the Fund's expenses were below the cap amount. 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 1.40% 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.
- --------------------------------------------------------------------------------
34 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
During the year ended Oct. 31, 2007, the Fund's transfer agency fees were
reduced by $247 as a result of earnings and 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 $160,320,970 and $37,482,671, respectively, for the year
ended Oct. 31, 2007. 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>
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(a) 677 26 (583) 120
Class W(b) 7,065,923 101,109 (3,573,928) 3,593,104
- ----------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
FEB. 16, 2006(C) TO OCT. 31, 2006
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 168,404 3,416 (20,281) 151,539
Class B 64,048 840 (15,679) 49,209
Class C 5,108 49 (2,339) 2,818
Class I 4,998,724 108,529 (448,871) 4,658,382
Class R4(a) 403 12 -- 415
- ----------------------------------------------------------------------------------------------
</Table>
(a) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(b) For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
(c) When shares became publicly available.
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
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 35
Fund aggregated $135,351,892 and $133,904,997, respectively, for the year ended
Oct. 31, 2007.
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 year ended Oct. 31, 2007.
7. CONCENTRATION OF RISK
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.
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. Because each
investment has a greater effect on the Fund's performance, the Fund may be more
exposed to the risks of loss and volatility than a fund that invests more
broadly.
GEOGRAPHIC CONCENTRATION/SECTOR RISK
Investments that are concentrated in a particular issuer, geographic region, or
sector will be more susceptible to changes in price.
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
- --------------------------------------------------------------------------------
36 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
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)), the parent company of RiverSource Investments, LLC
(RiverSource Investments), entered into settlement agreements with the
Securities and Exchange Commission (SEC) and Minnesota Department of Commerce
(MDOC) related to market timing activities. In connection with these matters,
the SEC and MDOC issued orders (the Orders) alleging that AEFC violated certain
provisions of the federal and Minnesota securities laws by failing to adequately
disclose market timing activities by allowing certain identified market timers
to continue to market time contrary to disclosures in mutual fund and variable
annuity product prospectuses. The Orders also alleged that AEFC failed to
implement procedures to detect and prevent market timing in 401(k) plans for
employees of AEFC and related companies and failed to adequately disclose that
there were no such procedures. Pursuant to the MDOC Order, the MDOC also alleged
that AEFC allowed inappropriate market timing to occur by failing to have
written policies and procedures and failing to properly supervise its employees.
As a result of the Orders, 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. Pursuant to the terms of the Orders, AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to make presentations at least annually to its board of directors and the
relevant mutual funds' board that include an overview of policies and procedures
to prevent market timing, material changes to these policies and procedures and
whether disclosures related to market timing are consistent with the SEC order
and federal securities laws. 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. In
addition, AEFC
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 37
agreed to complete and submit to the MDOC a compliance review of its procedures
regarding market timing within one year of the MDOC Order, including a summary
of actions taken to ensure compliance with applicable laws and regulations and
certification by a senior officer regarding compliance and supervisory
procedures.
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.
- --------------------------------------------------------------------------------
38 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL 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, 2007 2006(B)
Net asset value, beginning of period $10.16 $9.98
- ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .59(c) .33
Net gains (losses) (both realized and
unrealized) .39 .18
- ----------------------------------------------------------------------------------------------------
Total from investment operations .98 .51
- ----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.55) (.33)
Distributions from realized gains (.02) --
- ----------------------------------------------------------------------------------------------------
Total distributions (.57) (.33)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $10.57 $10.16
- ----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $5 $12
- ----------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.33% 1.81%(f)
- ----------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 1.33% 1.39%(f),(g)
- ----------------------------------------------------------------------------------------------------
Net investment income (loss) 5.61% 5.20%(f)
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 41% 32%
- ----------------------------------------------------------------------------------------------------
Total return(h) 9.94% 5.25%(i)
- ----------------------------------------------------------------------------------------------------
</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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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 certain fees
and expenses (excluding fees and expenses of acquired funds).
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 39
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006(B)
Net asset value, beginning of period $10.16 $9.97
- ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .52(c) .28
Net gains (losses) (both realized and
unrealized) .37 .19
- ----------------------------------------------------------------------------------------------------
Total from investment operations .89 .47
- ----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.48) (.28)
Distributions from realized gains (.02) --
- ----------------------------------------------------------------------------------------------------
Total distributions (.50) (.28)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $10.55 $10.16
- ----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1 $1
- ----------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 2.13% 2.62%(f)
- ----------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 2.13% 2.20%(f),(g)
- ----------------------------------------------------------------------------------------------------
Net investment income (loss) 4.90% 4.51%(f)
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 41% 32%
- ----------------------------------------------------------------------------------------------------
Total return(h) 8.94% 4.80%(h)(i)
- ----------------------------------------------------------------------------------------------------
</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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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 certain fees
and expenses (excluding fees and expenses of acquired funds).
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
40 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006(B)
Net asset value, beginning of period $10.15 $9.97
- ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .53(c) .28
Net gains (losses) (both realized and
unrealized) .36 .18
- ----------------------------------------------------------------------------------------------------
Total from investment operations .89 .46
- ----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.48) (.28)
Distributions from realized gains (.02) --
- ----------------------------------------------------------------------------------------------------
Total distributions (.50) (.28)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $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) 2.13% 2.61%(f)
- ----------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 2.13% 2.19%(f),(g)
- ----------------------------------------------------------------------------------------------------
Net investment income (loss) 5.00% 4.46%(f)
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 41% 32%
- ----------------------------------------------------------------------------------------------------
Total return(h) 8.94% 4.75%(h)(i)
- ----------------------------------------------------------------------------------------------------
</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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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 certain fees
and expenses (excluding fees and expenses of acquired funds).
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 41
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006(B)
Net asset value, beginning of period $10.16 $9.98
- ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .65(c) .35
Net gains (losses) (both realized and
unrealized) .38 .17
- ----------------------------------------------------------------------------------------------------
Total from investment operations 1.03 .52
- ----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.60) (.34)
Distributions from realized gains (.02) --
- ----------------------------------------------------------------------------------------------------
Total distributions (.62) (.34)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $10.57 $10.16
- ----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $147 $47
- ----------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) .93% 1.52%(f)
- ----------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) .93% 1.10%(f),(g)
- ----------------------------------------------------------------------------------------------------
Net investment income (loss) 6.14% 5.70%(f)
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 41% 32%
- ----------------------------------------------------------------------------------------------------
Total return(h) 10.38% 5.44%(i)
- ----------------------------------------------------------------------------------------------------
</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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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 certain fees
and expenses (excluding fees and expenses of acquired funds).
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
42 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
CLASS R4*
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006(B)
Net asset value, beginning of period $10.16 $9.98
- ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .60(c) .34
Net gains (losses) (both realized and
unrealized) .39 .18
- ----------------------------------------------------------------------------------------------------
Total from investment operations .99 .52
- ----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.57) (.34)
Distributions from realized gains (.02) --
- ----------------------------------------------------------------------------------------------------
Total distributions (.59) (.34)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $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) 1.24% 1.67%(f)
- ----------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 1.24% 1.25%(f),(g)
- ----------------------------------------------------------------------------------------------------
Net investment income (loss) 5.75% 5.37%(f)
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 41% 32%
- ----------------------------------------------------------------------------------------------------
Total return(h) 9.97% 5.36%(i)
- ----------------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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 certain fees
and expenses (excluding fees and expenses of acquired funds).
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 43
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007(B)
Net asset value, beginning of period $10.24
- ----------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .57
Net gains (losses) (both realized and
unrealized) .28
- ----------------------------------------------------------------------------------------------------
Total from investment operations .85
- ----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.52)
Distributions from realized gains (.02)
- ----------------------------------------------------------------------------------------------------
Total distributions (.54)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $10.55
- ----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $38
- ----------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.33%(f)
- ----------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 1.33%(f)
- ----------------------------------------------------------------------------------------------------
Net investment income (loss) 5.86%(f)
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 41%
- ----------------------------------------------------------------------------------------------------
Total return(g) 8.49%(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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
44 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
RIVERSOURCE EMERGING MARKETS BOND FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of RiverSource Emerging Markets Bond
Fund (the Fund) (one of the portfolios constituting the RiverSource Global
Series, Inc.) as of October 31, 2007, and the related statements of operations,
changes in net assets, and financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The financial
statements and financial highlights of the Fund for the periods presented
through October 31, 2006, were audited by other auditors whose report dated
December 20, 2006 expressed an unqualified opinion on those financial statements
and financial highlights.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2007, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the 2007 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
RiverSource Emerging Markets Bond Fund of the RiverSource Global Series, Inc. at
October 31, 2007, the results of its operations, changes in its net assets and
the financial highlights for the year then ended, in conformity with U.S.
generally accepted accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 17, 2007
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 45
FEDERAL INCOME TAX INFORMATION
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended Oct. 31, 2007
CLASS A
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Nov. 27, 2006............................................... $0.04413
Dec. 18, 2006............................................... $0.07585
Jan. 23, 2007............................................... $0.02750
Feb. 23, 2007............................................... $0.04752
March 26, 2007.............................................. $0.05631
April 25, 2007.............................................. $0.04532
May 25, 2007................................................ $0.04708
June 25, 2007............................................... $0.04247
July 25, 2007............................................... $0.04702
Aug. 24, 2007............................................... $0.04287
Sept. 24, 2007.............................................. $0.05063
Oct. 26, 2007............................................... $0.04822
Total distributions......................................... $0.57492
</Table>
- --------------------------------------------------------------------------------
46 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
CLASS B
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Nov. 27, 2006............................................... $0.03730
Dec. 18, 2006............................................... $0.07124
Jan. 23, 2007............................................... $0.01958
Feb. 23, 2007............................................... $0.04058
March 26, 2007.............................................. $0.04935
April 25, 2007.............................................. $0.03869
May 25, 2007................................................ $0.04063
June 25, 2007............................................... $0.03821
July 25, 2007............................................... $0.04005
Aug. 24, 2007............................................... $0.03757
Sept. 24, 2007.............................................. $0.04417
Oct. 26, 2007............................................... $0.04184
Total distributions......................................... $0.49921
</Table>
CLASS C
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Nov. 27, 2006............................................... $0.03889
Dec. 18, 2006............................................... $0.07149
Jan. 23, 2007............................................... $0.01980
Feb. 23, 2007............................................... $0.04121
March 26, 2007.............................................. $0.04957
April 25, 2007.............................................. $0.03880
May 25, 2007................................................ $0.03774
June 25, 2007............................................... $0.03762
July 25, 2007............................................... $0.04085
Aug. 24, 2007............................................... $0.03674
Sept. 24, 2007.............................................. $0.04416
Oct. 26, 2007............................................... $0.04110
Total distributions......................................... $0.49797
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 47
CLASS I
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Nov. 27, 2006............................................... $0.04686
Dec. 18, 2006............................................... $0.07767
Jan. 23, 2007............................................... $0.03064
Feb. 23, 2007............................................... $0.05026
March 26, 2007.............................................. $0.05911
April 25, 2007.............................................. $0.04808
May 25, 2007................................................ $0.04986
June 25, 2007............................................... $0.04752
July 25, 2007............................................... $0.05132
Aug. 24, 2007............................................... $0.04704
Sept. 24, 2007.............................................. $0.05512
Oct. 26, 2007............................................... $0.05278
Total distributions......................................... $0.61626
</Table>
CLASS R4*
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Nov. 27, 2006............................................... $0.04550
Dec. 18, 2006............................................... $0.07667
Jan. 23, 2007............................................... $0.02859
Feb. 23, 2007............................................... $0.04819
March 26, 2007.............................................. $0.05776
April 25, 2007.............................................. $0.04638
May 25, 2007................................................ $0.04330
June 25, 2007............................................... $0.04488
July 25, 2007............................................... $0.04873
Aug. 24, 2007............................................... $0.04454
Sept. 24, 2007.............................................. $0.05252
Oct. 26, 2007............................................... $0.05003
Total distributions......................................... $0.58709
</Table>
* Effective Dec. 11, 2006, Class Y was reamed Class R4.
- --------------------------------------------------------------------------------
48 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
CLASS W
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 18, 2006............................................... $0.07617
Jan. 23, 2007............................................... $0.02708
Feb. 23, 2007............................................... $0.04729
March 26, 2007.............................................. $0.05811
April 25, 2007.............................................. $0.04620
May 25, 2007................................................ $0.04711
June 25, 2007............................................... $0.04428
July 25, 2007............................................... $0.04792
Aug. 24, 2007............................................... $0.04375
Sept. 24, 2007.............................................. $0.05161
Oct. 26, 2007............................................... $0.04890
Total distributions......................................... $0.53842
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 49
BOARD MEMBERS AND OFFICERS
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board.
The following is a list of the Fund's Board members. Each member oversees 104
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme
901 S. Marquette Ave. since 2006 Court, 1998-2005
Minneapolis, MN 55402
Age 53
- -----------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, RiverSource Funds,
901 S. Marquette Ave. since 1999 1999-2006; former Governor of
Minneapolis, MN 55402 Minnesota
Age 73
- -----------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member President, Springboard -- Partners
901 S. Marquette Ave. since 2007 in Cross Cultural Leadership
Minneapolis, MN 55402 (consulting company)
Age 52
- -----------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and
901 S. Marquette Ave. since 2004 Management, Bentley College; former
Minneapolis, MN 55402 Dean, McCallum Graduate School of
Age 56 Business, Bentley College
- -----------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member Former Managing Director, Shikiar American Progressive
901 S. Marquette Ave. since 2005 Asset Management Insurance
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Professor of Valmont Industries,
901 S. Marquette Ave. since 2002 and Economics, Carleton College Inc. (manufactures
Minneapolis, MN 55402 Chair of the irrigation systems)
Age 68 Board since 2007
- -----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
50 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset Strategic
901 S. Marquette Ave. since 2004 Management, Inc. (private real Distribution, Inc.
Minneapolis, MN 55402 estate and asset management (transportation,
Age 55 company) distribution and
logistics
consultants)
- -----------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer, RiboNovix, Hybridon, Inc.
901 S. Marquette Ave. since 2002 Inc. since 2003 (biotechnology); (biotechnology);
Minneapolis, MN 55402 former President, Forester Biotech American Healthways,
Age 63 Inc. (health
management programs)
- -----------------------------------------------------------------------------------------------------
</Table>
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
William F. Truscott Board member President -- U.S. Asset Management
53600 Ameriprise since 2001, and Chief Investment Officer,
Financial Center Vice President Ameriprise Financial, Inc. and
Minneapolis, MN 55474 since 2002 President, Chairman of the Board
Age 47 and Chief Investment Officer,
RiverSource Investments, LLC since
2005; President, Ameriprise
Certificate Company since 2006;
Senior Vice President -- Chief
Investment Officer, Ameriprise
Financial, Inc. and Chairman of the
Board and Chief Investment Officer,
RiverSource Investments, LLC,
2001-2005
- -----------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 51
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Patrick T. Bannigan President since Senior Vice President -- Asset Management,
172 Ameriprise 2006 RiverSource Investments, LLC since 2006;
Financial Center Managing Director and Global Head of Product,
Minneapolis, MN 55474 Morgan Stanley Investment Management,
Age 41 2004-2006; President, Touchstone Investments,
2002-2004; Director of Strategic Planning,
Evergreen Investments, 1995-2002
- ------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President -- Equity and Fixed
172 Ameriprise since 2004 Income, Ameriprise Financial, Inc. and
Financial Center RiverSource Investments, LLC since 2006; Vice
Minneapolis, MN 55474 President -- Investments, Ameriprise
Age 43 Certificate Company since 2003; Senior Vice
President -- Fixed Income, Ameriprise
Financial, Inc., 2002-2006 and RiverSource
Investments, LLC, 2004-2006; Managing
Director, Zurich Global Assets, 2001-2002
- ------------------------------------------------------------------------------------------
Amy K. Johnson Vice President Vice President -- Asset Management and Trust
5228 Ameriprise since 2006 Company Services, RiverSource Investments, LLC
Financial Center since 2006; Vice President -- Operations and
Minneapolis, MN 55474 Compliance, RiverSource Investments, LLC,
Age 42 2004-2006; Director of Product
Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- ------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Vice President -- Investment Accounting,
105 Ameriprise 2002 Ameriprise Financial, Inc. since 2002; Vice
Financial Center President -- Finance, American Express
Minneapolis, MN 55474 Company, 2000-2002
Age 52
- ------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset
5228 Ameriprise General Counsel Management, Ameriprise Financial, Inc. since
Financial Center and Secretary 2005; Vice President, General Counsel and
Minneapolis, MN 55474 since 2006 Secretary, Ameriprise Certificate Company
Age 48 since 2005; Vice President -- Asset Management
Compliance, Ameriprise Financial, Inc.,
2004-2005; Senior Vice President and Chief
Compliance Officer, U.S. Bancorp Asset
Management, 2002-2004; Second Vice President
and Assistant General Counsel, Hartford Life,
2001-2002
- ------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance
172 Ameriprise Officer since Officer, RiverSource Investments, LLC since
Financial Center 2006 2006; Director -- Mutual Funds, Voyageur Asset
Minneapolis, MN 55474 Management, 2003-2006; Director of Finance,
Age 46 Voyageur Asset Management, 2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
52 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Compliance Director and Anti-Money Laundering
2934 Ameriprise Prevention Officer, Ameriprise Financial, Inc. since
Financial Center Officer since 2004; Manager Anti-Money Laundering,
Minneapolis, MN 55474 2004 Ameriprise Financial, Inc., 2003-2004;
Age 43 Compliance Director and Bank Secrecy Act
Officer, American Express Centurion Bank,
2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 53
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.
- --------------------------------------------------------------------------------
54 RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On April 12, 2007, Ernst & Young LLP was selected as the Fund's independent
registered public accounting firm for the 2007 fiscal year. A majority of the
Fund's Board of Directors, including a majority of the Independent Directors,
approved the appointment of Ernst & Young LLP. The predecessor independent
registered public accounting firm's reports on the Fund's financial statements
for the year ended Oct. 31, 2006 and the year ended Oct. 31, 2005 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During such fiscal periods
and through April 12, 2007 there were no disagreements between the Fund and the
predecessor independent registered public accounting firm on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which such disagreements, if not resolved to the
satisfaction of the predecessor independent registered public accounting firm,
would have caused them to make reference to the subject matter of the
disagreement in connection with their reports on the financial statements for
such fiscal periods.
- --------------------------------------------------------------------------------
RIVERSOURCE EMERGING MARKETS BOND FUND -- 2007 ANNUAL REPORT 55
RIVERSOURCE(R) 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) 2007 RiverSource Distributors, Inc. S-6398 D (12/07)
</Table>
Annual Report
and Prospectus
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE(R)
GLOBAL BOND FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
OCTOBER 31, 2007
(Prospectus also enclosed)
RIVERSOURCE GLOBAL BOND FUND SEEKS
TO PROVIDE SHAREHOLDERS WITH HIGH
TOTAL RETURN THROUGH INCOME AND
GROWTH OF CAPITAL.
This annual report includes a prospectus that
describes in detail the Fund's objective,
investment strategy, risks, sales charges, fees
and other matters of interest. Please read the
prospectus carefully before you invest or send
money.
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 3
Performance Summary................. 5
Questions & Answers
with Portfolio Management........ 7
The Fund's Long-term Performance ... 12
Fund Expenses Example............... 14
Investments in Securities........... 16
Financial Statements................ 29
Notes to Financial Statements....... 34
Report of Independent Registered
Public Accounting Firm........... 57
Federal Income Tax Information...... 58
Board Members and Officers.......... 60
Proxy Voting........................ 64
Change in Independent Registered
Public Accounting Firm........... 64
</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.
- --------------------------------------------------------------------------------
2 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
FUND SNAPSHOT AT OCT. 31, 2007
FUND OBJECTIVE
RiverSource Global Bond Fund seeks to provide shareholders with high total
return through income and growth of capital.
SECTOR BREAKDOWN
Percentage of portfolio assets
<Table>
Foreign Government 53.5%
Corporate Bonds(1) 16.2%
Mortgage-Backed 10.4%
Commercial Mortgage-Backed 8.0%
U.S. Government Obligations & Agencies 4.5%
Cash & Cash Equivalents 2.9%
Senior Loans(2) 2.3%
Asset-Backed 2.2%
</Table>
(1) Includes Financials 6.1%, Telecommunication 3.5%, Consumer Discretionary
1.7%, Utilities 1.3%, Consumer Staples 1.1%, Industrials 0.9%, Materials
0.8%, Energy 0.5% and Health Care 0.3%.
(2) Includes Telecommunication 0.6%, Consumer Discretionary 0.5%, Health Care
0.4%, Consumer Staples 0.3%, Materials 0.3%, Energy 0.1% and Financials
0.1%.
TOP TEN COUNTRIES
Percentage of portfolio assets
<Table>
United States 38.7%
Germany 10.6%
Japan 9.8%
United Kingdom 5.8%
France 4.7%
Netherlands 4.2%
Italy 3.6%
Canada 3.3%
Spain 3.3%
Belgium 2.3%
</Table>
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 -- 2007 ANNUAL REPORT 3
FUND SNAPSHOT AT OCT. 31, 2007
STYLE MATRIX
<Table>
<Caption>
DURATION
SHORT INT. LONG
X X HIGH
MEDIUM QUALITY
LOW
</Table>
Shading within the style matrix indicates areas in which the Fund generally
invests.
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 serves 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 MANAGER
<Table>
<Caption>
YEARS IN INDUSTRY
Nicholas Pifer, CFA* 17
</Table>
* The Fund is managed by a team of portfolio managers led by Nicholas Pifer.
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A IGBFX 03/20/89
Class B IGLOX 03/20/95
Class C AGBCX 06/26/00
Class I AGBIX 03/04/04
Class R4(1) -- 03/20/95
Class W RGBWX 12/01/06
(1) Effective Dec. 11, 2006, Class Y was renamed Class
R4.
Total net assets $519.9 million
Number of holdings 314
Weighted average life(2) 6.5 years
Effective duration(3) 4.9 years
Weighted average bond rating(4) AA
</Table>
(2) 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.
(3) 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.
(4) WEIGHTED AVERAGE BOND RATING represents the average credit quality of the
underlying bonds in the portfolio.
- --------------------------------------------------------------------------------
4 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the year ended Oct. 31, 2007
(BAR CHART)
<Table>
RiverSource Global Bond Fund Class A (exciting
sales charge) +8.63%
Lehman Brothers Global Aggregate Index (unmanaged) +8.91%
Lipper Global Income Funds Index +7.62%
</Table>
(see "The Fund's Long-term Performance" for Index descriptions)
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 bar chart. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
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.
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(b) 1.17% 1.12%
Class W(c) 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.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) Inception date for Class W was Dec. 1, 2006.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 5
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT OCT. 31, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 3/20/89) +8.63% +4.13% +7.19% +5.22% +7.47%
Class B (inception 3/20/95) +7.68% +3.30% +6.36% +4.41% +5.38%
Class C (inception 6/26/00) +7.75% +3.31% +6.35% N/A +6.02%
Class I (inception 3/4/04) +8.91% +4.55% N/A N/A +5.40%
Class R4* (inception 3/20/95) +8.84% +4.30% +7.38% +5.41% +6.23%
Class W (inception 12/1/06) N/A N/A N/A N/A +5.71%**
WITH SALES CHARGE
Class A (inception 3/20/89) +3.46% +2.45% +6.15% +4.69% +7.18%
Class B (inception 3/20/95) +2.68% +2.05% +6.04% +4.41% +5.38%
Class C (inception 6/26/00) +6.75% +3.31% +6.35% N/A +6.02%
</Table>
<Table>
<Caption>
AT SEPT. 30, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 3/20/89) +8.19% +4.62% +6.84% +5.04% +7.43%
Class B (inception 3/20/95) +7.41% +3.80% +6.04% +4.25% +5.32%
Class C (inception 6/26/00) +7.31% +3.81% +6.03% N/A +5.93%
Class I (inception 3/4/04) +8.64% +5.05% N/A N/A +5.14%
Class R4* (inception 3/20/95) +8.40% +4.79% +7.07% +5.23% +6.16%
Class W (inception 12/1/06) N/A N/A N/A N/A +4.32%**
WITH SALES CHARGE
Class A (inception 3/20/89) +3.06% +2.94% +5.81% +4.53% +7.15%
Class B (inception 3/20/95) +2.41% +2.55% +5.72% +4.25% +5.32%
Class C (inception 6/26/00) +6.31% +3.81% +6.03% N/A +5.93%
</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.
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
** Not annualized.
- --------------------------------------------------------------------------------
6 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, Nic Pifer, portfolio manager for RiverSource Global Bond Fund, discusses
the Fund's results and positioning for the annual period ended Oct. 31, 2007.
At Oct. 31, 2007, approximately 30% 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 43, 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 14 and 40.
Q: How did RiverSource Global Bond Fund perform for the annual period?
A: RiverSource Global Bond Fund's Class A shares gained 8.63% (excluding
sales charge) for the 12 months ended Oct. 31, 2007. The Fund underperformed
its benchmark, the Lehman Brothers Global Aggregate Index (Lehman Global
Index), which rose 8.91%. However, the Fund outperformed the Lipper Global
Income Funds Index, representing the Fund's peer group, which increased 7.62%
during the same period.
RELATIVE TO THE LEHMAN GLOBAL INDEX, THE FUND BENEFITED MOST FROM THE
COMBINED EFFECT OF ITS DURATION AND YIELD CURVE POSITIONING.
Q: What factors most significantly affected the Fund's performance?
A: Currency markets had the most positive impact on the Fund's performance, as
the U.S. dollar fell 9.4% on a trade-weighted basis for the 12 months ended
Oct. 31, 2007. As the value of the U.S. dollar decreases, the dollar value of
foreign investments typically increases and vice versa. Further boosting the
Fund's results were the modestly positive annual returns from the Fund's
fixed income holdings, as measured in local currency terms.
Relative to the Lehman Global Index, the Fund benefited most from the
combined effect of its duration and yield curve positioning. Duration is a
principal measure of interest rate risk and yield curve positioning is the
way the Fund is structured to respond to changes in short-term vs. long-term
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 7
QUESTIONS & ANSWERS
interest rates. The Fund's shorter duration relative to the Lehman Global
Index in the U.S. and U.K. bond markets was especially helpful to results
during the spring, when the broad fixed income market sold off and interest
rates rose.
The Fund also benefited from holding securities with a higher average yield
than the Lehman Global Index. Such higher yields were primarily the result of
effective country allocation. The Fund had significant exposure to the bond
markets of Australia, New Zealand and some European nations. The Fund had
only a modest position in the Japanese bond market. Each of these allocations
proved prudent.
Detracting from the Fund's results relative to the Lehman Global Index was
its sector allocation. A significant exposure to commercial mortgage-backed
securities (CMBS) hurt most. The Fund's CMBS investments underperformed,
having been affected by the spillover from turmoil in the subprime mortgage
and credit markets. The negative impact of CMBS more than offset the positive
contributions to performance made by the Fund's positioning in mortgage-
backed securities, investment grade corporate bonds, government agency bonds
and other government-related assets. Throughout the period, the majority of
the Fund's holdings remained in the government bond sector. Exposure to
emerging market bonds helped performance, however, allocations to high yield
corporate bonds and to Treasury inflation-protected securities (TIPS) also
detracted.
The Fund's currency positioning had an overall neutral effect on its
performance. Significant weightings in the Australian dollar, the Norwegian
krone, the New Zealand dollar, the Polish zloty and the British pound
contributed positively to results. However, this positioning was virtually
offset by the detracting effects of more modest exposure to the Japanese yen
and to the Canadian dollar and the Fund's positioning in the euro.
Q: What changes did you make to the Fund's portfolio during the period?
A: We made tactical shifts in the Fund's duration relative to the Lehman Global
Index throughout the annual period, reacting to movements in interest rates.
At the end of the period, the Fund's duration was shorter than the Lehman
Global Index but less so than it had been at the start of the fiscal year.
We added to the Fund's positions in government agency securities and in
investment grade corporate bonds during July and August, seeking to take
- --------------------------------------------------------------------------------
8 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
advantage of market weakness, but maintained the Fund's modest exposure to
these sectors relative to the Lehman Global Index. We shifted, as market
conditions changed throughout the period, between a neutral and sizable
exposure to AAA-rated CMBS, pass-through mortgages, asset-backed securities
and European covered bonds. Toward the end of the third quarter of 2007, we
modestly increased the Fund's allocation to high yield corporate bonds,
primarily in the form of high yield bank loans, and initiated a position in
emerging market bonds. We believe some value has returned to these sectors
following the turmoil they faced in previous months. We also established a
position in TIPS in the latter part of the period.
When the euro and other European currencies rallied vs. the U.S. dollar, we
took the opportunity to pare back the Fund's position in these currencies,
moving from a sizable exposure to a neutral allocation by the end of April
and then to a modest exposure compared to the Lehman Global Index by the end
of October. We redeployed most of those assets into the U.S. dollar. From
August through October, we decreased the Fund's significant exposure to the
dollar-bloc currencies of Australia, Canada and New Zealand as well as to the
currency of South Africa, bringing these positions to neutral compared to the
Lehman Global Index. Finally, we further decreased the Fund's already modest
exposure to the Japanese yen.
WITH GLOBAL ECONOMIC TRENDS RELATIVELY HEALTHY, WE BELIEVE THE MARKET IS
OVERESTIMATING THE ECONOMIC IMPACT OF THE FINANCIAL MARKET TURMOIL.
Q: What is the Fund's tactical view and strategy for the months ahead?
A: The annual period ended at a time of market stress and uncertainty given the
tug-of-war between the ripple effects of the financial and credit market
turmoil and the generally stable growth patterns in global markets.
Collectively, the global markets have priced in a gloomy U.S. economic
outlook due to troubles in the U.S. housing market.
With global economic trends relatively healthy, we believe the market is
overestimating the economic impact of the financial market turmoil. Given
this view, we think interest rates are too low and we intend to maintain the
Fund's short duration relative to the Lehman Global Index.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 9
QUESTIONS & ANSWERS
As always, we constantly monitor the market for changing conditions and
regularly re-evaluate the Fund's duration, sector, country, yield curve, and
currency positioning in an effort to seek an attractive trade-off 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.
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 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
THIS PAGE LEFT BLANK INTENTIONALLY
THE FUND'S LONG-TERM PERFORMANCE
The chart on the facing page illustrates the total value of an assumed $10,000
investment in RiverSource Global Bond Fund Class A shares (from 11/1/97 to
10/31/07) as compared to the performance of two widely cited performance
indices, the Lehman Brothers Global Aggregate Index and the Lipper Global Income
Funds Index. In comparing the Fund's Class A shares to these indices, you should
take into account the fact that the Fund's performance reflects the maximum
sales charge of 4.75%, while such charges are not reflected in the performance
of the indices. Returns for the Fund include the reinvestment of any
distribution paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. 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. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
<Table>
<Caption>
SINCE
Results at Oct. 31, 2007 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION(3)
RIVERSOURCE GLOBAL BOND FUND (INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,346 $10,753 $13,477 $15,791 $36,359
Average annual total return +3.46% +2.45% +6.15% +4.69% +7.18%
LEHMAN BROTHERS GLOBAL AGGREGATE INDEX(1)
Cumulative value of $10,000 $10,891 $11,438 $14,078 $17,702 N/A
Average annual total return +8.91% +4.58% +7.08% +5.88% N/A
LIPPER GLOBAL INCOME FUNDS INDEX(2)
Cumulative value of $10,000 $10,762 $11,563 $14,256 $16,929 $34,202
Average annual total return +7.62% +4.96% +7.35% +5.40% +6.84%
</Table>
Results for other share classes can be found on page 6.
- --------------------------------------------------------------------------------
12 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN RIVERSOURCE GLOBAL BOND FUND LINE
GRAPH)
<Table>
<Caption>
RIVERSOURCE GLOBAL BOND
FUND CLASS A (INCLUDES SALES LEHMAN BROTHERS GLOBAL LIPPER GLOBAL INCOME
CHARGE) AGGREGATE INDEX(1) FUNDS INDEX(2)
---------------------------- ---------------------- ------------------------
'97 $ 9,525 $10,000 $10,000
'98 10,026 11,227 10,446
'99 9,991 10,901 10,380
'00 9,475 10,592 10,280
'01 10,502 11,634 11,318
'02 11,157 12,575 11,872
'03 12,635 14,109 13,441
'04 13,987 15,475 14,641
'05 13,822 15,364 14,811
'06 14,537 16,253 15,730
'07 15,791 17,702 16,929
</Table>
(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.
(3) Fund data is from March 20, 1989. Lipper peer group data is from April 1,
1989. The Fund began operating before the inception of the Lehman Brothers
Global Aggregate Index.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 13
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 Oct. 31, 2007.
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.
- --------------------------------------------------------------------------------
14 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2007 OCT. 31, 2007 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $1,045.30 $ 6.44(c) 1.25%
Hypothetical
(5% return before
expenses) $1,000 $1,018.90 $ 6.36(c) 1.25%
Class B
Actual(b) $1,000 $1,040.60 $10.34(c) 2.01%
Hypothetical
(5% return before
expenses) $1,000 $1,015.07 $10.21(c) 2.01%
Class C
Actual(b) $1,000 $1,041.10 $10.34(c) 2.01%
Hypothetical
(5% return before
expenses) $1,000 $1,015.07 $10.21(c) 2.01%
Class I
Actual(b) $1,000 $1,047.40 $ 4.49(c) .87%
Hypothetical
(5% return before
expenses) $1,000 $1,020.82 $ 4.43(c) .87%
Class R4*
Actual(b) $1,000 $1,046.30 $ 5.57(c) 1.08%
Hypothetical
(5% return before
expenses) $1,000 $1,019.76 $ 5.50(c) 1.08%
Class W
Actual(b) $1,000 $1,046.10 $ 6.50(c) 1.26%
Hypothetical
(5% return before
expenses) $1,000 $1,018.85 $ 6.41(c) 1.26%
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(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 184/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Oct. 31, 2007: +4.53%
for Class A, +4.06% for Class B, +4.11% for Class C, +4.74% for Class I,
+4.63% for Class R4 and +4.61% for Class W.
(c) 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, 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. Any amounts waived will
not be reimbursed by the Fund. This change was effective Nov. 1, 2007. If
this change had been in place for the entire six month period ended Oct.
31, 2007, the actual expenses paid would have been $4.23 for Class I, $5.78
for Class R4 and $6.55 for Class W; the hypothetical expenses paid would
have been $4.18 for Class I, $5.70 for Class R4, $6.46 for Class W. The
actual and hypothetical expenses paid for Class A, Class B and Class C
would have been the same as those expenses presented in the table above.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 15
INVESTMENTS IN SECURITIES
OCT. 31, 2007
(Percentages represent value of investments compared to net assets)
<Table>
<Caption>
BONDS (92.8%)(c)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
ARGENTINA (0.1%)
Republic of Argentina
09-12-13 7.00% $250,000 $225,625
04-17-17 7.00 300,000 251,250
---------------
Total 476,875
- ----------------------------------------------------------------------------------
AUSTRALIA (1.6%)
Commonwealth Bank of Australia
(European Monetary Unit)
Sr Unsub
11-12-09 3.38 570,000 803,532
New South Wales Treasury
(Australian Dollar)
12-01-10 7.00 5,025,000 4,672,459
Queensland Treasury
(Australian Dollar)
05-14-10 5.50 2,410,000 2,165,183
Telstra
04-01-12 6.38 500,000 524,199
---------------
Total 8,165,373
- ----------------------------------------------------------------------------------
AUSTRIA (1.2%)
Republic of Austria
(European Monetary Unit)
01-15-10 5.50 4,100,000 6,103,062
- ----------------------------------------------------------------------------------
BELGIUM (2.2%)
Kingdom of Belgium
(European Monetary Unit)
03-28-10 3.00 8,250,000 11,633,635
- ----------------------------------------------------------------------------------
BRAZIL (0.2%)
Federative Republic of Brazil
01-15-18 8.00 699,000 782,880
- ----------------------------------------------------------------------------------
CANADA (3.2%)
Canadian Pacific Railway
(Canadian Dollar)
06-15-10 4.90 380,000(d) 402,213
Cascades
Sr Nts
02-15-13 7.25 75,000 72,750
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
CANADA (CONT.)
Molson Coors Capital Finance
09-22-10 4.85% $1,000,000 $993,088
Province of British Columbia
(Canadian Dollar)
08-23-10 6.38 4,445,000 4,942,633
Province of Ontario
(Canadian Dollar)
03-08-14 5.00 5,600,000 6,067,447
Quebecor Media
03-15-16 7.75 55,000(d) 54,175
TELUS
06-01-11 8.00 3,135,000 3,400,434
Thomson
Sr Unsecured
10-01-14 5.70 720,000 719,184
---------------
Total 16,651,924
- ----------------------------------------------------------------------------------
COLOMBIA (0.1%)
Republic of Colombia
09-18-37 7.38 320,000 365,440
- ----------------------------------------------------------------------------------
CZECH REPUBLIC (0.3%)
Czech Republic
(Czech Koruna)
06-16-13 3.70 28,500,000 1,495,222
- ----------------------------------------------------------------------------------
DENMARK (0.7%)
Danske Bank
(European Monetary Unit)
Sr Nts
03-16-10 4.78 750,000(b) 1,085,862
Nykredit
(Danish Krone)
10-01-28 5.00 12,461,370 2,371,916
---------------
Total 3,457,778
- ----------------------------------------------------------------------------------
FRANCE (4.6%)
BNP Paribas
(European Monetary Unit)
Sr Unsub
10-20-08 4.65 750,000(b) 1,084,538
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
16 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
FRANCE (CONT.)
France Telecom
(European Monetary Unit)
Sr Unsub
02-21-17 4.75% 1,365,000 $1,910,998
Govt of France
(European Monetary Unit)
04-25-12 5.00 4,220,000 6,312,131
04-25-13 4.00 8,195,000 11,756,833
10-25-16 5.00 1,270,000 1,932,278
Societe Generale
(European Monetary Unit)
Sr Unsecured
11-28-08 4.74 750,000(b) 1,084,506
---------------
Total 24,081,284
- ----------------------------------------------------------------------------------
GERMANY (10.2%)
Bayerische Landesbank
(Japanese Yen)
Sr Nts
04-22-13 1.40 250,000,000 2,183,801
Bundesrepublik Deutschland
(European Monetary Unit)
07-04-13 3.75 10,030,000 14,232,034
07-04-27 6.50 6,695,000 12,186,588
07-04-28 4.75 3,005,000 4,482,892
07-04-34 4.75 5,370,000 8,048,598
COREALCREDIT BANK
(European Monetary Unit)
Series 501
09-02-09 5.00 1,800,000(d) 2,627,249
DEPFA Deutsche Pfandbriefbank
(European Monetary Unit)
Series G6
01-15-10 5.50 1,800,000 2,665,972
Deutsche Bank
(European Monetary Unit)
Sr Unsub
07-28-09 4.25 500,000 723,730
KfW
(British Pound)
12-07-15 5.50 1,800,000 3,776,352
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
GERMANY (CONT.)
Rheinische Hypothekenbank
(European Monetary Unit)
Series 803
07-05-10 5.75% 1,825,000(d) $2,730,634
---------------
Total 53,657,850
- ----------------------------------------------------------------------------------
GREECE (1.2%)
Hellenic Republic
(European Monetary Unit)
10-22-22 5.90 3,700,000 6,039,550
- ----------------------------------------------------------------------------------
INDONESIA (0.5%)
Republic of Indonesia
(Indonesian Rupiah)
07-15-22 10.25 21,813,000,000 2,473,917
- ----------------------------------------------------------------------------------
ITALY (3.5%)
Buoni Poliennali Del Tesoro
(European Monetary Unit)
11-01-07 6.00 6,660,000 9,648,099
02-01-19 4.25 1,860,000 2,627,574
11-01-26 7.25 3,006,283 5,716,851
Telecom Italia Capital
11-15-33 6.38 405,000 403,308
---------------
Total 18,395,832
- ----------------------------------------------------------------------------------
JAPAN (9.6%)
Development Bank of Japan
(Japanese Yen)
06-20-12 1.40 506,000,000 4,431,793
Govt of Japan
(Japanese Yen)
12-21-09 1.70 919,000,000 8,113,607
09-20-10 0.80 810,000,000 6,993,679
06-20-12 1.40 614,000,000 5,406,410
12-20-12 1.00 1,195,000,000 10,299,919
12-20-14 1.30 324,000,000 2,806,706
12-20-26 2.10 1,135,000,000 9,738,571
12-20-34 2.40 234,000,000 2,018,345
---------------
Total 49,809,030
- ----------------------------------------------------------------------------------
JERSEY (0.2%)
ASIF III Jersey
(European Monetary Unit)
Secured
11-25-08 4.87 800,000(b) 1,158,583
- ----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 17
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
LUXEMBOURG (0.2%)
Gaz Capital
Sr Unsecured
08-16-37 7.29% $230,000(d) $242,938
Telecom Italia Capital
11-15-13 5.25 840,000 824,740
---------------
Total 1,067,678
- ----------------------------------------------------------------------------------
MALAYSIA (0.3%)
Petronas Capital
05-22-12 7.00 1,500,000(d) $1,611,678
- ----------------------------------------------------------------------------------
MEXICO (0.9%)
Mexican Fixed Rate Bonds
(Mexican Peso)
12-24-09 9.00 16,100,000 1,547,926
12-20-12 9.00 28,990,000 2,851,680
United Mexican States
09-27-34 6.75 270,000 301,995
---------------
Total 4,701,601
- ----------------------------------------------------------------------------------
NETHERLANDS (4.0%)
BMW Finance
(European Monetary Unit)
01-22-14 4.25 875,000 1,220,375
Deutsche Telekom Intl Finance
(European Monetary Unit)
01-19-15 4.00 1,445,000 1,954,142
Govt of Netherlands
(European Monetary Unit)
01-15-08 2.50 7,955,000 11,486,848
07-15-12 5.00 2,575,000 3,857,229
ING Groep
(European Monetary Unit)
Sr Unsecured
05-31-17 4.75 875,000 1,242,435
Telefonica Europe
09-15-10 7.75 735,000 787,004
---------------
Total 20,548,033
- ----------------------------------------------------------------------------------
NEW ZEALAND (0.9%)
Govt of New Zealand
(New Zealand Dollar)
07-15-09 7.00 6,350,000 4,880,564
- ----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
NORWAY (1.2%)
Govt of Norway
(Norwegian Krone)
05-16-11 6.00% 31,260,000 $6,037,968
- ----------------------------------------------------------------------------------
PHILIPPINE ISLANDS (0.1%)
Republic of Philippines
01-14-31 7.75 320,000 364,800
- ----------------------------------------------------------------------------------
POLAND (1.3%)
Republic of Poland
(Polish Zloty)
03-24-10 5.75 17,415,000 6,995,191
- ----------------------------------------------------------------------------------
SOUTH AFRICA (0.4%)
Republic of South Africa
(South African Rand)
08-31-10 13.00 10,937,500 1,856,438
- ----------------------------------------------------------------------------------
SOUTH KOREA (0.3%)
Korea Development Bank
(Japanese Yen)
Series 21RG
06-25-08 0.98 70,000,000 605,809
Korea Development Bank
(Japanese Yen)
Series 23BR
06-28-10 0.87 100,000,000 855,780
---------------
Total 1,461,589
- ----------------------------------------------------------------------------------
SPAIN (3.2%)
Caja de Ahorros y Monte de Piedad de Madrid
(European Monetary Unit)
03-25-11 3.50 2,400,000 3,364,868
Govt of Spain
(European Monetary Unit)
07-30-09 5.15 9,115,000 13,429,639
---------------
Total 16,794,507
- ----------------------------------------------------------------------------------
SUPRA-NATIONAL (1.0%)
European Investment Bank
(British Pound)
12-07-11 5.50 2,385,000 4,967,126
- ----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
18 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
SWEDEN (0.9%)
Govt of Sweden
(Swedish Krona)
01-28-09 5.00% 13,850,000 $2,204,415
03-15-11 5.25 16,620,000 2,698,948
---------------
Total 4,903,363
- ----------------------------------------------------------------------------------
TURKEY (0.1%)
Republic of Turkey
03-17-36 6.88 $380,000 $376,694
- ----------------------------------------------------------------------------------
UNITED KINGDOM (5.7%)
Abbey Natl Treasury Services
(European Monetary Unit)
05-27-09 4.85 750,000(b) 1,084,001
BT Group
Sr Unsecured
12-15-10 8.63 550,000 605,094
HBOS Treasury Services
(European Monetary Unit)
02-12-09 3.50 1,600,000 2,288,581
United Kingdom Treasury
(British Pound)
12-07-07 7.25 1,160,000 2,415,195
03-07-12 5.00 6,050,000 12,589,885
09-07-14 5.00 5,010,000 10,428,798
---------------
Total 29,411,554
- ----------------------------------------------------------------------------------
UNITED STATES (32.9%)
AES
Sr Nts
10-15-17 8.00 170,000(d) 171,488
Allied Waste North America
Secured
06-01-17 6.88 110,000 108,350
AmeriCredit Auto Receivables Trust
Series 2007-DF Cl A3A (FSA)
07-06-12 5.49 1,025,000(i) 1,028,789
Anadarko Petroleum
Sr Unsecured
09-15-16 5.95 345,000 346,856
Baldor Electric
02-15-17 8.63 595,000 621,775
Ball
03-15-18 6.63 20,000 19,800
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Banc of America Commercial Mtge
Series 2005-1 Cl A4
11-10-42 5.02% $750,000(f) $744,187
Banc of America Commercial Mtge
Series 2007-1 Cl A3
01-15-49 5.45 2,075,000(f) 2,059,368
Bear Stearns Commercial Mtge Securities
Series 2003-T10 Cl A1
03-13-40 4.00 400,278(f) 391,444
Bear Stearns Commercial Mtge Securities
Series 2007-T26 Cl A4
01-12-45 5.47 1,050,000(f) 1,038,555
Brandywine Operating Partnership LP
05-01-17 5.70 370,000 352,828
Burlington Northern Santa Fe
05-01-37 6.15 470,000(h) 464,323
Cadbury Schweppes US Finance LLC
10-01-08 3.88 2,820,000(d) 2,792,911
California State Teachers' Retirement System Trust
Series 2002-C6 Cl A3
11-20-14 4.46 1,806,740(d,f) 1,787,902
Capital One Multi-Asset Execution Trust
Series 2007-A7 Cl A7
07-15-20 5.75 400,000 404,588
CenterPoint Energy Resources
Sr Unsecured
02-15-11 7.75 250,000 265,769
Chesapeake Energy
01-15-16 6.63 730,000(h) 715,400
Citibank Credit Card Issuance Trust
Series 2007-A8 Cl A8
09-20-19 5.65 1,300,000 1,298,479
Citigroup Commercial Mtge Trust
Series 2005-EMG Cl A1
09-20-51 4.15 494,096(d,f) 489,825
Citigroup Commercial Mtge Trust
Series 2006-C5 Cl A4
10-15-49 5.43 450,000(f) 442,286
Citigroup Commercial Mtge Trust
Series 2007-C6 Cl A4
12-10-49 5.70 1,900,000(f) 1,911,909
Citigroup
(European Monetary Unit)
Sr Unsecured
05-21-10 3.88 1,660,000 2,355,362
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 19
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Citizens Communications
Sr Unsecured
03-15-19 7.13% $35,000 $34,475
CMS Energy
Sr Unsub
07-17-17 6.55 470,000 456,219
Colorado Interstate Gas
Sr Nts
11-15-15 6.80 1,270,000 1,318,480
Comcast
03-15-16 5.90 1,305,000 1,311,809
03-15-37 6.45 860,000 866,942
Commercial Mtge Pass-Through Ctfs
Series 2006-CN2A Cl BFL
02-05-19 5.44 400,000(b,d,f) 401,487
Commercial Mtge Pass-Through Ctfs
Series 2007-C9 Cl A4
12-10-49 6.01 1,050,000(f) 1,065,810
Commercial Mtge Pass-Through Ctfs
Series 2007-FL14 Cl MKL1
06-15-22 5.67 1,775,000(b,d,f) 1,768,275
Communications & Power Inds
02-01-12 8.00 30,000 30,150
Cott Beverages USA
12-15-11 8.00 280,000 270,900
Countrywide Alternative Loan Trust
Collateralized Mtge Obligation
Series 2005-64CB Cl 1A1
12-25-35 5.50 1,665,849(f) 1,670,127
Countrywide Alternative Loan Trust
Collateralized Mtge Obligation
Series 2005-6CB Cl 1A1
04-25-35 7.50 876,280(f) 912,280
Countrywide Alternative Loan Trust
Collateralized Mtge Obligation
Series 2006-22R Cl 1A2
05-25-36 6.00 1,726,455(f) 1,740,023
Coventry Health Care
Sr Unsecured
08-15-14 6.30 460,000 467,326
Credit Suisse Mtge Capital Ctfs
Series 2006-C2 Cl A3
03-15-39 5.66 900,000(f) 906,122
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Credit Suisse Mtge Capital Ctfs
Series 2007-C3 Cl A4
06-15-39 5.72% $950,000(f) $956,710
Crown Americas LLC/Capital
11-15-13 7.63 110,000 111,925
11-15-15 7.75 130,000 133,900
CS First Boston Mtge Securities
Series 2003-CPN1 Cl A2
03-15-35 4.60 600,000(f) 578,806
CSC Holdings
Sr Nts Series B
07-15-09 8.13 270,000 275,400
CSX
Sr Nts
03-15-13 5.75 745,000 748,628
Del Monte
02-15-15 6.75 70,000 68,075
Dex Media West LLC/Finance
Sr Unsecured
Series B
08-15-10 8.50 85,000 87,231
DRS Technologies
11-01-13 6.88 135,000 135,000
02-01-18 7.63 70,000 71,575
Dunkin Securitization
Series 2006-1 Cl A2 (AMBAC)
06-20-31 5.78 1,600,000(d,i) 1,612,422
EchoStar DBS
10-01-13 7.00 40,000 41,650
02-01-16 7.13 80,000 83,600
El Paso
Sr Sub Nts
06-15-14 6.88 86,000 86,154
Erac USA Finance
10-15-17 6.38 755,000(d) 758,065
ERP Operating LP
06-15-17 5.75 485,000 470,363
Exelon
06-15-10 4.45 1,000,000 982,835
Exelon Generation LLC
Sr Unsecured
10-01-17 6.20 570,000 572,092
Federal Home Loan Mtge Corp
07-12-10 4.13 5,261,000 5,226,177
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
20 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Federal Home Loan Mtge Corp #A11799
08-01-33 6.50% $232,717(f) $239,458
Federal Home Loan Mtge Corp #A15881
11-01-33 5.00 1,181,754(f) 1,138,927
Federal Home Loan Mtge Corp #E91486
09-01-17 6.50 274,524(f) 281,812
Federal Home Loan Mtge Corp #E99684
10-01-18 5.00 597,784(f) 591,188
Federal Home Loan Mtge Corp #G01535
04-01-33 6.00 1,488,062(f) 1,508,677
Federal Natl Mtge Assn
11-15-30 6.63 2,675,000 3,171,239
Federal Natl Mtge Assn #254686
04-01-18 5.50 1,459,733(f) 1,466,869
Federal Natl Mtge Assn #254722
05-01-18 5.50 744,230(f) 747,868
Federal Natl Mtge Assn #360800
01-01-09 5.74 1,131,561(f) 1,138,279
Federal Natl Mtge Assn #545874
08-01-32 6.50 242,522(f) 250,225
Federal Natl Mtge Assn #555528
04-01-33 6.00 1,090,978(f) 1,103,987
Federal Natl Mtge Assn #555734
07-01-23 5.00 891,562(f) 867,261
Federal Natl Mtge Assn #555740
08-01-18 4.50 1,335,596(f) 1,298,293
Federal Natl Mtge Assn #555851
01-01-33 6.50 1,272,911(f) 1,311,442
Federal Natl Mtge Assn #575487
04-01-17 6.50 633,026(f) 650,796
Federal Natl Mtge Assn #621581
12-01-31 6.50 278,496(f) 287,835
Federal Natl Mtge Assn #633966
03-01-17 6.00 168,614(f) 171,886
Federal Natl Mtge Assn #634749
03-01-17 5.50 673,790(f) 678,260
Federal Natl Mtge Assn #640996
05-01-32 7.50 450,001(f) 475,059
Federal Natl Mtge Assn #643381
06-01-17 6.00 376,269(f) 383,571
Federal Natl Mtge Assn #645053
05-01-32 7.00 912,228(f) 954,439
Federal Natl Mtge Assn #646147
06-01-32 7.00 365,289(f) 384,604
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Federal Natl Mtge Assn #652284
08-01-32 6.50% $353,689(f) $364,039
Federal Natl Mtge Assn #653145
07-01-17 6.00 235,636(f) 240,505
Federal Natl Mtge Assn #653730
09-01-32 6.50 166,368(f) 171,650
Federal Natl Mtge Assn #655589
08-01-32 6.50 1,470,435(f) 1,523,310
Federal Natl Mtge Assn #666424
08-01-32 6.50 237,887(f) 244,848
Federal Natl Mtge Assn #670461
11-01-32 7.50 230,251(f) 243,072
Federal Natl Mtge Assn #677333
01-01-33 6.00 4,053,261(f) 4,101,593
Federal Natl Mtge Assn #688034
03-01-33 5.50 507,010(f) 501,577
Federal Natl Mtge Assn #688691
03-01-33 5.50 805,773(f) 796,296
Federal Natl Mtge Assn #711503
06-01-33 5.50 1,147,842(f) 1,138,695
Federal Natl Mtge Assn #735029
09-01-13 5.28 636,575(f) 640,262
Federal Natl Mtge Assn #741850
09-01-33 5.50 1,813,217(f) 1,791,891
Federal Natl Mtge Assn #753507
12-01-18 5.00 2,354,312(f) 2,326,302
Federal Natl Mtge Assn #755498
11-01-18 5.50 1,110,096(f) 1,116,053
Federal Natl Mtge Assn #756236
01-01-34 6.00 3,941,822(f) 3,996,372
Federal Natl Mtge Assn #756788
11-01-33 6.50 219,589(f) 226,043
Federal Natl Mtge Assn #759336
01-01-34 6.00 3,898,273(f) 3,952,147
Federal Natl Mtge Assn #765946
02-01-34 5.50 4,157,690(f) 4,108,790
Federal Natl Mtge Assn #845229
11-01-35 5.50 1,726,874(e,f) 1,703,537
Federal Natl Mtge Assn #886292
07-01-36 7.00 4,014,480(f) 4,173,434
FedEx
04-01-09 3.50 720,000 703,055
Florida Power
1st Mtge
09-15-37 6.35 220,000 230,995
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 21
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Forest Oil
Sr Nts
06-15-19 7.25% $50,000(d) $50,000
Freeport-McMoRan Copper & Gold
Sr Unsecured
04-01-15 8.25 755,000 815,400
04-01-17 8.38 25,000 27,375
General Electric Capital Assurance
Series 2003-1 Cl A4
05-12-35 5.25 450,000(d,f) 447,109
General Electric Capital
(New Zealand Dollar)
02-04-10 6.63 2,640,000 1,953,855
Genworth Financial
(Japanese Yen)
06-20-11 1.60 95,000,000 825,270
Govt Natl Mtge Assn #604708
10-15-33 5.50 1,019,661(f) 1,014,705
Govt Natl Mtge Assn
Collateralized Mtge Obligation
Interest Only
Series 2002-80 Cl CI
01-20-32 23.03 663,698(f,g) 61,786
Greenwich Capital Commercial Funding
Series 2004-GG1 Cl A5
06-10-36 4.88 500,000(f) 496,056
Greenwich Capital Commercial Funding
Series 2007-GG9 Cl A4
03-10-39 5.44 950,000(f) 935,351
GS Mtge Securities II
Series 2004-GG2 Cl A4
08-10-38 4.96 950,000(f) 945,207
GS Mtge Securities II
Series 2007-EOP Cl J
03-06-20 5.97 1,250,000(b,d,f) 1,223,261
GS Mtge Securities II
Series 2007-GG10 Cl A4
08-10-45 5.99 1,950,000(f) 1,976,695
GS Mtge Securities II
Series 2007-GG10 Cl F
08-10-45 5.99 775,000(f) 708,156
Hertz
01-01-14 8.88 160,000 164,800
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Hertz Vehicle Financing LLC
Series 2004-1A Cl A3 (MBIA)
05-25-09 2.85% $400,000(d,i) $398,010
HJ Heinz
12-01-08 6.43 275,000(d) 279,793
Home Depot
Sr Unsecured
12-16-36 5.88 1,340,000 1,169,951
Indiana Michigan Power
Sr Nts
03-15-37 6.05 750,000 724,207
IPALCO Enterprises
Secured
11-14-08 8.38 250,000 254,375
JPMorgan Chase & Co
Sub Nts
10-01-15 5.15 1,855,000 1,801,279
JPMorgan Chase Bank
Sub Nts
10-01-17 6.00 340,000 344,803
JPMorgan Chase Commercial Mtge Securities
Series 2003-LN1 Cl A1
10-15-37 4.13 350,799(f) 342,443
JPMorgan Chase Commercial Mtge Securities
Series 2003-ML1A Cl A1
03-12-39 3.97 353,035(f) 346,884
JPMorgan Chase Commercial Mtge Securities
Series 2003-ML1A Cl A2
03-12-39 4.77 1,200,000(f) 1,165,635
JPMorgan Chase Commercial Mtge Securities
Series 2005-LDP5 Cl A4
12-15-44 5.34 850,000(f) 831,488
JPMorgan Chase Commercial Mtge Securities
Series 2006-LDP6 Cl A4
04-15-43 5.48 825,000(f) 817,307
JPMorgan Chase Commercial Mtge Securities
Series 2006-LDP6 Cl ASB
04-15-43 5.49 1,150,000(f) 1,145,860
JPMorgan Chase Commercial Mtge Securities
Series 2007-CB20 Cl A4
02-12-51 5.79 850,000(f) 855,862
JPMorgan Chase Commercial Mtge Securities
Series 2007-CB20 Cl E
02-12-51 6.20 675,000(d,f) 644,333
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
22 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Kohl's
Sr Unsecured
12-15-17 6.25% $640,000 $640,717
L-3 Communications
01-15-15 5.88 135,000 131,625
L-3 Communications
Series B
10-15-15 6.38 65,000 65,000
Lamar Media
Sr Sub Nts
08-15-15 6.63 280,000(d) 267,400
LB-UBS Commercial Mtge Trust
Series 2004-C2 Cl A3
03-15-29 3.97 750,000(f) 722,400
LB-UBS Commercial Mtge Trust
Series 2006-C4 Cl AAB
06-15-32 5.86 750,000(f) 762,998
LB-UBS Commercial Mtge Trust
Series 2006-C6 Cl A4
09-15-39 5.37 800,000(f) 784,484
LB-UBS Commercial Mtge Trust
Series 2007-C1 Cl A4
02-15-40 5.42 850,000(f) 834,835
Lehman Brothers Holdings
Sr Unsecured
09-26-14 6.20 1,015,000 1,021,586
Lehman XS Net Interest Margin Nts
Collateralized Mtge Obligation
Series 2006-GPM6 Cl A1
10-28-46 6.25 195,688(d,f) 191,900
Lincoln Natl
Sr Unsecured
10-09-37 6.30 220,000 220,414
Macys Retail Holdings
07-15-09 4.80 725,000 717,285
Manufacturers & Traders Trust
Sub Nts
12-01-21 5.63 1,500,000 1,450,355
Marathon Oil
10-01-37 6.60 340,000(h) 353,835
Morgan Stanley Capital I
Series 2003-T11 Cl A2
06-13-41 4.34 775,000(f) 767,425
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Morgan Stanley Capital I
Series 2004-HQ4 Cl A5
04-14-40 4.59% $750,000(f) $738,458
Morgan Stanley Capital I
Series 2006-T23 Cl AAB
08-12-41 5.97 575,000(f) 583,892
NALCO
Sr Unsecured
11-15-11 7.75 970,000 986,975
Natl Collegiate Student Loan Trust
Collateralized Mtge Obligation
Interest Only
Series 2006-3 Cl AIO
01-25-12 5.88 2,400,000(g) 607,584
Natl Collegiate Student Loan Trust
Collateralized Mtge Obligation
Interest Only
Series 2007-2 Cl AIO
07-25-12 5.90 1,050,000(g) 289,055
NewMarket
12-15-16 7.13 80,000 80,200
NewPage
05-01-12 10.00 345,000 364,837
News America
12-15-35 6.40 1,160,000 1,152,415
Northwest Pipeline
Sr Unsecured
04-15-17 5.95 130,000 130,163
NRG Energy
02-01-14 7.25 65,000 65,000
01-15-17 7.38 140,000 139,300
Omnicare
12-15-13 6.75 455,000 439,075
12-15-15 6.88 60,000 57,600
Overseas Private Investment
U.S. Govt Guaranty Series 1996A
09-15-08 6.99 833,333 847,516
Owens-Brockway Glass Container
05-15-13 8.25 745,000 774,800
Pacificorp
1st Mtge
10-15-37 6.25 240,000 248,086
Peabody Energy
11-01-16 7.38 160,000 166,400
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 23
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Peabody Energy
Series B
03-15-13 6.88% $90,000 $90,450
Rainbow Natl Services LLC
Sr Nts
09-01-12 8.75 275,000(d) 286,000
Range Resources
03-15-15 6.38 70,000 68,250
05-15-16 7.50 30,000 30,600
Regions Bank
Sub Nts
06-26-37 6.45 285,000(h) 292,404
Renaissance Home Equity Loan Trust
Series 2005-4 Cl A3
02-25-36 5.57 800,000 795,088
RH Donnelley
Sr Nts
10-15-17 8.88 185,000(d) 185,231
RR Donnelley & Sons
Sr Unsecured
01-15-17 6.13 1,480,000 1,490,692
Sierra Pacific Power
Series M
05-15-16 6.00 765,000(h) 768,070
Silgan Holdings
Sr Sub Nts
11-15-13 6.75 50,000 49,250
Smurfit-Stone Container Enterprises
Sr Unsecured
03-15-17 8.00 250,000 248,438
Toyota Motor Credit
(Japanese Yen)
Sr Unsub
06-09-08 0.75 279,000,000 2,416,232
TransDigm
07-15-14 7.75 15,000 15,263
Travelers Companies
Sr Unsecured
06-15-37 6.25 440,000 433,796
U.S. Treasury
09-30-09 4.00 220,000 220,310
02-15-10 4.75 2,690,000 2,736,865
10-31-12 3.88 105,000(e) 103,655
08-15-17 4.75 420,000 429,253
02-15-26 6.00 410,000 469,450
</Table>
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
U.S. Treasury Inflation-Indexed Bond
01-15-14 2.00% $9,779,031(n) $9,770,787
Valmont Inds
05-01-14 6.88 50,000 50,000
Verizon New York
Series A
04-01-12 6.88 1,300,000 1,377,753
Verizon Pennsylvania
Series A
11-15-11 5.65 970,000(h) 988,692
Visant
10-01-12 7.63 25,000 25,688
Wachovia Bank Commercial Mtge Trust
Series 2003-C8 Cl A2
11-15-35 3.89 1,250,000(f) 1,234,123
Wachovia Bank Commercial Mtge Trust
Series 2005-C18 Cl A4
04-15-42 4.94 750,000(f) 718,971
Wachovia Bank Commercial Mtge Trust
Series 2005-C20 Cl A5
07-15-42 5.09 800,000(f) 791,417
Wachovia Bank Commercial Mtge Trust
Series 2006-C24 Cl APB
03-15-45 5.58 500,000(f) 500,248
Wachovia Bank Commercial Mtge Trust
Series 2006-C27 Cl A3
07-15-45 5.77 1,975,000(f) 1,987,406
Wachovia Bank Commercial Mtge Trust
Series 2006-C27 Cl APB
07-15-45 5.73 900,000(f) 905,944
Wachovia Bank Commercial Mtge Trust
Series 2006-C29 Cl A4
11-15-48 5.31 650,000(f) 633,628
WellPoint
Sr Unsub
01-15-36 5.85 475,000 446,329
06-15-37 6.38 120,000 121,585
Williams Companies
Sr Nts
07-15-19 7.63 351,000(h) 380,835
Windstream
08-01-16 8.63 695,000 743,650
03-15-19 7.00 70,000 68,950
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
24 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
XTO Energy
Sr Unsecured
08-01-37 6.75% $710,000 $762,064
---------------
Total 171,437,906
- ----------------------------------------------------------------------------------
URUGUAY (0.1%)
Republica Orient Uruguay
03-21-36 7.63 350,000 391,125
- ----------------------------------------------------------------------------------
TOTAL BONDS
(Cost: $444,150,486) $482,556,050
- ----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MUNICIPAL BONDS (0.2%)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(A)
UNITED STATES
Tobacco Settlement Financing Corporation
Revenue Bonds
Series 2007A-1
06-01-46 6.71% $1,200,000 $1,130,340
- ----------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost: $1,199,880) $1,130,340
- ----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SENIOR LOANS (2.3%)(c,k)
COUPON PRINCIPAL
BORROWER RATE AMOUNT VALUE(A)
CANADA (--%)
Domtar
Tranche B Term Loan
03-07-14 6.48% $241,875 $237,599
- -----------------------------------------------------------------------------------
GERMANY (0.1%)
Celanese
Term Loan
04-06-14 5.12-6.98 482,766 475,886
- -----------------------------------------------------------------------------------
NETHERLANDS (0.2%)
Nielsen Finance
Tranche B Term Loan
08-09-13 7.36 947,201 922,573
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SENIOR LOANS (CONTINUED)
COUPON PRINCIPAL
BORROWER RATE AMOUNT VALUE(A)
UNITED STATES (2.0%)
Aramark
Letter of Credit
01-26-14 5.12% $34,672 $33,834
Aramark
Term Loan
01-20-14 7.20 485,126 473,401
Asurion
Term Loan
07-03-14 8.36 470,000 458,838
Bausch & Lomb
1st Lien Term Loan
TBD TBD 140,000(e,l) 140,237
Bausch & Lomb
Delayed Draw Term Loan
TBD TBD 35,000(e,l,m) 35,044
Charter Communications
Term Loan
09-06-14 7.13 1,075,000 1,031,043
Community Health Systems
Delayed Draw Term Loan
TBD TBD 38,360(e,l,m) 37,507
Community Health Systems
Term Loan
07-25-14 7.76 581,640 568,698
Dresser
1st Lien Term Loan
05-04-14 7.32-8.01 356,331 349,560
Flextronics Semiconductor
Delayed Draw Term Loan
TBD TBD 112,179(e,l,m) 111,057
Flextronics Semiconductor
Tranche B Term Loan
TBD TBD 390,382(e,l) 387,064
Fontainebleau Las Vegas
Delayed Draw Term Loan
TBD TBD 171,559(e,l,m) 166,841
Fontainebleau Las Vegas
Term Loan
06-05-14 8.95 343,117 333,681
Georgia Pacific
Tranche B Term Loan
TBD TBD 649,010(e,l) 633,005
HCA
Tranche B Term Loan
01-21-13 7.45 1,168,538 1,139,616
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 25
<Table>
<Caption>
SENIOR LOANS (CONTINUED)
COUPON PRINCIPAL
BORROWER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Idearc
Term Loan
11-17-14 7.20% $179,548 $176,720
TBD TBD 713,769(e,l) 702,527
Jarden
Tranche B Term Loan
TBD TBD 718,200(e,l) 705,632
Level 3 Communications
Tranche B Term Loan
03-13-14 7.49 585,000 568,913
Neiman Marcus Group
Tranche B Term Loan
04-06-13 7.45 301,103 295,746
Pinnacle Foods Finance
Term Loan
04-02-14 7.94-7.95 448,875 437,842
Univision
Delayed Draw Term Loan
09-23-14 7.00 27,383 25,902
TBD TBD 34,228(e,l,m) 32,378
Univision
Term Loan
09-23-14 7.21 958,389 906,579
</Table>
<Table>
<Caption>
SENIOR LOANS (CONTINUED)
COUPON PRINCIPAL
BORROWER RATE AMOUNT VALUE(A)
UNITED STATES (CONT.)
Vanguard Health System
Term Loan
TBD TBD $359,100(e,l) $352,367
West Corp
Tranche B Term Loan
10-24-13 7.13-7.88% 237,605 232,622
---------------
Total 10,336,654
- -----------------------------------------------------------------------------------
TOTAL SENIOR LOANS
(Cost: $12,221,360) $11,972,712
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (2.8%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 14,623,644(j) $14,623,644
- ----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $14,623,644) $14,623,644
- ----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $472,195,370)(o) $510,282,746
==================================================================================
</Table>
NOTES TO INVESTMENTS IN SECURITIES
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Oct. 31,
2007.
(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
has been 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 Oct. 31,
2007, the value of these securities amounted to $21,424,299 or 4.1% of net
assets.
(e) At Oct. 31, 2007, the cost of securities purchased, including interest
purchased, on a when-issued and/or other forward-commitment basis was
$5,113,524.
(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.
- --------------------------------------------------------------------------------
26 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
NOTES TO INVESTMENTS IN SECURITIES (CONTINUED)
(g) 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 Oct. 31, 2007.
(h) Partially pledged as initial margin deposit on the following open interest
rate futures contracts (see Note 6 to the financial statements):
<Table>
<Caption>
TYPE OF SECURITY NOTIONAL AMOUNT
- -------------------------------------------------------------------------------
PURCHASE CONTRACTS
Euro-Bund, Dec. 2007, 10-year $11,800,000
Japanese Govt Bond, Dec. 2007, 10-year 500,000
U.S. Long Bond, Dec. 2007, 20-year 8,800,000
U.S. Treasury Note, Dec. 2007, 2-year 10,400,000
SALE CONTRACTS
U.S. Treasury Note, Dec. 2007, 5-year 20,500,000
U.S. Treasury Note, Dec. 2007, 10-year 17,900,000
</Table>
(i) 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>
(j) Affiliated Money Market Fund -- See Note 8 to the financial statements.
(k) 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.
(l) 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.
(m) At Oct. 31, 2007, the Fund had unfunded senior loan commitments pursuant to
the term 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>
BORROWER UNFUNDED COMMITMENT
- ------------------------------------------------------------------------------
Bausch & Lomb $34,913
Community Health Systems 38,360
Flextronics Semiconductor 111,067
Fontainebleau Las Vegas 171,130
Univision 34,228
- ------------------------------------------------------------------------------
Total $389,698
- ------------------------------------------------------------------------------
</Table>
(n) 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.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 27
NOTES TO INVESTMENTS IN SECURITIES (CONTINUED)
(o) At Oct. 31, 2007, the cost of securities for federal income tax purposes
was $477,608,556 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $35,767,958
Unrealized depreciation (3,093,768)
- ------------------------------------------------------------------------------
Net unrealized appreciation $32,674,190
- ------------------------------------------------------------------------------
</Table>
HOW TO FIND INFORMATION ABOUT THE FUND'S PORTFOLIO HOLDINGS
(n)
(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.
- --------------------------------------------------------------------------------
28 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCT. 31, 2007
<Table>
ASSETS
Investments in securities, at value (Note 1)
Unaffiliated issuers (identified cost $457,571,726) $495,659,102
Affiliated money market fund (identified cost
$14,623,644) (Note 8) 14,623,644
- ----------------------------------------------------------------------------
Total investments in securities (identified cost
$472,195,370) 510,282,746
Foreign currency holdings (identified cost $980,779) (Note
1) 1,032,645
Capital shares receivable 16,010,160
Accrued interest receivable 6,865,991
Receivable for investment securities sold 266,160
Variation margin receivable 65,932
Unrealized appreciation on forward foreign currency
contracts (Note 5) 19,306
- ----------------------------------------------------------------------------
Total assets 534,542,940
- ----------------------------------------------------------------------------
LIABILITIES
Disbursements in excess of cash 184,003
Capital shares payable 461,840
Payable for investment securities purchased 12,689,101
Unrealized depreciation on forward foreign currency
contracts (Note 5) 939,855
Unrealized depreciation on swap transactions (Note 7) 232,059
Accrued investment management services fee 10,061
Accrued distribution fee 3,501
Accrued transfer agency fee 1,272
Accrued administrative services fee 1,137
Accrued plan administration services fee 1
Other accrued expenses 123,830
- ----------------------------------------------------------------------------
Total liabilities 14,646,660
- ----------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $519,896,280
============================================================================
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 29
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
OCT. 31, 2007
<Table>
REPRESENTED BY
Capital stock -- $.01 par value (Note 1) $ 754,906
Additional paid-in capital 485,298,686
Undistributed net investment income 1,426,074
Accumulated net realized gain (loss) (Note 10) (4,671,050)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (Notes 5, 6 and 7) 37,087,664
- ----------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $519,896,280
============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $258,702,627
Class B $ 46,947,863
Class C $ 2,541,238
Class I $157,401,057
Class R4 $ 112,309
Class W $ 54,191,186
Net asset value per share of outstanding
capital stock: Class A shares(1) 37,571,540 $ 6.89
Class B shares 6,745,575 $ 6.96
Class C shares 367,669 $ 6.91
Class I shares 22,911,568 $ 6.87
Class R4 shares 16,311 $ 6.89
Class W shares 7,877,974 $ 6.88
- --------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $7.23. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 4.75%.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
30 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
STATEMENT OF OPERATIONS
YEAR ENDED OCT. 31, 2007
<Table>
INVESTMENT INCOME
Income:
Interest $20,814,388
Income distributions from affiliated money market fund (Note
8) 340,225
Fee income from securities lending (Note 3) 6,589
Less foreign taxes withheld (97,869)
- ---------------------------------------------------------------------------
Total income 21,063,333
- ---------------------------------------------------------------------------
Expenses (Note 2):
Investment management services fee 3,438,893
Distribution fee
Class A 653,140
Class B 555,147
Class C 27,011
Class W 27,525
Transfer agency fee
Class A 654,964
Class B 147,916
Class C 7,014
Class R4 69
Class W 22,021
Service fee -- Class R4 12
Administrative services fee 388,646
Plan administration services fee -- Class R4 220
Compensation of board members 8,804
Custodian fees 160,287
Printing and postage 89,100
Registration fees 68,400
Professional fees 43,765
Other 11,358
- ---------------------------------------------------------------------------
Total expenses 6,304,292
Expenses waived/reimbursed by the Investment Manager and
its affiliates (Note 2) (381,383)
- ---------------------------------------------------------------------------
5,922,909
Earnings and bank fee credits on cash balances (Note 2) (17,860)
- ---------------------------------------------------------------------------
Total net expenses 5,905,049
- ---------------------------------------------------------------------------
Investment income (loss) -- net 15,158,284
- ---------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 31
STATEMENT OF OPERATIONS (CONTINUED)
YEAR ENDED OCT. 31, 2007
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (Note 3) $ 5,241,921
Foreign currency transactions (2,844,238)
Futures contracts 181,540
Swap transactions (766,292)
- ---------------------------------------------------------------------------
Net realized gain (loss) on investments 1,812,931
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies 22,918,455
- ---------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 24,731,386
- ---------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $39,889,670
===========================================================================
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
32 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007 2006
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 15,158,284 $ 14,113,384
Net realized gain (loss) on investments 1,812,931 4,307,910
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in
foreign currencies 22,918,455 6,637,272
- ---------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 39,889,670 25,058,566
- ---------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (10,445,402) (15,319,991)
Class B (1,830,230) (2,907,320)
Class C (87,382) (127,417)
Class I (6,698,983) (6,261,680)
Class R4 (4,654) (4,811)
Class W (324,071) N/A
- ---------------------------------------------------------------------------------------
Total distributions (19,390,722) (24,621,219)
- ---------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Proceeds from sales
Class A shares (Note 2) 41,925,593 47,932,918
Class B shares 8,520,931 8,983,786
Class C shares 420,509 679,733
Class I shares 35,313,664 74,810,942
Class R4 shares 71,093 10,801
Class W shares 57,650,812 N/A
Reinvestment of distributions at net asset value
Class A shares 9,776,138 14,313,214
Class B shares 1,714,958 2,699,471
Class C shares 79,537 111,372
Class I shares 6,698,564 6,261,148
Class R4 shares 4,654 4,811
Class W shares 323,864 N/A
Payments for redemptions
Class A shares (79,932,025) (138,853,002)
Class B shares (Note 2) (28,554,355) (59,219,298)
Class C shares (Note 2) (1,185,971) (1,955,029)
Class I shares (35,536,448) (25,820,432)
Class R4 shares (48,411) (19,002)
Class W shares (5,063,418) N/A
- ---------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 12,179,689 (70,058,567)
- ---------------------------------------------------------------------------------------
Total increase (decrease) in net assets 32,678,637 (69,621,220)
Net assets at beginning of year 487,217,643 556,838,863
- ---------------------------------------------------------------------------------------
Net assets at end of year $519,896,280 $ 487,217,643
=======================================================================================
Undistributed net investment income $ 1,426,074 $ 6,181,660
- ---------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 33
NOTES TO FINANCIAL STATEMENTS
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. The Fund invests primarily in debt obligations of U.S. and foreign
issuers.
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 have no sales charge and are offered only to
qualifying institutional investors.
Effective Dec. 11, 2006, the Board approved renaming Class Y as Class R4,
terminating the shareholder servicing agreement, revising the fee structure
under the transfer agent agreement from account-based to asset-based, and
adopting a plan administration services agreement.
At Oct. 31, 2007, RiverSource Investments, LLC (the Investment Manager) and the
affiliated funds-of-funds, owned 100% of Class I shares.
Effective Dec. 1, 2006, the Fund offers an additional class of shares, Class W,
through qualifying discretionary accounts. Class W shares are sold without a
front-end sales charge or CDSC.
At Oct. 31, 2007, Ameriprise Financial and the affiliated funds-of-funds owned
approximately 30% 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 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.
- --------------------------------------------------------------------------------
34 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
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
of Directors of the funds 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), as administrator to the Fund and the parent company of the
Investment Manager, will fair value foreign securities pursuant to procedures
adopted by the Board of Directors of the funds, 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
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 35
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 Oct. 31, 2007, the Fund has entered into outstanding
when-issued securities of $1,571,046 and other forward-commitments of
$3,542,478.
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 "Investments in
securities." At Oct. 31, 2007, the Fund has entered into unfunded loan
commitments of $389,698.
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 year ended Oct. 31,
2007.
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
- --------------------------------------------------------------------------------
36 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
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 year ended
Oct. 31, 2007, 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.
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 Oct. 31, 2007, foreign currency holdings consisted of
multiple denominations.
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.
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
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 37
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
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.
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.
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 purpose 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.
On the statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been decreased by $523,148
and accumulated net realized loss has been decreased by $523,148.
- --------------------------------------------------------------------------------
38 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
The tax character of distributions paid for the years indicated is as follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007 2006
- ----------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income......................... $10,445,402 $15,319,991
Long-term capital gain.................. -- --
CLASS B
Distributions paid from:
Ordinary income......................... 1,830,230 2,907,320
Long-term capital gain.................. -- --
CLASS C
Distributions paid from:
Ordinary income......................... 87,382 127,417
Long-term capital gain.................. -- --
CLASS I
Distributions paid from:
Ordinary income......................... 6,698,983 6,261,680
Long-term capital gain.................. -- --
CLASS R4*
Distributions paid from:
Ordinary income......................... 4,654 4,811
Long-term capital gain.................. -- --
CLASS W**
Distributions paid from:
Ordinary income......................... 324,071 N/A
Long-term capital gain.................. -- N/A
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
** For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
At Oct. 31, 2007, the components of distributable earnings on a tax basis are as
follows:
<Table>
Undistributed ordinary income.............................. $ 6,463,694
Undistributed accumulated long-term gain................... $ --
Accumulated realized loss.................................. $ (4,163,824)
Unrealized appreciation (depreciation)..................... $ 31,542,818
</Table>
RECENT ACCOUNTING PRONOUNCEMENTS
On Sept. 20, 2006, the Financial Accounting Standards Board (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 framework for measuring fair value, and requires additional disclosures
about fair-value measurements. The application of SFAS 157 is required for
fiscal years beginning after Nov. 15, 2007 and interim periods within those
fiscal years. The impact of SFAS 157 on the Fund's financial statements is being
evaluated.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 39
In June 2006, the FASB issued FASB Interpretation 48 (FIN 48), "Accounting for
Uncertainty in Income Taxes." 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. FIN 48 is effective for fiscal
years beginning after Dec. 15, 2006. Recent SEC guidance allows implementing FIN
48 in fund NAV calculations as late as the fund's last NAV calculation in the
first required financial statement reporting period. As a result, the Fund will
adopt FIN 48 in its semiannual report for the period ending April 30, 2008. Tax
positions of the Fund are being evaluated to determine the impact, if any, to
the Fund. The adoption of FIN 48 is not anticipated to have a material impact on
the Fund.
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.
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 year
ended Oct. 31, 2007, was 0.71% 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 year ended Oct. 31, 2007, was 0.08% of
the Fund's average daily net assets.
Other expenses in the amount of $1,912 are for, among other things, certain
expenses of the Fund or the Board including: Fund boardroom and office expense,
- --------------------------------------------------------------------------------
40 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
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.
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 fee per shareholder account for this service as follows:
- - Class A $20.50
- - Class B $21.50
- - Class C $21.00
Effective Dec. 11, 2006, as part of the Board's approval to rename Class Y as
Class R4, the fee structure under the Transfer Agency Agreement was revised from
an account-based fee for Class Y to an asset-based fee for Class R4. The Fund
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. Prior to Dec.
11, 2006, the Fund paid the Transfer Agent an annual account-based fee of $18.50
per shareholder account.
In addition, the Fund pays the Transfer Agent an annual asset-based fee at a
rate of 0.20% of the Fund's average daily net assets attributable to Class W
shares.
Prior to Dec. 11, 2006, Class I paid a transfer agency fee at an annual rate per
shareholder account of $1. Effective Dec. 11, 2006, this fee was eliminated.
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.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Prior to Oct. 1, 2007, Ameriprise
Financial Services, Inc. also served as a principal underwriter and distributor
to the Fund. 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
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 41
to 1.00% of the Fund's average daily net assets attributable to Class B and
Class C shares.
Effective Dec. 11, 2006, under a Plan Administration Services Agreement, a fee
for the provision of various administrative, recordkeeping, communication and
educational services was adopted for the restructured Class R4. The fee is
calculated at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares.
Prior to Dec. 11, 2006, under a Shareholder Service Agreement, the Fund paid the
Distributor a fee for service provided to shareholders by the Distributor and
other servicing agents with respect to Class Y shares. The fee was calculated at
a rate of 0.10% of the Fund's average daily net assets attributable to Class Y
shares. Effective Dec. 11, 2006, this agreement was terminated.
Sales charges received by the Distributor for distributing Fund shares were
$256,515 for Class A, $56,131 for Class B and $1,356 for Class C for the year
ended Oct. 31, 2007.
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 year ended Oct. 31, 2007, the Investment Manager and its affiliates
waived 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, 1.08% for Class R4 and 1.26% for Class W. Of these waived fees and
expenses, the transfer agency fees waived at the class level were $304,097,
$64,618, $3,144, $69 and $9,436 for Class A, Class B, Class C, Class R4 and
Class W, respectively, and the plan administration services fee waived at the
class level was $19 for Class R4. Under an agreement, which was effective until
Oct. 31, 2007, the Investment Manager and its affiliates contractually agreed to
waive certain fees and expenses such that net expenses (excluding fees and
expenses of acquired funds) would not exceed 1.25% for Class A, 2.02% for Class
B, 2.02% for Class C, 0.90% for Class I, 1.08% for Class R4 and 1.26% for Class
W of the Fund's average daily net assets. 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 1.25% 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.
- --------------------------------------------------------------------------------
42 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
During the year ended Oct. 31, 2007, the Fund's custodian and transfer agency
fees were reduced by $17,860 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 $365,012,763 and $376,943,123, respectively, for the
year ended Oct. 31, 2007. Realized gains and losses are determined on an
identified cost basis.
Income from securities lending amounted to $6,589 for the year ended Oct. 31,
2007. Expenses paid to the Investment Manager were $296 for the year ended Oct.
31, 2007, 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 Oct. 31, 2007, the Fund had no outstanding securities lending.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
<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>
<Table>
<Caption>
YEAR ENDED OCT. 31, 2006
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ------------------------------------------------------------------------------------------
Class A 7,394,126 2,234,083 (21,409,456) (11,781,247)
Class B 1,374,250 417,094 (9,072,811) (7,281,467)
Class C 104,714 17,325 (300,714) (178,675)
Class I 11,574,667 977,816 (4,003,763) 8,548,720
Class R4* 1,649 751 (2,933) (533)
- ------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
** For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 43
5. FORWARD FOREIGN CURRENCY CONTRACTS
At Oct. 31, 2007, the Fund had forward foreign currency exchange contracts that
obligate it to deliver currencies at specified future dates. The unrealized
appreciation and/or depreciation on these contracts is included in the
accompanying financial statements. See "Summary of significant accounting
policies." The terms of the open contracts are as follows:
<Table>
<Caption>
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED
EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION
- ---------------------------------------------------------------------------------------------------
Nov. 5, 2007 5,780,320 4,000,000 $14,077 $ --
U.S. Dollar European Monetary Unit
Nov. 6, 2007 2,330,744 268,725,423 -- 687
U.S. Dollar Japanese Yen
Nov. 8, 2007 28,070,000 1,456,971 -- 54,247
Czech Koruna U.S. Dollar
Nov. 16, 2007 30,500,000 4,668,534 -- 135,304
Swedish Krona U.S. Dollar
Nov. 19, 2007 1,100,000,000 9,399,299 -- 156,336
Japanese Yen U.S. Dollar
Nov. 26, 2007 6,050,000 6,192,426 -- 212,483
Canadian Dollar U.S. Dollar
Nov. 28, 2007 12,630,000 18,055,595 -- 247,706
European Monetary Unit U.S. Dollar
Dec. 5, 2007 4,720,000 4,273,866 -- 114,159
Australian Dollar U.S. Dollar
Dec. 7, 2007 1,453,992 2,100,000 453 --
U.S. Dollar Singapore Dollar
Dec. 7, 2007 933,154 1,220,000 4,776 --
U.S. Dollar New Zealand Dollar
Dec. 10, 2007 9,100,000 1,686,606 -- 8,199
Norwegian Krone U.S. Dollar
Dec. 10, 2007 9,100,000 3,627,811 -- 10,734
Polish Zloty U.S. Dollar
- ---------------------------------------------------------------------------------------------------
Total $19,306 $939,855
- ---------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
44 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
6. INTEREST RATE FUTURES CONTRACTS
At Oct. 31, 2007, investments in securities included securities valued at
$693,049 that were pledged as collateral to cover initial margin deposits on
open purchase and open sale contracts. See "Summary of significant accounting
policies" and "Notes to investments in securities." The terms of the open
purchase and sale contracts are as follows:
<Table>
<Caption>
NUMBER OF NOTIONAL UNREALIZED
TYPE OF SECURITY CONTRACTS MARKET VALUE GAIN (LOSS)
- ---------------------------------------------------------------------------------
PURCHASE CONTRACTS
Euro-Bund, Dec. 2007, 10-year
(European Monetary Unit) 118 $19,372,032 $ (21,175)
Japanese Govt Bond, Dec. 2007,
10-year (Japanese Yen) 5 5,895,691 28,341
U.S. Long Bond, Dec. 2007, 20-year
(U.S. Dollar) 88 9,908,250 111,740
U.S. Treasury Note, Dec. 2007, 2-year
(U.S. Dollar) 52 10,769,688 69,720
- ---------------------------------------------------------------------------------
Total $45,945,661 $ 188,626
- ---------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
NUMBER OF NOTIONAL UNREALIZED
SALE CONTRACTS CONTRACTS MARKET VALUE GAIN (LOSS)
- ---------------------------------------------------------------------------------
U.S. Treasury Note, Dec. 2007, 5-year
(U.S. Dollar) 205 $22,005,469 $(176,154)
U.S. Treasury Note, Dec. 2007,
10-year (U.S. Dollar) 179 19,692,798 (167,680)
- ---------------------------------------------------------------------------------
Total $41,698,267 $(343,834)
- ---------------------------------------------------------------------------------
</Table>
7. SWAP CONTRACTS
At Oct. 31, 2007, the Fund had the following open CMBS total return swap
contracts:
<Table>
<Caption>
TERMINATION NOTIONAL UNREALIZED UNREALIZED
DATE AMOUNT APPRECIATION DEPRECIATION
- -------------------------------------------------------------------------------------
Receive total return on
Lehman Brothers Baa
8.5+ Commercial
Mortgage-Backed
Securities Index and
pay a floating rate
based on 1-month LIBOR
less 1.20%.
Counterparty: Citigroup Nov. 1, 2007 $1,300,000 $-- $ 53,349
- -------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 45
<Table>
<Caption>
TERMINATION NOTIONAL UNREALIZED UNREALIZED
DATE AMOUNT APPRECIATION DEPRECIATION
- -------------------------------------------------------------------------------------
Receive total return on
Lehman Brothers Baa
8.5+ Commercial
Mortgage-Backed
Securities Index and
pay a floating rate
based on 1-month LIBOR
less 1.10%.
Counterparty: Citigroup Dec. 1, 2007 $1,350,000 $-- $ 55,517
- -------------------------------------------------------------------------------------
Receive total return on
Lehman Brothers Baa
8.5+ Commercial
Mortgage-Backed
Securities Index and
pay a floating rate
based on 1-month LIBOR
less 1.05%.
Counterparty: Wachovia Dec. 1, 2007 1,175,000 -- 48,237
- -------------------------------------------------------------------------------------
Receive spread on
Lehman Brothers Baa
8.5+ Commercial
Mortgage-Backed
Securities Index plus
1.00% times notional
amount plus spread
return amount, if such
amount is positive, and
pay the absolute value
of the spread return
amount, if such amount
is negative.
Counterparty: Citigroup Jan. 1, 2008 400,000 -- 19,590
- -------------------------------------------------------------------------------------
Receive spread on
Lehman Brothers Baa
8.5+ Commercial
Mortgage-Backed
Securities Index times
notional amount plus
spread return amount,
if such amount is
positive, and pay the
absolute value of the
spread return amount,
if such amount is
negative.
Counterparty: Citigroup Jan. 1, 2008 1,300,000 -- --
- -------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
46 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
TERMINATION NOTIONAL UNREALIZED UNREALIZED
DATE AMOUNT APPRECIATION DEPRECIATION
- -------------------------------------------------------------------------------------
Receive total return on
Lehman Brothers Baa
8.5+ Commercial
Mortgage-Backed
Securities Index and
pay a floating rate
based on 1-month LIBOR
less 1.10%.
Counterparty: Wachovia Jan. 1, 2008 $1,350,000 $-- $ 55,366
- -------------------------------------------------------------------------------------
Total $-- $232,059
- -------------------------------------------------------------------------------------
</Table>
8. 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 $128,999,232 and $123,798,434, respectively, for the year
ended Oct. 31, 2007.
9. 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 year ended Oct. 31, 2007.
10. 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>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 47
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.
11. CONCENTRATION OF RISK
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.
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. Because each
investment has a greater effect on the Fund's performance, the Fund may be more
exposed to the risks of loss and volatility than a fund that invests more
broadly.
GEOGRAPHIC CONCENTRATION/SECTOR RISK
Investments that are concentrated in a particular issuer, geographic region, or
sector will be more susceptible to changes in price.
12. 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)), the parent company of RiverSource Investments, LLC
(RiverSource Investments), entered into settlement agreements
- --------------------------------------------------------------------------------
48 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
with the Securities and Exchange Commission (SEC) and Minnesota Department of
Commerce (MDOC) related to market timing activities. In connection with these
matters, the SEC and MDOC issued orders (the Orders) alleging that AEFC violated
certain provisions of the federal and Minnesota securities laws by failing to
adequately disclose market timing activities by allowing certain identified
market timers to continue to market time contrary to disclosures in mutual fund
and variable annuity product prospectuses. The Orders also alleged that AEFC
failed to implement procedures to detect and prevent market timing in 401(k)
plans for employees of AEFC and related companies and failed to adequately
disclose that there were no such procedures. Pursuant to the MDOC Order, the
MDOC also alleged that AEFC allowed inappropriate market timing to occur by
failing to have written policies and procedures and failing to properly
supervise its employees.
As a result of the Orders, 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. Pursuant to the terms of the Orders, AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to make presentations at least annually to its board of directors and the
relevant mutual funds' board that include an overview of policies and procedures
to prevent market timing, material changes to these policies and procedures and
whether disclosures related to market timing are consistent with the SEC order
and federal securities laws. 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. In
addition, AEFC agreed to complete and submit to the MDOC a compliance review of
its procedures regarding market timing within one year of the MDOC Order,
including a summary of actions taken to ensure compliance with applicable laws
and regulations and certification by a senior officer regarding compliance and
supervisory procedures.
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 BOND FUND -- 2007 ANNUAL REPORT 49
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.
- --------------------------------------------------------------------------------
50 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
13. 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, 2007 2006 2005 2004 2003
Net asset value, beginning of period $6.60 $6.59 $7.02 $6.57 $6.00
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .20(b) .19 .16 .17 .18
Net gains (losses) (both realized and
unrealized) .35 .14 (.23) .52 .60
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .55 .33 (.07) .69 .78
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.26) (.32) (.36) (.24) (.21)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.89 $6.60 $6.59 $7.02 $6.57
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $259 $276 $353 $389 $380
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (c),(d) 1.37% 1.39% 1.37% 1.34% 1.36%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement (c),(d) 1.25%(e) 1.25%(e) 1.35%(e) 1.34% 1.36%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.08% 2.77% 2.42% 2.66% 2.73%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 77% 68% 73% 92% 117%
- -----------------------------------------------------------------------------------------------------------
Total return(f) 8.63% 5.17% (1.18%) 10.70% 13.25%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of 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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds).
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 51
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004 2003
Net asset value, beginning of
period $6.67 $6.59 $7.02 $6.57 $5.99
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .15(b) .13 .10 .14 .12
Net gains (losses) (both realized
and unrealized) .35 .16 (.23) .50 .62
- ---------------------------------------------------------------------------------------------------------
Total from investment operations .50 .29 (.13) .64 .74
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.21) (.21) (.30) (.19) (.16)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.96 $6.67 $6.59 $7.02 $6.57
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $47 $63 $111 $142 $158
- ---------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (c),(d) 2.13% 2.16% 2.13% 2.10% 2.12%
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement (c),(d) 2.01%(e) 2.02%(e) 2.12%(e) 2.10% 2.12%
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.30% 1.98% 1.65% 1.90% 1.97%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 77% 68% 73% 92% 117%
- ---------------------------------------------------------------------------------------------------------
Total return(f) 7.68% 4.45% (1.98%) 9.83% 12.39%
- ---------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of 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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds).
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
52 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004 2003
Net asset value, beginning of
period $6.62 $6.57 $6.99 $6.55 $5.98
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .15(b) .14 .11 .14 .13
Net gains (losses) (both realized
and unrealized) .35 .13 (.22) .49 .60
- ---------------------------------------------------------------------------------------------------------
Total from investment operations .50 .27 (.11) .63 .73
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.21) (.22) (.31) (.19) (.16)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.91 $6.62 $6.57 $6.99 $6.55
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $3 $3 $4 $5 $5
- ---------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement (c),(d) 2.13% 2.16% 2.14% 2.09% 2.14%
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement (c),(d) 2.01%(e) 2.02%(e) 2.12%(e) 2.09% 2.14%
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.32% 2.00% 1.65% 1.91% 1.89%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 77% 68% 73% 92% 117%
- ---------------------------------------------------------------------------------------------------------
Total return(f) 7.75% 4.25% (1.83%) 9.72% 12.41%
- ---------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of 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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds).
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 53
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004(B)
Net asset value, beginning of period $6.59 $6.61 $7.03 $6.77
- --------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .23(c) .21 .19 .16
Net gains (losses) (both realized and
unrealized) .34 .14 (.22) .24
- --------------------------------------------------------------------------------------------------
Total from investment operations .57 .35 (.03) .40
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.29) (.37) (.39) (.14)
- --------------------------------------------------------------------------------------------------
Net asset value, end of period $6.87 $6.59 $6.61 $7.03
- --------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $157 $145 $89 $24
- --------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) .87% .88% .91% .89%(f)
- --------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) .87% .88% .91% .89%(f)
- --------------------------------------------------------------------------------------------------
Net investment income (loss) 3.47% 3.18% 2.87% 3.07%(f)
- --------------------------------------------------------------------------------------------------
Portfolio turnover rate 77% 68% 73% 92%
- --------------------------------------------------------------------------------------------------
Total return(g) 8.91% 5.52% (.56%) 6.06%(h)
- --------------------------------------------------------------------------------------------------
</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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
54 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
CLASS R4*
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004 2003
Net asset value, beginning of
period $6.60 $6.61 $7.04 $6.59 $6.01
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .22(b) .20 .16 .18 .19
Net gains (losses) (both realized
and unrealized) .35 .13 (.22) .52 .61
- ---------------------------------------------------------------------------------------------------------
Total from investment operations .57 .33 (.06) .70 .80
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment
income (.28) (.34) (.37) (.25) (.22)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.89 $6.60 $6.61 $7.04 $6.59
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $-- $-- $--
- ---------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.17% 1.20% 1.20% 1.17% 1.18%
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c),(d) 1.08%(e) 1.08%(e) 1.18%(e) 1.17% 1.18%
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.27% 2.95% 2.60% 2.83% 2.69%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 77% 68% 73% 92% 117%
- ---------------------------------------------------------------------------------------------------------
Total return(f) 8.84% 5.29% (1.00%) 10.86% 13.54%
- ---------------------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of 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) The Investment Manager and its affiliates have agreed to waive certain fees
and expenses (excluding fees and expenses of acquired funds).
(f) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 55
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007(B)
Net asset value, beginning of period $6.79
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .20
Net gains (losses) (both realized and
unrealized) .17
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .37
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.28)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.88
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $54
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.35%(f)
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e) 1.26%(f),(g)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.34%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 77%
- -----------------------------------------------------------------------------------------------------------
Total return(h) 5.71%(i)
- -----------------------------------------------------------------------------------------------------------
</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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of 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 certain fees
and expenses (excluding fees and expenses of acquired funds).
(h) Total return does not reflect payment of a sales charge.
(i) Not annualized.
- --------------------------------------------------------------------------------
56 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
RIVERSOURCE GLOBAL BOND FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of RiverSource Global Bond (the Fund)
(one of the portfolios constituting the RiverSource Global Series, Inc.) as of
October 31, 2007, and the related statements of operations, changes in net
assets, and financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The financial statements
and financial highlights of the Fund for the periods presented through October
31, 2006, were audited by other auditors whose report dated December 20, 2006
expressed an unqualified opinion on those financial statements and financial
highlights.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2007, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the 2007 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
RiverSource Global Bond Fund of the RiverSource Global Series, Inc. at October
31, 2007, the results of its operations, changes in its net assets and the
financial highlights for the year then ended, in conformity with U.S. generally
accepted accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 17, 2007
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 57
FEDERAL INCOME TAX INFORMATION
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended Oct. 31, 2007
CLASS A
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.14376
March 26, 2007.............................................. 0.03141
June 25, 2007............................................... 0.04174
Sept. 24, 2007.............................................. 0.04682
Total distributions......................................... $0.26373
</Table>
CLASS B
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.13157
March 26, 2007.............................................. 0.01739
June 25, 2007............................................... 0.02861
Sept. 24, 2007.............................................. 0.03281
Total distributions......................................... $0.21038
</Table>
CLASS C
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.13074
March 26, 2007.............................................. 0.01805
June 25, 2007............................................... 0.02872
Sept. 24, 2007.............................................. 0.03386
Total distributions......................................... $0.21137
</Table>
- --------------------------------------------------------------------------------
58 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
CLASS I
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.14984
March 26, 2007.............................................. 0.03838
June 25, 2007............................................... 0.04822
Sept. 24, 2007.............................................. 0.05317
Total distributions......................................... $0.28961
</Table>
CLASS R4*
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.14718
March 26, 2007.............................................. 0.03431
June 25, 2007............................................... 0.04526
Sept. 24, 2007.............................................. 0.04969
Total distributions......................................... $0.27644
</Table>
CLASS W
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 0.00%
Dividends Received Deduction for corporations......... 0.00%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.14948
March 26, 2007.............................................. 0.03761
June 25, 2007............................................... 0.04508
Sept. 24, 2007.............................................. 0.04852
Total distributions......................................... $0.28069
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 59
BOARD MEMBERS AND OFFICERS
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board.
The following is a list of the Fund's Board members. Each member oversees 104
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme
901 S. Marquette Ave. since 2006 Court, 1998-2005
Minneapolis, MN 55402
Age 53
- -----------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, RiverSource Funds,
901 S. Marquette Ave. since 1999 1999-2006; former Governor of
Minneapolis, MN 55402 Minnesota
Age 73
- -----------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member President, Springboard -- Partners
901 S. Marquette Ave. since 2007 in Cross Cultural Leadership
Minneapolis, MN 55402 (consulting company)
Age 52
- -----------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and
901 S. Marquette Ave. since 2004 Management, Bentley College; former
Minneapolis, MN 55402 Dean, McCallum Graduate School of
Age 56 Business, Bentley College
- -----------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member Former Managing Director, Shikiar American Progressive
901 S. Marquette Ave. since 2005 Asset Management Insurance
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Professor of Valmont Industries,
901 S. Marquette Ave. since 2002 and Economics, Carleton College Inc. (manufactures
Minneapolis, MN 55402 Chair of the irrigation systems)
Age 68 Board since 2007
- -----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
60 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset Strategic
901 S. Marquette Ave. since 2004 Management, Inc. (private real Distribution, Inc.
Minneapolis, MN 55402 estate and asset management (transportation,
Age 55 company) distribution and
logistics
consultants)
- -----------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer, RiboNovix, Hybridon, Inc.
901 S. Marquette Ave. since 2002 Inc. since 2003 (biotechnology); (biotechnology);
Minneapolis, MN 55402 former President, Forester Biotech American Healthways,
Age 63 Inc. (health
management programs)
- -----------------------------------------------------------------------------------------------------
</Table>
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
William F. Truscott Board member President -- U.S. Asset Management
53600 Ameriprise since 2001, and Chief Investment Officer,
Financial Center Vice President Ameriprise Financial, Inc. and
Minneapolis, MN 55474 since 2002 President, Chairman of the Board
Age 47 and Chief Investment Officer,
RiverSource Investments, LLC since
2005; President, Ameriprise
Certificate Company since 2006;
Senior Vice President -- Chief
Investment Officer, Ameriprise
Financial, Inc. and Chairman of the
Board and Chief Investment Officer,
RiverSource Investments, LLC,
2001-2005
- -----------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 61
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Patrick T. Bannigan President since Senior Vice President -- Asset Management,
172 Ameriprise 2006 RiverSource Investments, LLC since 2006;
Financial Center Managing Director and Global Head of Product,
Minneapolis, MN 55474 Morgan Stanley Investment Management,
Age 41 2004-2006; President, Touchstone Investments,
2002-2004; Director of Strategic Planning,
Evergreen Investments, 1995-2002
- ------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President -- Equity and Fixed
172 Ameriprise since 2004 Income, Ameriprise Financial, Inc. and
Financial Center RiverSource Investments, LLC since 2006; Vice
Minneapolis, MN 55474 President -- Investments, Ameriprise
Age 43 Certificate Company since 2003; Senior Vice
President -- Fixed Income, Ameriprise
Financial, Inc., 2002-2006 and RiverSource
Investments, LLC, 2004-2006; Managing
Director, Zurich Global Assets, 2001-2002
- ------------------------------------------------------------------------------------------
Amy K. Johnson Vice President Vice President -- Asset Management and Trust
5228 Ameriprise since 2006 Company Services, RiverSource Investments, LLC
Financial Center since 2006; Vice President -- Operations and
Minneapolis, MN 55474 Compliance, RiverSource Investments, LLC,
Age 42 2004-2006; Director of Product
Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- ------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Vice President -- Investment Accounting,
105 Ameriprise 2002 Ameriprise Financial, Inc. since 2002; Vice
Financial Center President -- Finance, American Express
Minneapolis, MN 55474 Company, 2000-2002
Age 52
- ------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset
5228 Ameriprise General Counsel Management, Ameriprise Financial, Inc. since
Financial Center and Secretary 2005; Vice President, General Counsel and
Minneapolis, MN 55474 since 2006 Secretary, Ameriprise Certificate Company
Age 48 since 2005; Vice President -- Asset Management
Compliance, Ameriprise Financial, Inc.,
2004-2005; Senior Vice President and Chief
Compliance Officer, U.S. Bancorp Asset
Management, 2002-2004; Second Vice President
and Assistant General Counsel, Hartford Life,
2001-2002
- ------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance
172 Ameriprise Officer since Officer, RiverSource Investments, LLC since
Financial Center 2006 2006; Director -- Mutual Funds, Voyageur Asset
Minneapolis, MN 55474 Management, 2003-2006; Director of Finance,
Age 46 Voyageur Asset Management, 2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
62 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Compliance Director and Anti-Money Laundering
2934 Ameriprise Prevention Officer, Ameriprise Financial, Inc. since
Financial Center Officer since 2004; Manager Anti-Money Laundering,
Minneapolis, MN 55474 2004 Ameriprise Financial, Inc., 2003-2004;
Age 43 Compliance Director and Bank Secrecy Act
Officer, American Express Centurion Bank,
2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT 63
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.
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On April 12, 2007, Ernst & Young LLP was selected as the Fund's independent
registered public accounting firm for the 2007 fiscal year. A majority of the
Fund's Board of Directors, including a majority of the Independent Directors,
approved the appointment of Ernst & Young LLP. The predecessor independent
registered public accounting firm's reports on the Fund's financial statements
for the year ended Oct. 31, 2006 and the year ended Oct. 31, 2005 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During such fiscal periods
and through April 12, 2007 there were no disagreements between the Fund and the
predecessor independent registered public accounting firm on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which such disagreements, if not resolved to the
satisfaction of the predecessor independent registered public accounting firm,
would have caused them to make reference to the subject matter of the
disagreement in connection with their reports on the financial statements for
such fiscal periods.
- --------------------------------------------------------------------------------
64 RIVERSOURCE GLOBAL BOND FUND -- 2007 ANNUAL REPORT
RIVERSOURCE(R) 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) 2007 RiverSource Distributors, Inc. S-6309 AD (12/07)
</Table>
Annual Report
and Prospectus
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE(R)
GLOBAL EQUITY FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
OCTOBER 31, 2007
(Prospectus also enclosed)
RIVERSOURCE GLOBAL EQUITY FUND
SEEKS TO PROVIDE SHAREHOLDERS WITH
LONG-TERM CAPITAL GROWTH.
This annual report includes a prospectus that
describes in detail the Fund's objective,
investment strategy, risks, sales charges, fees
and other matters of interest. Please read the
prospectus carefully before you invest or send
money.
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 3
Performance Summary................. 5
Questions & Answers
with Portfolio Management........ 8
The Fund's Long-term Performance ... 12
Fund Expenses Example............... 14
Investments in Securities........... 16
Financial Statements................ 21
Notes to Financial Statements....... 27
Report of Independent Registered
Public Accounting Firm........... 48
Federal Income Tax Information...... 49
Board Members and Officers.......... 51
Proxy Voting........................ 55
Change in Independent Registered
Public Accounting Firm........... 56
</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.
- --------------------------------------------------------------------------------
2 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
FUND SNAPSHOT AT OCT. 31, 2007
FUND OBJECTIVE
RiverSource Global Equity Fund seeks to provide shareholders with long-term
capital growth.
COUNTRY BREAKDOWN
Percentage of portfolio assets
(PIE CHART)
<Table>
United States 33.5%
Hong Kong 8.0%
Germany 8.0%
United Kingdom 7.4%
Japan 7.1%
Switzerland 7.0%
Other(1) 29.0%
</Table>
(1) Includes Brazil 5.3%, Australia 3.5%, South Africa 2.3%, Spain 2.1%, Taiwan
2.1%, Canada 1.8%, France 1.7%, South Korea 1.6%, Sweden 1.4%, Russia 1.3%,
Netherlands 0.9%, Bermuda 0.8%, India 0.8%, Ireland 0.5%, Mexico 0.5%,
Norway 0.5%, Finland 0.4% and Cash & Cash Equivalents 1.5%.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Microsoft (United States) 2.8%
Roche Holding (Switzerland) 2.3%
Google Cl A (United States) 1.8%
Braskem Series A (Brazil) 1.5%
Plum Creek Timber (United States) 1.4%
China Mobile (Hong Kong) 1.4%
United Technologies (United States) 1.4%
CSL (Australia) 1.4%
Inditex (Spain) 1.3%
Carphone Warehouse Group (United
Kingdom) 1.3%
</Table>
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
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.
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 EQUITY FUND -- 2007 ANNUAL REPORT 3
FUND SNAPSHOT AT OCT. 31, 2007
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 generally
invests.
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 serves 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 MANAGERS
THREADNEEDLE INTERNATIONAL LIMITED
<Table>
<Caption>
YEARS IN INDUSTRY
Dominic Rossi 21
Stephen Thornber 20
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A IGLGX 05/29/90
Class B IDGBX 03/20/95
Class C RGCEX 06/26/00
Class R2 -- 12/11/06
Class R3 -- 12/11/06
Class R4(1) IDGYX 03/20/95
Class R5 -- 12/11/06
Class W -- 12/01/06
(1) Effective Dec. 11, 2006, Class Y was renamed Class
R4.
Total net assets $858.8 million
Number of holdings 119
</Table>
- --------------------------------------------------------------------------------
4 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the year ended Oct. 31, 2007
(BAR CHART)
<Table>
RiverSource Global Equity Fund Class A (excluding
sales charge) +28.82%
Morgan Stanley Capital International
MSCI All Country World Index (unmanaged) +24.77%
Lipper Global Funds Index +21.25%
</Table>
(see "The Fund's Long-term Performance" for Index descriptions)
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 bar chart. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
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.
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(a) 1.74%
Class R3(a) 1.49%
Class R4(b) 1.24%
Class R5(a) 0.99%
Class W(c) 1.39%
</Table>
(a) Inception date for Class R2, Class R3 and Class R5 was Dec. 11, 2006.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) Inception date for Class W was Dec. 1, 2006.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 5
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT OCT. 31, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 5/29/90) +28.82% +23.72% +20.05% +7.48% +7.31%
Class B (inception 3/20/95) +27.81% +22.82% +19.13% +6.66% +7.49%
Class C (inception 6/26/00) +27.76% +22.83% +19.11% N/A +1.88%
Class R2 (inception 12/11/06) N/A N/A N/A N/A +23.41%*
Class R3 (inception 12/11/06) N/A N/A N/A N/A +23.80%*
Class R4** (inception 3/20/95) +28.85% +23.94% +20.25% +7.65% +8.49%
Class R5 (inception 12/11/06) N/A N/A N/A N/A +24.33%*
Class W (inception 12/1/06) N/A N/A N/A N/A +24.87%*
WITH SALES CHARGE
Class A (inception 5/29/90) +21.39% +21.34% +18.63% +6.93% +7.00%
Class B (inception 3/20/95) +22.81% +21.93% +18.94% +6.66% +7.49%
Class C (inception 6/26/00) +26.76% +22.83% +19.11% N/A +1.88%
</Table>
<Table>
<Caption>
AT SEPT. 30, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 5/29/90) +27.66% +22.44% +20.01% +6.06% +7.00%
Class B (inception 3/20/95) +26.61% +21.48% +19.11% +5.25% +7.07%
Class C (inception 6/26/00) +26.48% +21.47% +19.07% N/A +1.12%
Class R2 (inception 12/11/06) N/A N/A N/A N/A +16.61%*
Class R3 (inception 12/11/06) N/A N/A N/A N/A +16.88%*
Class R4** (inception 3/20/95) +27.69% +22.55% +20.25% +6.22% +8.06%
Class R5 (inception 12/11/06) N/A N/A N/A N/A +17.40%*
Class W (inception 12/1/06) N/A N/A N/A N/A +17.89%*
</Table>
<Table>
<Caption>
With sales charge
Class A (inception 5/29/90) +20.32% +20.04% +18.60% +5.43% +6.63%
Class B (inception 3/20/95) +21.61% +20.57% +18.91% +5.25% +7.07%
Class C (inception 6/26/00) +25.48% +21.47% +19.07% N/A +1.12%
</Table>
- --------------------------------------------------------------------------------
6 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
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.
** Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 7
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, RiverSource Global Equity Fund portfolio managers Dominic Rossi and
Stephen Thornber of Threadneedle International Limited (Threadneedle) discuss
the Fund's results and positioning for the fiscal year ended Oct. 31, 2007.
Threadneedle, an indirect wholly owned subsidiary of Ameriprise Financial, Inc.,
acts as the subadviser to the Fund.
Q: How did RiverSource Global Equity Fund perform for the period?
A: The Fund increased 28.82% (Class A shares excluding sales charge) for the
12-month period ended Oct. 31, 2007. The Fund outperformed its benchmark, the
Morgan Stanley Capital International All Country World Index (MSCI Index),
which increased 24.77% for the period. The Fund also outperformed the Lipper
Global Funds Index, representing the Fund's peer group, which increased
21.25% over the same time frame.
Q: What factors most significantly affected performance?
A: World markets remained healthy during the past 12 months, with the strongest
results coming from the developing markets of Asia, Latin America and
emerging Europe. Performance in developed markets, including Japan, the U.S.
and Europe, was less impressive. This reflected the division in economic
growth, with growth slowing in the U.S. and other mature economies, but
remaining robust in the emerging markets.
The Fund benefited from its regional positioning, particularly its emerging
markets exposure. Allocations to Asia, Latin America and other emerging
markets were larger than those of the MSCI Index and were a key performance
driver. Having smaller weightings in the U.K. and U.S. was also advantageous.
The Fund began the year with a larger weighting in Japan than the MSCI Index,
which turned out to be disadvantageous, as the Japanese market was quite
weak.
Exposure to the mining, retail and real estate sectors all added value during
the year. We emphasized mining stocks based on anticipated strength in
emerging markets and a favorable outlook for commodities prices. The Fund's
larger-than-MSCI Index weightings in retail and real estate also proved
advantageous. Though the Fund was overweight in banks at the start of the
year, we quickly moved to an underweight when the U.S. subprime situation
developed. This enabled us to minimize the negative impact when concerns
spread from the U.S. to global markets. Initially, the Fund's information
technology weighting
- --------------------------------------------------------------------------------
8 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
was smaller than the MSCI Index, but we later moved to a large overweight,
which proved beneficial as well.
Individual contributors to performance included three mining stocks, Phelps
Dodge, Cia Vale do Rio Doce (CVRD) and Freeport-McMoRan Copper & Gold. Phelps
Dodge was acquired during the period, while CVRD, a Brazilian iron ore and
copper miner, and Freeport-McMoRan Copper & Gold, a U.S. copper and gold
mining firm, benefited from higher metals prices. Two companies based in
China also contributed to Fund results, property company China Overseas Land
& Investment and China Mobile, the nation's largest wireless company.
Petroleo Brasileiro, Brazil's national oil company, also added to results,
benefiting from higher oil prices and new offshore discoveries. Google was
another strong performer, as the Internet search engine regularly exceeded
analyst earnings estimates.
Having smaller positions in the strongly performing utilities and industrials
sectors than the MSCI Index was a detractor. In Japan, the Fund's financial
holdings suffered amid global weakness in the sector. In particular,
Mitsubishi UFJ Financial Group faced write-offs related to the subprime
situation and performed poorly; consequently we reduced the Fund's holdings.
Stock selection in Europe was also a negative factor.
In the U.S., holdings of E*TRADE Financial detracted. We held the stock based
on its valuation, but mortgage and subprime exposure led to weak performance,
which caused us to sell the position. The Fund's results were also hampered
by U.S. homebuilders, such as DR Horton and Hovnanian Enterprises. We sold
these stocks in the first half of the year when we saw continued weakness in
the housing market.
THE FUND BENEFITED FROM ITS REGIONAL POSITIONING, PARTICULARLY ITS
EMERGING MARKETS EXPOSURE.
Q: What changes did you make to the Fund during the 12-month period?
The Fund's regional positioning was largely unchanged. We continued to
emphasize Asia, Latin America and emerging markets, while keeping the Fund's
U.K. and U.S. positions smaller than those of the MSCI Index. We reduced the
Fund's allocation to Japan, which started out larger than the MSCI Index, but
became smaller as of fiscal year-end. We decreased the
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 9
QUESTIONS & ANSWERS
Fund's U.S. position relative to the MSCI Index, mainly because we see better
opportunities elsewhere.
The Fund's positions in the materials, retail and information technology
sectors remained larger than their respective weightings in the MSCI Index.
We slightly increased the materials allocation, maintaining mining exposure
while adding to soft commodities, particularly forest industries, paper and
pulp.
We reduced the retail sector overweight by taking profits in stocks that had
done well. We are becoming more concerned about consumer spending,
particularly in the U.S. and Europe. We also reduced the health care
overweight, as the struggling sector faces significant patent expirations
over the next 18 months, lack of new drugs coming to market and a potential
for greater pricing pressure due to the impending U.S. presidential election.
We moved from an underweight to an overweight in the information technology
sector. Valuations had become quite attractive; we saw interesting business
dynamics such as product launches and we thought some solid growth companies
like IBM and Microsoft were being overlooked by the market.
We shifted financials from an overweight to an underweight solely by reducing
exposure to banks. Though we are looking for opportunities in the bank
universe, we are not finding them at this time. The Fund's portfolio turnover
rate for the annual period was 100%.
WE DO EXPECT DIFFERENTIATED ECONOMIC GROWTH RATES FROM VARIOUS REGIONS,
INCLUDING CONTINUED STRONG GROWTH FROM ASIA, LATIN AMERICA AND EMERGING
MARKETS.
Q: How do you intend to manage the Fund in the months ahead?
A: We remain positive on equities, given that healthy economic growth in Asia
and emerging markets, and low, but still positive growth in mature countries
should keep the corporate earnings cycle positive. Another source of
confidence is the general health of corporate balance sheets, where debt
levels appear low. Finally, we consider equities attractively valued compared
to their history and to bonds.
- --------------------------------------------------------------------------------
10 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
We do expect differentiated economic growth rates from various regions,
including continued strong growth from Asia, Latin America and emerging
markets. We believe domestic dynamics in these areas can offset weakness in
Europe and the U.S. We also believe stronger economic growth will flow to
corporations and stock markets in these regions, and are therefore
maintaining our current geographical positioning.
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 EQUITY FUND -- 2007 ANNUAL REPORT 11
THE FUND'S LONG-TERM PERFORMANCE
The chart on the facing page illustrates the total value of an assumed $10,000
investment in RiverSource Global Equity Fund Class A shares (from 11/1/97 to
10/31/07) as compared to the performance of two widely cited performance
indices, the Morgan Stanley Capital International (MSCI) All Country World Index
and the Lipper Global Funds Index. In comparing the Fund's Class A shares to
these indices, you should take into account the fact that the Fund's performance
reflects the maximum sales charge of 5.75%, while such charges are not reflected
in the performance of the indices. Returns for the Fund include the reinvestment
of any distribution paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. 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. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
<Table>
<Caption>
SINCE
Results at Oct. 31, 2007 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION(3)
RIVERSOURCE GLOBAL EQUITY FUND (INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $12,139 $17,865 $23,495 $19,387 $32,509
Average annual total return +21.39% +21.34% +18.63% +6.93% +7.00%
MSCI ALL COUNTRY WORLD INDEX(1)
Cumulative value of $10,000 $12,477 $17,597 $25,133 $23,343 $47,445
Average annual total return +24.77% +20.73% +20.24% +8.85% +9.35%
LIPPER GLOBAL FUNDS INDEX(2)
Cumulative value of $10,000 $12,125 $16,856 $23,317 $22,655 $47,294
Average annual total return +21.25% +19.01% +18.45% +8.51% +9.33%
</Table>
Results for other share classes can be found on page 6.
- --------------------------------------------------------------------------------
12 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN RIVERSOURCE GLOBAL EQUITY FUND
LINE GRAPH)
<Table>
<Caption>
RIVERSOURCE GLOBAL EQUITY (MORGAN STANLEY CAPITAL
FUND CLASS A (INCLUDES SALES INTERNATIONAL) ALL COUNTRY LIPPER GLOBAL FUNDS
CHARGE) WORLD INDEX(1) INDEX(2)
---------------------------- -------------------------- -------------------
'97 $ 9,425 $10,000 $10,000
'98 11,027 11,303 10,576
'99 13,629 14,244 13,104
'00 14,275 14,358 14,666
'01 9,303 10,747 11,193
'02 7,775 9,289 9,710
'03 9,164 11,634 11,909
'04 10,238 13,266 13,441
'05 12,437 15,239 15,473
'06 15,050 18,709 18,685
'07 19,387 23,343 22,655
</Table>
(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.
(3) Fund data is from May 29, 1990. MSCI All Country World Index and Lipper
peer group data is from June 1, 1990.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 13
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 Oct. 31, 2007.
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.
- --------------------------------------------------------------------------------
14 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2007 OCT. 31, 2007 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $1,153.70 $ 7.60 1.40%
Hypothetical
(5% return before
expenses) $1,000 $1,018.15 $ 7.12 1.40%
Class B
Actual(b) $1,000 $1,149.00 $11.65 2.15%
Hypothetical
(5% return before
expenses) $1,000 $1,014.37 $10.92 2.15%
Class C
Actual(b) $1,000 $1,147.80 $11.64 2.15%
Hypothetical
(5% return before
expenses) $1,000 $1,014.37 $10.92 2.15%
Class R2
Actual(b) $1,000 $1,150.70 $ 9.49 1.75%
Hypothetical
(5% return before
expenses) $1,000 $1,016.38 $ 8.89 1.75%
Class R3
Actual(b) $1,000 $1,152.90 $ 8.25 1.52%
Hypothetical
(5% return before
expenses) $1,000 $1,017.54 $ 7.73 1.52%
Class R4*
Actual(b) $1,000 $1,154.80 $ 6.79 1.25%
Hypothetical
(5% return before
expenses) $1,000 $1,018.90 $ 6.36 1.25%
Class R5
Actual(b) $1,000 $1,156.30 $ 5.49 1.01%
Hypothetical
(5% return before
expenses) $1,000 $1,020.11 $ 5.14 1.01%
Class W
Actual(b) $1,000 $1,154.10 $ 7.60 1.40%
Hypothetical
(5% return before
expenses) $1,000 $1,018.15 $ 7.12 1.40%
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(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 184/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Oct. 31, 2007: +15.37%
for Class A, +14.90% for Class B, +14.78% for Class C, +15.07% for Class
R2, +15.29% for Class R3, +15.48% for Class R4, +15.63% for Class R5 and
+15.41% for Class W.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 15
INVESTMENTS IN SECURITIES
OCT. 31, 2007
(Percentages represent value of investments compared to net assets)
<Table>
<Caption>
COMMON STOCKS (96.0%)(c)
ISSUER SHARES VALUE(A)
AUSTRALIA (3.5%)
BIOTECHNOLOGY (1.4%)
CSL 341,235 $11,720,426
- -----------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING (0.6%)
Boart Longyear Group 2,200,000(b) 5,289,733
- -----------------------------------------------------------------------------------
METALS & MINING (1.5%)
Oxiana 1,810,470 7,213,842
Zinifex 373,505 5,909,664
---------------
Total 13,123,506
- -----------------------------------------------------------------------------------
BERMUDA (0.8%)
INSURANCE
PartnerRe 79,238 6,596,564
- -----------------------------------------------------------------------------------
BRAZIL (3.7%)
HOUSEHOLD DURABLES (0.8%)
Cyrela Brazil Realty 393,100 6,739,831
- -----------------------------------------------------------------------------------
METALS & MINING (1.1%)
Cia Vale do Rio Doce ADR 287,329 9,070,977
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (1.0%)
Petroleo Brasileiro ADR 102,697 9,820,914
- -----------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.7%)
Aracruz Celulose ADR 76,778 5,903,460
- -----------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (0.1%)
Cyrela Commercial Properties Empreendimentos
e Participacoes 78,620(b) 611,060
- -----------------------------------------------------------------------------------
CANADA (1.8%)
METALS & MINING (1.1%)
Barrick Gold 207,147 9,141,397
- -----------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.7%)
AbitibiBowater Canada 174,420 5,931,586
- -----------------------------------------------------------------------------------
FINLAND (0.5%)
COMMUNICATIONS EQUIPMENT
Nokia 101,478 4,030,386
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
FRANCE (1.7%)
AUTOMOBILES (0.5%)
Renault 26,711 $4,511,658
- -----------------------------------------------------------------------------------
COMMERCIAL BANKS (1.2%)
Societe Generale 59,061 9,978,181
- -----------------------------------------------------------------------------------
GERMANY (7.3%)
AEROSPACE & DEFENSE (1.3%)
MTU Aero Engines Holding 165,463 10,104,720
- -----------------------------------------------------------------------------------
AUTO COMPONENTS (1.0%)
Continental 58,429 8,829,608
- -----------------------------------------------------------------------------------
AUTOMOBILES (1.0%)
Daimler 79,681 8,787,630
- -----------------------------------------------------------------------------------
CHEMICALS (1.0%)
Bayer 102,285 8,542,275
- -----------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (1.0%)
Deutsche Boerse 55,480 8,907,040
- -----------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (0.9%)
Siemens 55,894 7,632,680
- -----------------------------------------------------------------------------------
INSURANCE (1.1%)
Allianz 42,705 9,635,208
- -----------------------------------------------------------------------------------
HONG KONG (8.0%)
DIVERSIFIED FINANCIAL SERVICES (0.7%)
Hong Kong Exchanges and Clearing 174,000 5,808,588
- -----------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (0.9%)
Hongkong & Shanghai Hotels 4,277,500 7,919,207
- -----------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.7%)
China Grand Forestry Resources Group 17,538,000(b) 6,232,876
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
16 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
HONG KONG (CONT.)
REAL ESTATE MANAGEMENT & DEVELOPMENT (3.3%)
Agile Property Holdings 2,772,000 $6,727,804
China Overseas Land & Investment 2,956,000 7,075,536
Great Eagle Holdings 1,424,607 5,922,065
Hang Lung Properties 1,781,000 8,568,601
---------------
Total 28,294,006
- -----------------------------------------------------------------------------------
SPECIALTY RETAIL (1.0%)
Esprit Holdings 497,500 8,308,958
- -----------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (1.4%)
China Mobile 586,500 12,125,068
- -----------------------------------------------------------------------------------
INDIA (0.8%)
WIRELESS TELECOMMUNICATION SERVICES
Bharti Airtel 273,379(b) 7,035,002
- -----------------------------------------------------------------------------------
IRELAND (0.5%)
COMMERCIAL BANKS
Bank of Ireland 230,829 4,254,099
- -----------------------------------------------------------------------------------
JAPAN (7.0%)
BUILDING PRODUCTS (0.6%)
Asahi Glass 361,000 4,973,107
- -----------------------------------------------------------------------------------
COMMERCIAL BANKS (1.9%)
Chiba Bank 572,000 4,592,412
Mitsubishi UFJ Financial Group 627,000 6,275,756
Mizuho Financial Group 999 5,616,529
---------------
Total 16,484,697
- -----------------------------------------------------------------------------------
HOUSEHOLD DURABLES (1.0%)
GOLDCREST 183,980 8,763,643
- -----------------------------------------------------------------------------------
INSURANCE (0.6%)
Sony Financial Holdings 1,500(b) 5,397,555
- -----------------------------------------------------------------------------------
MACHINERY (1.4%)
AMADA 707,000 7,155,941
THK 220,900 4,872,681
---------------
Total 12,028,622
- -----------------------------------------------------------------------------------
OFFICE ELECTRONICS (1.2%)
Canon 204,500 10,350,717
- -----------------------------------------------------------------------------------
SOFTWARE (0.3%)
Nintendo 4,000 2,541,086
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
MEXICO (0.5%)
WIRELESS TELECOMMUNICATION SERVICES
America Movil ADR Series L 68,532 $4,481,307
- -----------------------------------------------------------------------------------
NETHERLANDS (0.8%)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT
ASML Holding 209,163(b) 7,283,153
- -----------------------------------------------------------------------------------
NORWAY (0.5%)
OIL, GAS & CONSUMABLE FUELS
StatoilHydro 137,750 4,694,021
- -----------------------------------------------------------------------------------
RUSSIA (1.3%)
CHEMICALS (0.1%)
Uralkali GDR 18,717(b,d,e) 469,797
- -----------------------------------------------------------------------------------
METALS & MINING (0.3%)
MMC Norilsk Nickel ADR 8,000 2,520,000
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (0.9%)
Gazprom ADR 157,754 7,852,994
- -----------------------------------------------------------------------------------
SOUTH AFRICA (2.2%)
FOOD & STAPLES RETAILING (1.1%)
Massmart Holdings 777,726 9,761,545
- -----------------------------------------------------------------------------------
MEDIA (0.8%)
Naspers Series N 224,691 7,147,270
- -----------------------------------------------------------------------------------
METALS & MINING (0.3%)
First Uranium 209,500(b) 2,399,989
- -----------------------------------------------------------------------------------
SOUTH KOREA (1.6%)
COMMERCIAL BANKS (1.2%)
Kookmin Bank 23,903 1,952,281
Shinhan Financial Group 127,121 8,295,164
---------------
Total 10,247,445
- -----------------------------------------------------------------------------------
METALS & MINING (0.4%)
POSCO 5,022 3,657,746
- -----------------------------------------------------------------------------------
SPAIN (2.1%)
BIOTECHNOLOGY (0.8%)
Grifols 251,669 6,677,083
- -----------------------------------------------------------------------------------
SPECIALTY RETAIL (1.3%)
Inditex 153,725 11,494,220
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 17
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SWEDEN (1.4%)
MACHINERY (0.5%)
Atlas Copco Series A 269,600 $4,532,580
- -----------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS (0.9%)
Holmen Series B 184,200 7,268,364
- -----------------------------------------------------------------------------------
SWITZERLAND (7.0%)
CAPITAL MARKETS (0.6%)
UBS 94,680 5,076,456
- -----------------------------------------------------------------------------------
CHEMICALS (1.1%)
Syngenta 37,505 9,073,005
- -----------------------------------------------------------------------------------
FOOD PRODUCTS (1.2%)
Nestle 22,959 10,605,262
- -----------------------------------------------------------------------------------
METALS & MINING (0.7%)
Xstrata 86,564 6,241,160
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (1.1%)
Petroplus Holdings 104,424(b) 9,115,645
- -----------------------------------------------------------------------------------
PHARMACEUTICALS (2.3%)
Roche Holding 117,009 19,987,232
- -----------------------------------------------------------------------------------
TAIWAN (2.1%)
COMPUTERS & PERIPHERALS (1.2%)
Asustek Computer 1,377,000 4,889,497
High Tech Computer 279,500 5,759,042
---------------
Total 10,648,539
- -----------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.9%)
Hon Hai Precision Industry 988,370 7,578,131
- -----------------------------------------------------------------------------------
UNITED KINGDOM (7.4%)
COMMERCIAL BANKS (0.8%)
Standard Chartered 184,753 7,185,181
- -----------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.4%)
Drax Group 247,726 3,488,002
- -----------------------------------------------------------------------------------
METALS & MINING (0.8%)
Anglo American 98,795 6,871,315
- -----------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (2.1%)
BG Group 459,974 8,527,475
Tullow Oil 632,070 8,407,409
---------------
Total 16,934,884
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
UNITED KINGDOM (CONT.)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (0.7%)
CSR 451,029(b) $6,082,453
- -----------------------------------------------------------------------------------
SOFTWARE (0.8%)
Autonomy 349,500(b) 7,167,407
- -----------------------------------------------------------------------------------
SPECIALTY RETAIL (1.3%)
Carphone Warehouse Group 1,517,961 11,124,671
- -----------------------------------------------------------------------------------
TOBACCO (0.5%)
Imperial Tobacco Group 87,406 4,436,245
- -----------------------------------------------------------------------------------
UNITED STATES (33.5%)
AEROSPACE & DEFENSE (1.4%)
United Technologies 153,752 11,775,866
- -----------------------------------------------------------------------------------
BEVERAGES (2.1%)
Hansen Natural 120,546(b) 8,197,128
PepsiCo 128,998 9,509,733
---------------
Total 17,706,861
- -----------------------------------------------------------------------------------
BIOTECHNOLOGY (0.5%)
Gilead Sciences 98,811(b) 4,564,080
- -----------------------------------------------------------------------------------
CAPITAL MARKETS (1.3%)
FCStone Group 110,260(b) 3,886,665
Goldman Sachs Group 30,000 7,437,600
---------------
Total 11,324,265
- -----------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (0.6%)
Republic Services 161,173 5,510,505
- -----------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (0.6%)
Cisco Systems 152,241(b) 5,033,087
- -----------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (1.9%)
Apple 32,000(b) 6,078,400
IBM 89,676 10,413,177
---------------
Total 16,491,577
- -----------------------------------------------------------------------------------
CONSUMER FINANCE (0.7%)
American Express 96,446 5,878,384
- -----------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.6%)
Bank of America 112,583 5,435,507
- -----------------------------------------------------------------------------------
ELECTRIC UTILITIES (1.0%)
Exelon 106,428 8,810,110
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
18 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
UNITED STATES (CONT.)
ENERGY EQUIPMENT & SERVICES (1.2%)
Diamond Offshore Drilling 47,454 $5,373,216
Schlumberger 54,861 5,297,927
---------------
Total 10,671,143
- -----------------------------------------------------------------------------------
FOOD & STAPLES RETAILING (0.4%)
Winn-Dixie Stores 148,386(b) 3,507,845
- -----------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.9%)
St. Jude Medical 193,944(b) 7,899,339
- -----------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (1.3%)
WellPoint 136,300(b) 10,799,049
- -----------------------------------------------------------------------------------
HOUSEHOLD DURABLES (0.5%)
KB HOME 140,653 3,887,649
- -----------------------------------------------------------------------------------
INSURANCE (0.7%)
American Intl Group 94,086 5,938,708
- -----------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (3.2%)
eBay 299,604(b) 10,815,704
Google Cl A 22,323(b) 15,782,361
---------------
Total 26,598,065
- -----------------------------------------------------------------------------------
IT SERVICES (1.4%)
Automatic Data Processing 135,883 6,734,362
DST Systems 67,161(b) 5,689,208
---------------
Total 12,423,570
- -----------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES (1.4%)
Exelixis 360,510(b) 3,965,610
Thermo Fisher Scientific 138,839(b) 8,165,122
---------------
Total 12,130,732
- -----------------------------------------------------------------------------------
MEDIA (0.7%)
Comcast Cl A 270,647(b) 5,697,119
- -----------------------------------------------------------------------------------
METALS & MINING (1.7%)
Alcoa 98,000 3,879,820
Freeport-McMoRan Copper & Gold 58,920 6,933,707
Newmont Mining 78,548 3,994,951
---------------
Total 14,808,478
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
UNITED STATES (CONT.)
OIL, GAS & CONSUMABLE FUELS (2.4%)
Devon Energy 108,181 $10,104,105
Marathon Oil 175,530 10,379,088
---------------
Total 20,483,193
- -----------------------------------------------------------------------------------
PHARMACEUTICALS (0.8%)
Johnson & Johnson 101,270 6,599,766
- -----------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (1.4%)
Plum Creek Timber 276,843 12,366,577
- -----------------------------------------------------------------------------------
ROAD & RAIL (0.9%)
Norfolk Southern 144,625 7,469,881
- -----------------------------------------------------------------------------------
SOFTWARE (2.8%)
Microsoft 661,123 24,335,937
- -----------------------------------------------------------------------------------
SPECIALTY RETAIL (0.6%)
Abercrombie & Fitch Cl A 61,960 4,907,232
- -----------------------------------------------------------------------------------
TOBACCO (0.5%)
Altria Group 53,630 3,911,236
- -----------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $664,403,845) $824,494,934
- -----------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
PREFERRED STOCKS & OTHER (2.2%)(c)
ISSUER SHARES VALUE(A)
BRAZIL (1.5%)
Braskem Series A 1,400,000 $13,267,842
- -----------------------------------------------------------------------------------
GERMANY (0.7%)
Porsche 2,162 5,768,418
- -----------------------------------------------------------------------------------
HONG KONG (--%)
China Overseas Land & Investment
Warrants 244,833(b,e) 203,759
- -----------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS & OTHER
(Cost: $15,520,876) $19,240,019
- -----------------------------------------------------------------------------------
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 19
<Table>
<Caption>
MONEY MARKET FUND (1.5%)
SHARES VALUE(A)
RiverSource Short-Term Cash Fund 12,652,602(f) $12,652,602
- -----------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $12,652,602) $12,652,602
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $692,577,323)(g) $856,387,555
===================================================================================
</Table>
NOTES TO INVESTMENTS IN SECURITIES
(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) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
has been 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 Oct. 31,
2007, the value of these securities amounted to $469,797 or 0.1% 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 Oct. 31,
2007, is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
- ---------------------------------------------------------------------------------
Uralkali GDR* 10-15-07 $327,548
China Overseas Land & Investment
Warrants 08-14-07 --
</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.
(g) At Oct. 31, 2007, the cost of securities for federal income tax purposes
was $693,254,865 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $171,108,252
Unrealized depreciation (7,975,562)
- ------------------------------------------------------------------------------
Net unrealized appreciation $163,132,690
- ------------------------------------------------------------------------------
</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.
- --------------------------------------------------------------------------------
20 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCT. 31, 2007
<Table>
ASSETS
Investments in securities, at value (Note 1)
Unaffiliated issuers (identified cost $679,924,721) $ 843,734,953
Affiliated money market fund (identified cost
$12,652,602) (Note 5) 12,652,602
- ------------------------------------------------------------------------------
Total investments in securities (identified cost
$692,577,323) 856,387,555
Foreign currency holdings (identified cost $542,999) (Note
1) 549,211
Capital shares receivable 430,246
Dividends receivable 1,291,335
Receivable for investment securities sold 1,368,801
- ------------------------------------------------------------------------------
Total assets 860,027,148
- ------------------------------------------------------------------------------
LIABILITIES
Disbursements in excess of cash 205,830
Capital shares payable 670,974
Payable for investment securities purchased 142,781
Accrued investment management services fee 17,823
Accrued distribution fee 7,993
Accrued transfer agency fee 1,077
Accrued administrative services fee 1,806
Accrued plan administration services fee 66
Other accrued expenses 173,140
- ------------------------------------------------------------------------------
Total liabilities 1,221,490
- ------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 858,805,658
==============================================================================
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 21
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
OCT. 31, 2007
<Table>
REPRESENTED BY
Capital stock -- $.01 par value (Note 1) $ 900,997
Additional paid-in capital 1,036,399,541
Excess of distributions over net investment income 2,648,118
Accumulated net realized gain (loss) (Note 7) (345,022,269)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies 163,879,271
- ------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $ 858,805,658
==============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $736,862,352
Class B $103,845,698
Class C $ 8,245,080
Class R2 $ 6,099
Class R3 $ 6,115
Class R4 $ 9,828,003
Class R5 $ 6,141
Class W $ 6,170
Net asset value per share of outstanding Class A
capital stock: shares(1) 76,651,956 $ 9.61
Class B shares 11,509,285 $ 9.02
Class C shares 922,827 $ 8.93
Class R2 shares 634 $ 9.62
Class R3 shares 634 $ 9.65
Class R4 shares 1,013,137 $ 9.70
Class R5 shares 634 $ 9.69
Class W shares 639 $ 9.66
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $10.20. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
22 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
STATEMENT OF OPERATIONS
YEAR ENDED OCT. 31, 2007
<Table>
INVESTMENT INCOME
Income:
Dividends $ 13,582,601
Interest 30,081
Income distributions from affiliated money market fund (Note
5) 443,195
Fee income from securities lending (Note 3) 116,235
Less foreign taxes withheld (1,104,148)
- ----------------------------------------------------------------------------
Total income 13,067,964
- ----------------------------------------------------------------------------
Expenses (Note 2):
Investment management services fee 6,075,014
Distribution fee
Class A 1,638,700
Class B 1,107,840
Class C 68,437
Class R2 24
Class R3 12
Class W 12
Transfer agency fee
Class A 1,331,589
Class B 240,803
Class C 14,294
Class R2 3
Class R3 3
Class R4 5,799
Class R5 3
Class W 10
Service fee -- Class R4 931
Administrative services fee 611,621
Plan administration services fee
Class R2 12
Class R3 12
Class R4 20,261
Compensation of board members 13,808
Custodian fees 262,921
Printing and postage 181,440
Registration fees 91,726
Professional fees 46,902
Other 29,790
- ----------------------------------------------------------------------------
Total expenses 11,741,967
Earnings and bank fee credits on cash balances (Note 2) (49,124)
- ----------------------------------------------------------------------------
Total net expenses 11,692,843
- ----------------------------------------------------------------------------
Investment income (loss) -- net 1,375,121
- ----------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 23
STATEMENT OF OPERATIONS (CONTINUED)
YEAR ENDED OCT. 31, 2007
5x
<Table>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (Note 3) $130,461,314
Foreign currency transactions (13,569)
- -----------------------------------------------------------------------------------
Net realized gain (loss) on investments 130,447,745
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 67,887,744
- -----------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 198,335,489
- -----------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $199,710,610
===================================================================================
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
24 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007 2006
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 1,375,121 $ 636,865
Net realized gain (loss) on investments 130,447,745 98,555,283
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and
liabilities in foreign currencies 67,887,744 22,761,204
- ---------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 199,710,610 121,953,352
- ---------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (5,052,007) (1,251,232)
Class B (46,137) --
Class C (24,579) (867)
Class R2 (60) N/A
Class R3 (61) N/A
Class R4 (77,098) (25,269)
Class R5 (61) N/A
Class W (61) N/A
- ---------------------------------------------------------------------------------------
Total distributions (5,200,064) (1,277,368)
- ---------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 25
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007 2006
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Proceeds from sales
Class A shares (Note 2) $ 103,394,162 $ 172,183,612
Class B shares 16,189,120 35,714,119
Class C shares 2,137,681 3,352,708
Class R2 shares 5,000 N/A
Class R3 shares 5,000 N/A
Class R4 shares 2,445,834 3,186,241
Class R5 shares 5,000 N/A
Class W shares 5,000 N/A
Reinvestment of distributions at net asset value
Class A shares 4,972,629 1,230,861
Class B shares 45,360 --
Class C shares 23,936 850
Class R4 shares 77,098 25,268
Payments for redemptions
Class A shares (141,986,972) (110,583,690)
Class B shares (Note 2) (50,692,015) (46,861,081)
Class C shares (Note 2) (1,286,730) (685,303)
Class R4 shares (4,449,426) (1,565,797)
- ---------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (69,109,323) 55,997,788
- ---------------------------------------------------------------------------------------
Total increase (decrease) in net assets 125,401,223 176,673,772
Net assets at beginning of year 733,404,435 556,730,663
- ---------------------------------------------------------------------------------------
Net assets at end of year $ 858,805,658 $ 733,404,435
=======================================================================================
Undistributed net investment income $ 2,648,118 $ 158,923
- ---------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
26 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RiverSource Global Equity 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. 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 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 R4 shares have no sales charge and are offered only to qualifying
institutional investors.
Effective Dec. 11, 2006, the Board approved renaming Class Y as Class R4,
terminating the shareholder servicing agreement, revising the fee structure
under the transfer agent agreement from account-based to asset-based, and
adopting a plan administration services agreement.
Effective Dec. 11, 2006, the Fund offers additional classes of shares, Class R2,
Class R3 and Class R5, to certain institutional investors. These shares are sold
without a front-end sales charge or CDSC. At Oct. 31, 2007, RiverSource
Investments, LLC (the Investment Manager) owned 100% of Class R2, Class R3 and
Class R5 shares.
Effective Dec. 1, 2006, the Fund offers an additional class of shares, Class W,
through qualifying discretionary accounts. Class W shares are sold without a
front-end sales charge or CDSC. At Oct. 31, 2007, the Investment Manager owned
100% of 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 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.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 27
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
of Directors of the funds 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 equities) 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), as administrator to the Fund and the parent company of the
Investment Manager, will fair value foreign equity securities pursuant to
procedures adopted by the Board of Directors of the funds, 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 Oct. 31, 2007, 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. Prior to July 12, 2007, the Fund limited the percent held in
securities and other instruments that were illiquid to 10% of the Fund's net
assets. The aggregate value of such securities at Oct. 31, 2007 was $673,556
representing 0.08% of net assets. These securities may be valued at fair value
according to
- --------------------------------------------------------------------------------
28 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
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
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. During
the year ended Oct. 31, 2007, 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
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 29
recorded as unrealized gains and losses. The Fund recognizes a realized gain or
loss when the contract is closed or expires. At Oct. 31, 2007, 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 Oct. 31, 2007, foreign currency holdings consisted of
multiple denominations.
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 Oct. 31, 2007, 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.
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
- --------------------------------------------------------------------------------
30 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL 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.
On the Statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by
$6,314,138 and accumulated net realized loss has been increased by $6,314,138.
The tax character of distributions paid for the years indicated is as follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007 2006
- ----------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income........................... $5,052,007 $1,251,232
Long-term capital gain.................... -- --
CLASS B
Distributions paid from:
Ordinary income........................... 46,137 --
Long-term capital gain.................... -- --
CLASS C
Distributions paid from:
Ordinary income........................... 24,579 867
Long-term capital gain.................... -- --
CLASS R2(A)
Distributions paid from:
Ordinary income........................... 60 N/A
Long-term capital gain.................... -- N/A
CLASS R3(A)
Distributions paid from:
Ordinary income........................... 61 N/A
Long-term capital gain.................... -- N/A
CLASS R4(B)
Distributions paid from:
Ordinary income........................... 77,098 25,269
Long-term capital gain.................... -- --
CLASS R5(A)
Distributions paid from:
Ordinary income........................... 61 N/A
Long-term capital gain.................... -- N/A
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 31
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007 2006
- ----------------------------------------------------------------------------
CLASS W(C)
Distributions paid from:
Ordinary income........................... $ 61 N/A
Long-term capital gain.................... -- N/A
</Table>
(a) For the period from Dec. 11, 2006 (inception date) to Oct. 31, 2007.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
At Oct. 31, 2007, the components of distributable earnings on a tax basis are as
follows:
<Table>
Undistributed ordinary income............................ $ 2,946,914
Undistributed accumulated long-term gain................. $ --
Accumulated realized loss................................ $(344,634,903)
Unrealized appreciation (depreciation)................... $ 163,193,109
</Table>
RECENT ACCOUNTING PRONOUNCEMENTS
On Sept. 20, 2006, the Financial Accounting Standards Board (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 framework for measuring fair value, and requires additional disclosures
about fair-value measurements. The application of SFAS 157 is required for
fiscal years beginning after Nov. 15, 2007 and interim periods within those
fiscal years. The impact of SFAS 157 on the Fund's financial statements is being
evaluated.
In June 2006, the (FASB) issued FASB Interpretation 48 (FIN 48), "Accounting for
Uncertainty in Income Taxes." 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. FIN 48 is effective for fiscal
years beginning after Dec. 15, 2006. Recent SEC guidance allows implementing FIN
48 in fund NAV calculations as late as the fund's last NAV calculation in the
first required financial statement reporting period. As a result, the Fund will
adopt FIN 48 in its semiannual report for the period ending April 30, 2008. Tax
positions of the Fund are being evaluated to determine the impact, if any, to
the Fund. The adoption of FIN 48 is not anticipated to have a material impact on
the Fund.
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
- --------------------------------------------------------------------------------
32 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
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 0.57% annually as the Fund's assets increase. The fee may be adjusted upward
or downward by a performance incentive adjustment based on a comparison of the
performance of Class A shares of the Fund to 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 $29,844 for the
year ended Oct. 31, 2007. The management fee for the year ended Oct. 31, 2007,
was 0.78% 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 year ended Oct. 31, 2007, was 0.08% of
the Fund's average daily net assets.
Other expenses in the amount of $4,580 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.
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.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 33
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 fee per shareholder account for this service as follows:
- - Class A $19.50
- - Class B $20.50
- - Class C $20.00
Effective Dec. 11, 2006, as part of the Board's approval to rename Class Y as
Class R4, the fee structure under the Transfer Agency Agreement was revised from
an account-based fee for Class Y to an asset-based fee for Class R4. The Fund
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. Prior to Dec.
11, 2006, the Fund paid the Transfer Agent an annual account-based fee of $17.50
per shareholder account.
In addition, the Fund 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 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.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Prior to Oct. 1, 2007, Ameriprise
Financial Services, Inc. also served as a principal underwriter and distributor
to the Fund. 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.
Effective Dec. 11, 2006, under a Plan Administration Services Agreement, a fee
for the provision of various administrative, recordkeeping, communication and
educational services was adopted for the restructured Class R4 and the
introduction of Class R2 and Class R3. The fee is calculated at a rate of 0.25%
of
- --------------------------------------------------------------------------------
34 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
the Fund's average daily net assets attributable to Class R2, Class R3 and Class
R4 shares.
Prior to Dec. 11, 2006, under a Shareholder Service Agreement, the Fund paid the
Distributor a fee for service provided to shareholders by the Distributor and
other servicing agents with respect to Class Y shares. The fee was calculated at
a rate of 0.10% of the Fund's average daily net assets attributable to Class Y
shares. Effective Dec. 11, 2006, this agreement was terminated.
Sales charges received by the Distributor for distributing Fund shares were
$841,596 for Class A, $53,834 for Class B and $1,148 for Class C for the year
ended Oct. 31, 2007.
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.
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), before giving effect to any performance incentive adjustment,
will not exceed 1.27% for Class R4 of the Fund's average daily net assets until
Oct. 31, 2008, unless sooner terminated at the discretion of the Board. For the
year ended Oct. 31, 2007, the waiver was not invoked since the Fund's expenses
were below the cap amount.
During the year ended Oct. 31, 2007, the Fund's custodian and transfer agency
fees were reduced by $49,124 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 $774,144,689 and $857,517,015, respectively, for the
year ended Oct. 31, 2007. Realized gains and losses are determined on an
identified cost basis.
Income from securities lending amounted to $116,235 for the year ended Oct. 31,
2007. Expenses paid to the Investment Manager were $1,762 for the year ended
Oct. 31, 2007, 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 Oct. 31, 2007, the Fund had no outstanding securities lending.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 35
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
<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(a) 634 -- -- 634
Class R3(a) 634 -- -- 634
Class R4(b) 288,576 9,796 (531,402) (233,030)
Class R5(a) 634 -- -- 634
Class W(c) 639 -- -- 639
- ------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED OCT. 31, 2006
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ------------------------------------------------------------------------------------------
Class A 24,909,235 183,985 (15,810,293) 9,282,927
Class B 5,476,744 -- (7,193,343) (1,716,599)
Class C 511,941 135 (104,104) 407,972
Class R4(b) 450,583 3,744 (221,723) 232,604
- ------------------------------------------------------------------------------------------
</Table>
(a) For the period from Dec. 11, 2006 (inception date) to Oct. 31, 2007.
(b) Effective Dec. 11, 2006, Class Y was renamed Class R4.
(c) 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 $402,363,676 and $394,130,571, respectively, for the year
ended Oct. 31, 2007.
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
- --------------------------------------------------------------------------------
36 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
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 year ended Oct. 31, 2007.
7. 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.
8. CONCENTRATION OF RISK
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.
GEOGRAPHIC CONCENTRATION/SECTOR RISK
Investments that are concentrated in a particular issuer, geographic region, or
sector will be more susceptible to changes in price.
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
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 37
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)), the parent company of RiverSource Investments, LLC
(RiverSource Investments), entered into settlement agreements with the
Securities and Exchange Commission (SEC) and Minnesota Department of Commerce
(MDOC) related to market timing activities. In connection with these matters,
the SEC and MDOC issued orders (the Orders) alleging that AEFC violated certain
provisions of the federal and Minnesota securities laws by failing to adequately
disclose market timing activities by allowing certain identified market timers
to continue to market time contrary to disclosures in mutual fund and variable
annuity product prospectuses. The Orders also alleged that AEFC failed to
implement procedures to detect and prevent market timing in 401(k) plans for
employees of AEFC and related companies and failed to adequately disclose that
there were no such procedures. Pursuant to the MDOC Order, the MDOC also alleged
that AEFC allowed inappropriate market timing to occur by failing to have
written policies and procedures and failing to properly supervise its employees.
As a result of the Orders, 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. Pursuant to the terms of the Orders, AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to make presentations at least annually to its board of directors and the
relevant mutual funds' board that include an overview of policies and procedures
to prevent market timing, material changes to these policies and procedures and
whether disclosures related to market timing are consistent with the SEC order
and federal securities laws. 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. In
addition, AEFC agreed to complete and submit to the MDOC a compliance review of
its procedures regarding market timing within one year of the MDOC Order,
including a summary of actions taken to ensure compliance with applicable laws
and regulations and certification by a senior officer regarding compliance and
supervisory procedures.
- --------------------------------------------------------------------------------
38 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
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 GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 39
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, 2007 2006 2005 2004 2003
Net asset value, beginning of period $7.52 $6.23 $5.16 $4.62 $3.92
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02(b) .01 .02 -- .01
Net gains (losses) (both realized and
unrealized) 2.13 1.30 1.08 .54 .69
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 2.15 1.31 1.10 .54 .70
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.06) (.02) (.03) -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.61 $7.52 $6.23 $5.16 $4.62
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $737 $608 $446 $364 $366
- -----------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 1.39% 1.51% 1.57% 1.41% 1.50%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .28% .23% .33% .07% .26%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 100% 112% 93% 104% 132%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 28.82% 21.01% 21.48% 11.72% 17.86%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
40 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $7.06 $5.88 $4.87 $4.40 $3.76
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.04)(b) (.01) (.02) (.03) (.03)
Net gains (losses) (both realized and
unrealized) 2.00 1.19 1.03 .50 .67
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.96 1.18 1.01 .47 .64
- -----------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income .00 -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.02 $7.06 $5.88 $4.87 $4.40
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $104 $110 $102 $104 $142
- -----------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 2.15% 2.28% 2.34% 2.18% 2.27%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.45%) (.54%) (.41%) (.66%) (.52%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 100% 112% 93% 104% 132%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 27.81% 20.07% 20.74% 10.68% 17.02%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 41
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $7.02 $5.85 $4.85 $4.38 $3.75
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.04)(b) (.01) (.02) (.02) (.03)
Net gains (losses) (both realized and
unrealized) 1.98 1.18 1.03 .49 .66
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.94 1.17 1.01 .47 .63
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.03) -- (.01) -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.93 $7.02 $5.85 $4.85 $4.38
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $8 $6 $2 $1 $1
- -----------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 2.15% 2.27% 2.33% 2.19% 2.29%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.48%) (.50%) (.53%) (.69%) (.52%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 100% 112% 93% 104% 132%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 27.76% 20.03% 20.89% 10.73% 16.80%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
42 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007(B)
Net asset value, beginning of period $7.89
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) (.01)
Net gains (losses) (both realized and
unrealized) 1.84
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.83
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.10)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.62
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Total expenses(d),(e) 1.74%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.13%)(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 100%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 23.41%(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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 43
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007(B)
Net asset value, beginning of period $7.89
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .01
Net gains (losses) (both realized and
unrealized) 1.85
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.86
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.10)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.65
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Total expenses(d),(e) 1.49%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .12%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 100%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 23.80%(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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
44 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
CLASS R4*
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $7.60 $6.29 $5.20 $4.65 $3.94
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04(b) .02 .04 .01 .02
Net gains (losses) (both realized and
unrealized) 2.13 1.31 1.09 .54 .69
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 2.17 1.33 1.13 .55 .71
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.07) (.02) (.04) -- --
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.70 $7.60 $6.29 $5.20 $4.65
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $10 $9 $6 $4 $5
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.23% 1.32% 1.38% 1.23% 1.30%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c),(d) 1.23% 1.32% 1.38% 1.23% 1.30%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .45% .44% .49% .25% .43%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 100% 112% 93% 104% 132%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 28.85% 21.26% 21.90% 11.88% 18.02%
- -----------------------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 45
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007(B)
Net asset value, beginning of period $7.89
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .05
Net gains (losses) (both realized and
unrealized) 1.85
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.90
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.10)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.69
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Total expenses(d),(e) .99%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .62%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 100%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
46 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007(B)
Net asset value, beginning of period $7.83
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .02
Net gains (losses) (both realized and
unrealized) 1.91
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.93
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.10)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.66
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $--
- -----------------------------------------------------------------------------------------------------------
Total expenses(d),(e) 1.39%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) .20%(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 100%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) Total return does not reflect payment of a sales charge.
(h) Not annualized.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 47
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
RIVERSOURCE GLOBAL EQUITY FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of RiverSource Global Equity Fund
(the Fund) (one of the portfolios constituting the RiverSource Global Series,
Inc.) as of October 31, 2007, and the related statements of operations, changes
in net assets, and financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The financial statements
and financial highlights of the Fund for the periods presented through October
31, 2006, were audited by other auditors whose report dated December 20, 2006,
expressed an unqualified opinion on those financial statements and financial
highlights.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2007, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the 2007 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
RiverSource Global Equity of the RiverSource Global Series, Inc. at October 31,
2007, the results of its operations, changes in its net assets and the financial
highlights for the year then ended, in conformity with U.S. generally accepted
accounting principles.
/s/ Ernst & Young LLP
MINNEAPOLIS, MINNESOTA
DECEMBER 17, 2007
- --------------------------------------------------------------------------------
48 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
FEDERAL INCOME TAX INFORMATION
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended Oct. 31, 2007
CLASS A
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 59.61%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.06284
</Table>
CLASS B
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 59.61%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.00295
</Table>
CLASS C
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 59.61%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.02928
</Table>
CLASS R2
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 59.61%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.09543
</Table>
CLASS R3
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 59.61%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.09591
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 49
CLASS R4*
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 59.61%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.07261
</Table>
CLASS R5
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 59.61%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.09670
</Table>
CLASS W
<Table>
<Caption>
INCOME DISTRIBUTIONS - taxable as dividend income:
Qualified Dividend Income for individuals............. 100%
Dividends Received Deduction for corporations......... 59.61%
</Table>
<Table>
<Caption>
PAYABLE DATE PER SHARE
Dec. 20, 2006............................................... $0.09531
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
50 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
BOARD MEMBERS AND OFFICERS
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board.
The following is a list of the Fund's Board members. Each member oversees 104
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme
901 S. Marquette Ave. since 2006 Court, 1998-2005
Minneapolis, MN 55402
Age 53
- -----------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, RiverSource Funds,
901 S. Marquette Ave. since 1999 1999-2006; former Governor of
Minneapolis, MN 55402 Minnesota
Age 73
- -----------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member President, Springboard -- Partners
901 S. Marquette Ave. since 2007 in Cross Cultural Leadership
Minneapolis, MN 55402 (consulting company)
Age 52
- -----------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and
901 S. Marquette Ave. since 2004 Management, Bentley College; former
Minneapolis, MN 55402 Dean, McCallum Graduate School of
Age 56 Business, Bentley College
- -----------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member Former Managing Director, Shikiar American Progressive
901 S. Marquette Ave. since 2005 Asset Management Insurance
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Professor of Valmont Industries,
901 S. Marquette Ave. since 2002 and Economics, Carleton College Inc. (manufactures
Minneapolis, MN 55402 Chair of the irrigation systems)
Age 68 Board since 2007
- -----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 51
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset Strategic
901 S. Marquette Ave. since 2004 Management, Inc. (private real Distribution, Inc.
Minneapolis, MN 55402 estate and asset management (transportation,
Age 55 company) distribution and
logistics
consultants)
- -----------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer, RiboNovix, Hybridon, Inc.
901 S. Marquette Ave. since 2002 Inc. since 2003 (biotechnology); (biotechnology);
Minneapolis, MN 55402 former President, Forester Biotech American Healthways,
Age 63 Inc. (health
management programs)
- -----------------------------------------------------------------------------------------------------
</Table>
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
William F. Truscott Board member President -- U.S. Asset Management
53600 Ameriprise since 2001, and Chief Investment Officer,
Financial Center Vice President Ameriprise Financial, Inc. and
Minneapolis, MN 55474 since 2002 President, Chairman of the Board
Age 47 and Chief Investment Officer,
RiverSource Investments, LLC since
2005; President, Ameriprise
Certificate Company since 2006;
Senior Vice President -- Chief
Investment Officer, Ameriprise
Financial, Inc. and Chairman of the
Board and Chief Investment Officer,
RiverSource Investments, LLC,
2001-2005
- -----------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- --------------------------------------------------------------------------------
52 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Patrick T. Bannigan President since Senior Vice President -- Asset Management,
172 Ameriprise 2006 RiverSource Investments, LLC since 2006;
Financial Center Managing Director and Global Head of Product,
Minneapolis, MN 55474 Morgan Stanley Investment Management,
Age 41 2004-2006; President, Touchstone Investments,
2002-2004; Director of Strategic Planning,
Evergreen Investments, 1995-2002
- ------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President -- Equity and Fixed
172 Ameriprise since 2004 Income, Ameriprise Financial, Inc. and
Financial Center RiverSource Investments, LLC since 2006; Vice
Minneapolis, MN 55474 President -- Investments, Ameriprise
Age 43 Certificate Company since 2003; Senior Vice
President -- Fixed Income, Ameriprise
Financial, Inc., 2002-2006 and RiverSource
Investments, LLC, 2004-2006; Managing
Director, Zurich Global Assets, 2001-2002
- ------------------------------------------------------------------------------------------
Amy K. Johnson Vice President Vice President -- Asset Management and Trust
5228 Ameriprise since 2006 Company Services, RiverSource Investments, LLC
Financial Center since 2006; Vice President -- Operations and
Minneapolis, MN 55474 Compliance, RiverSource Investments, LLC,
Age 42 2004-2006; Director of Product
Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- ------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Vice President -- Investment Accounting,
105 Ameriprise 2002 Ameriprise Financial, Inc. since 2002; Vice
Financial Center President -- Finance, American Express
Minneapolis, MN 55474 Company, 2000-2002
Age 52
- ------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset
5228 Ameriprise General Counsel Management, Ameriprise Financial, Inc. since
Financial Center and Secretary 2005; Vice President, General Counsel and
Minneapolis, MN 55474 since 2006 Secretary, Ameriprise Certificate Company
Age 48 since 2005; Vice President -- Asset Management
Compliance, Ameriprise Financial, Inc.,
2004-2005; Senior Vice President and Chief
Compliance Officer, U.S. Bancorp Asset
Management, 2002-2004; Second Vice President
and Assistant General Counsel, Hartford Life,
2001-2002
- ------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance
172 Ameriprise Officer since Officer, RiverSource Investments, LLC since
Financial Center 2006 2006; Director -- Mutual Funds, Voyageur Asset
Minneapolis, MN 55474 Management, 2003-2006; Director of Finance,
Age 46 Voyageur Asset Management, 2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 53
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Compliance Director and Anti-Money Laundering
2934 Ameriprise Prevention Officer, Ameriprise Financial, Inc. since
Financial Center Officer since 2004; Manager Anti-Money Laundering,
Minneapolis, MN 55474 2004 Ameriprise Financial, Inc., 2003-2004;
Age 43 Compliance Director and Bank Secrecy Act
Officer, American Express Centurion Bank,
2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
54 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL 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.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT 55
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On April 12, 2007, Ernst & Young LLP was selected as the Fund's independent
registered public accounting firm for the 2007 fiscal year. A majority of the
Fund's Board of Directors, including a majority of the Independent Directors,
approved the appointment of Ernst & Young LLP. The predecessor independent
registered public accounting firm's reports on the Fund's financial statements
for the year ended Oct. 31, 2006 and the year ended Oct. 31, 2005 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During such fiscal periods
and through April 12, 2007 there were no disagreements between the Fund and the
predecessor independent registered public accounting firm on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which such disagreements, if not resolved to the
satisfaction of the predecessor independent registered public accounting firm,
would have caused them to make reference to the subject matter of the
disagreement in connection with their reports on the financial statements for
such fiscal periods.
- --------------------------------------------------------------------------------
56 RIVERSOURCE GLOBAL EQUITY FUND -- 2007 ANNUAL REPORT
RIVERSOURCE(R) 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. 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) 2007 RiverSource Distributors, Inc. S-6334 AD (12/07)
</Table>
Annual Report
and Prospectus
(RIVERSOURCE INVESTMENTS LOGO)
RIVERSOURCE(R)
GLOBAL TECHNOLOGY FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
OCTOBER 31, 2007
(Prospectus also enclosed)
RIVERSOURCE GLOBAL TECHNOLOGY FUND
SEEKS TO PROVIDE SHAREHOLDERS WITH
LONG-TERM CAPITAL GROWTH.
This annual report includes a prospectus that
describes in detail the Fund's objective,
investment strategy, risks, sales charges, fees
and other matters of interest. Please read the
prospectus carefully before you invest or send
money.
TABLE OF CONTENTS
<Table>
Fund Snapshot....................... 3
Performance Summary................. 5
Questions & Answers
with Portfolio Management........ 7
The Fund's Long-term Performance ... 12
Fund Expenses Example............... 14
Investments in Securities........... 16
Financial Statements................ 18
Notes to Financial Statements....... 22
Report of Independent Registered
Public Accounting Firm........... 40
Board Members and Officers.......... 41
Proxy Voting........................ 45
Change in Independent Registered
Public Accounting Firm........... 46
</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.
- --------------------------------------------------------------------------------
2 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
FUND SNAPSHOT AT OCT. 31, 2007
FUND OBJECTIVE
RiverSource Global Technology Fund seeks to provide shareholders with long-term
capital growth.
SECTOR BREAKDOWN*
Percentage of portfolio assets
(PIE CHART)
<Table>
Information Technology 86.5%
Telecommunication Services 6.4%
Cash & Cash Equivalents(1) 6.3%
Financials 0.8%
</Table>
* Sectors can be comprised of several industries. Please refer to the section
entitled "Investments in Securities" for a complete listing.
(1) Of the 6.3%, 0.5% is due to security lending activity and 5.8% is the
Fund's cash equivalent position.
TOP TEN HOLDINGS
Percentage of portfolio assets
<Table>
Microsoft 8.3%
Cisco Systems 6.3%
Intel 5.6%
Google Cl A 4.6%
Oracle 4.4%
Hewlett-Packard 4.1%
IBM 3.8%
Apple 3.8%
Dell 2.7%
Adobe Systems 2.4%
</Table>
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
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.
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.
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.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 3
FUND SNAPSHOT AT OCT. 31, 2007
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 generally
invests.
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 serves 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 MANAGERS
<Table>
<Caption>
YEARS IN INDUSTRY
Bob Ewing, CFA 19
Nick Thakore 14
</Table>
FUND FACTS
<Table>
<Caption>
TICKER SYMBOL INCEPTION DATE
Class A AXIAX 11/13/96
Class B INVBX 11/13/96
Class C AXICX 06/26/00
Class I -- 07/15/04
Class R4(1) RSGTX 11/13/96
(1) Effective Dec. 11, 2006, Class Y was renamed Class
R4.
Total net assets $185.5 million
Number of holdings 54
</Table>
- --------------------------------------------------------------------------------
4 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
PERFORMANCE SUMMARY
PERFORMANCE COMPARISON
For the year ended Oct. 31, 2007
(BAR CHART)
<Table>
RiverSource Global Technology Fund Class A
(excluding sales charge) +25.62%
S&P GSTI(TM) Composite Index (unmanaged) +29.06%
Lipper Science and Technology Funds Index +29.71%
</Table>
(see "The Fund's Long-term Performance" for Index descriptions)
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 bar chart. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
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.
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(a) 1.34%
</Table>
(a) Effective Dec. 11, 2006, Class Y was renamed Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 5
PERFORMANCE SUMMARY
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
AT OCT. 31, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 11/13/96) +25.62% +18.43% +24.17% +7.49% +7.32%
Class B (inception 11/13/96) +24.88% +17.72% +23.19% +6.66% +6.49%
Class C (inception 6/26/00) +24.76% +17.62% +23.28% N/A -8.54%
Class I (inception 7/15/04) +26.42% +19.34% N/A N/A +20.11%
Class R4* (inception 11/13/96) +26.34% +18.82% +24.41% +7.60% +7.42%
WITH SALES CHARGE
Class A (inception 11/13/96) +18.29% +16.15% +22.77% +6.94% +7.32%
Class B (inception 11/13/96) +19.88% +16.75% +23.01% +6.66% +6.49%
Class C (inception 6/26/00) +23.76% +17.62% +23.28% N/A -8.54%
</Table>
<Table>
<Caption>
AT SEPT. 30, 2007
SINCE
WITHOUT SALES CHARGE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION
Class A (inception 11/13/96) +24.14% +19.68% +28.25% +6.28% +6.85%
Class B (inception 11/13/96) +22.89% +18.62% +27.26% +5.43% +6.00%
Class C (inception 6/26/00) +23.38% +18.78% +27.36% N/A -9.33%
Class I (inception 7/15/04) +25.00% +20.41% N/A N/A +18.73%
Class R4* (inception 11/13/96) +24.36% +19.86% +28.52% +6.39% +6.95%
WITH SALES CHARGE
Class A (inception 11/13/96) +16.98% +17.35% +26.73% +5.65% +6.27%
Class B (inception 11/13/96) +17.89% +17.66% +27.11% +5.43% +6.00%
Class C (inception 6/26/00) +22.38% +18.78% +27.36% N/A -9.33%
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
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.
- --------------------------------------------------------------------------------
6 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS WITH PORTFOLIO MANAGEMENT
Below, portfolio managers Bob Ewing and Nick Thakore discuss the Fund's results
and positioning for the fiscal year ended Oct. 31, 2007. Mr. Ewing and Mr.
Thakore took over management of the Fund in June 2007. They 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.
Q: How did RiverSource Global Technology Fund perform for the annual period
ended Oct. 31, 2007?
A: RiverSource Global Technology Fund's Class A shares increased 25.62%
(excluding sales charge) for the 12 months ended Oct. 31, 2007,
underperforming its benchmark, the unmanaged S&P GSTI(TM) Composite Index,
formerly known as the Goldman Sachs Technology Index(R) (GSTI(R)) Composite
Index, which increased 29.06% and its peer group, represented by the Lipper
Science and Technology Funds Index, which increased 29.71% during the same
period.
Q: What factors most significantly affected performance during the fiscal year?
A: The technology sector showed very positive growth at the end of 2006, before
experiencing greater ups and downs in early 2007. Technology usually performs
better in the second half of the calendar year, and that cycle was even more
pronounced in 2007. Consumer spending generally held up better than expected,
with personal computer purchases continuing to be robust. Spending on
telecommunications weakened a bit, but in general, technology expenditures
were favorable and investors responded positively to the sector.
The Fund's strong positive results fell short of its benchmark, the S&P GSTI
Composite Index, which is weighted heavily toward large-cap stocks. During
periods when the technology sector appreciates rapidly, more aggressive
strategies typically perform best. However, we position the Fund for the long
term and believe its performance over full market cycles supports the
soundness of our approach. Portfolio positioning in computers and
peripherals, semiconductors and media detracted from return relative to the
S&P GSTI Composite Index. The Fund benefited from its positioning in
software, communications equipment and telecommunications services.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 7
QUESTIONS & ANSWERS
Software was by far the strongest performing industry for the Fund. The
software position, which was significantly larger than that of the S&P GSTI
Composite Index, included a selection of small- and mid-size software
companies that we thought would be takeover candidates. The environment for
merger and acquisition (M&A) in the software industry remained strong, and
the Fund's results were enhanced by acquired holdings. Nuance Communications
was among the Fund's leading contributors for the year. The company, a leader
in the speech recognition business, provides software to call centers,
dictation services and hospitals. We trimmed the position following its
strong gains, but still look for long-term potential.
Positioning in the communications equipment group also added to return as
cell phone makers Motorola and Nokia benefited from growth in handset sales.
An underweight in another strong performer, Research in Motion, detracted
from return. These companies continue to profit from expanded use of cell
phones and other handheld devices for email and Internet browsing, areas
where penetration rates are low, but increasing. Continued growth in emerging
market cell phone sales is also driving earnings.
THE ENVIRONMENT FOR MERGER AND ACQUISITION IN THE SOFTWARE INDUSTRY
REMAINED STRONG, AND THE FUND'S RESULTS WERE ENHANCED BY ACQUIRED
HOLDINGS.
In the telecommunications services sector, the Fund benefited from its
holdings of Spain's Telefonica, a stock that is not in the S&P GSTI Composite
Index. The company provides wireless services to residential and corporate
customers in Europe and Latin America, two growth regions.
Cogent Communications Group was a leading individual contributor. The company
provides Internet connectivity for office buildings in U.S. metropolitan
areas. Our research showed the company had great operating leverage and was a
leader in its market. The company performed well through July 2007 before
giving back gains. We had already taken profits and had minimal holdings when
the stock weakened.
Within the semiconductor group, emphasis was on turnaround stocks and those
positioned to benefit from developing themes, such as the rapid increase of
cell phone usage. However, semiconductor stocks often have high debt levels,
a
- --------------------------------------------------------------------------------
8 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
disadvantage in tightening credit markets. In addition, many semiconductors
exhibited a price premium because they were considered acquisition
candidates. When private equity and M&A activity dried up, this price premium
disappeared. We still believe these companies can perform well, but it may
take longer than expected.
Spansion, a mid-cap company that provides memory for cell phones, was one of
the largest detractors during the period. Spansion is well-positioned with
technology that no other company offers, but has been stymied by concerns
about its debt load, excess inventory in a key market and the expense of
building a new factory. We believe margins will improve once the building is
completed and that the inventory situation will improve by early 2008.
The Fund's underperformance in the computers and peripherals segment stemmed
mainly from an underweight in Apple and EMC, two strong performers in the S&P
GSTI Composite Index. Apple was a top 10 position in the Fund during much of
its advance, but the stock's weighting in the S&P GSTI Composite Index was
larger than we considered prudent for the Fund given its premium valuation
characteristics. Our outlook for Apple is favorable and we believe the
iPhone, a breakthrough product in its early stages, could lead to further
innovations and create a halo effect on other Apple products. We sold EMC in
the spring before the data storage provider benefited from a partial spin-off
of VMWare.
Q: What changes did you make to the Fund and how is it currently positioned?
A: During the summer, we increased our focus on large-cap stocks as they became
inexpensive relative to small- and mid-size stocks and had very attractive
free cash flow yields. We bought stocks such as IBM, Oracle and Microsoft and
took profits in some small-cap stocks that had performed well. This
repositioning proved effective toward the end of the period as investors
became nervous about small-cap stocks. We continue to emphasize large-cap
stocks, given expectations for slowing economic growth in developed nations.
We also reduced some telecommunications services holdings, selling Sprint
Nextel and Virgin Media, and reduced our holdings of Qwest Communications
Intl.
The Fund's portfolio turnover rate during the annual period was 167%.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 9
QUESTIONS & ANSWERS
STRONG EMERGING MARKETS GROWTH HAS CUSHIONED SOME AREAS OF TECHNOLOGY,
COMPENSATING FOR LACKLUSTER GROWTH EXHIBITED BY LARGE ENTERPRISES AND
COMPANIES WITH FINANCIAL SERVICES EXPOSURE.
Q: How do you intend to manage the Fund in the coming months?
A: While we remain optimistic about the long-term demand for technology
products, we realize that growth over the near-term may be dampened somewhat
by the murky domestic economic picture. The first quarter of the year is
generally challenging for technology, and recent concerns about economic
growth may lead to conservative budget planning and cautious first quarter
spending. We are cognizant of the difficulties exhibited by companies in the
U.S. financial services industry and have de-emphasized investments in this
area, as there is a strong possibility that business uncertainty will likely
reduce hiring and related technology spending. Strong emerging markets growth
has cushioned some areas of technology, compensating for lackluster growth
exhibited by large enterprises and companies with financial services
exposure. Other areas that may help counterbalance domestic weakness include
government, education and health care, as the budgets of these industries are
less impacted by the credit markets or consumer spending.
Though generally pleased with the strength of U.S. consumer spending, we are
somewhat concerned that spending will weaken. For that reason, we are looking
closely at technology product cycles and continue to seek out companies that
have the "it" product to attract high-end consumers. Personal computer sales,
which experienced phenomenal growth this year, could come in below growth
levels during the fourth quarter due to component constraints. However, we
are optimistic that a shift toward notebook computers, a higher margin
product, may support continued demand above growth trend levels. In
evaluating PC providers, we are focusing on their mix of products, since some
tend to be more diversified than others. We are closely monitoring end market
demand for products that contain semiconductors, such as handsets and
personal computers, as less than expected sales could spell trouble for
companies exposed to either end market.
- --------------------------------------------------------------------------------
10 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
QUESTIONS & ANSWERS
As semiconductor inventory levels appear to be well-managed at this point,
any correction should be somewhat short-lived, barring an economic meltdown.
We anticipate maintaining a slightly defensive positioning through the end of
2007 and into the first quarter of 2008. Though we are looking for small-cap
companies that might be longer term success stories, we remain comfortable
with the Fund's current large-cap slant.
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 -- 2007 ANNUAL REPORT 11
THE FUND'S LONG-TERM PERFORMANCE
The chart on the facing page illustrates the total value of an assumed $10,000
investment in RiverSource Global Technology Fund Class A shares (from 11/1/97 to
10/31/07) as compared to the performance of two widely cited performance
indices, the S&P GSTI(TM) Composite Index and the Lipper Science and Technology
Funds Index. In comparing the Fund's Class A shares to these indices, you should
take into account the fact that the Fund's performance reflects the maximum
sales charge of 5.75%, while such charges are not reflected in the performance
of the indices. Returns for the Fund include the reinvestment of any
distribution paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. 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. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
<Table>
<Caption>
Results at Oct. 31, 2007
SINCE
1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION(3)
RIVERSOURCE GLOBAL TECHNOLOGY FUND (INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $11,829 $15,670 $27,891 $19,412 $21,697
Average annual total return +18.29% +16.15% +22.77% +6.94% +7.32%
S&P GSTI COMPOSITE INDEX(1)
Cumulative value of $10,000 $12,906 $15,189 $22,198 $18,127 $22,545
Average annual total return +29.06% +14.95% +17.29% +6.13% +7.67%
LIPPER SCIENCE AND TECHNOLOGY FUNDS INDEX(2)
Cumulative value of $10,000 $12,971 $15,484 $22,426 $17,648 $19,909
Average annual total return +29.71% +15.69% +17.53% +5.84% +6.46%
</Table>
Results for other share classes can be found on page 6.
- --------------------------------------------------------------------------------
12 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN RIVERSOURCE GLOBAL TECHNOLOGY
BOND FUND LINE GRAPH)
<Table>
<Caption>
RIVERSOURCE GLOBAL
TECHNOLOGY FUND CLASS A S&P GSTI COMPOSITE LIPPER SCIENCE &
(INCLUDES SALES CHARGE) INDEX(1) TECHNOLOGY FUNDS INDEX(2)
----------------------- ------------------ -------------------------
10/97 $ 9,425 $10,000 $10,000
10/98 9,678 12,595 10,748
10/99 20,160 22,545 20,895
10/00 33,583 27,259 28,202
10/01 10,216 11,937 11,746
10/02 6,577 8,166 7,870
10/03 10,983 12,211 11,759
10/04 11,686 11,933 11,396
10/05 12,707 12,673 12,433
10/06 15,453 14,045 13,606
10/07 19,412 18,127 17,648
</Table>
(1) The S&P GSTI Composite Index, formerly known as the Goldman Sachs
Technology Index (GSTI) 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.
(3) Fund data is from Nov. 13, 1996. S&P GSTI Composite Index and Lipper peer
group data is from Dec. 1, 1996.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 13
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 Oct. 31, 2007.
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.
- --------------------------------------------------------------------------------
14 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
ENDING
BEGINNING ACCOUNT VALUE EXPENSES
ACCOUNT VALUE OCT. 31, PAID DURING ANNUALIZED
MAY 1, 2007 2007 THE PERIOD(A) EXPENSE RATIO
Class A
Actual(b) $1,000 $1,169.20 $ 8.47 1.55%
Hypothetical
(5% return before
expenses) $1,000 $1,017.39 $ 7.88 1.55%
Class B
Actual(b) $1,000 $1,165.20 $12.66 2.32%
Hypothetical
(5% return before
expenses) $1,000 $1,013.51 $11.77 2.32%
Class C
Actual(b) $1,000 $1,169.60 $12.58 2.30%
Hypothetical
(5% return before
expenses) $1,000 $1,013.61 $11.67 2.30%
Class I
Actual(b) $1,000 $1,173.60 $ 5.20 .95%
Hypothetical
(5% return before
expenses) $1,000 $1,020.42 $ 4.84 .95%
Class R4*
Actual(b) $1,000 $1,171.80 $ 6.84 1.25%
Hypothetical
(5% return before
expenses) $1,000 $1,018.90 $ 6.36 1.25%
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(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 184/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Oct. 31, 2007: +16.92%
for Class A, +16.52% for Class B, +16.96% for Class C, +17.36% for Class I
and +17.18% for Class R4.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 15
INVESTMENTS IN SECURITIES
OCT. 31, 2007
(Percentages represent value of investments compared to net assets)
<Table>
<Caption>
COMMON STOCKS (93.2%)
ISSUER SHARES VALUE(A)
CAPITAL MARKETS (--%)
Alibaba.com 500(b,c) $871
- ------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (15.0%)
Cisco Systems 351,912(b) 11,634,211
JDS Uniphase 148,072(b) 2,259,579
Juniper Networks 47,032(b) 1,693,152
Motorola 137,340 2,580,619
Nokia ADR 60,513(c) 2,403,576
Packeteer 154,845(b) 1,345,603
QUALCOMM 99,751 4,262,360
Telefonaktiebolaget LM Ericsson ADR 52,539(c) 1,578,797
---------------
Total 27,757,897
- ------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (18.4%)
Apple 36,539(b) 6,940,583
Brocade Communications Systems 169,175(b) 1,608,854
Dell 163,453(b) 5,001,662
Hewlett-Packard 146,241 7,557,735
IBM 60,951 7,077,630
Network Appliance 52,465(b) 1,652,123
SanDisk 38,203(b) 1,696,213
Seagate Technology 91,678(c) 2,552,316
---------------
Total 34,087,116
- ------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.8%)
Compass Diversified Holdings 90,300 1,454,733
- ------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (5.2%)
Cogent Communications Group 69,524(b) 1,924,425
France Telecom 51,463(c) 1,903,180
Global Crossing 59,709(b,c,d) 1,259,263
Qwest Communications Intl 111,496(b) 800,541
Telefonica 114,634(c) 3,795,815
---------------
Total 9,683,224
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
INTERNET SOFTWARE & SERVICES (5.9%)
eBay 64,984(b) $2,345,922
Google Cl A 12,050(b) 8,519,350
---------------
Total 10,865,272
- ------------------------------------------------------------------------------------
IT SERVICES (5.3%)
Automatic Data Processing 54,550 2,703,498
Cognizant Technology Solutions Cl A 75,356(b) 3,124,260
Fiserv 26,276(b) 1,455,690
Ness Technologies 221,480(b,c) 2,591,316
---------------
Total 9,874,764
- ------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (17.8%)
Atmel 586,244(b) 2,866,733
Broadcom Cl A 53,996(b) 1,757,570
Intel 381,047 10,250,164
Marvell Technology Group 226,001(b,c) 4,074,798
Maxim Integrated Products 74,185 2,010,414
MEMC Electronic Materials 24,711(b) 1,809,339
Natl Semiconductor 64,509 1,621,756
NVIDIA 71,118(b) 2,516,155
Samsung Electronics 2,056(c) 1,266,179
Spansion Cl A 257,159(b) 1,812,971
Texas Instruments 92,983 3,031,246
---------------
Total 33,017,325
- ------------------------------------------------------------------------------------
SOFTWARE (23.7%)
Adobe Systems 91,390(b) 4,377,581
BEA Systems 195,829(b) 3,309,510
Citrix Systems 24,872(b) 1,069,247
Electronic Arts 31,272(b) 1,911,345
Microsoft 414,194 15,246,482
Nintendo 4,300(c) 2,731,667
Nuance Communications 87,773(b) 1,940,661
OPNET Technologies 100,000(b) 1,229,000
</Table>
See accompanying notes to investments in securities.
- --------------------------------------------------------------------------------
16 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(A)
SOFTWARE (CONT.)
Oracle 369,044(b) $8,181,706
Red Hat 87,777(b) 1,895,105
Salesforce.com 19,030(b) 1,072,721
TIBCO Software 115,073(b) 1,056,370
---------------
Total 44,021,395
- ------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (1.1%)
Vodafone Group 535,008(c) 2,108,018
- ------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $144,954,802) $172,870,615
- ------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (6.3%)(e)
ISSUER SHARES VALUE(A)
RiverSource Short-Term Cash Fund 11,594,115(f) $11,594,115
- ------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $11,594,115) $11,594,115
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $156,548,917)(g) $184,464,730
====================================================================================
</Table>
NOTES TO INVESTMENTS IN SECURITIES
(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 Oct. 31, 2007, the
value of foreign securities represented 14.2% of net assets.
(d) At Oct. 31, 2007, security was partially or fully on loan. See Note 6 to
the financial statements.
(e) Cash collateral received from security lending activity is invested in an
affiliated money market fund and represents 0.5% of net assets. See Note 6
to the financial statements. The Fund's cash equivalent position is 5.8% of
net assets.
(f) Affiliated Money Market Fund - See Note 7 to the financial statements.
(g) At Oct. 31, 2007, the cost of securities for federal income tax purposes
was $157,130,151 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $31,598,918
Unrealized depreciation (4,264,339)
- ------------------------------------------------------------------------------
Net unrealized appreciation $27,334,579
- ------------------------------------------------------------------------------
</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 -- 2007 ANNUAL REPORT 17
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCT. 31, 2007
<Table>
ASSETS
Investments in securities, at value (Note 1)
Unaffiliated issuers* (identified cost $144,954,802) $172,870,615
Affiliated money market fund (identified cost
$11,594,115) (Note 7) 11,594,115
- ----------------------------------------------------------------------------
Total investments in securities (identified cost
$156,548,917) 184,464,730
Foreign currency holdings (identified cost $923) (Note 1) 952
Capital shares receivable 89,068
Dividends receivable 23,337
Receivable for investment securities sold 2,012,698
- ----------------------------------------------------------------------------
Total assets 186,590,785
- ----------------------------------------------------------------------------
LIABILITIES
Capital shares payable 171,471
Payable for investment securities purchased 880
Payable upon return of securities loaned (Note 6) 880,000
Accrued investment management services fee 3,602
Accrued distribution fee 2,193
Accrued transfer agency fee 773
Accrued administrative services fee 300
Accrued plan administration services fee 1
Other accrued expenses 78,506
- ----------------------------------------------------------------------------
Total liabilities 1,137,726
- ----------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $185,453,059
============================================================================
</Table>
- --------------------------------------------------------------------------------
18 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
OCT. 31, 2007
<Table>
REPRESENTED BY
Capital stock - $.01 par value (Note 1) $ 635,009
Additional paid-in capital 489,129,855
Excess of distributions over net investment income (1,860)
Accumulated net realized gain (loss) (Note 9) (332,225,787)
Unrealized appreciation (depreciation) on investments and on
translation of assets and liabilities in foreign
currencies (Note 5) 27,915,842
- ----------------------------------------------------------------------------
Total - representing net assets applicable to outstanding
capital stock $185,453,059
============================================================================
</Table>
<Table>
Net assets applicable to outstanding
shares: Class A $138,622,786
Class B $ 42,629,517
Class C $ 4,011,851
Class I $ 18,312
Class R4 $ 170,593
Net asset value per share of outstanding
capital stock: Class A shares(1) 45,570,117 $ 3.04
Class B shares 16,336,743 $ 2.61
Class C shares 1,532,650 $ 2.62
Class I shares 5,882 $ 3.11
Class R4 shares 55,549 $ 3.07
- -------------------------------------------------------------------------------------------
*Including securities on loan, at value
(Note 6) $ 843,600
- -------------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $3.23. The offering
price is calculated by dividing the net asset value by 1.0 minus the
maximum sales charge of 5.75%.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 19
STATEMENT OF OPERATIONS
YEAR ENDED OCT. 31, 2007
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $ 1,026,957
Income distributions from affiliated money market fund (Note
7) 325,369
Fee income from securities lending (Note 6) 53,743
Less foreign taxes withheld (42,166)
- ---------------------------------------------------------------------------
Total income 1,363,903
- ---------------------------------------------------------------------------
Expenses (Note 2):
Investment management services fee 1,412,081
Distribution fee
Class A 316,437
Class B 417,897
Class C 35,534
Transfer agency fee
Class A 451,322
Class B 157,638
Class C 13,004
Class R4 325
Service fee -- Class R4 68
Administrative services fee 103,335
Plan administration services fee - Class R4 558
Compensation of board members 2,981
Custodian fees 33,945
Printing and postage 70,140
Registration fees 41,780
Professional fees 38,531
Other 13,028
- ---------------------------------------------------------------------------
Total expenses 3,108,604
Earnings and bank fee credits on cash balances (Note 2) (13,015)
- ---------------------------------------------------------------------------
Total net expenses 3,095,589
- ---------------------------------------------------------------------------
Investment income (loss) - net (1,731,686)
- ---------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) - NET
Net realized gain (loss) on:
Security transactions (Note 3) 32,315,477
Foreign currency transactions (30,792)
- ---------------------------------------------------------------------------
Net realized gain (loss) on investments 32,284,685
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies 8,992,097
- ---------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 41,276,782
- ---------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $39,545,096
===========================================================================
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
20 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007 2006
OPERATIONS
Investment income (loss) - net $ (1,731,686) $ (1,876,776)
Net realized gain (loss) on investments 32,284,685 24,531,936
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and
liabilities in foreign currencies 8,992,097 9,282,250
- --------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 39,545,096 31,937,410
- --------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Proceeds from sales
Class A shares (Note 2) 21,370,119 16,756,579
Class B shares 3,823,491 3,746,698
Class C shares 784,042 483,485
Class R4 shares 221,867 179,064
Payments for redemptions
Class A shares (35,029,639) (36,795,583)
Class B shares (Note 2) (13,037,111) (15,568,576)
Class C shares (Note 2) (989,760) (854,294)
Class R4 shares (653,020) (43,302)
- --------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (23,510,011) (32,095,929)
- --------------------------------------------------------------------------------------
Total increase (decrease) in net assets 16,035,085 (158,519)
Net assets at beginning of year 169,417,974 169,576,493
- --------------------------------------------------------------------------------------
Net assets at end of year $185,453,059 $169,417,974
======================================================================================
Undistributed (excess of distributions over) net
investment income $ (1,860) $ --
- --------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 21
NOTES TO FINANCIAL STATEMENTS
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. 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 have no sales charge and are offered only to
qualifying institutional investors.
Effective Dec. 11, 2006, the Board approved renaming Class Y as Class R4,
terminating the shareholder servicing agreement, revising the fee structure
under the transfer agent agreement from account-based to asset-based, and
adopting a plan administration services agreement.
At Oct. 31, 2007, 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 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 GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL 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
of Directors of the funds 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 equities) 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), as administrator to the Fund and the parent company of the
Investment Manager, will fair value foreign equity securities pursuant to
procedures adopted by the Board of Directors of the funds, 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
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 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.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 23
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 year ended Oct. 31, 2007, 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 Oct. 31, 2007, 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 Oct. 31, 2007, foreign currency holdings were entirely
comprised of South Korean wons.
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
- --------------------------------------------------------------------------------
24 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
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 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.
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.
On the Statement of assets and liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by
$1,729,826 and accumulated net realized loss has been decreased by $30,792
resulting in a net reclassification adjustment to decrease paid-in capital by
$1,760,618.
The tax character of distributions paid for the years indicated is as follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007 2006
- --------------------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income..................................... $-- $--
Long-term capital gain.............................. -- --
CLASS B
Distributions paid from:
Ordinary income..................................... -- --
Long-term capital gain.............................. -- --
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 25
<Table>
<Caption>
YEAR ENDED OCT. 31, 2007 2006
- --------------------------------------------------------------------------
CLASS C
Distributions paid from:
Ordinary income..................................... -- --
Long-term capital gain.............................. -- --
CLASS I
Distributions paid from:
Ordinary income..................................... -- --
Long-term capital gain.............................. -- --
CLASS R4*
Distributions paid from:
Ordinary income..................................... -- --
Long-term capital gain.............................. -- --
</Table>
* Effective Dec. 11, 2006, Class Y was renamed to Class R4.
As of Oct. 31, 2007, the components of distributable earnings on a tax basis are
as follows:
<Table>
Undistributed ordinary income............................ $ --
Undistributed accumulated long-term gain................. $ --
Accumulated realized loss................................ $(331,644,553)
Unrealized appreciation (depreciation)................... $ 27,332,748
</Table>
RECENT ACCOUNTING PRONOUNCEMENTS
On Sept. 20, 2006, the Financial Accounting Standards Board (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 framework for measuring fair value, and requires additional disclosures
about fair-value measurements. The application of SFAS 157 is required for
fiscal years beginning after Nov. 15, 2007 and interim periods within those
fiscal years. The impact of SFAS 157 on the Fund's financial statements is being
evaluated.
In June 2006, the FASB issued FASB Interpretation 48 (FIN 48), "Accounting for
Uncertainty in Income Taxes." 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. FIN 48 is effective for fiscal
years beginning after Dec. 15, 2006. Recent SEC guidance allows implementing FIN
48 in fund NAV calculations as late as the fund's last NAV calculation in the
first required financial statement reporting period. As a result, the Fund will
adopt FIN 48 in its
- --------------------------------------------------------------------------------
26 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
semiannual report for the period ending April 30, 2008. Tax positions of the
Fund are being evaluated to determine the impact, if any, to the Fund. The
adoption of FIN 48 is not anticipated to have a material impact on the Fund.
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, 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 Agreements RiverSource Investments, LLC
(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
based on a comparison of the performance of Class A shares of the Fund to 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 increased the fee by $172,062 for the year ended Oct. 31, 2007. The
management fee for the year ended Oct. 31, 2007, was 0.82% 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 year ended Oct. 31, 2007, was 0.06% of
the Fund's average daily net assets.
Other expenses in the amount of $774 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.
Compensation of Board members includes, for a former Board Chair, compensation
as well as retirement benefits. Certain other aspects of the former
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 27
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 fee per shareholder account for this service as follows:
- - Class A $19.50
- - Class B $20.50
- - Class C $20.00
Effective Dec. 11, 2006, as part of the Board's approval to rename Class Y as
Class R4, the fee structure under the Transfer Agency Agreement was revised from
an account-based fee for Class Y to an asset-based fee for Class R4. The Fund
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. Prior to Dec.
11, 2006, the Fund paid the Transfer Agent an annual account-based fee of $17.50
per shareholder account.
Prior to Dec. 11, 2006, Class I paid a transfer agency fee at an annual rate per
shareholder account of $1. Effective Dec. 11, 2006, this fee was eliminated.
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.
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Prior to Oct. 1, 2007, Ameriprise
Financial Services, Inc. also served as a principal underwriter and distributor
to the Fund. 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.
Effective Dec. 11, 2006, under a Plan Administration Services Agreement, a fee
for the provision of various administrative, recordkeeping, communication and
educational services was adopted for the restructured Class R4. The fee is
calculated at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares.
- --------------------------------------------------------------------------------
28 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
Prior to Dec. 11, 2006, under a Shareholder Service Agreement, the Fund paid the
Distributor a fee for service provided to shareholders by the Distributor and
other servicing agents with respect to Class Y shares. The fee was calculated at
a rate of 0.10% of the Fund's average daily net assets attributable to Class Y
shares. Effective Dec. 11, 2006, this agreement was terminated.
Sales charges received by the Distributor for distributing Fund shares were
$181,408 for Class A, $30,871 for Class B and $495 for Class C for the year
ended Oct. 31, 2007.
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.
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), before giving effect to any performance incentive adjustment,
will not exceed 1.41% for Class R4 of the Fund's average daily net assets until
Oct. 31, 2008, unless sooner terminated at the discretion of the Board. For the
year ended Oct. 31, 2007, the waiver was not invoked since the Fund's expenses
were below the cap amount.
During the year ended Oct. 31, 2007, the Fund's custodian and transfer agency
fees were reduced by $13,015 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 $277,607,298 and $314,305,732 respectively, for the year
ended Oct. 31, 2007. Realized gains and losses are determined on an identified
cost basis.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 29
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the years indicated are as follows:
<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 I -- -- -- --
Class R4* 88,006 -- (256,250) (168,244)
- ----------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED OCT. 31, 2006
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------------------
Class A 7,679,804 -- (16,832,375) (9,152,571)
Class B 1,956,234 -- (8,357,096) (6,400,862)
Class C 247,215 -- (446,399) (199,184)
Class I -- -- -- --
Class R4* 80,137 -- (19,274) 60,863
- ----------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
5. FORWARD FOREIGN CURRENCY CONTRACTS
At Oct. 31, 2007, the Fund had a forward foreign currency exchange contract that
obligates it to deliver currency at a specified future date. The unrealized
appreciation and/or depreciation on this contract, if any, is included in the
accompanying financial statements. See "Summary of significant accounting
policies." The terms of the open contract are as follows:
<Table>
<Caption>
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED
EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION
- -----------------------------------------------------------------------------------------
Nov. 6, 2007 880 6,818 $-- $--
U.S. Dollar Hong Kong Dollar
- -----------------------------------------------------------------------------------------
</Table>
6. 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 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
- --------------------------------------------------------------------------------
30 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
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 Oct. 31, 2007,
securities valued at $843,600 were on loan to brokers. For collateral, the Fund
received $880,000 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
"Investments in securities." Income from securities lending amounted to $53,743
for the year ended Oct. 31, 2007. Expenses paid to the Investment Manager were
$5,026 for the year ended Oct. 31, 2007, 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.
7. 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 $143,169,468 and $142,845,282, respectively, for the year
ended Oct. 31, 2007.
8. 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 year ended Oct. 31, 2007.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 31
9. 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.
10. CONCENTRATION OF RISK
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.
GEOGRAPHIC CONCENTRATION/SECTOR RISK
Investments that are concentrated in a particular issuer, geographic region, or
sector will be more susceptible to changes in price.
11. 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)), the parent company of RiverSource
- --------------------------------------------------------------------------------
32 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
Investments, LLC (RiverSource Investments), entered into settlement agreements
with the Securities and Exchange Commission (SEC) and Minnesota Department of
Commerce (MDOC) related to market timing activities. In connection with these
matters, the SEC and MDOC issued orders (the Orders) alleging that AEFC violated
certain provisions of the federal and Minnesota securities laws by failing to
adequately disclose market timing activities by allowing certain identified
market timers to continue to market time contrary to disclosures in mutual fund
and variable annuity product prospectuses. The Orders also alleged that AEFC
failed to implement procedures to detect and prevent market timing in 401(k)
plans for employees of AEFC and related companies and failed to adequately
disclose that there were no such procedures. Pursuant to the MDOC Order, the
MDOC also alleged that AEFC allowed inappropriate market timing to occur by
failing to have written policies and procedures and failing to properly
supervise its employees.
As a result of the Orders, 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. Pursuant to the terms of the Orders, AEFC agreed to pay
disgorgement of $10 million and civil money penalties of $7 million. AEFC also
agreed to make presentations at least annually to its board of directors and the
relevant mutual funds' board that include an overview of policies and procedures
to prevent market timing, material changes to these policies and procedures and
whether disclosures related to market timing are consistent with the SEC order
and federal securities laws. 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. In
addition, AEFC agreed to complete and submit to the MDOC a compliance review of
its procedures regarding market timing within one year of the MDOC Order,
including a summary of actions taken to ensure compliance with applicable laws
and regulations and certification by a senior officer regarding compliance and
supervisory procedures.
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
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 33
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 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
12. 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, 2007 2006 2005 2004 2003
Net asset value, beginning of period $2.42 $1.99 $1.83 $1.72 $1.03
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.02)(b) (.02) (.02) (.03) (.02)
Net gains (losses) (both realized and
unrealized) .64 .45 .18 .14 .71
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .62 .43 .16 .11 .69
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.04 $2.42 $1.99 $1.83 $1.72
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $139 $123 $120 $146 $145
- -----------------------------------------------------------------------------------------------------------
Total expenses (c),(d) 1.60% 1.69% 1.75% 1.74% 1.94%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.80%) (.89%) (.92%) (1.48%) (1.47%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 167% 196% 115% 349% 546%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 25.62% 21.61% 8.74% 6.40% 66.99%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 35
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $2.09 $1.74 $1.60 $1.53 $ .92
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.04)(b) (.03) (.03) (.04) (.03)
Net gains (losses) (both realized and
unrealized) .56 .38 .17 .11 .64
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .52 .35 .14 .07 .61
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.61 $2.09 $1.74 $1.60 $1.53
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $43 $42 $46 $59 $64
- -----------------------------------------------------------------------------------------------------------
Total expenses (c),(d) 2.38% 2.47% 2.53% 2.52% 2.75%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.58%) (1.66%) (1.71%) (2.26%) (2.27%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 167% 196% 115% 349% 546%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 24.88% 20.12% 8.75% 4.58% 66.30%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
36 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $2.10 $1.74 $1.61 $1.53 $.92
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.04)(b) (.03) (.03) (.04) (.03)
Net gains (losses) (both realized and
unrealized) .56 .39 .16 .12 .64
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .52 .36 .13 .08 .61
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.62 $2.10 $1.74 $1.61 $1.53
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $4 $3 $3 $4 $4
- -----------------------------------------------------------------------------------------------------------
Total expenses (c),(d) 2.36% 2.45% 2.52% 2.49% 2.72%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.56%) (1.66%) (1.69%) (2.23%) (2.26%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 167% 196% 115% 349% 546%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 24.76% 20.69% 8.07% 5.23% 66.30%
- -----------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 37
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004(B)
Net asset value, beginning of period $2.46 $2.01 $1.83 $1.70
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)(c) (.01) (.01) (.02)
Net gains (losses) (both realized and
unrealized) .66 .46 .19 .15
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .65 .45 .18 .13
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.11 $2.46 $2.01 $1.83
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Total expenses (d),(e) .99% 1.01% 1.04% 1.03%(f)
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.19%) (.22%) (.21%) (.73%)(f)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 167% 196% 115% 349%
- -----------------------------------------------------------------------------------------------------------
Total return(g) 26.42% 22.39% 9.84% 7.65%(h)
- -----------------------------------------------------------------------------------------------------------
</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 amount has been calculated using the average shares outstanding
method.
(d) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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.
- --------------------------------------------------------------------------------
38 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
CLASS R4*
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
FISCAL PERIOD ENDED OCT. 31, 2007 2006 2005 2004 2003
Net asset value, beginning of period $2.43 $2.00 $1.83 $1.72 $1.03
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)(b) (.02) (.02) (.02) (.02)
Net gains (losses) (both realized and
unrealized) .65 .45 .19 .13 .71
- -----------------------------------------------------------------------------------------------------------
Total from investment operations .64 .43 .17 .11 .69
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.07 $2.43 $2.00 $1.83 $1.72
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $-- $1 $-- $-- $--
- -----------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.34% 1.47% 1.54% 1.55% 1.69%
- -----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(c),(d) 1.34% 1.47% 1.54% 1.55% 1.69%
- -----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.52%) (.68%) (.73%) (1.28%) (1.25%)
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 167% 196% 115% 349% 546%
- -----------------------------------------------------------------------------------------------------------
Total return(e) 26.34% 21.50% 9.29% 6.40% 66.99%
- -----------------------------------------------------------------------------------------------------------
</Table>
* Effective Dec. 11, 2006, Class Y was renamed Class R4.
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amount has been calculated using the average shares outstanding
method.
(c) Expense ratio is before reduction of earnings and bank fee credits on cash
balances. Includes the impact of a performance incentive adjustment fee, if
any.
(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) Total return does not reflect payment of a sales charge.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 39
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
RIVERSOURCE GLOBAL TECHNOLOGY FUND:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments in securities, of RiverSource Global Technology Fund
(the Fund) (one of the portfolios constituting the RiverSource Global Series,
Inc.) as of October 31, 2007, and the related statements of operations, changes
in net assets, and financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The financial statements
and financial highlights of the Fund for the periods presented through October
31, 2006, were audited by other auditors whose report dated December 20, 2006,
expressed an unqualified opinion on those financial statements and financial
highlights.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2007, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the 2007 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
RiverSource Global Technology Fund of the RiverSource Global Series, Inc. at
October 31, 2007, the results of its operations, changes in its net assets and
the financial highlights for the year then ended, in conformity with U.S.
generally accepted accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 17, 2007
- --------------------------------------------------------------------------------
40 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
BOARD MEMBERS AND OFFICERS
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board.
The following is a list of the Fund's Board members. Each member oversees 104
RiverSource funds. Board members serve until the next regular shareholders'
meeting or until he or she reaches the mandatory retirement age established by
the Board. Under the current Board policy, members may serve until the end of
the meeting following their 75th birthday, or the fifteenth anniversary of the
first Board meeting they attended as members of the Board, whichever occurs
first. This policy does not apply to Ms. Jones who may retire after her 75th
birthday.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Kathleen Blatz Board member Chief Justice, Minnesota Supreme
901 S. Marquette Ave. since 2006 Court, 1998-2005
Minneapolis, MN 55402
Age 53
- -----------------------------------------------------------------------------------------------------
Arne H. Carlson Board member Chair, RiverSource Funds,
901 S. Marquette Ave. since 1999 1999-2006; former Governor of
Minneapolis, MN 55402 Minnesota
Age 73
- -----------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member President, Springboard -- Partners
901 S. Marquette Ave. since 2007 in Cross Cultural Leadership
Minneapolis, MN 55402 (consulting company)
Age 52
- -----------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member Trustee Professor of Economics and
901 S. Marquette Ave. since 2004 Management, Bentley College; former
Minneapolis, MN 55402 Dean, McCallum Graduate School of
Age 56 Business, Bentley College
- -----------------------------------------------------------------------------------------------------
Anne P. Jones Board member Attorney and Consultant
901 S. Marquette Ave. since 1985
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member Former Managing Director, Shikiar American Progressive
901 S. Marquette Ave. since 2005 Asset Management Insurance
Minneapolis, MN 55402
Age 72
- -----------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Board member President Emeritus and Professor of Valmont Industries,
901 S. Marquette Ave. since 2002 and Economics, Carleton College Inc. (manufactures
Minneapolis, MN 55402 Chair of the irrigation systems)
Age 68 Board since 2007
- -----------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 41
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
Catherine James Paglia Board member Director, Enterprise Asset Strategic
901 S. Marquette Ave. since 2004 Management, Inc. (private real Distribution, Inc.
Minneapolis, MN 55402 estate and asset management (transportation,
Age 55 company) distribution and
logistics
consultants)
- -----------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member Chief Executive Officer, RiboNovix, Hybridon, Inc.
901 S. Marquette Ave. since 2002 Inc. since 2003 (biotechnology); (biotechnology);
Minneapolis, MN 55402 former President, Forester Biotech American Healthways,
Age 63 Inc. (health
management programs)
- -----------------------------------------------------------------------------------------------------
</Table>
BOARD MEMBER AFFILIATED WITH RIVERSOURCE INVESTMENTS*
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION OTHER
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS DIRECTORSHIPS
- -----------------------------------------------------------------------------------------------------
William F. Truscott Board member President -- U.S. Asset Management
53600 Ameriprise since 2001, and Chief Investment Officer,
Financial Center Vice President Ameriprise Financial, Inc. and
Minneapolis, MN 55474 since 2002 President, Chairman of the Board
Age 47 and Chief Investment Officer,
RiverSource Investments, LLC since
2005; President, Ameriprise
Certificate Company since 2006;
Senior Vice President -- Chief
Investment Officer, Ameriprise
Financial, Inc. and Chairman of the
Board and Chief Investment Officer,
RiverSource Investments, LLC,
2001-2005
- -----------------------------------------------------------------------------------------------------
</Table>
* Interested person by reason of being an officer, director, security holder
and/or employee of RiverSource Investments.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling RiverSource Funds at (888)
791-3380; contacting your financial institution; or visiting
riversource.com/funds.
- --------------------------------------------------------------------------------
42 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Patrick T. Bannigan President since Senior Vice President -- Asset Management,
172 Ameriprise 2006 RiverSource Investments, LLC since 2006;
Financial Center Managing Director and Global Head of Product,
Minneapolis, MN 55474 Morgan Stanley Investment Management,
Age 41 2004-2006; President, Touchstone Investments,
2002-2004; Director of Strategic Planning,
Evergreen Investments, 1995-2002
- ------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President Executive Vice President -- Equity and Fixed
172 Ameriprise since 2004 Income, Ameriprise Financial, Inc. and
Financial Center RiverSource Investments, LLC since 2006; Vice
Minneapolis, MN 55474 President -- Investments, Ameriprise
Age 43 Certificate Company since 2003; Senior Vice
President -- Fixed Income, Ameriprise
Financial, Inc., 2002-2006 and RiverSource
Investments, LLC, 2004-2006; Managing
Director, Zurich Global Assets, 2001-2002
- ------------------------------------------------------------------------------------------
Amy K. Johnson Vice President Vice President -- Asset Management and Trust
5228 Ameriprise since 2006 Company Services, RiverSource Investments, LLC
Financial Center since 2006; Vice President -- Operations and
Minneapolis, MN 55474 Compliance, RiverSource Investments, LLC,
Age 42 2004-2006; Director of Product
Development -- Mutual Funds, Ameriprise
Financial, Inc., 2001-2004
- ------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Vice President -- Investment Accounting,
105 Ameriprise 2002 Ameriprise Financial, Inc. since 2002; Vice
Financial Center President -- Finance, American Express
Minneapolis, MN 55474 Company, 2000-2002
Age 52
- ------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset
5228 Ameriprise General Counsel Management, Ameriprise Financial, Inc. since
Financial Center and Secretary 2005; Vice President, General Counsel and
Minneapolis, MN 55474 since 2006 Secretary, Ameriprise Certificate Company
Age 48 since 2005; Vice President -- Asset Management
Compliance, Ameriprise Financial, Inc.,
2004-2005; Senior Vice President and Chief
Compliance Officer, U.S. Bancorp Asset
Management, 2002-2004; Second Vice President
and Assistant General Counsel, Hartford Life,
2001-2002
- ------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance
172 Ameriprise Officer since Officer, RiverSource Investments, LLC since
Financial Center 2006 2006; Director -- Mutual Funds, Voyageur Asset
Minneapolis, MN 55474 Management, 2003-2006; Director of Finance,
Age 46 Voyageur Asset Management, 2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 43
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Compliance Director and Anti-Money Laundering
2934 Ameriprise Prevention Officer, Ameriprise Financial, Inc. since
Financial Center Officer since 2004; Manager Anti-Money Laundering,
Minneapolis, MN 55474 2004 Ameriprise Financial, Inc., 2003-2004;
Age 43 Compliance Director and Bank Secrecy Act
Officer, American Express Centurion Bank,
2000-2003
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
44 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL 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.
- --------------------------------------------------------------------------------
RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT 45
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On April 12, 2007, Ernst & Young LLP was selected as the Fund's independent
registered public accounting firm for the 2007 fiscal year. A majority of the
Fund's Board of Directors, including a majority of the Independent Directors,
approved the appointment of Ernst & Young LLP. The predecessor independent
registered public accounting firm's reports on the Fund's financial statements
for the year ended Oct. 31, 2006 and the year ended Oct. 31, 2005 contained no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles. During such fiscal periods
and through April 12, 2007 there were no disagreements between the Fund and the
predecessor independent registered public accounting firm on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which such disagreements, if not resolved to the
satisfaction of the predecessor independent registered public accounting firm,
would have caused them to make reference to the subject matter of the
disagreement in connection with their reports on the financial statements for
such fiscal periods.
- --------------------------------------------------------------------------------
46 RIVERSOURCE GLOBAL TECHNOLOGY FUND -- 2007 ANNUAL REPORT
RIVERSOURCE(R) 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) 2007 RiverSource Distributors, Inc. S-6395 M (12/07)
</Table>
Item 2. (a) The Registrant has adopted a code of ethics that applies to the
Registrant's principal executive officer and principal financial
officer. A copy of the code of ethics is filed as an exhibit to this
form N-CSR.
(b) During the period covered by this report, there were not any
amendments to the provisions of the code of ethics adopted in 2(a)
above.
(c) During the period covered by this report, there were not any
implicit or explicit waivers to the provisions of the code of ethics
adopted in 2(a).
Item 3. The Registrant's board of directors has determined that independent
directors Pamela G. Carlton, Jeffrey Laikind and Anne P. Jones, each
qualify as audit committee financial experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Fund - Related Fees
(a) Audit Fees. The fees for the year ended Oct. 31, to Ernst & Young LLP for
professional services rendered for the audit of the annual financial
statements for RiverSource Global Series, Inc. were as follows:
2007 - $168,900
(b) Audit - Related Fees. The fees for the year ended Oct. 31, to Ernst & Young
LLP for additional professional services rendered in connection with the
registrant's security count pursuant to Rule 17f-2 and the semiannual
financial statement review for RiverSource Global Series, Inc. were as
follows:
2007 - $4,770
(c) Tax Fees. The fees for the year ended Oct. 31, to Ernst & Young LLP for tax
compliance related services for RiverSource Global Series, Inc. were as
follows:
2007 - $19,800
(d) All Other Fees. The fees for the year ended Oct. 31, to Ernst & Young LLP
for additional professional services rendered for RiverSource Global
Series, Inc. were as follows:
2007 - $0
(e) (1) Audit Committee Pre-Approval Policy. Pursuant to Sarbanes-Oxley
pre-approval requirements, all services to be performed by Ernst & Young
LLP for the registrant and to the registrant's investment adviser and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant must be
pre-approved by the audit committee.
(e) (2) 100% of the services performed for items (b) through (d) above during
2007 were pre-approved by the audit committee.
(f) Not applicable.
(g) Non-Audit Fees. The fees for the year ended Oct. 31, to Ernst & Young LLP
by the registrant for non-audit fees and by the registrant's investment
adviser, and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant were as
follows:
2007 - $608,150
(h) 100% of the services performed in item (g) above during 2007 were
pre-approved by the Ameriprise Financial Audit Committee and/or the
RiverSource Mutual Funds Audit Committee.
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) Code of ethics as applies to the Registrant's principal
executive officer and principal financial officer, as required to be
disclosed under Item 2 of Form N-CSR, is attached as Ex. 99.CODE ETH.
(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 January 2, 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 January 2, 2008
By /s/ Jeffrey P. Fox
-----------------------------------------
Jeffrey P. Fox
Treasurer and Principal Financial Officer
Date January 2, 2008