Annual Report
(THREADNEEDLE LOGO)
THREADNEEDLE
GLOBAL EQUITY FUND
ANNUAL REPORT FOR
THE PERIOD ENDED
OCTOBER 31, 2008
THREADNEEDLE GLOBAL EQUITY FUND SEEKS TO PROVIDE
SHAREHOLDERS WITH LONG-TERM CAPITAL GROWTH.
(SINGLE STRATEGY FUNDS ICON)
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 3
Manager Commentary................. 7
The Fund's Long-term Performance... 14
Fund Expenses Example.............. 16
Portfolio of Investments........... 19
Statement of Assets and
Liabilities...................... 23
Statement of Operations............ 24
Statements of Changes in Net
Assets........................... 26
Financial Highlights............... 27
Notes to Financial Statements...... 36
Report of Independent Registered
Public Accounting Firm........... 52
Federal Income Tax Information..... 53
Board Members and Officers......... 54
Proxy Voting....................... 59
</Table>
RIVERSOURCE FAMILY OF FUNDS
Threadneedle Funds are a part of the RiverSource
family of funds that includes funds branded
"RiverSource," "RiverSource Partners," and
"Threadneedle." These funds share the same Board of
Directors/Trustees and officers.
Please see the pages that follow this report for a
list of mutual funds that are included in the
RiverSource family of funds.
(DALBAR LOGO)
The RiverSource mutual fund shareholder reports have
been awarded the Communications Seal from Dalbar Inc.,
an independent financial services research firm. The
Seal recognizes communications demonstrating a level
of excellence in the industry.
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2 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
FUND SUMMARY
- --------------------------------------------------------------------------------
> Threadneedle Global Equity Fund (the Fund) Class A shares declined 45.55%
(excluding sales charge) for the 12 months ended Oct. 31, 2008.
> The Fund underperformed its benchmark, the Morgan Stanley Capital
International (MSCI) All Country World Index, which fell 43.25% for the 12-
month period.
> The Lipper Global Funds Index, representing the Fund's peer group, declined
40.36% over the same time frame.
ANNUALIZED TOTAL RETURNS (for period ended Oct. 31, 2008)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 year 3 years 5 years 10 years
- ---------------------------------------------------------------------
Threadneedle Global Equity Fund
Class A (excluding sales
charge) -45.55% -5.32% +2.87% -0.44%
- ---------------------------------------------------------------------
MSCI All Country World Index
(unmanaged) -43.25% -4.56% +2.63% +1.60%
- ---------------------------------------------------------------------
Lipper Global Funds Index -40.36% -4.42% +2.56% +2.47%
- ---------------------------------------------------------------------
</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 table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses. See the Average Annual Total Returns table for performance of other
share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
STYLE MATRIX
- --------------------------------------------------------------------------------
<Table>
<Caption>
STYLE
VALUE BLEND GROWTH
X LARGE
MEDIUM SIZE
SMALL
</Table>
Shading within the style matrix indicates areas in which the Fund is designed to
generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a mutual fund, and may serve as a guideline for helping
you build a portfolio.
Investment products, including shares of mutual funds, are not federally or
FDIC-insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
ANNUAL OPERATING EXPENSE RATIO
(as of the current prospectus)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Total expenses
- --------------------------------------
Class A 1.46%
- --------------------------------------
Class B 2.23%
- --------------------------------------
Class C 2.22%
- --------------------------------------
Class I 0.85%
- --------------------------------------
Class R2 1.79%
- --------------------------------------
Class R3 1.54%
- --------------------------------------
Class R4 1.29%(a)
- --------------------------------------
Class R5 1.04%
- --------------------------------------
Class W 1.43%
- --------------------------------------
</Table>
(a) The Investment Manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until Oct. 31, 2009, 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), before giving effect to any
performance incentive adjustment (that increased the management fee by 0.06%
for the year ended Oct. 31, 2008), will not exceed 1.27% for Class R4.
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.
- --------------------------------------------------------------------------------
4 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT OCT. 31, 2008
SINCE
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION*
Class A (inception
5/29/90) -45.55% -5.32% +2.87% -0.44% N/A
- ---------------------------------------------------------------------------
Class B (inception
3/20/95) -46.01% -6.08% +2.06% -1.21% N/A
- ---------------------------------------------------------------------------
Class C (inception
6/26/00) -45.91% -6.12% +2.07% N/A -5.58%
- ---------------------------------------------------------------------------
Class I (inception
8/1/08) N/A N/A N/A N/A -29.72%**
- ---------------------------------------------------------------------------
Class R2 (inception
12/11/06) -45.48% N/A N/A N/A -18.93%
- ---------------------------------------------------------------------------
Class R3 (inception
12/11/06) -45.43% N/A N/A N/A -18.76%
- ---------------------------------------------------------------------------
Class R4 (inception
3/20/95) -45.47% -5.21% +3.04% -0.27% N/A
- ---------------------------------------------------------------------------
Class R5 (inception
12/11/06) -45.40% N/A N/A N/A -18.55%
- ---------------------------------------------------------------------------
Class W (inception
12/1/06) -45.62% N/A N/A N/A -18.30%
- ---------------------------------------------------------------------------
With sales charge
Class A (inception
5/29/90) -48.70% -7.17% +1.67% -0.95% N/A
- ---------------------------------------------------------------------------
Class B (inception
3/20/95) -48.71% -7.35% +1.69% -1.21% N/A
- ---------------------------------------------------------------------------
Class C (inception
6/26/00) -46.45% -6.12% +2.07% N/A -5.58%
- ---------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 5
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
<Table>
<Caption>
AT SEPT. 30, 2008
SINCE
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION*
Class A (inception
5/29/90) -29.10% +0.39% +8.32% +2.44% N/A
- --------------------------------------------------------------------------
Class B (inception
3/20/95) -29.66% -0.37% +7.51% +1.65% N/A
- --------------------------------------------------------------------------
Class C (inception
6/26/00) -29.62% -0.36% +7.47% N/A -3.22%
- --------------------------------------------------------------------------
Class I (inception
8/1/08) N/A N/A N/A N/A -13.52%**
- --------------------------------------------------------------------------
Class R2 (inception
12/11/06) -29.06% N/A N/A N/A -9.99%
- --------------------------------------------------------------------------
Class R3 (inception
12/11/06) -28.84% N/A N/A N/A -9.72%
- --------------------------------------------------------------------------
Class R4 (inception
3/20/95) -28.97% 0.51% +8.49% +2.61% N/A
- --------------------------------------------------------------------------
Class R5 (inception
12/11/06) -28.85% N/A N/A N/A -9.50%
- --------------------------------------------------------------------------
Class W (inception
12/1/06) -29.08 N/A N/A N/A -9.32%
- --------------------------------------------------------------------------
With sales charge
Class A (inception
5/29/90) -33.15% -1.56% +7.04% +1.91% N/A
- --------------------------------------------------------------------------
Class B (inception
3/20/95) -33.18% -1.72% +7.20% +1.65% N/A
- --------------------------------------------------------------------------
Class C (inception
6/26/00) -30.32% -0.36% +7.47% N/A -3.22%
- --------------------------------------------------------------------------
</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, Class R2, Class R3, Class R4, Class R5 and Class W shares.
Class I, Class R2, Class R3, Class R4 and Class R5 shares are available to
institutional investors only. Class W shares are offered through qualifying
discretionary accounts.
*For classes with less than 10 years performance.
**Not annualized.
- --------------------------------------------------------------------------------
6 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
MANAGER COMMENTARY -------------------------------------------------------------
Below, Threadneedle Global Equity Fund (the Fund) portfolio managers Stephen
Thornber and Andrew Holliman of Threadneedle International Limited
(Threadneedle) discuss the Fund's results and positioning for the fiscal year
ended Oct. 31, 2008. Threadneedle, an indirect wholly-owned subsidiary of
Ameriprise Financial, Inc., acts as the subadvisor to the Fund.
Dear Shareholders,
Threadneedle Global Equity Fund Class A shares declined 45.55% (excluding sales
charge) for the 12 months ended Oct. 31, 2008. The Fund underperformed its
benchmark, the Morgan Stanley Capital International (MSCI) All Country World
Index, which fell 43.25% for the period. The Lipper Global Funds Index,
representing the Fund's peer group, declined 40.36% over the same time frame.
COUNTRY DIVERSIFICATION (at Oct. 31, 2008; % of portfolio assets)
- ---------------------------------------------------------------------
<Table>
Australia 1.3%
- ------------------------------------------------
Bermuda 2.0%
- ------------------------------------------------
Brazil 0.7%
- ------------------------------------------------
Canada 1.5%
- ------------------------------------------------
Denmark 0.7%
- ------------------------------------------------
Finland 0.8%
- ------------------------------------------------
France 0.5%
- ------------------------------------------------
Germany 4.3%
- ------------------------------------------------
Hong Kong 1.5%
- ------------------------------------------------
Japan 6.9%
- ------------------------------------------------
Mexico 0.2%
- ------------------------------------------------
Netherlands 1.1%
- ------------------------------------------------
Portugal 0.4%
- ------------------------------------------------
Russia 0.3%
- ------------------------------------------------
Singapore 1.2%
- ------------------------------------------------
South Africa 0.2%
- ------------------------------------------------
Spain 1.5%
- ------------------------------------------------
Switzerland 9.7%
- ------------------------------------------------
Taiwan 0.4%
- ------------------------------------------------
United Kingdom 9.4%
- ------------------------------------------------
United States 53.9%
- ------------------------------------------------
Other(1) 1.5%
- ------------------------------------------------
</Table>
(1) Cash & Cash Equivalents.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
SIGNIFICANT PERFORMANCE FACTORS
Market activity during the past 12 months has been unprecedented. We entered the
fiscal year expecting a continuation of the economic growth phase, only to see
those expectations derailed by the global credit crisis and its contagion into
the real economy. Following the bankruptcy of Lehman Brothers, the AIG bailout
and government takeover of mortgage lenders Fannie Mae and Freddie Mac, analysts
sharply reduced economic and earnings forecasts in both developed and emerging
nations. Equity markets faced steep losses amid extreme volatility.
Stock selection in the Fund was primarily responsible for its underperformance
of the MSCI All Country World Index. Though our sector allocation decisions were
broadly correct, individual holdings underperformed. In the energy and mining
industries, we held stocks that were more sensitive to commodity prices, a
detriment late in the period when commodity prices fell. Detractors included
ARCH COAL in the U.S., XSTRATA in Switzerland, CIA VALE DO RIO DOCE in Brazil
and FIRST URANIUM in South Africa. In the consumer discretionary sector, retail
holdings lagged. Even though we held retailers we believed could weather the
economic slowing, stocks like Hong Kong retailer ESPRIT HOLDINGS and U.S.
retailer ABERCROMBIE & FITCH disappointed us in the tough environment.
TOP TEN HOLDINGS (at Oct. 31, 2008; % of portfolio assets)
- ---------------------------------------------------------------------
<Table>
Nestle (Switzerland) 3.6%
- ------------------------------------------------
Wal-Mart Stores (United States) 3.2%
- ------------------------------------------------
Johnson & Johnson (United States) 3.0%
- ------------------------------------------------
Microsoft (United States) 3.0%
- ------------------------------------------------
IBM (United States) 2.4%
- ------------------------------------------------
Norfolk Southern (United States) 2.4%
- ------------------------------------------------
Roche Holding (Switzerland) 2.4%
- ------------------------------------------------
Novartis (Switzerland) 2.2%
- ------------------------------------------------
PepsiCo (United States) 2.0%
- ------------------------------------------------
Procter & Gamble (United States) 2.0%
- ------------------------------------------------
</Table>
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
8 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
Positioning in the financials sector had the largest positive effect on return
relative to the MSCI All Country World Index. We largely avoided the worst
companies in this sector, having no portfolio exposure to Fannie Mae, Freddie
Mac, AIG, Washington Mutual or Lehman Brothers. The Fund also held some better
performing financial stocks including JPMORGAN CHASE & CO. in the U.S. and SONY
FINANCIAL HOLDINGS in Japan. Conversely, a position in BEAR STEARNS, which we
sold before the company was liquidated, had a negative effect on relative
performance. Other holdings such as LLOYD'S TSB GROUP, a U.K. retail bank, and
AMERICAN EXPRESS suffered from the negative sentiment toward the sector.
The Fund's health care position was a positive contributor. The portfolio was
overweight health care relative to the MSCI All Country World Index as the
fiscal period began and we further increased the overweight during the year. The
sector was attractively valued, in our view, and when investors' risk attitudes
shifted, pharmaceutical companies with steady earnings growth came to the
forefront.
Stock selection was favorable in the technology sector, although the sector
itself declined in line with the MSCI All Country World Index. Examples of
technology contributors include IBM, MICROSOFT and CANON, all large-cap
defensive companies whose steady, though unspectacular, earnings growth was more
appealing under the harsher economic conditions.
Increasing the portfolio's U.S. emphasis had a positive impact on relative
performance as U.S. equities benefited from investors' flight to quality. During
the period, we moved from a substantial
We are particularly drawn toward companies with capital or cash flow that can
be used to build market share or acquire struggling competitors during the
economic weakness.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 9
MANAGER COMMENTARY (continued) -------------------------------------------------
U.S. underweight to an overweight relative to the MSCI All Country World Index.
We achieved this by shifting assets from other parts of the global market.
Japan's equity market also performed better than other countries, but the Fund
was underweight in Japan. Though we moved money from Asia to the U.S. during the
year, the shift was not enough to fully shield the Fund from Asia's
underperformance.
CHANGES TO THE FUND'S PORTFOLIO
We moved the portfolio to a more cautious stance, increasing our holdings of
large-cap companies that appear to have a stable earnings outlook and that we
believe can generate growth in the difficult market environment. Initially, the
Fund's allocation to large-cap stocks was less than that of the MSCI All Country
World Index, but was greater by fiscal year end. We reduced the Fund's holdings
of stocks that tend to be more volatile than the overall equity market,
including stocks in the emerging markets.
As noted above, we increased the Fund's U.S. holdings. We moved from overweights
in Asia and Latin America to underweight positions, compared to the MSCI All
Country World Index. The portfolio's weighting in Europe was about equal to that
of the MSCI All Country World Index, while the allocation to Japan was smaller
than that of the Index.
The portfolio initially had larger positions in the materials and consumer
discretionary sectors than the MSCI All Country World Index. In both sectors we
shifted to smaller positions relative to the Index. In the telecommunications
sector, we slightly increased the weighting relative to the MSCI All Country
World Index, moving from a modest underweight to a neutral weighting. We shifted
away from telecommunications companies focused on the emerging market wireless
business toward companies with fixed and wireless businesses in developed
nations. Thus, we sold CHINA MOBILE and AMERICA MOVIL and moved the money into
AT&T, FRANCE TELECOM and VODAFONE GROUP.
We increased the emphasis on health care stocks, the portfolio's largest single
sector position at fiscal year end. Health care is a sector where we are finding
companies that meet our requirements for this market -- large-cap, stable or
visible earnings, strong balance sheets and attractive
- --------------------------------------------------------------------------------
10 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
valuations. We kept the portfolio overweight in information technology, but are
being very selective in the sector. As in other sectors, we're focused on
companies with solid growth potential and strong balance sheets, but among
technology companies, we're also looking for innovators. Examples include
AUTONOMY in the U.K. and ADOBE SYSTEMS and MCAFEE in the U.S., companies we
believe can generate growth through product innovation.
We continued to emphasize consumer staples stocks in the portfolio. These are
perceived as very defensive and, therefore, appear well-equipped to withstand
the difficult economy. Though we're constantly looking for opportunities in the
banking segment and have purchased a few better quality regional U.S. banks, the
portfolio remained underweight in banks. Likewise, we kept the portfolio
underweight in commodity-related stocks, including energy and mining companies.
OUR FUTURE STRATEGY
The credit crisis has clearly dampened global economic activity and we believe
the impact could still be in its early stages. Whether or not markets are at or
near their lowest levels of this market cycle, we're not expecting a sharp
recovery. The credit crisis took a while to develop and solutions will take
time. Given the magnitude of the shock to consumer confidence, we think economic
recovery and any market rebound will be muted in the early stages.
We do think the U.S. may be further through this economic cycle than other
economies and may emerge from recession sooner. We see Asia and Latin America as
riskier in the short term. Though their economies are still growing, investor
sentiment has turned sharply against them and we think it could be some time
before they recover.
In light of our outlook, we are maintaining the Fund's cautious stance. We are
emphasizing defensive, large-cap companies where we anticipate growth or at
least stable earnings. We are striving to find companies that can survive the
downturn and also emerge in a stronger business position for the next phase of
the cycle. We are particularly drawn toward
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 11
MANAGER COMMENTARY (continued) -------------------------------------------------
companies with capital or cash flow that can be used to build market share or
acquire struggling competitors during the economic weakness.
<Table>
(PHOTO - STEPHEN THORNBER) (PHOTO - ANDREW HOLLIMAN)
Stephen Thor nber Andrew Holliman, CFA(R)
Portfolio Manager Deputy Portfolio Manager
</Table>
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of RiverSource Investments, LLC (RiverSource) or
any subadviser to the Fund or any other person in the RiverSource or subadviser
organizations. Any such views are subject to change at any time based upon
market or other conditions and RiverSource disclaims any responsibility to
update such views. These views may not be relied on as investment advice and,
because investment decisions for a RiverSource fund are based on numerous
factors, may not be relied on as an indication of trading intent on behalf of
any RiverSource fund.
- --------------------------------------------------------------------------------
12 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 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 Threadneedle Global Equity Fund Class A shares (from 11/1/98 to
10/31/08) 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>
Results at Oct. 31, 2008
1 YEAR 3 YEARS 5 YEARS 10 YEARS
THREADNEEDLE GLOBAL EQUITY FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $5,130 $8,000 $10,863 $9,023
- ------------------------------------------------------------------------------------------
Average annual total return -48.70% -7.17% +1.67% -0.95%
- ------------------------------------------------------------------------------------------
MSCI ALL COUNTRY WORLD INDEX(1)
Cumulative value of $10,000 $5,675 $8,693 $11,386 $11,720
- ------------------------------------------------------------------------------------------
Average annual total return -43.25% -4.56% +2.63% +1.60%
- ------------------------------------------------------------------------------------------
LIPPER GLOBAL FUNDS INDEX(2)
Cumulative value of $10,000 $5,964 $8,732 $11,347 $12,776
- ------------------------------------------------------------------------------------------
Average annual total return -40.36% -4.42% +2.56% +2.47%
- ------------------------------------------------------------------------------------------
</Table>
Results for other share classes can be found on pages 5 and 6.
- --------------------------------------------------------------------------------
14 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN THREADNEEDLE GLOBAL EQUITY FUND
LINE GRAPH)
<Table>
<Caption>
THREADNEEDLE GLOBAL
EQUITY FUND
CLASS A MSCI ALL
( INCLUDES COUNTRY WORLD LIPPER GLOBAL
SALES CHARGE) INDEX(1) FUNDS INDEX(2)
------------------- ------------- --------------
'98 $ 9,425 $10,000 $10,000
'99 11,648 12,602 12,390
'00 12,200 12,703 13,867
'01 7,951 9,508 10,583
'02 6,645 8,218 9,181
'03 7,832 10,293 11,260
'04 8,750 11,737 12,709
'05 10,630 13,482 14,630
'06 12,863 16,552 17,667
'07 16,570 20,652 21,422
'08 9,023 11,720 12,776
</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.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 15
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 expense ratio of each of the acquired funds as of the acquired fund's
most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period indicated and held until Oct. 31, 2008.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses. You may use the information in this line, together with the
amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading titled "Expenses paid during the period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. The hypothetical account values and expenses may not be used to
estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
Fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
16 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2008(A) OCT. 31, 2008 THE PERIOD(B) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 618.00 $ 5.83 1.43%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.00 $ 7.27 1.43%
- -------------------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 615.70 $ 8.96 2.20%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.12 $11.17 2.20%
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 616.10 $ 8.92 2.19%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.17 $11.12 2.19%
- -------------------------------------------------------------------------------------------
Class I
- -------------------------------------------------------------------------------------------
Actual(d) $1,000 $ 702.80 $ 1.80 .85%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.92 $ 4.33 .85%
- -------------------------------------------------------------------------------------------
Class R2
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 618.20 $ 7.06 1.73%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.48 $ 8.79 1.73%
- -------------------------------------------------------------------------------------------
Class R3
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 618.70 $ 6.04 1.48%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.74 $ 7.53 1.48%
- -------------------------------------------------------------------------------------------
Class R4
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 618.80 $ 5.06 1.24%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.95 $ 6.31 1.24%
- -------------------------------------------------------------------------------------------
Class R5
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 619.10 $ 4.00 .98%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.27 $ 4.99 .98%
- -------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 17
FUND EXPENSES EXAMPLE (continued) ----------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2008(A) OCT. 31, 2008 THE PERIOD(B) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class W
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 617.50 $ 5.63 1.38%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.25 $ 7.02 1.38%
- -------------------------------------------------------------------------------------------
</Table>
(a) The beginning account value for Class I is as of Aug. 1, 2008 (when shares
of the class became publicly available) for actual expense calculations, and
as of May 1, 2008 for hypothetical expense calculations.
(b) Expenses for Classes A, B, C, R2, R3, R4, R5 and W 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). Actual expenses for Class I are equal to the Fund's
annualized expense ratio as indicated above, multiplied by the average
account value over the period, multiplied by 91/365 (to reflect the period
from Aug. 1, 2008 to Oct. 31, 2008). Hypothetical expenses for Class I 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).
(c) Based on the actual return for the six months ended Oct. 31, 2008: -38.20%
for Class A, -38.43% for Class B, -38.39% for Class C, -38.18% for Class R2,
-38.13% for Class R3, -38.12% for Class R4, -38.09% for Class R5 and -38.25%
for Class W.
(d) Based on the actual return for the period from Aug. 1, 2008 (when shares
became publicly available) to Oct. 31, 2008: -29.72% for Class I.
- --------------------------------------------------------------------------------
18 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
OCT. 31, 2008
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (99.0%)(c)
ISSUER SHARES VALUE(a)
AUSTRALIA (1.3%)
CSL 229,557 $5,579,839
- -------------------------------------------------------------------------------------
BERMUDA (2.0%)
Accenture Cl A 90,000 2,974,500
PartnerRe 83,022 5,619,759
-----------
Total 8,594,259
- -------------------------------------------------------------------------------------
BRAZIL (0.7%)
Petroleo Brasileiro ADR 112,520 3,025,663
- -------------------------------------------------------------------------------------
CANADA (1.6%)
Barrick Gold 124,296 2,824,005
Research In Motion 28,926(b) 1,458,738
ShawCor Cl A 161,600 2,447,570
-----------
Total 6,730,313
- -------------------------------------------------------------------------------------
DENMARK (0.7%)
Vestas Wind Systems 70,000(b) 2,867,131
- -------------------------------------------------------------------------------------
FINLAND (0.8%)
Nokia 95,587 1,463,703
Talvivaara Mining 600,000(b) 1,957,691
-----------
Total 3,421,394
- -------------------------------------------------------------------------------------
FRANCE (0.5%)
France Telecom 87,761 2,212,162
- -------------------------------------------------------------------------------------
GERMANY (4.3%)
Allianz 43,511 3,273,019
E.ON 54,547 2,086,821
K+S 25,717 999,715
Linde 52,819 4,441,274
MTU Aero Engines Holding 110,000 2,166,895
RWE 36,846 3,062,946
Siemens 43,323 2,601,550
-----------
Total 18,632,220
- -------------------------------------------------------------------------------------
HONG KONG (1.5%)
Esprit Holdings 295,000 1,676,316
Great Eagle Holdings 1,714,607 1,968,499
Hongkong & Shanghai Hotels 2,828,000 2,671,302
-----------
Total 6,316,117
- -------------------------------------------------------------------------------------
JAPAN (6.9%)
AMADA 383,000 1,759,338
Canon 115,700 4,049,663
GOLDCREST 100,280 1,473,257
Honda Motor 103,800 2,581,749
Mitsubishi Estate 309,000 5,521,317
Mitsubishi UFJ Financial Group 434,100 2,728,721
Nintendo 18,300 5,881,584
Sony Financial Holdings 1,832 5,959,840
-----------
Total 29,955,469
- -------------------------------------------------------------------------------------
MEXICO (0.2%)
America Movil ADR Series L 32,000 990,080
- -------------------------------------------------------------------------------------
NETHERLANDS (1.1%)
ASML Holding 153,704 2,689,844
Fugro 60,000 2,143,298
-----------
Total 4,833,142
- -------------------------------------------------------------------------------------
PORTUGAL (0.4%)
Galp Energia Series B 187,199 1,701,236
- -------------------------------------------------------------------------------------
RUSSIA (0.3%)
Mobile Telesystems ADR 30,000 1,174,500
- -------------------------------------------------------------------------------------
SINGAPORE (1.3%)
DBS Group Holdings 708,000 5,407,067
- -------------------------------------------------------------------------------------
SOUTH AFRICA (0.2%)
First Uranium 843,700(b) 980,273
- -------------------------------------------------------------------------------------
SPAIN (1.6%)
Gamesa Tecnologica 85,016 1,393,325
Inditex 81,177 2,743,012
Telefonica 140,000 2,591,175
-----------
Total 6,727,512
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 19
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
SWITZERLAND (9.7%)
Nestle 404,766 $15,738,097
Novartis 185,205 9,399,422
Roche Holding 67,141 10,266,334
Syngenta 21,598 4,036,863
Xstrata 159,226 2,723,199
-----------
Total 42,163,915
- -------------------------------------------------------------------------------------
TAIWAN (0.4%)
Asustek Computer 1,114,293 1,596,910
- -------------------------------------------------------------------------------------
UNITED KINGDOM (9.4%)
Anglo American 94,865 2,380,062
Autonomy 157,985(b) 2,504,725
BG Group 336,105 4,941,614
Home Retail Group 559,734 1,783,860
HSBC Holdings 587,350 6,956,056
Intl Power 656,446 2,348,219
Lloyds TSB Group 632,067 2,042,718
Prudential 552,011 2,772,681
SOCO Intl 73,459(b) 1,692,172
Tesco 630,217 3,452,709
Tullow Oil 436,396 3,705,782
Vodafone Group 3,199,094 6,153,577
-----------
Total 40,734,175
- -------------------------------------------------------------------------------------
UNITED STATES (54.1%)
Adobe Systems 107,541(b) 2,864,892
American Express 70,000 1,925,000
Aon 60,397 2,554,793
Arch Coal 80,000 1,712,800
AT&T 303,983 8,137,625
Cisco Systems 240,920(b) 4,281,148
Cliffs Natural Resources 35,580 960,304
Coca-Cola 129,628 5,711,410
Comcast Cl A 432,615 6,818,012
CVS Caremark 98,220 3,010,443
Devon Energy 77,055 6,230,667
Diamond Offshore Drilling 30,359 2,695,880
eBay 146,456(b) 2,236,383
ENSCO Intl 60,000 2,280,600
Genzyme 83,200(b) 6,063,616
Gilead Sciences 96,397(b) 4,419,802
Goldman Sachs Group 14,294 1,322,195
Google Cl A 12,175(b) 4,375,208
IBM 112,478 10,457,080
Johnson & Johnson 213,502 13,096,212
JPMorgan Chase & Co 195,667 8,071,264
KeyCorp 200,000 2,446,000
Laboratory Corp of America Holdings 83,120(b) 5,111,048
Lowe's Companies 120,000 2,604,000
McAfee 53,912(b) 1,754,836
Merck & Co 88,013 2,724,002
Microsoft 581,405 12,982,773
Norfolk Southern 172,379 10,332,397
Oracle 373,402(b) 6,829,522
PepsiCo 150,814 8,597,906
Pfizer 406,759 7,203,702
Philip Morris Intl 112,356 4,884,115
Plum Creek Timber 83,189 3,101,286
Procter & Gamble 132,051 8,522,572
QUALCOMM 75,000 2,869,500
Republic Services 201,992 4,787,210
Schering-Plough 201,953 2,926,299
St. Jude Medical 76,051(b) 2,892,220
Synovus Financial 432,084 4,463,428
Thermo Fisher Scientific 138,398(b) 5,618,959
Travelers Companies 184,253 7,839,966
Ultra Petroleum 50,984(b) 2,373,305
Valero Energy 118,660 2,442,023
Wal-Mart Stores 251,538 14,038,336
Walt Disney 146,355 3,790,595
WellPoint 98,572(b) 3,831,494
-----------
Total 234,192,828
- -------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $588,312,259) $427,836,205
- -------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (1.5%)
SHARES VALUE(a)
RiverSource Short-Term Cash Fund, 1.60% 6,623,559(d) $6,623,559
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $6,623,559) $6,623,559
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $594,935,818)(e) $434,459,764
=====================================================================================
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
20 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SUMMARY OF INVESTMENTS IN SECURITIES BY INDUSTRY
The following table represents the portfolio investments of the Fund by industry
classifications as a percentage of total net assets at Oct. 31, 2008:
<Table>
<Caption>
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE
- -----------------------------------------------------------------------
Aerospace & Defense 0.5% $2,166,895
Automobiles 0.6 2,581,749
Beverages 3.3 14,309,316
Biotechnology 3.7 16,063,257
Capital Markets 0.3 1,322,195
Chemicals 2.2 9,477,852
Commercial Banks 5.6 24,043,990
Commercial Services & Supplies 1.1 4,787,210
Communications Equipment 2.3 10,073,089
Computers & Peripherals 2.8 12,053,990
Consumer Finance 0.4 1,925,000
Diversified Financial Services 1.9 8,071,264
Diversified Telecommunication Services 3.0 12,940,962
Electric Utilities 0.5 2,086,821
Electrical Equipment 1.0 4,260,456
Energy Equipment & Services 2.2 9,567,348
Food & Staples Retailing 4.7 20,501,488
Food Products 3.6 15,738,097
Health Care Equipment & Supplies 0.7 2,892,220
Health Care Providers & Services 2.1 8,942,542
Hotels, Restaurants & Leisure 0.6 2,671,302
Household Durables 0.3 1,473,257
Household Products 2.0 8,522,572
Independent Power Producers & Energy
Traders 0.5 2,348,219
Industrial Conglomerates 0.6 2,601,550
Insurance 6.6 28,020,058
Internet & Catalog Retail 0.4 1,783,860
Internet Software & Services 1.5 6,611,591
IT Services 0.7 2,974,500
Life Sciences Tools & Services 1.3 5,618,959
Machinery 0.4 1,759,338
Media 2.5 10,608,607
Metals & Mining 2.7 11,825,534
Multi-Utilities 0.7 3,062,946
Office Electronics 0.9 4,049,663
Oil, Gas & Consumable Fuels 6.5 27,825,262
Pharmaceuticals 10.6 45,615,971
Real Estate Investment Trusts (REITs) 0.7 3,101,286
Real Estate Management & Development 1.7 7,489,816
Road & Rail 2.4 10,332,397
Semiconductors & Semiconductor
Equipment 0.6 2,689,844
Software 7.7 32,818,332
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 21
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE
- -----------------------------------------------------------------------
Specialty Retail 1.6% $7,023,328
Tobacco 1.1 4,884,115
Wireless Telecommunication Services 1.9 8,318,157
Other(1) 1.5 6,623,559
- -----------------------------------------------------------------------
Total $434,459,764
- -----------------------------------------------------------------------
</Table>
(1) Cash & Cash Equivalents.
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using procedures described in Note 1 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(d) Affiliated Money Market Fund -- See Note 5 to the financial statements. The
rate shown is the seven-day current annualized yield at Oct. 31, 2008.
(e) At Oct. 31, 2008, the cost of securities for federal income tax purposes
was $598,979,582 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $3,607,213
Unrealized depreciation (168,127,031)
- ------------------------------------------------------------
Net unrealized depreciation $(164,519,818)
- ------------------------------------------------------------
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which 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.
- --------------------------------------------------------------------------------
22 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
OCT. 31, 2008
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers (identified cost $588,312,259) $ 427,836,205
Affiliated money market fund (identified cost $6,623,559) 6,623,559
- --------------------------------------------------------------------------------
Total investments in securities (identified cost $594,935,818) 434,459,764
Foreign currency holdings (identified cost $250,247) 252,785
Capital shares receivable 358,291
Dividends receivable 706,822
Receivable for investment securities sold 4,409,678
Reclaims receivable 394,816
- --------------------------------------------------------------------------------
Total assets 440,582,156
- --------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 468,262
Payable for investment securities purchased 7,517,275
Accrued investment management services fees 9,180
Accrued distribution fees 3,817
Accrued transfer agency fees 3,375
Accrued administrative services fees 930
Accrued plan administration services fees 34
Other accrued expenses 144,192
- --------------------------------------------------------------------------------
Total liabilities 8,147,065
- --------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 432,435,091
- --------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 836,473
Additional paid-in capital 997,824,407
Undistributed net investment income 2,536,752
Accumulated net realized gain (loss) (408,287,051)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (160,475,490)
- --------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $ 432,435,091
- --------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $380,429,958 73,040,390 $5.21(1)
Class B $ 42,166,196 8,654,662 $4.87
Class C $ 4,754,813 985,451 $4.83
Class I $ 3,498 666 $5.25
Class R2 $ 3,314 634 $5.23
Class R3 $ 3,322 634 $5.24
Class R4 $ 5,067,319 963,574 $5.26
Class R5 $ 3,329 634 $5.25
Class W $ 3,342 639 $5.23
- -----------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $5.53. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 23
STATEMENT OF OPERATIONS --------------------------------------------------------
YEAR ENDED OCT. 31, 2008
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $ 15,191,451
Interest 17,988
Income distributions from affiliated money market fund 267,987
Fee income from securities lending 101,233
Less foreign taxes withheld (798,509)
- --------------------------------------------------------------------------------
Total income 14,780,150
- --------------------------------------------------------------------------------
Expenses:
Investment management services fees 5,825,153
Distribution fees
Class A 1,507,084
Class B 814,247
Class C 73,244
Class R2 25
Class R3 13
Class W 13
Transfer agency fees
Class A 1,316,120
Class B 187,180
Class C 16,522
Class R2 3
Class R3 3
Class R4 4,089
Class R5 3
Class W 10
Administrative services fees 549,601
Plan administration services fees
Class R2 13
Class R3 13
Class R4 20,446
Compensation of board members 15,113
Custodian fees 240,610
Printing and postage 165,380
Registration fees 83,650
Professional fees 42,982
Other 26,395
- --------------------------------------------------------------------------------
Total expenses 10,887,912
Expenses waived/reimbursed by the Investment Manager and its
affiliates (1,360)
Earnings and bank fee credits on cash balances (18,631)
- --------------------------------------------------------------------------------
Total net expenses 10,867,921
- --------------------------------------------------------------------------------
Investment income (loss) -- net 3,912,229
- --------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
24 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $ (63,602,873)
Foreign currency transactions (738,516)
- --------------------------------------------------------------------------------
Net realized gain (loss) on investments (64,341,389)
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies (324,354,761)
- --------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (388,696,150)
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $(384,783,921)
- --------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 25
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2008 2007
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 3,912,229 $ 1,375,121
Net realized gain (loss) on investments (64,341,389) 130,447,745
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities in
foreign currencies (324,354,761) 67,887,744
- -----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (384,783,921) 199,710,610
- -----------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (2,895,413) (5,052,007)
Class B -- (46,137)
Class C -- (24,579)
Class R2 (16) (60)
Class R3 (28) (61)
Class R4 (51,464) (77,098)
Class R5 (43) (61)
Class W (24) (61)
- -----------------------------------------------------------------------------------------------
Total distributions (2,946,988) (5,200,064)
- -----------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares 122,218,532 103,394,162
Class B shares 19,744,662 16,189,120
Class C shares 2,778,659 2,137,681
Class I shares 5,000 N/A
Class R2 shares -- 5,000
Class R3 shares -- 5,000
Class R4 shares 2,142,353 2,445,834
Class R5 shares -- 5,000
Class W shares -- 5,000
Reinvestment of distributions at net asset value
Class A shares 2,842,402 4,972,629
Class B shares -- 45,360
Class C shares -- 23,936
Class R4 shares 51,464 77,098
Payments for redemptions
Class A shares (144,969,040) (141,986,972)
Class B shares (38,846,306) (50,692,015)
Class C shares (2,137,746) (1,286,730)
Class R4 shares (2,469,638) (4,449,426)
- -----------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions (38,639,658) (69,109,323)
- -----------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (426,370,567) 125,401,223
Net assets at beginning of year 858,805,658 733,404,435
- -----------------------------------------------------------------------------------------------
Net assets at end of year $ 432,435,091 $ 858,805,658
- -----------------------------------------------------------------------------------------------
Undistributed net investment income $ 2,536,752 $ 2,648,118
- -----------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
26 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
CLASS A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2008 2007 2006 2005 2004
Net asset value, beginning of period $9.61 $7.52 $6.23 $5.16 $4.62
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .05(b) .02(b) .01 .02 --
Net gains (losses) (both realized and
unrealized) (4.41) 2.13 1.30 1.08 .54
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (4.36) 2.15 1.31 1.10 .54
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.06) (.02) (.03) --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.21 $9.61 $7.52 $6.23 $5.16
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $380 $737 $608 $446 $364
- --------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 1.46% 1.39% 1.51% 1.57% 1.41%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) .65% .28% .23% .33% .07%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 97% 100% 112% 93% 104%
- --------------------------------------------------------------------------------------------------------------
Total return(e) (45.55%) 28.82% 21.01% 21.48% 11.72%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the year ended Oct. 31, 2008
were less than 0.01% of average net assets.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Total return does not reflect payment of a sales charge.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 27
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
CLASS B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2008 2007 2006 2005 2004
Net asset value, beginning of period $9.02 $7.06 $5.88 $4.87 $4.40
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)(b) (.04)(b) (.01) (.02) (.03)
Net gains (losses) (both realized and
unrealized) (4.14) 2.00 1.19 1.03 .50
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (4.15) 1.96 1.18 1.01 .47
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- .00(c) -- -- --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.87 $9.02 $7.06 $5.88 $4.87
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $42 $104 $110 $102 $104
- --------------------------------------------------------------------------------------------------------------
Total expenses(d),(e) 2.23% 2.15% 2.28% 2.34% 2.18%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.11%) (.45%) (.54%) (.41%) (.66%)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 97% 100% 112% 93% 104%
- --------------------------------------------------------------------------------------------------------------
Total return(f) (46.01%) 27.81% 20.07% 20.74% 10.68%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Rounds to zero.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the year ended Oct. 31, 2008
were less than 0.01% of average net assets.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Total return does not reflect payment of a sales charge.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
28 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2008 2007 2006 2005 2004
Net asset value, beginning of period $8.93 $7.02 $5.85 $4.85 $4.38
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)(b) (.04)(b) (.01) (.02) (.02)
Net gains (losses) (both realized and
unrealized) (4.09) 1.98 1.18 1.03 .49
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (4.10) 1.94 1.17 1.01 .47
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.03) -- (.01) --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.83 $8.93 $7.02 $5.85 $4.85
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $5 $8 $6 $2 $1
- --------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 2.22% 2.15% 2.27% 2.33% 2.19%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.09%) (.48%) (.50%) (.53%) (.69%)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 97% 100% 112% 93% 104%
- --------------------------------------------------------------------------------------------------------------
Total return(e) (45.91%) 27.76% 20.03% 20.89% 10.73%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the year ended Oct. 31, 2008
were less than 0.01% of average net assets.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Total return does not reflect payment of a sales charge.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 29
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
CLASS I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2008(b)
Net asset value, beginning of period $7.47
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .03
Net gains (losses) (both realized and
unrealized) (2.25)
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (2.22)
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.25
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
- --------------------------------------------------------------------------------------------------------------
Total expenses(d),(e) .85%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.55%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 97%
- --------------------------------------------------------------------------------------------------------------
Total return (29.72%)(g)
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Aug. 1, 2008 (when shares became publicly available) to
Oct. 31, 2008.
(c) Per share amount has been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the year ended Oct. 31, 2008
were less than 0.01% of average net assets.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Not annualized.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
30 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS R2
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2008 2007(b)
Net asset value, beginning of period $9.62 $7.89
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .05 (.01)
Net gains (losses) (both realized and
unrealized) (4.42) 1.84
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (4.37) 1.83
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) (.10)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.23 $9.62
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $--
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.79% 1.74%(f)
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.54% 1.74%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) .57% (.13%)(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 97% 100%
- --------------------------------------------------------------------------------------------------------------
Total return (45.48%) 23.41%(i)
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to Oct. 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the year ended Oct. 31, 2008
were less than 0.01% of average net assets.
(i) Not annualized.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 31
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
CLASS R3
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2008 2007(b)
Net asset value, beginning of period $9.65 $7.89
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .06 .01
Net gains (losses) (both realized and
unrealized) (4.43) 1.85
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (4.37) 1.86
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.10)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.24 $9.65
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $--
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.54% 1.49%(f)
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.29% 1.49%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) .82% .12%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 97% 100%
- --------------------------------------------------------------------------------------------------------------
Total return (45.43%) 23.80%(i)
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to Oct. 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the year ended Oct. 31, 2008
were less than 0.01% of average net assets.
(i) Not annualized.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
32 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2008 2007 2006 2005 2004
Net asset value, beginning of period $9.70 $7.60 $6.29 $5.20 $4.65
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .07(b) .04(b) .02 .04 .01
Net gains (losses) (both realized and
unrealized) (4.46) 2.13 1.31 1.09 .54
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (4.39) 2.17 1.33 1.13 .55
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.07) (.02) (.04) .00
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.26 $9.70 $7.60 $6.29 $5.20
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $5 $10 $9 $6 $4
- --------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(c),(d) 1.29% 1.23% 1.32% 1.38% 1.23%
- --------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(d),(e),(f) 1.28% 1.23% 1.32% 1.38% 1.23%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) .83% .45% .44% .49% .25%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 97% 100% 112% 93% 104%
- --------------------------------------------------------------------------------------------------------------
Total return (45.47%) 28.85% 21.26% 21.90% 11.88%
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratio.
(e) 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) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the year ended Oct. 31, 2008
were less than 0.01% of average net assets.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 33
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
CLASS R5
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2008 2007(b)
Net asset value, beginning of period $9.69 $7.89
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .08 .05
Net gains (losses) (both realized and
unrealized) (4.45) 1.85
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (4.37) 1.90
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.07) (.10)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.25 $9.69
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $--
- --------------------------------------------------------------------------------------------------------------
Total expenses(d),(e) 1.04% .99%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.07% .62%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 97% 100%
- --------------------------------------------------------------------------------------------------------------
Total return (45.40%) 24.33%(g)
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 11, 2006 (inception date) to Oct. 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the year ended Oct. 31, 2008
were less than 0.01% of average net assets.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Not annualized.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
34 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
CLASS W
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2008 2007(b)
Net asset value, beginning of period $9.66 $7.83
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) .05 .02
Net gains (losses) (both realized and
unrealized) (4.44) 1.91
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (4.39) 1.93
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.10)
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.23 $9.66
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $--
- --------------------------------------------------------------------------------------------------------------
Total expenses(d),(e) 1.43% 1.39%(f)
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) .68% .20%(f)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 97% 100%
- --------------------------------------------------------------------------------------------------------------
Total return (45.62%) 24.87%(g)
- --------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) For the period from Dec. 1, 2006 (inception date) to Oct. 31, 2007.
(c) Per share amounts have been calculated using the average shares outstanding
method.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits for the year ended Oct. 31, 2008
were less than 0.01% of average net assets.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Adjusted to an annual basis.
(g) Not annualized.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 35
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Threadneedle Global Equity Fund (the Fund) (formerly RiverSource Global Equity
Fund) is a series of RiverSource Global Series, Inc. and is registered under the
Investment Company Act of 1940 (as amended) as a diversified, open-end
management investment company. RiverSource Global Series, Inc. has 10 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the Board of Directors (the Board). Under normal market
conditions, at least 80% of the Fund's net assets will be invested in equity
securities, including companies located in developed and emerging countries.
The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class
R4, Class R5 and Class W shares.
- - Class A shares are sold with a front-end sales charge.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth year of
ownership.
- - Class C shares may be subject to a CDSC.
- - Class I, Class R2, Class R3, Class R4 and Class R5 shares are sold without a
front-end sales charge or CDSC and are offered to qualifying institutional
investors. Class I shares became effective Aug. 1, 2008.
- - Class W shares are sold without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts.
At Oct. 31, 2008, RiverSource Investments, LLC (RiverSource Investments or the
Investment Manager) owned 100% of Class I, Class R2, Class R3, Class R5 and
Class W shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
The Fund's significant accounting policies are summarized below:
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
- --------------------------------------------------------------------------------
36 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
VALUATION OF SECURITIES
All securities are valued at the close of each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities (such as foreign securities)
that is not reflected in price quotations or valuations from other sources. A
fair value price is a good faith estimate of the value of a security at a given
point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the New York Stock Exchange and therefore the closing prices for securities
in such markets or on such exchanges may not fully reflect events that occur
after such close but before the close of the New York Stock Exchange, including
significant movements in the U.S. market after foreign exchanges have closed.
Accordingly, in those situations, Ameriprise Financial, Inc. (Ameriprise
Financial), parent company of the Investment Manager, as administrator to the
Fund, will fair value foreign securities pursuant to procedures adopted by the
Board, including utilizing a third party pricing service to determine these fair
values. These procedures take into account multiple factors, including movements
in the U.S. securities markets, to determine a good faith estimate that
reasonably reflects the current market conditions as of the close of the New
York Stock Exchange.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates; those maturing in 60 days or less are valued at amortized cost, which
approximates fair value.
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
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 37
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
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 (OTC
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. Option
contracts, including OTC option contracts, with no readily available market
value are valued using quotations obtained from independent brokers as of the
close of the New York Stock Exchange. The Fund will realize a gain or loss when
the option transaction expires or closes. When an option is exercised, the
proceeds on sales for a written call option, the purchase cost for a written put
option or the cost of a security for a purchased put or call option is adjusted
by the amount of premium received or paid. At Oct. 31, 2008, and for the year
then ended, the Fund had no outstanding option contracts.
FUTURES TRANSACTIONS
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund also may buy and write put and call options on these 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 and options on 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, 2008, the Fund had no outstanding futures contracts.
- --------------------------------------------------------------------------------
38 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
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, 2008, foreign currency holdings consisted of
multiple denominations.
The Fund may enter into forward foreign currency contracts for operational
purposes and to protect against adverse exchange rate fluctuation. The net U.S.
dollar value of foreign currency underlying all contractual commitments held by
the Fund and the resulting unrealized appreciation or depreciation are
determined using foreign currency exchange rates from an independent pricing
service. The Fund is subject to the credit risk that the counterparty will not
complete its contract obligations. At Oct. 31, 2008, the Fund had no outstanding
forward foreign currency contracts.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income to shareholders. No provision for income or excise
taxes is thus required.
Financial Accounting Standards Board (FASB) Interpretation 48 (FIN 48),
"Accounting for Uncertainty in Income Taxes," clarifies the accounting for
uncertainty in income taxes recognized in accordance with FASB Statement 109,
"Accounting for Income Taxes." FIN 48 provides guidance for how uncertain tax
positions should be recognized, measured, presented and disclosed in the
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 39
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
financial statements. Management of the Fund has concluded that there are no
significant uncertain tax positions that would require recognition in the
financial statements. Generally, the tax authorities can examine all the tax
returns filed for the last three years.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of foreign currency
transactions, passive foreign investment company (PFIC) holdings, re-
characterization of REIT distributions, and losses deferred due to wash sales.
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
$1,076,607 and accumulated net realized loss has been decreased by $1,076,607.
The tax character of distributions paid for the years indicated is as follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2008* 2007**
- ----------------------------------------------------------------
CLASS A
Distributions paid from:
Ordinary income.................... $2,895,413 $5,052,007
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
Long-term capital gain............. -- --
CLASS I
Distributions paid from:
Ordinary income.................... -- N/A
Long-term capital gain............. -- N/A
CLASS R2
Distributions paid from:
Ordinary income.................... 16 60
Long-term capital gain............. -- --
</Table>
- --------------------------------------------------------------------------------
40 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2008* 2007**
- ----------------------------------------------------------------
CLASS R3
Distributions paid from:
Ordinary income.................... $28 $61
Long-term capital gain............. -- --
CLASS R4
Distributions paid from:
Ordinary income.................... 51,464 77,098
Long-term capital gain............. -- --
CLASS R5
Distributions paid from:
Ordinary income.................... 43 61
Long-term capital gain............. -- --
CLASS W
Distributions paid from:
Ordinary income.................... 24 61
Long-term capital gain............. -- --
</Table>
* Class I is for the period from Aug. 1, 2008 (when shares became publicly
available) to Oct. 31, 2008.
** Class R2, Class R3 and Class R5 are for the period from Dec. 11, 2006
(inception date) to Oct. 31, 2007. Class W is for the period from Dec. 1,
2006 (inception date) to Oct. 31, 2007.
At Oct. 31, 2008, the components of distributable earnings on a tax basis are as
follows:
<Table>
Undistributed ordinary income................. $ 2,543,644
Undistributed accumulated long-term gain...... $ --
Accumulated realized loss..................... $(404,243,287)
Unrealized appreciation (depreciation)........ $(164,526,146)
</Table>
RECENT ACCOUNTING PRONOUNCEMENTS
In March 2008, the FASB issued Statement of Financial Accounting Standards No.
161 (SFAS 161), "Disclosures about Derivative Instruments and Hedging
Activities -- an amendment of FASB Statement No. 133," which requires enhanced
disclosures about a fund's derivative and hedging activities. Funds are required
to provide enhanced disclosures about (a) how and why a fund uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under SFAS 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect a fund's financial
position, financial performance, and cash flows. SFAS 161 is effective for
financial statements issued for periods beginning after Nov. 15, 2008. As of
Oct. 31, 2008, management does not believe the adoption of SFAS 161 will impact
the financial statement amounts; however, additional footnote disclosures may be
required about the use of derivative instruments and hedging items.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
On Sept. 20, 2006, the FASB released Statement of Financial Accounting Standards
No. 157 "Fair Value Measurements" (SFAS 157). SFAS 157 establishes an
authoritative definition of fair value, sets out a hierarchy for measuring fair
value, and requires additional disclosures about the inputs used to develop the
measurements of fair value and the effect of certain measurements reported in
the Statement of Operations for a fiscal period. The application of SFAS 157
will be effective for the Fund's fiscal year beginning Nov. 1, 2008. The
adoption of SFAS 157 is not anticipated to have a material impact on the Fund's
financial statements; however, additional disclosures will be required about the
inputs used to develop the measurements of fair value and the effect of certain
measurements reported in the Statement of Operations for a fiscal period.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date or upon receipt of
ex-dividend notification in the case of certain foreign securities. Interest
income, including amortization of premium, market discount and original issue
discount using the effective interest method, is accrued daily.
2. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
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 determined monthly by
measuring the percentage difference over a rolling 12-month period between the
annualized performance of one Class A share of the Fund and the annualized
performance of the Lipper Global Funds Index. In certain circumstances, the
Board may approve a change in the index. The maximum adjustment is 0.12% per
year. If the performance difference is less than 0.50%, the adjustment will be
zero. The adjustment increased the management fee by $393,409 for the year ended
Oct. 31, 2008. The management fee for the year ended Oct. 31, 2008 was 0.83% of
the Fund's average daily net assets, including the adjustment under the terms of
the performance incentive arrangement.
- --------------------------------------------------------------------------------
42 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
SUBADVISORY AGREEMENT
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.
ADMINISTRATIVE SERVICES FEES
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, 2008 was 0.08% of
the Fund's average daily net assets.
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the year ended Oct. 31,
2008, other expenses paid to this company were $3,588.
COMPENSATION OF BOARD MEMBERS
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.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, RiverSource Service Corporation (the Transfer
Agent) maintains shareholder accounts and records. The Fund pays the Transfer
Agent an annual account-based fee at a rate equal to $19.50 for Class A, $20.50
for Class B and $20.00 for Class C for this service. The Fund also pays the
Transfer Agent an annual asset-based fee at a rate of 0.05% of the Fund's
average daily net assets attributable to Class R2, Class R3, Class R4 and Class
R5 shares and an annual asset-based fee at a rate of 0.20% of the Fund's average
daily net assets attributable to Class W shares.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
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.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
DISTRIBUTION FEES
The Fund has an agreement with RiverSource Distributors, Inc. (the Distributor)
for distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund pays a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A, Class
R3 and Class W shares, a fee at an annual rate of up to 0.50% of the Fund's
average daily net assets attributable to Class R2 shares and a fee at an annual
rate of up to 1.00% of the Fund's average daily net assets attributable to Class
B and Class C shares. For Class B and Class C shares, up to 0.75% of the fee is
reimbursed for distribution expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed expense") was approximately $1,733,000 and $58,000 for
Class B and Class C shares, respectively. These amounts are based on the most
recent information available as Oct. 31, 2008, and may be recovered from future
payments under the distribution plan or CDSC. To the extent the unreimbursed
expense has been fully recovered, the distribution fee is reduced.
SALES CHARGES
Sales charges received by the Distributor for distributing Fund shares were
$749,778 for Class A, $49,352 for Class B and $1,644 for Class C for the year
ended Oct. 31, 2008.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the year ended Oct. 31, 2008, the Investment Manager and its affiliates
waived/reimbursed certain fees and expenses such that net expenses (excluding
fees and expenses of acquired funds*), including the adjustment under the terms
of a performance incentive arrangement, were as follows:
<Table>
Class R2............................................ 1.54%
Class R3............................................ 1.29
Class R4............................................ 1.28
</Table>
- --------------------------------------------------------------------------------
44 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
The waived/reimbursed fees and expenses for the plan administration services
fees at the class level were as follows:
<Table>
Class R2........................................... $13
Class R3........................................... 13
Class R4........................................... 1,334
</Table>
The Investment Manager and its affiliates have contractually agreed to waive
certain fees and expenses until Oct. 31, 2009, unless sooner terminated at the
discretion of the Board, such that net expenses (excluding fees and expenses of
acquired funds*), before giving effect to any performance incentive adjustment,
will not exceed the following percentage of the Fund's average daily net assets:
<Table>
Class R4............................................ 1.27%
</Table>
* 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.
EARNINGS AND BANK FEE CREDITS
During the year ended Oct. 31, 2008, the Fund's custodian and transfer agency
fees were reduced by $18,631 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 $670,217,944 and $698,227,533, respectively, for the
year ended Oct. 31, 2008. Realized gains and losses are determined on an
identified cost basis.
Income from securities lending amounted to $101,233 for the year ended Oct. 31,
2008. Expenses paid to the Investment Manager as securities lending agent were
$1,067 for the year ended Oct. 31, 2008, which are included in other expenses on
the Statement of Operations. The risk 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, 2008, the Fund had no securities out on loan.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 45
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2008*
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------
Class A 15,480,435 328,601 (19,420,602) (3,611,566)
Class B 2,606,662 -- (5,461,285) (2,854,623)
Class C 381,563 -- (318,939) 62,624
Class I 666 -- -- 666
Class R4 264,404 5,909 (319,876) (49,563)
- ----------------------------------------------------------------------------------
<Caption>
YEAR ENDED OCT. 31, 2007**
ISSUED FOR
REINVESTED NET
SOLD DISTRIBUTIONS REDEEMED INCREASE (DECREASE)
- ----------------------------------------------------------------------------------
Class A 12,264,903 636,700 (17,108,766) (4,207,163)
Class B 2,095,921 6,146 (6,192,934) (4,090,867)
Class C 276,396 3,279 (164,135) 115,540
Class R2 634 -- -- 634
Class R3 634 -- -- 634
Class R4 288,576 9,796 (531,402) (233,030)
Class R5 634 -- -- 634
Class W 639 -- -- 639
- ----------------------------------------------------------------------------------
</Table>
* Class I is for the period from Aug. 1, 2008 (when shares became publicly
available) to Oct. 31, 2008.
** Class R2, Class R3 and Class R5 are for the period from Dec. 11, 2006
(inception date) to Oct. 31, 2007. Class W is 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 $302,567,723 and $308,596,766, respectively, for the year
ended Oct. 31, 2008. The income distributions received with respect to the
Fund's investment in RiverSource Short-Term Cash Fund can be found on the
Statement of Operations and the Fund's invested balance in RiverSource Short-
Term Cash Fund at Oct. 31, 2008, can be found in the Portfolio of Investments.
- --------------------------------------------------------------------------------
46 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
6. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led 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. 16, 2008, 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 $475 million. The borrowers
shall have the right, upon written notice to the Administrative Agent to request
an increase of up to $175 million in the aggregate amount of the credit facility
from new or existing lenders, provided that the aggregate amount of the credit
facility shall at no time exceed $650 million. Participation in such increase by
any existing lender shall be at such lender's sole discretion. Interest is
charged to each Fund based on its borrowings at a rate equal to the federal
funds rate plus 0.75%. 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, in addition to an upfront fee equal to its pro rata share of
0.02% of the amount of the credit facility. The Fund had no borrowings during
the year ended Oct. 31, 2008.
Under the prior credit facility which was effective until Oct. 15, 2008, the
Fund had entered into a revolving credit facility with a syndicate of banks
headed by JPMorgan Chase Bank, N.A. (JPMCB), whereby the Fund was permitted to
borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility agreement, which was a
collective agreement between the Fund and certain other RiverSource funds,
severally and not jointly, permitted collective borrowings up to $500 million.
Interest was 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 matured
no later than 60 days after the date of borrowing. The Fund also paid a
commitment fee equal to its pro rata share of the amount of the credit facility
at a rate of 0.06% per annum.
7. CAPITAL LOSS CARRY-OVER
For federal income tax purposes, the Fund had a capital loss carry-over of
$404,243,287 at Oct. 31, 2008, that if not offset by capital gains will expire
as follows:
<Table>
<Caption>
2009 2010 2011 2016
$170,490,067 $143,634,885 $30,509,951 $59,608,384
</Table>
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 47
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
It is unlikely the Board will authorize a distribution of any net realized
capital gains until the available capital loss carry-over has been offset or
expires.
8. RISKS RELATING TO CERTAIN INVESTMENTS
FOREIGN/EMERGING MARKETS RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities. Investing in
emerging markets may accentuate these risks.
9. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc., was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company mutual funds and
they purport to bring the action derivatively on behalf of those funds under the
Investment Company Act of 1940. The plaintiffs allege that fees allegedly paid
to the defendants by the funds for investment advisory and administrative
services are excessive. The plaintiffs seek remedies including restitution and
rescission of investment advisory and distribution agreements. The plaintiffs
voluntarily agreed to transfer this case to the United States District Court for
the District of Minnesota. In response to defendants' motion to dismiss the
complaint, the Court dismissed one of plaintiffs' four claims and granted
plaintiffs limited discovery. Defendants moved for summary judgment in April
2007. Summary judgment was granted in the defendants' favor on July 9, 2007. The
plaintiffs filed a notice of appeal with the Eighth Circuit Court of Appeals on
August 8, 2007.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties
- --------------------------------------------------------------------------------
48 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
- --------------------------------------------------------------------------------
ordered by the SEC in accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise
Financial, Inc., acquired J. & W. Seligman & Co., Inc. (Seligman). In late 2003,
Seligman conducted an extensive internal review concerning mutual fund trading
practices. Seligman's review, which covered the period 2001-2003, noted one
arrangement that permitted frequent trading in certain open-end registered
investment companies managed by Seligman (the Seligman Funds); this arrangement
was in the process of being closed down by Seligman before September 2003.
Seligman identified three other arrangements that permitted frequent trading,
all of which had been terminated by September 2002. In January 2004, Seligman,
on a voluntary basis, publicly disclosed these four arrangements to its clients
and to shareholders of the Seligman Funds. Seligman also provided information
concerning mutual fund trading practices to the SEC and the Office of the
Attorney General of the State of New York (NYAG). In September 2005, the New
York staff of the SEC indicated that it was considering recommending to the
Commissioners of the SEC the instituting of a formal action against Seligman and
the distributor of the Seligman Funds, Seligman Advisors, Inc., relating to
frequent trading in the Seligman Funds. Seligman responded to the staff in
October 2005 that it believed that any action would be both inappropriate and
unnecessary, especially in light of the fact that Seligman had previously
resolved the underlying issue with the Independent Directors of the Seligman
Funds and made recompense to the affected Seligman Funds.
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc., Seligman Data Corp. (transfer
agent for the Seligman Funds) and Brian T. Zino (collectively, the Seligman
Parties), alleging, in substance, that, in addition to the four arrangements
noted above, the Seligman Parties permitted other persons to engage in frequent
trading and, as a result, the prospectus disclosure used by the registered
investment companies managed by Seligman is and has been misleading. The NYAG
included other related claims and also claimed that the fees charged by Seligman
to the Seligman Funds were excessive. The NYAG is seeking damages of at least
$80 million and restitution, disgorgement, penalties and costs and injunctive
relief. The Seligman Parties answered the complaint in December 2006 and believe
that the claims are without merit. Any resolution of these matters may include
the relief noted above or other sanctions or changes in procedures. Any damages
would be paid by Seligman and not by the Seligman
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 49
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
Funds. If the NYAG obtains injunctive relief, Seligman and its affiliates could,
in the absence of the SEC in its discretion granting exemptive relief, be
enjoined from providing advisory and underwriting services to the Seligman Funds
and other registered investment companies. Seligman does not believe that the
foregoing legal action or other possible actions will have a material adverse
impact on Seligman or its clients, including the Seligman Funds and other
investment companies managed by it; however, there can be no assurance of this
or that these matters and any related publicity will not affect demand for
shares of the Seligman Funds and such other investment companies or have other
adverse consequences.
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.
10. SUBSEQUENT EVENT
Effective Dec. 15, 2008, the Fund will pay custodian fees to JPMorgan Chase
Bank, N.A. and, in addition, JPMorgan Chase Bank, N.A. will serve as the
securities lending agent for the Fund.
- --------------------------------------------------------------------------------
50 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
THREADNEEDLE GLOBAL EQUITY FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Threadneedle Global Equity Fund (the Fund),
formerly the RiverSource Global Equity Fund, (one of the portfolios constituting
the RiverSource Global Series, Inc.) as of October 31, 2008, and the related
statement of operations for the year then ended, and the statements of changes
in net assets and the financial highlights for each of the two years in the
period 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
audits. The 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 highlights.
We conducted our audits 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 audits 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, 2008, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 51
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (continued) ------------
In our opinion, the financial statements and financial highlights audited by us
as referred to above present fairly, in all material respects, the financial
position of Threadneedle Global Equity Fund of the RiverSource Global Series,
Inc. at October 31, 2008, the results of its operations for the year then ended,
and changes in its net assets and the financial highlights for each of the two
years in the period then ended, in conformity with U.S. generally accepted
accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 19, 2008
- --------------------------------------------------------------------------------
52 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 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, 2008
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Qualified Dividend Income for individuals.................... 100%
Dividends Received Deduction for corporations................ 100%
U.S. Government Obligations.................................. 0.00%
</Table>
The Fund also designates as distributions of long-term gains, to the extent
necessary to fully distribute such capital gains, earnings and profits
distributed to shareholders on the redemption of shares.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 53
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.
The RiverSource complex of funds that each Board member oversees consists of 162
funds, which includes 104 RiverSource funds and 58 Seligman 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 since Chief Justice, Minnesota Supreme Court, 1998-2006; None
901 S. Marquette Ave. 2006 Attorney
Minneapolis, MN 55402
Age 54
- ------------------------------------------------------------------------------------------------------------------------------
Arne H. Carlson Board member since Chair, RiverSource Funds, 1999-2006; former Governor of None
901 S. Marquette Ave. 1999 Minnesota
Minneapolis, MN 55402
Age 74
- ------------------------------------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member since President, Springboard -- Partners in Cross Cultural None
901 S. Marquette Ave. 2007 Leadership (consulting company)
Minneapolis, MN 55402
Age 54
- ------------------------------------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member since Trustee Professor of Economics and Management, Bentley None
901 S. Marquette Ave. 2004 College; former Dean, McCallum Graduate School of
Minneapolis, MN 55402 Business, Bentley College
Age 58
- ------------------------------------------------------------------------------------------------------------------------------
Anne P. Jones Board member since Attorney and Consultant None
901 S. Marquette Ave. 1985
Minneapolis, MN 55402
Age 73
- ------------------------------------------------------------------------------------------------------------------------------
Jeffrey Laikind, CFA Board member since Former Managing Director, Shikiar Asset Management American Progressive
901 S. Marquette Ave. 2005 Insurance
Minneapolis, MN 55402
Age 73
- ------------------------------------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Chair of the Board President Emeritus and Professor of Economics, Carleton Valmont Industries,
901 S. Marquette Ave. since 2007, College Inc. (manufactures
Minneapolis, MN 55402 Board member since irrigation systems)
Age 69 2002
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
54 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 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
- ------------------------------------------------------------------------------------------------------------------------------
John F. Maher Board member since Retired President and Chief Executive Officer and None
901 S. Marquette Ave. 2008 former Director, Great Western Financial Corporation
Minneapolis, MN 55402 (bank holding company) and its principal subsidiary,
Age 64 Great Western Bank (federal savings bank)
- ------------------------------------------------------------------------------------------------------------------------------
Catherine James Paglia Board member since Director, Enterprise Asset Management, Inc. (private None
901 S. Marquette Ave. 2004 real estate and asset management company)
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Leroy C. Richie Board member since Counsel, Lewis & Munday, P.C.; Director, Vibration Lead Outside
901 S. Marquette Ave. 2008 Control Technologies, LLC (auto vibration technology); Director, Digital
Minneapolis, MN 55402 Director and Chairman, Highland Park Michigan Economic Ally, Inc. (digital
Age 66 Development Corp; and Chairman, Detroit Public Schools imaging); and
Foundation. Formerly, Chairman and Chief Executive Infinity, Inc. (oil
Officer, Q Standards Worldwide, Inc. (library of and gas exploration
technical standards); Director, Kerr-McGee Corporation and production);
(diversified energy and chemical company); Trustee, New Director, OGE Energy
York University Law Center Foundation; Vice Chairman, Corp. (energy and
Detroit Medical Center and Detroit Economic Growth energy services
Corp. provider offering
physical delivery
and related services
for both electricity
and natural gas)
- ------------------------------------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member since Chief Executive Officer and Director, RiboNovix, Inc. Idera
901 S. Marquette Ave. 2002 since 2003 (biotechnology); former President, Forester Pharmaceutical, Inc.
Minneapolis, MN 55402 Biotech (biotechnology);
Age 64 Healthways, Inc.
(health management
programs)
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 55
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
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 since President -- U.S. Asset Management and Chief Investment None
53600 Ameriprise 2001, Officer, Ameriprise Financial, Inc. and President,
Financial Center Vice President since Chairman of the Board and Chief Investment Officer,
Minneapolis, MN 55474 2002 RiverSource Investments, LLC since 2005; Director,
Age 48 President and Chief Executive Officer, Ameriprise
Certificate Company and Chairman of the Board, Chief
Executive Officer and President, RiverSource
Distributors, Inc. 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.
- --------------------------------------------------------------------------------
56 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 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 2006 Director and Senior Vice President -- Asset Management,
172 Ameriprise Financial Products and Marketing, RiverSource Investments, LLC
Center since 2006; Director and Vice President -- Asset
Minneapolis, MN 55474 Management, Products and Marketing, RiverSource
Age 43 Distributors, Inc. since 2006; Managing Director and
Global Head of Product, Morgan Stanley Investment
Management, 2004-2006; President, Touchstone
Investments, 2002-2004
- --------------------------------------------------------------------------------------------------------
Michelle M. Keeley Vice President since Executive Vice President -- Equity and Fixed Income,
172 Ameriprise Financial 2004 Ameriprise Financial, Inc. and RiverSource Investments,
Center LLC since 2006; Vice President -- Investments,
Minneapolis, MN 55474 Ameriprise Certificate Company since 2003; Senior Vice
Age 44 President -- Fixed Income, Ameriprise Financial, Inc.,
2002-2006 and RiverSource Investments, LLC, 2004-2006
- --------------------------------------------------------------------------------------------------------
Amy K. Johnson Vice President since Vice President -- Asset Management and Trust Company
5228 Ameriprise Financial 2006 Services, RiverSource Investments, LLC since 2006; Vice
Center Minneapolis, MN President -- Operations and Compliance, RiverSource
55474 Investments, LLC, 2004-2006; Director of Product
Age 43 Development -- Mutual Funds, Ameriprise Financial,
Inc., 2001-2004
- --------------------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since 2002 Vice President -- Investment Accounting, Ameriprise
105 Ameriprise Financial Financial, Inc. since 2002; Chief Financial Officer,
Center RiverSource Distributors, Inc. since 2006
Minneapolis, MN 55474
Age 53
- --------------------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Vice President and Chief Counsel -- Asset Management,
5228 Ameriprise Financial General Counsel and Ameriprise Financial, Inc. since 2005; Chief Counsel,
Center Secretary since 2006 RiverSource Distributors, Inc. and Chief Legal Officer
Minneapolis, MN 55474 and Assistant Secretary, RiverSource Investments, LLC
Age 49 since 2006; Vice President, General Counsel and
Secretary, Ameriprise Certificate Company since 2005;
Vice President -- Asset Management Compliance,
Ameriprise Financial, Inc., 2004-2005; Senior Vice
President and Chief Compliance Officer, USBancorp Asset
Management, 2002-2004
- --------------------------------------------------------------------------------------------------------
Jennifer D. Lammers Chief Compliance U.S. Asset Management Chief Compliance Officer,
172 Ameriprise Financial Officer since 2006 RiverSource Investments, LLC since 2006;
Center Director -- Mutual Funds, Voyageur Asset Management,
Minneapolis, MN 55474 2003-2006; Director of Finance, Voyageur Asset
Age 48 Management, 2000-2003
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 57
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
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 Officer,
2934 Ameriprise Financial Prevention Officer Ameriprise Financial, Inc. since 2004; Manager Anti-
Center since 2004 Money Laundering, Ameriprise Financial, Inc., 2003-
Minneapolis, MN 55474 2004; Compliance Director and Bank Secrecy Act Officer,
Age 44 American Express Centurion Bank, 2000-2003
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
58 THREADNEEDLE GLOBAL EQUITY FUND -- 2008 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.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY FUND -- 2008 ANNUAL REPORT 59
THREADNEEDLE GLOBAL EQUITY FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
RIVERSOURCE.COM/FUNDS
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus.
Threadneedle(R) mutual funds are distributed by RiverSource
Distributors, Inc., Member FINRA, managed by RiverSource
Investments, LLC, and subadvised by Threadneedle
International Limited. These companies are part of
Ameriprise Financial, Inc.
(THREADNEEDLE LOGO) (C) 2008 RiverSource Distributors, Inc. S-6334 AG (12/08)
</Table>