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[LOGO] G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
ADVISOR CLASS
PROSPECTUS -- OCTOBER 18, 1995
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND ("Small Cap Fund") seeks long-term
capital appreciation by investing all of its investable assets in the Small Cap
Portfolio that, in turn, invests primarily in equity securities of small
capitalization ("small cap") companies domiciled in the United States.
G.T. GLOBAL: AMERICA VALUE FUND ("Value Fund") seeks long-term capital
appreciation by investing all of its investable assets in the Value Portfolio
that, in turn, invests primarily in those equity securities of medium to large
capitalization issuers domiciled in the United States which the investment
adviser believes are undervalued and therefore offer above-average potential for
capital appreciation.
There can be no assurance that any Fund or its corresponding Portfolio will
achieve its investment objective.
The Small Cap Fund, and the Value Fund (collectively, the "Funds") are mutual
funds each organized as a diversified series of G.T. Global Growth Series
("Company"). EACH FUND, UNLIKE MANY OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE
AND MANAGE THEIR OWN PORTFOLIOS OF SECURITIES, SEEKS ITS INVESTMENT OBJECTIVE BY
INVESTING ALL OF ITS INVESTABLE ASSETS IN ITS CORRESPONDING PORTFOLIO, AS
DESCRIBED ABOVE. The Small Cap Portfolio and Value Portfolio (collectively, the
"Portfolios") are open-end management investment companies each managed by G.T.
CAPITAL MANAGEMENT, INC. ("G.T. Capital"). Each Portfolio's investment objective
is identical to that of its corresponding Fund. This structure is different from
many other investment companies which directly acquire and manage their own
portfolios. Accordingly, investors should carefully consider this investment
approach. For additional information, see "Investment Objectives and Policies;
Risk Factors" and "Management."
G.T. Capital is part of the G.T. Group, a leading international investment
advisory organization with offices throughout the world that long has emphasized
global investment.
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge and without a Rule 12b-1 charge.
This Prospectus sets forth concisely the information an investor should know
before investing and should be read carefully and retained for future reference.
A Statement of Additional Information, dated October 18, 1995, has been filed
with the Securities and Exchange Commission ("SEC") and, as amended or
supplemented from time to time, is incorporated herein by reference. The
Statement of Additional Information is available without charge by writing to
the Funds at 50 California Street, 27th Floor, San Francisco, California 94111,
or by calling (800) 824-1580.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED BY,
ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
An investment in one or more of the Funds offers the following advantages:
/ / Professional Management by a Leading Manager with Offices in the World's
Major Markets
/ / Automatic Dividend and Other Distribution Reinvestment at no Additional
Sales Charge
/ / Exchange Privileges with the Corresponding Classes of the Other G.T. Global
Mutual Funds
FOR FURTHER INFORMATION, CONTACT (800) 824-1580 OR YOUR STOCKBROKER.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
TABLE OF CONTENTS
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Page
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Prospectus Summary........................................................................ 3
Investment Objectives and Policies; Risk Factors.......................................... 7
How To Invest............................................................................. 12
How to Make Exchanges..................................................................... 14
How to Redeem Shares...................................................................... 15
Shareholder Account Manual................................................................ 17
Calculation of Net Asset Value............................................................ 18
Dividends, Other Distributions and Federal Income Taxation................................ 18
Management................................................................................ 20
Other Information......................................................................... 22
</TABLE>
Prospectus Page 2
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
PROSPECTUS SUMMARY
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<TABLE>
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
</TABLE>
The following summary is qualified in its entirety by the more detailed
information appearing in the body of this Prospectus. Cross-references in this
summary are to headings in the body of the Prospectus.
<TABLE>
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Investment Objectives: Each Fund seeks long-term capital appreciation
Principal Investments: Small Cap Fund invests all of its investable assets in the Small
Cap Portfolio, that, in turn, invests primarily in the equity
securities of small capitalization ("small cap") companies
domiciled in the United States
Value Fund invests all of its investable assets in the Value
Portfolio, that, in turn, invests primarily in those equity
securities of medium to large capitalization issuers domiciled in
the United States that G.T. Capital believes are undervalued and
therefore offer above-average potential for capital appreciation
Investment Manager: G.T. Capital, part of the G.T. Group, a leading international
investment advisory organization with over $22 billion under
management
Advisor Class shares are offered through this Prospectus to (a)
Advisor Class Shares: trustees or other fiduciaries purchasing shares for employee
benefit plans which are sponsored by organizations which have at
least 250 employees; (b) any account investing at least $25,000 in
one or more G.T. Global Mutual Funds if (i) a financial planner,
trust company, bank trust department or registered investment
adviser has investment discretion over such account, and (ii) the
account holder pays such person as compensation for its advice and
other services an annual fee of at least .50% on the assets in the
account; (c) any account investing at least $25,000 in one or more
G.T. Global Mutual Funds if (i) such account is established under
a "wrap fee" program, and (ii) the account holder pays the sponsor
of such program an annual fee of at least .50% on the assets in
the account; (d) accounts advised by one of the companies
comprising or affiliated with the G.T. Group; and (e) any of the
companies comprising or affiliated with the G.T. Group
Shares Available Through: Most brokerage firms nationwide, or directly through the Funds'
distributor
Exchange Privileges: Advisor Class shares of one Fund may be exchanged for Advisor
Class shares of other G.T. Global Mutual Funds without a sales
charge
Dividends and Other
Distributions: Dividends paid annually from available net investment income and
realized net short-term capital gains; other distributions paid
annually from realized net capital gain and net gains from foreign
currency transactions, if any
Reinvestment: Distributions may be reinvested automatically in Advisor Class
shares of the distributing Fund or in Advisor Class shares of
other G.T. Global Mutual Funds without a sales charge
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Prospectus Page 3
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
PROSPECTUS SUMMARY
(Continued)
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THE FUNDS. The Small Cap Fund and Value Fund are diversified series of G.T.
Global Growth Series ("Company"), a registered open-end management investment
company. Each Fund is hereinafter referred to individually as a "Fund" and
together, as the "Funds." Each Fund seeks long-term capital appreciation.
In seeking this objective, the Small Cap Fund and Value Fund invest all of their
investable assets in the Small Cap Portfolio and Value Portfolio, respectively,
that, in turn, invest in securities in accordance with an investment objective
and policies identical to those of its corresponding Fund. The Small Cap
Portfolio and Value Portfolio are hereinafter referred to individually as a
"Portfolio," or together, as the "Portfolios." Each Portfolio concentrates in
the market sector corresponding to that Portfolio's name. Each Fund's shares of
beneficial interest are available through broker/ dealers that have entered into
agreements to sell shares with the Funds' distributor, G.T. Global Financial
Services, Inc. ("G.T. Global"). Shares also may be acquired directly through the
Funds' distributor or through exchanges of shares of the other G.T. Global
Mutual Funds. See "How to Invest" and "Shareholder Account Manual." Shares may
be redeemed either through broker/dealers or G.T. Global Investor Services, Inc.
("Transfer Agent"). See "How to Redeem Shares" and "Shareholder Account Manual."
INVESTMENT MANAGER AND ADMINISTRATOR. G.T. Capital is the investment manager and
administrator for the Portfolios and is the administrator for the Funds. G.T.
Capital provides investment management and/or administration services to all of
the G.T. Global Mutual Funds as well as other institutional, corporate and
individual clients. G.T. Capital is part of the G.T. Group, a leading
international investment advisory organization that long has emphasized global
investing. The G.T. Group maintains fully staffed investment offices in San
Francisco, London, Tokyo, Hong Kong, Singapore and Sydney. As of August 31,
1995, total assets under G.T. Group management exceeded $22 billion. The
companies comprising the G.T. Group are indirect subsidiaries of the Prince of
Liechtenstein Foundation. See "Management."
INVESTMENT OBJECTIVES, TECHNIQUES AND RISK FACTORS. The Small Cap Fund seeks its
investment objective by investing all of its investable assets in the Small Cap
Portfolio, that, in turn, normally invests at least 65% of its total assets in
equity securities, including common stocks, convertible preferred stocks,
convertible debt securities and warrants, of small cap companies domiciled in
the United States. For purposes of the foregoing, "small cap" companies are
companies that, at the time of purchase of their securities by the Portfolio,
have market capitalizations of up to $500 million. The remainder of the Small
Cap Portfolio's assets may be invested in common stocks, convertible preferred
stocks, convertible debt securities and warrants of companies that are larger
than small cap companies as defined above, non-convertible preferred stocks,
non-convertible debt securities, government securities and high quality money
market instruments such as government obligations, high grade commercial paper,
bank certificates of deposit and bankers' acceptances of issuers domiciled in
the United States. Investments in securities of small cap companies may be more
vulnerable than securities of larger companies to adverse business or economic
developments. Securities of small cap companies may also be less liquid and
their prices more volatile than those of larger companies.
The Value Fund seeks its investment objective by investing all of its investable
assets in the Value Portfolio, that, in turn normally invests at least 65% of
its total assets in equity securities, including common stocks, convertible
preferred stocks, convertible debt securities and warrants of medium to large
cap issuers domiciled in the United States that G.T. Capital believes to be
undervalued in relation to the long-term earning power or other factors. For
purposes of the foregoing, "medium to large cap" issuers are issuers with a
market capitalization greater than $500 million at the time of purchase by the
Value Portfolio. The remainder of the Portfolio's assets may be invested in
common stocks, convertible preferred stocks, convertible debt securities and
warrants of companies that are
Prospectus Page 4
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
PROSPECTUS SUMMARY
(Continued)
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smaller than the issuers defined above, non-convertible preferred stocks,
non-convertible debt securities, government securities and high quality money
market instruments such as government obligations, high grade commercial paper,
bank certificates of deposit and bankers' acceptances of issuers domiciled in
the United States.
Each Portfolio may engage in certain options and futures transactions to attempt
to hedge against the overall level of investment risk associated with its
present or planned investments. For temporary defensive purposes, each Portfolio
may hold U.S. dollars and/or may invest any portion of its assets in domestic
debt securities or high quality money market instruments. Each Portfolio also
may hold U.S. dollars and/or invest in domestic debt securities or high quality
money market instruments pending investment of proceeds from new sales of Fund
shares or to meet their ordinary daily cash needs. See "Investment Objectives
and Policies; Risk Factors."
There is no assurance that any Fund or any Portfolio will achieve its investment
objective. Each Fund's net asset value will fluctuate, reflecting fluctuation in
the market value of its corresponding Portfolio's securities positions.
EXPENSES. Each Fund pays administration fees directly to G.T. Capital at an
annualized rate of 0.25% of that Fund's average daily net assets. In addition,
each Fund bears its pro rata portion of the investment management and
administration fees paid by its corresponding Portfolio to G.T. Capital. Each
Portfolio pays such fees, based on the average daily net assets of that
Portfolio, at the annualized rate of .475% on the first $500 million, .45% on
the next $500 million, .425% on the next $500 million, and .40% on all amounts
thereafter.
Each Portfolio pays all expenses not assumed by G.T. Capital, G.T. Global or
other agents. G.T. Capital and G.T. Global have undertaken to limit each Fund's
expenses (exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rate of 1.65% of the average daily net assets of the
Advisor Class shares. See "Management."
Prospectus Page 5
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
PROSPECTUS SUMMARY
(Continued)
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SUMMARY OF INVESTOR COSTS. The expenses and maximum transactions costs
associated with investing in the Advisor Class shares of each Fund and the
estimated aggregate annual operating expenses for each Fund and its
corresponding Portfolio are reflected in the following tables*+:
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G.T. GLOBAL:
AMERICA SMALL G.T. GLOBAL:
CAP GROWTH AMERICA VALUE
FUND FUND
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ADVISOR CLASS ADVISOR CLASS
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SHAREHOLDER TRANSACTION COSTS:
Maximum sales charge on purchases (as a % of offering price)........................... None None
Sales charges on reinvested distributions.............................................. None None
Deferred sales charges................................................................. None None
Redemption charges..................................................................... None None
Exchange fees:
-- On first four exchanges each year................................................. None None
-- On each additional exchange....................................................... $7.50 $7.50
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS):
Investment management and administration fees.......................................... 0.73% 0.73%
12b-1 distribution and service fees.................................................... None None
Other expenses (estimated)............................................................. 0.92% 0.92%
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Total Fund Operating Expenses.......................................................... 1.65% 1.65%
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</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES+:
An investor directly or indirectly would have paid the following expenses at the
end of the periods shown on a $1,000 investment, assuming a 5% annual return:
<TABLE>
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1 YEAR 3 YEARS
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G.T. Global: America Small Cap Growth Fund
Advisor Class shares (1)........................................................................ $16 $52
G.T. Global: America Value Fund
Advisor Class shares (1)........................................................................ $16 $52
<FN>
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* Because Advisor Class shares have not previously been offered, expenses are
estimates and do not reflect actual Advisor Class expenses. G.T. Capital
and G.T. Global have undertaken to limit each Fund's expenses (exlusive of
brokerage commissions, taxes, interests and extraordinary expenses) to the
annual rate of 1.65% of the average daily net assets of the Advisor Class.
Exchange fee waivers are available for Advisor Class shares.
+ THESE TABLES ARE INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUNDS. Long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers, Inc. ("NASD") rules regarding investment companies. "Other
expenses" are based on estimated amounts for the first fiscal year of
operations of each Fund and its corresponding Portfolio. "Other expenses"
include custody, transfer agent, legal, audit and other expenses. "Other
expenses" may be reduced to the extent that (i) certain broker/dealers
executing the Portfolios' portfolio transactions pay all or a portion of
the Funds' transfer agency expenses or the Funds' custodian fees, or (ii)
fees received in connection with the lending of portfolio securities are
used to reduce custodian fees. These arrangements are not anticipated to
materially increase the brokerage commissions paid by the Portfolios. See
"Management" herein and in the Statement of Additional Information for more
information. THE "HYPOTHETICAL EXAMPLE" SET FORTH ABOVE IS NOT A
REPRESENTATION OF FUTURE EXPENSES; EACH FUND'S AND PORTFOLIO'S ACTUAL
EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. The above tables and the
assumption in the example of a 5% annual return are required by regulation
of the Securities and Exchange Commission applicable to all mutual funds;
the 5% annual return is not a prediction of and does not represent the
Funds' projected or actual performance.
The Annual Fund Operating Expenses for each Fund and its corresponding
Portfolio are annualized projections based upon current administration fees
for that Fund and the management and administration fees for its
corresponding Portfolio and estimated amounts for Other expenses. The Board
of Trustees of the Company believes that the aggregate per share expenses
of each Fund and its corresponding Portfolio will be approximately equal to
the expenses such Fund would incur if its assets were invested directly in
the type of securities being held by its corresponding Portfolio. If
investors other than such Fund invest in its corresponding Portfolio, that
Fund could achieve economies of scale which could reduce expenses.
</TABLE>
Prospectus Page 6
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
INVESTMENT OBJECTIVES
AND POLICIES; RISK FACTORS
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The investment objective of each Fund is to seek long-term capital appreciation.
The Small Cap Fund seeks its investment objective by investing all of its
investable assets in the Small Cap Portfolio, that, in turn, normally invests at
least 65% of its total assets in equity securities, including common stocks,
convertible preferred stocks, convertible debt securities and warrants of small
cap companies domiciled in the United States. For purposes of the foregoing,
"small cap" companies are companies that, at the time of purchase of their
securities by the Portfolio, have market capitalizations of up to $500 million.
Market capitalization means the total market value of a company's outstanding
common stock. There is no necessary correlation between market capitalization
and the financial attributes (such as level of assets, revenues or income) often
used to measure a company's size. The remainder of the Small Cap Portfolio's
assets may be invested in common stocks, convertible preferred stocks,
convertible debt securities and warrants of companies domiciled in the United
States that are not small cap companies as defined above, non-convertible
preferred stocks, non-convertible debt securities, U.S. government securities
and high quality money market instruments such as U.S. government obligations,
high grade commercial paper, bank certificates of deposit and bankers'
acceptances of issuers domiciled in the United States.
The Value Fund seeks its investment objective by investing all of its investable
assets in the Value Portfolio, that, in turn, normally invests at least 65% of
its total assets in equity securities, including common stocks, convertible
preferred stocks, convertible debt securities and warrants of medium to large
cap issuers domiciled in the United States that G.T. Capital believes to be
undervalued in relation to the long-term earning power or other factors. For
purposes of the foregoing, "medium to large cap" issuers are issuers with a
market capitalization greater than $500 million at the time of purchase by the
Value Portfolio. The remainder of the Value Portfolio's assets may be invested
in common stocks, convertible preferred stocks, convertible debt securities and
warrants of companies domiciled in the United States that are smaller than the
issuers defined above, non-convertible preferred stocks, non-convertible debt
securities, U.S. government securities and high quality money market instruments
such as U.S. government obligations, high grade commercial paper, bank
certificates of deposit and bankers' acceptances of issuers domiciled in the
United States.
In selecting issuers for the Value Portfolio, G.T. Capital attempts to identify
securities of issuers whose prospects and growth potential, in G.T. Capital's
opinion, are currently undervalued by investors. In G.T. Capital's view, an
issuer may show favorable prospects as a result of many factors, including, but
not limited to, changes in management, shifts in supply and demand conditions in
the industry in which it operates, technological advances, new products or
product cycles, or changes in macroeconomic trends. The securities of such
issuers may be undervalued by the market due to many factors, including market
decline, tax-loss selling, poor economic conditions, limited coverage by the
investment community, investors' reluctance to overlook perceived financial,
operational, managerial or other problems affecting the issuer or the industry
in which it operates and other factors. G.T. Capital will attempt to identify
those undervalued issuers with the potential for attractive returns.
For purposes of the foregoing, an issuer is considered domiciled in the United
States if it is incorporated under the laws of any of its states or territories
or the District of Columbia, and either (i) at least 50% of the value of its
assets is located in the United States, or (ii) it normally derives at least 50%
of its income from operations or sales in the United States. There is no
assurance that any Fund or Portfolio will achieve its investment objective.
The debt obligations that the Portfolios may invest in are limited to U.S.
government securities and corporate debt securities of issuers domiciled in the
United States. The Portfolios will limit their purchases of debt securities to
investment grade obligations. "Investment grade" debt securities refers to those
debt securities rated within one of the
Prospectus Page 7
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
four highest ratings categories by Moody's Investors Service, Inc. ("Moody's")
or by Standard & Poor's ("S&P"), or, if not similarly rated by any other
nationally recognized statistical rating organization ("NRSRO"), deemed by G.T.
Capital to be of equivalent quality. Moody's considers securities rated in the
lowest category of investment grade, i.e., securities rated Baa, to have
speculative characteristics. See the Statement of Additional Information for a
full description of Moody's and S&P ratings.
OTHER POLICIES. Each Portfolio may invest up to 15% of its net assets in
illiquid securities.
Each Portfolio retains the flexibility to respond promptly to changes in market
and economic conditions. Accordingly, in the interest of preserving
shareholders' capital and consistent with each Portfolio's investment objective,
G.T. Capital may employ a temporary defensive investment strategy if it
determines such a strategy to be warranted due to market, economic or political
conditions. Under a defensive strategy, each Portfolio may hold cash and/or
invest any portion or all of its assets in debt securities or high quality money
market instruments issued by corporations or the U.S. government. To the extent
a Portfolio adopts a temporary defensive position, it will not be invested so as
to achieve directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, each Portfolio may hold cash and may invest
in high quality domestic money market instruments. Money market instruments in
which the Portfolios may invest include, but are not limited to, the following:
U.S. government securities, high grade commercial paper, bank certificates of
deposit, and bankers' acceptances of issuers domiciled in the United States and
repurchase agreements related to any of the foregoing. High grade commercial
paper refers to commercial paper rated P-1 by Moody's or A-1 by S&P at the time
of investment or, if unrated, deemed by G.T. Capital to be of comparable
quality.
Each Portfolio may invest up to 10% of its total assets in other investment
companies. As a shareholder in an investment company, that Portfolio would bear
its ratable share of that investment company's expenses, including its advisory
and administration fees. At the same time, the Portfolio would continue to pay
its own management fees and other expenses.
From time to time, it may be advantageous for each Portfolio to borrow money
rather than sell existing portfolio positions to meet redemption requests.
Accordingly, each Portfolio may borrow from banks or may borrow through reverse
repurchase agreements and "roll" transactions in connection with meeting
requests for the redemptions of a Portfolio's shares. Each Portfolio also may
borrow up to 5% of its total assets for temporary or emergency purposes other
than to meet redemptions. However, no Portfolio will borrow for leveraging
purposes, nor will any Portfolio purchase securities while borrowings are
outstanding. See "Investment Objectives and Policies" in the Statement of
Additional Information.
The Portfolios are authorized to make loans of portfolio securities, for the
purpose of realizing additional income, to broker/dealers or to other
institutional investors. At all times a loan is outstanding, the borrower must
maintain with the Portfolio's custodian collateral consisting of cash, U.S.
government securities or other liquid, high grade debt securities equal to at
least the value of the borrowed securities, plus any accrued interest. Each
Portfolio will receive any interest paid on the loaned securities and a fee
and/or a portion of the interest earned on the collateral. Each Portfolio will
limit loans of portfolio securities to an aggregate of 30% of the value of its
total assets, measured at the time any such loan is made. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delay in receiving additional collateral or in recovery of the
securities or possible loss of rights in the collateral should the borrower fail
financially.
The Portfolios may purchase debt securities on a "when-issued" basis and may
purchase or sell such securities on a "forward commitment" basis in order to
hedge against anticipated changes in interest rates and prices. The price, which
generally is expressed in yield terms, is fixed at the time the commitment is
made, but delivery and payment for the securities take place at a later date.
When-issued securities and forward commitments may be sold prior to the
settlement date, but the Portfolios will enter into when-issued and forward
commitments only with the intention of actually receiving or delivering the
securities, as the case may be. No income accrues on securities which have been
purchased pursuant to a forward commitment or on a when-issued basis prior to
delivery to the Portfolio. If the Portfolio disposes of the right to acquire a
when-issued security prior to its acquisition or disposes of its right to
deliver or
Prospectus Page 8
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
receive against a forward commitment, it may incur a gain or loss. At the time a
Portfolio enters into a transaction on a when-issued or forward commitment
basis, a segregated account consisting of cash or high grade liquid debt
securities equal to the value of the when-issued or forward commitment
securities will be established and maintained with its custodian and will be
marked to market daily. There is a risk that the securities may not be delivered
and that a Portfolio may incur a loss on such transactions. See "Investment
Objectives and Policies" in the Statement of Additional Information.
RISK FACTORS. Each Fund's net asset value will fluctuate, reflecting
fluctuations in the market value of the portfolio positions of its corresponding
Portfolio.
SMALL CAP FUND AND SMALL CAP PORTFOLIO. Small cap companies may be more
vulnerable than larger companies to adverse business, economic, or market
developments. Small cap companies may also have more limited product lines,
markets or financial resources than companies with larger capitalizations, and
may be more dependent on a relatively small management group. In addition, small
cap companies may not be well-known to the investing public, may not have
institutional ownership and may have only cyclical, static or moderate growth
prospects. Most small cap company stocks pay low or no dividends. Securities of
small cap companies are generally less liquid and their prices more volatile
than those of securities of larger companies. The securities of some small cap
companies may not be widely traded; the Small Cap Portfolio's position in
securities of such companies may be substantial in relation to the market for
such securities. Accordingly, it may be difficult for the Small Cap Portfolio to
dispose of securities of these small cap companies at prevailing market prices
in order to meet redemptions.
RISKS ASSOCIATED WITH DEBT SECURITIES. G.T. Capital allocates investments among
fixed income securities of particular issuers on the basis of its views as to
the best values then currently available in the market place. Such values are a
function of yield, maturity, issue classification and quality characteristics,
coupled with expectations regarding the economy, movements in the general level
of interest rates and political developments. If market interest rates decline,
fixed income securities generally appreciate in value, and vice versa.
OPTIONS AND FUTURES. Each Portfolio may use options on securities, options on
indices, futures contracts, and options on futures contracts to implement
strategies to attempt to hedge its portfolio, I.E., reduce the overall level of
investment risk normally associated with the Portfolio. These instruments are
often referred to as "derivatives," which may be defined as financial
instruments whose performance is derived, at least in part, from the performance
of another asset (such as a security or an index of securities). Each Portfolio
may enter into such instruments up to the full value of its portfolio assets.
There can be no assurance that these hedging efforts will succeed. These
techniques are described below and are further detailed in the Statement of
Additional Information.
In addition, each Portfolio may purchase and sell put and call options on equity
and debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Portfolio or that G.T. Capital intends to include in the
Portfolio's portfolio. The Portfolios also may buy and sell put and call options
on equity and debt security indices. Such index options serve to hedge against
overall fluctuations in the securities markets or market sectors generally,
rather than anticipated increases or decreases in the value of a particular
security.
Further, the Portfolios may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Portfolios' holdings. The Portfolios also may buy stock index futures contracts
and purchase call options or write put options on such contracts to hedge
against a general stock market or market sector advance and thereby attempt to
lessen the cost of future securities acquisitions. A Portfolio may use interest
rate futures contracts and options thereon to hedge the debt portion of its
portfolio against changes in the general level of interest rates.
In addition, each Portfolio may purchase and sell put and call options on
securities and indices that are traded on recognized securities exchanges and
over-the-counter ("OTC") markets.
These practices may result in the loss of principal under certain conditions. In
addition, certain provisions of the Internal Revenue Code of 1986, as amended
("Code"), limit the extent to which a Portfolio may enter into futures
contracts, or engage in options transactions. See "Taxes" in the Statement of
Additional Information.
Although a Portfolio might not employ any of the foregoing strategies, the use
of options and futures
Prospectus Page 9
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
would involve certain investment risks and transaction costs to which it might
not otherwise be subject. These risks include: (1) dependence on G.T. Capital's
ability to predict movements in the prices of individual securities,
fluctuations in the general securities markets and movements in interest rates;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, futures contracts or options thereon and movements in the
price of the security hedged or used for cover; (3) the fact that skills and
techniques needed to trade options, futures contracts and options thereon are
different from those needed to select the securities in which the Portfolios
invest; (4) lack of assurance that a liquid secondary market will exist for any
particular option, futures contract or option thereon at any particular time;
(5) the possible inability of a Portfolio to purchase or sell a portfolio
security at a time when it would otherwise be favorable for it to do so, or the
possible need for a Portfolio to sell a security at a disadvantageous time, due
to the need for the Portfolio to maintain "cover" or to segregate securities in
connection with hedging transactions; and (6) the possible need to defer closing
out certain options, futures contracts and options thereon in order to qualify
for the beneficial tax treatment afforded regulated investment companies under
the Code. See "Dividends, Other Distributions and Federal Income Taxation"
herein and "Taxes" in the Statement of Additional Information. If G.T. Capital
incorrectly forecasts securities market movements or interest rates in utilizing
a strategy for a Portfolio, the Portfolio would be in a better position if it
had not hedged at all.
REPURCHASE AGREEMENTS. Each Portfolio may enter into repurchase agreements,
which are transactions in which a Portfolio purchases a security from a bank or
recognized securities dealer and simultaneously commits to resell that security
to the bank or dealer at an agreed-upon price, date and market rate of interest
unrelated to the coupon rate or maturity of the purchased security. The
Portfolios intend to enter into repurchase agreements only with banks and
dealers believed by G.T. Capital to present minimal credit risks in accordance
with guidelines approved by the Portfolios' Board of Trustees. See "Investment
Objectives and Policies -- Repurchase Agreements" in the Statement of Additional
Information.
OTHER INFORMATION. Each Fund's investment objective of long-term capital
appreciation may not be changed without the approval of a majority of the Fund's
outstanding voting securities. As defined in the 1940 Act and as used in this
Prospectus, a "majority of a Fund's outstanding voting securities" means the
lesser of (i) 67% of the Fund's shares represented at a meeting at which more
than 50% of the Fund's outstanding shares are represented, or (ii) more than 50%
of the Fund's outstanding shares. In addition, each Fund has adopted certain
investment limitations as fundamental policies which also may not be changed
without shareholder approval. A complete description of these limitations is
included in the Statement of Additional Information.
Unless specifically noted, the Portfolios' and the Funds' investment policies
described in this Prospectus, and in the Statement of Additional Information,
including the policies with respect to investment in its market sector's
securities and the percentage limitations with respect to such investments, are
not fundamental policies and may be changed by vote of the Company's or the
Portfolios' Board of Trustees, as applicable, without shareholder approval. Each
Portfolio's policies regarding lending, the percentage of that Portfolio's
assets that may be committed to borrowing and diversification of investments are
fundamental policies and may not be changed without shareholder approval. See
"Investment Limitations" in the Statement of Additional Information.
OTHER INFORMATION REGARDING THE PORTFOLIOS. The Small Cap Fund and Value Fund
may each withdraw its investment in its corresponding Portfolio at any time, if
the Board of Trustees of the Company determines that it is in the best interests
of that Fund and its shareholders to do so. Upon such withdrawal, the Board
would consider what action might be taken, including the investment of all the
investable assets of that Fund in another pooled investment entity having
substantially the same investment objective as that Fund or the retention by
that Fund of its own investment adviser to manage that Fund's assets in
accordance with the investment objective, policies and limitations discussed
herein with respect to each such Fund and its investment in its corresponding
Portfolio.
The approval of the Small Cap Fund and Value Fund and of other investors in
their corresponding Portfolio, if any, is not required to change the investment
objective, policies or limitations of that Portfolio, unless otherwise
specified. Written notice shall be provided to shareholders of such Fund thirty
days prior to any changes in its corresponding Portfolio's investment objective.
If the
Prospectus Page 10
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
objective of that Portfolio changes and the shareholders of the corresponding
Fund do not approve a parallel change in such Fund's investment objective, that
Fund would seek an alternative investment vehicle or directly retain its own
investment adviser.
As previously described, investors should be aware that the Small Cap Fund and
Value Fund, unlike mutual funds which directly acquire and manage their own
portfolios of securities, seek to achieve their investment objective by
investing all of their investable assets in the Small Cap Portfolio and Value
Portfolio, respectively, each of which is a separate investment company, as
previously described. Since each Fund will invest only in its corresponding
Portfolio, that Fund's shareholders will acquire only an indirect interest in
the investments of that Portfolio.
In addition to selling its interest to its corresponding Fund, the Small Cap
Portfolio and Value Portfolio may each sell its interests to other
non-affiliated investment companies and/or other institutional investors. All
institutional investors in a Portfolio will pay a proportionate share of that
Portfolio's expenses and will invest in that Portfolio on the same terms and
conditions. However, if another investment company invests all of its assets in
a Portfolio, it would not be required to sell its shares at the same public
offering price as the Portfolio's corresponding Fund and may charge different
sales commissions. Therefore, investors in the Small Cap Fund and Value Fund may
experience different returns from investors in another investment company which
invests exclusively in its corresponding Portfolio. As of the date of this
Prospectus, the Small Cap Fund and Value Fund are the only institutional
investors in their corresponding Portfolios. However, the Small Cap Portfolio
and Value Portfolio expect to offer beneficial interests to other institutional
investors in the future. Although interests in the Portfolios are not currently
available, either directly or indirectly, to individual investors through other
funds, information regarding any such funds will be available from G.T. Global
at the appropriate toll-free telephone number provided in the Shareholder
Account Manual.
Investors in the Small Cap Fund and Value Fund should be aware that such Fund's
investment in its corresponding Portfolio may be materially affected by the
actions of large investors in such Portfolio, if any. For example, as with all
open-end investment companies, if a large investor were to redeem its interest
in a Portfolio, that Portfolio's remaining investors could experience higher pro
rata operating expenses, thereby producing lower returns. As a result, that
Portfolio's security holdings may become less diverse, resulting in increased
risk. Institutional investors in a Portfolio that have a greater pro rata
ownership interest in that Portfolio than its corresponding Fund could have
effective voting control over the operation of that Portfolio. A change in a
Portfolio's fundamental objective, policies and restrictions, which is not
approved by the shareholders of its corresponding Fund could require such Fund
to redeem its interest in the Portfolio. Any such redemption could result in a
distribution in kind of portfolio securities (as opposed to a cash distribution)
by that Portfolio. Should such a distribution occur, the Small Cap Fund and
Value Fund could incur brokerage fees or other transaction costs in converting
such securities to cash. In addition, a distribution in kind could result in a
less diversified portfolio of investments for the Small Cap Fund and Value Fund
and could affect adversely the liquidity of such Funds.
See "Management" for a complete description of the investment management fee and
other expenses associated with the investment of the Small Cap Fund and Value
Fund in their corresponding Portfolios. This Prospectus and the Statement of
Additional Information dated October 18, 1995 contain more detailed information
about this organizational structure of the Funds and their corresponding
Portfolios, including information related to: (i) the investment objective,
policies and restrictions of such Funds and their Portfolios; (ii) the Board of
Trustees and officers of the Company, the Trustees and officers of the
Portfolios, the administrator of such Funds and the investment manager and
administrator of the Portfolios; (iii) portfolio transactions and brokerage
commissions; (iv) such Funds' shares, including the rights and liabilities of
its shareholders; (v) additional performance information, including the method
used to calculate yield and total return; and (vi) the determination of the
value of the shares of such Funds.
Prospectus Page 11
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
HOW TO INVEST
- --------------------------------------------------------------------------------
GENERAL. Advisor Class shares are offered through this Prospectus to (a)
trustees or other fiduciaries purchasing shares for employee benefit plans which
are sponsored by organizations which have at least 250 employees; (b) any
account investing at least $25,000 in one or more G.T. Global Mutual Funds if
(i) a financial planner, trust company, bank trust department or registered
investment adviser has investment discretion over such account, and (ii) the
account holder pays such person as compensation for its advice and other
services an annual fee of at least .50% on the assets in the account ("Advisory
Account"); (c) any account investing at least $25,000 in one or more G.T. Global
Mutual Funds if (i) such account is established under a "wrap fee" program, and
(ii) the account holder pays the sponsor of such program an annual fee of at
least .50% on the assets in the account ("Wrap Fee Account"); (d) accounts
advised by one of the companies comprising or affiliated with the G.T. Group;
and (e) any of the companies comprising or affiliated with the G.T. Group.
Investors known to be eligible to purchase Advisor Class shares will be sold
only Advisor Class shares rather than any other class of shares offered by a
Fund.
Orders received before the close of regular trading on the New York Stock
Exchange ("NYSE") (currently 4:00 p.m. Eastern time, unless weather, equipment
failure or other factors contribute to an earlier closing time) on any Business
Day will be executed at the public offering price for the applicable class of
shares determined that day. A "Business Day" is any day Monday through Friday on
which the NYSE is open for business. All purchase orders will be executed at the
public offering price next determined after the purchase order is received. See
"How to Invest -- Public Offering Price." The Funds and G.T. Global reserve the
right to reject any purchase order and to suspend the offering of shares for a
period of time.
IN ORDER TO INVEST IN ADVISOR CLASS SHARES, INVESTORS WILL BE REQUIRED TO SUBMIT
DOCUMENTATION SATISFACTORY TO G.T. GLOBAL ESTABLISHING THEIR ELIGIBILITY TO
PURCHASE SUCH SHARES.
FOR SPECIFIC INFORMATION ON OPENING AN ACCOUNT, PLEASE CONTACT YOUR FINANCIAL
ADVISOR OR G.T. GLOBAL.
PURCHASES THROUGH BROKER/DEALERS. Shares of the Funds may be purchased through
broker/dealers with which G.T. Global has entered into dealer agreements. Orders
received by such broker/dealers before the close of regular trading on the NYSE
on a Business Day will be effected that day, provided that such order is
transmitted to the Transfer Agent prior to its close of business on such day.
The broker/dealer will be responsible for forwarding the investor's order to the
Transfer Agent so that it will be received prior to such time. After an initial
investment is made and a shareholder account is established through a
broker/dealer, at the investor's option, subsequent purchases may be made
directly through G.T. Global. See "Shareholder Account Manual."
Broker/dealers that do not have dealer agreements with G.T. Global also may
offer to place orders for the purchase of shares. Purchases made through such
broker/dealers will be effected at the public offering price next determined
after the order is received by the Transfer Agent. Such a broker/ dealer may
charge the investor a transaction fee as determined by the broker/dealer. Such
fee may be avoided if shares are purchased through a broker/ dealer that has a
dealer agreement with G.T. Global or directly through G.T. Global.
PURCHASES THROUGH THE DISTRIBUTOR. Investors may purchase shares and open an
account directly through G.T. Global, each Fund's distributor, by completing and
signing the Account Application located at the end of this Prospectus. Investors
should mail to the Transfer Agent the completed Account Application together
with a check to cover the purchase in accordance with the instructions provided
in the Shareholder Account Manual. Purchases will be executed at the public
offering price next determined after the Transfer Agent has received the Account
Application and check. Subsequent investments do not need to be accompanied by
such an application.
Investors also may purchase shares of the Funds through G.T. Global by bank
wire. Bank wire
Prospectus Page 12
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
purchases will be effected at the next determined public offering price after
the bank wire is received. Accordingly, a bank wire received by the close of
regular trading on the NYSE on a Business Day will be effected that day. A wire
investment is considered received when the Transfer Agent is notified that the
bank wire has been credited to a Fund. The investor is responsible for providing
prior telephonic or facsimile notice to the Transfer Agent that a bank wire is
being sent. An investor's bank may charge a service fee for wiring money to the
Funds. The Transfer Agent currently does not charge a service fee for
facilitating wire purchases, but reserves the right to do so in the future.
Investors desiring to open an account by bank wire should call the Transfer
Agent at the appropriate toll-free number provided in the Shareholder Account
Manual to obtain an account number and detailed instructions.
CERTIFICATES. In the interest of economy and convenience, physical certificates
representing a Fund's shares will not be issued unless an investor submits a
written request to the Transfer Agent, or unless the investor's broker requests
that the Transfer Agent provide certificates. Shares of a Fund are recorded on a
register by the Transfer Agent, and shareholders who do not elect to receive
certificates have the same rights of ownership as if certificates had been
issued to them. Redemptions and exchanges by shareholders who hold certificates
may take longer to effect than similar transactions involving non-certificated
shares because the physical delivery and processing of properly executed
certificates is required. ACCORDINGLY, THE FUNDS AND G.T. GLOBAL RECOMMEND THAT
SHAREHOLDERS DO NOT REQUEST ISSUANCE OF CERTIFICATES.
Prospectus Page 13
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
HOW TO MAKE EXCHANGES
- --------------------------------------------------------------------------------
Advisor Class shares of one of the Funds may be exchanged for shares of any
other Fund, and for Advisor Class shares of the other G.T. Global Mutual Funds,
based on their respective net asset values without imposition of any sales
charges, provided that the registration remains identical. This exchange
privilege is available only in those jurisdictions where the sale of G.T Global
Mutual Fund shares to be acquired may be legally made. EXCHANGES ARE NOT
TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE
MAY BE, FOR TAX PURPOSES. See "Dividends, Other Distributions and Federal Income
Taxation."
Other than the Funds, the G.T. Global Mutual Funds currently include:
-- G.T. GLOBAL: WORLDWIDE GROWTH FUND
-- G.T. GLOBAL: INTERNATIONAL GROWTH FUND
-- G.T. GLOBAL: NEW PACIFIC GROWTH FUND
-- G.T. GLOBAL: EUROPE GROWTH FUND
-- G.T. GLOBAL: AMERICA GROWTH FUND
-- G.T. GLOBAL: JAPAN GROWTH FUND
-- G.T. GLOBAL EMERGING MARKETS FUND
-- G.T. GLOBAL HEALTH CARE FUND
-- G.T. GLOBAL FINANCIAL SERVICES FUND
-- G.T. GLOBAL INFRASTRUCTURE FUND
-- G.T. GLOBAL NATURAL RESOURCES FUND
-- G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
-- G.T. GLOBAL TELECOMMUNICATIONS FUND
-- G.T. LATIN AMERICA GROWTH FUND
-- G.T. GLOBAL GROWTH & INCOME FUND
-- G.T. GLOBAL GOVERNMENT INCOME FUND
-- G.T. GLOBAL STRATEGIC INCOME FUND
-- G.T. GLOBAL HIGH INCOME FUND
-- G.T. GLOBAL DOLLAR FUND
Up to four exchanges each year may be made without charge. A $7.50 service
charge will be imposed on each subsequent exchange. Exchange requests received
in good order by the Transfer Agent before the close of regular trading on the
NYSE on any Business Day will be processed at the net asset value calculated on
that day.
A shareholder interested in making an exchange should write or call his or her
broker/dealer or the Transfer Agent to request the prospectus of the other G.T.
Global Mutual Fund(s) being considered. Certain brokers may charge a fee for
handling exchanges.
EXCHANGES BY TELEPHONE. A shareholder may give exchange instructions to the
shareholder's broker/ dealer or to the Transfer Agent by telephone at the
appropriate toll-free number provided in the Shareholder Account Manual.
Exchange orders will be accepted by telephone provided that the exchange
involves only uncertificated shares on deposit in the shareholder's account or
for which certificates previously have been deposited.
Shareholders automatically have telephone privileges to authorize exchanges. The
Funds, G.T. Global and the Transfer Agent shall not be liable for any loss or
damage for acting in good faith upon instructions received by telephone and
reasonably believed to be genuine. The Funds employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, including
requiring some form of personal identification prior to acting upon instructions
received by telephone, providing written confirmation of such transactions,
and/or tape recording of telephone instructions. The Funds may be liable for any
losses due to unauthorized or fraudulent instructions if they do not follow
reasonable procedures.
EXCHANGES BY MAIL. Exchange orders should be sent by mail to the investor's
broker/dealer or to the Transfer Agent at the address set forth in the
Shareholder Account Manual.
OTHER INFORMATION ABOUT EXCHANGES. Purchases, redemptions and exchanges should
be made for investment purposes only. A pattern of frequent exchanges, purchases
and sales is not acceptable and can be limited by a Fund's or G.T. Global's
refusal to accept further purchase and exchange orders from the investor or
broker/dealer. The terms of the exchange offer described above may be modified
at any time, on 60 days' prior written notice to shareholders.
Prospectus Page 14
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
As described below, shares of the Funds may be redeemed at their net asset value
and redemption proceeds will be sent within seven days of the execution of a
redemption request. Shareholders with broker/dealers that sell shares may redeem
shares through such broker/dealers; if the shares are held in the
broker/dealer's "street name," the redemption must be made through the broker/
dealer. Other shareholders may redeem shares through the Transfer Agent.
REDEMPTIONS THROUGH BROKER/DEALERS. Shareholders with accounts at broker/dealers
that sell shares of the Funds may submit redemption requests to such
broker/dealers. Broker/dealers may honor a redemption request either by
repurchasing shares from a redeeming shareholder at the shares' net asset value
next computed after the broker/dealer receives the request or by forwarding such
requests to the Transfer Agent (see "How to Redeem Shares -- Redemptions Through
the Transfer Agent"). Redemption proceeds normally will be paid by check or, if
offered by the broker/dealer, credited to the shareholder's brokerage account at
the election of the shareholder. Broker/dealers may impose a service charge for
handling redemption transactions placed through them and may have other
requirements concerning redemptions. Accordingly, shareholders should contact
their broker/dealers for more details.
REDEMPTIONS THROUGH THE TRANSFER AGENT. Redemption requests may be transmitted
to the Transfer Agent by telephone or by mail, in accordance with the
instructions provided in the Shareholder Account Manual. All redemptions will be
effected at the net asset value next determined after the Transfer Agent has
received the request in good order and any required supporting documentation.
Redemption requests received before the close of regular trading on the NYSE on
any Business Day will be effected at the net asset value calculated on that day.
Redemption requests will not require a signature guarantee if the redemption
proceeds are to be sent either: (i) to the redeeming shareholder at the
shareholder's address of record as maintained by the Transfer Agent, provided
the shareholder's address of record has not been changed within the preceding
thirty days; or (ii) directly to a pre-designated bank, savings and loan or
credit union account ("Pre-Designated Account"). ALL OTHER REDEMPTION REQUESTS
MUST BE ACCOMPANIED BY A SIGNATURE GUARANTEE OF THE REDEEMING SHAREHOLDER'S
SIGNATURE. A signature guarantee can be obtained from any bank, U.S. trust
company, a member firm of a U.S. stock exchange or a foreign branch of any of
the foregoing or other eligible guarantor institution. A notary public is not an
acceptable guarantor. A shareholder with questions concerning the Funds'
signature guarantee requirement should contact the Transfer Agent.
Shareholders may qualify to have redemption proceeds sent to a Pre-Designated
Account by completing the appropriate section of the Account Application at the
end of this Prospectus. Shareholders with Pre-Designated Accounts should request
that redemption proceeds be sent either by bank wire or by check. The minimum
redemption amount for a bank wire is $1,000. Shareholders requesting a bank wire
should allow two business days from the time the redemption request is effected
for the proceeds to be deposited in the shareholder's Pre-Designated Account.
See "How to Redeem Shares -- Other Important Redemption Information."
Shareholders may change their Pre-Designated Accounts only by a letter of
instruction to the Transfer Agent containing all account signatures, each of
which must be guaranteed. The Transfer Agent currently does not charge a bank
wire service fee on each wire redemption sent, but reserves the right to do so
in the future.
REDEMPTIONS BY TELEPHONE. Redemption requests may be made by telephone by
calling the Transfer Agent at the appropriate toll-free number provided in the
Shareholder Account Manual. Shareholders who hold certificates for shares may
not redeem by telephone. REDEMPTION REQUESTS MAY NOT BE MADE BY TELEPHONE FOR
THIRTY DAYS FOLLOWING ANY CHANGE OF THE SHAREHOLDER'S ADDRESS OF RECORD.
Shareholders automatically have telephone privileges to authorize redemptions.
The Funds, G.T. Global and the Transfer Agent shall not be liable for any loss
or damage for acting in good faith
Prospectus Page 15
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
upon instructions received by telephone and reasonably believed to be genuine.
The Funds employ reasonable procedures to confirm that instructions communicated
by telephone are genuine, including requiring some form of personal
identification prior to acting upon instructions received by telephone,
providing written confirmation of such transactions, and/or tape recording of
telephone instructions. The Funds may be liable for any losses due to
unauthorized or fraudulent instructions if they do not follow reasonable
procedures.
REDEMPTIONS BY MAIL. Redemption requests should be mailed directly to the
Transfer Agent at the appropriate address provided in the Shareholder Account
Manual. As discussed above, requests for payment of redemption proceeds to a
party other than the registered account owner(s) and/or requests that redemption
proceeds be mailed to an address other than the shareholder's address of record
require a signature guarantee. In addition, if the shareholder's address of
record has been changed within the preceding thirty days, a signature guarantee
is required. Redemptions of shares for which certificates have been issued must
be accompanied by properly endorsed share certificates.
OTHER IMPORTANT REDEMPTION INFORMATION. A request for redemption will not be
processed until all of the necessary documentation has been received in good
order. A shareholder in doubt about what documents are required should contact
his or her broker/dealer or the Transfer Agent.
Except in extraordinary circumstances and as permitted under the 1940 Act,
payment for shares redeemed by telephone or by mail will be made promptly after
receipt of a redemption request, if in good order, but not later than seven days
after the date the request is executed. Requests for redemption which are
subject to any special conditions or which specify a future or past effective
date cannot be accepted.
If the Transfer Agent is requested to redeem shares for which a Fund has not yet
received good payment, the Fund may delay payment of redemption proceeds until
it has assured itself that good payment has been collected for the purchase of
the shares. In the case of purchases by check, it can take up to 10 business
days to confirm that the check has cleared and good payment has been received.
Redemption proceeds will not be delayed when shares have been paid for by wire
or when the investor's account holds a sufficient number of shares for which
funds already have been collected.
G.T. Global reserves the right to redeem the shares of any Advisory Account or
Wrap Fee Account if the amount invested in G.T. Global Mutual Funds through such
account is reduced to less than $25,000 through redemptions or other action by
the shareholder. Written notice will be given to the shareholder at least 60
days prior to the date fixed for such redemption, during which time the
shareholder may increase the amount invested in G.T. Global Mutual Funds through
such account to an aggregate amount of $25,000 or more.
Prospectus Page 16
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
SHAREHOLDER ACCOUNT MANUAL
- --------------------------------------------------------------------------------
Shareholders are encouraged to place purchase, exchange and redemption orders
through their broker/dealers. Shareholders also may place such orders directly
through G.T. Global in accordance with this Manual. See "How to Invest"; "How to
Make Exchanges"; "How to Redeem Shares"; and "Dividends, Other Distributions and
Federal Income Taxation -- Taxes" for more information.
Each Fund's Transfer Agent is G.T. GLOBAL INVESTOR SERVICES, INC.
INVESTMENTS BY MAIL
Send completed Account Application (if initial purchase) or letter stating Fund
name, class of shares, shareholder's registered name and account number (if
subsequent purchase) with a check to:
G.T. Global
P.O. Box 7345
San Francisco, California 94120-7345
INVESTMENTS BY BANK WIRE
An investor opening a new account should call 1-800-223-2138 to obtain an
account number. WITHIN SEVEN DAYS OF PURCHASE SUCH AN INVESTOR MUST SEND A
COMPLETED ACCOUNT APPLICATION CONTAINING THE INVESTOR'S CERTIFIED TAXPAYER
IDENTIFICATION NUMBER TO G.T. GLOBAL AT THE ADDRESS PROVIDED ABOVE UNDER
"INVESTMENTS BY MAIL." Wire instructions must state Fund name, class of shares,
shareholder's registered name and account number. Bank wires should be sent
through the Federal Reserve Bank Wire System to:
WELLS FARGO BANK, N.A.
ABA 121000248
Attn: G.T. GLOBAL
ACCOUNT NO. 4023-050701
(Stating Fund name, class of shares, shareholder's registered name and
account number)
EXCHANGES BY TELEPHONE
Call G.T. Global at 1-800-223-2138
EXCHANGES BY MAIL
Send complete instructions, including name of Fund exchanging from, amount of
exchange, class of shares, name of the G.T. Global Mutual Fund exchanging into,
shareholder's registered name and account number, to:
G.T. Global
P.O. Box 7893
San Francisco, California 94120-7893
REDEMPTIONS BY TELEPHONE
Call G.T. Global at 1-800-223-2138
REDEMPTIONS BY MAIL
Send complete instructions, including name of Fund, class of shares, amount of
redemption, shareholder's registered name and account number, to:
G.T. Global
P.O. Box 7893
San Francisco, California 94120-7893
OVERNIGHT MAIL
Overnight mail services do not deliver to post office boxes. To send purchase,
exchange or redemption orders by overnight mail, comply with the above
instructions but send to the following:
G.T. Global Investor Services
California Plaza
2121 N. California Boulevard
Suite 450
Walnut Creek, CA 94596
ADDITIONAL QUESTIONS
Shareholders with additional questions regarding purchase, exchange and
redemption procedures may call G.T. Global at 1-800-223-2138.
Prospectus Page 17
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
CALCULATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------
Each Fund calculates its net asset value as of the close of regular trading on
the NYSE (currently 4:00 p.m. Eastern Time, unless weather, equipment failure or
other factors contribute to an earlier closing time) each Business Day. Each
Fund's net asset value per share is computed by determining the value of its
total assets (which is the value of such Fund's investment in its corresponding
Portfolio), subtracting all the Fund's liabilities, and dividing the result by
the total number of shares outstanding at such time. Net asset value is
determined separately for each class of shares of each Fund.
Equity securities held by the Portfolios are valued at the last sale price on
the exchange or in the principal over-the-counter market in which such
securities are traded, as of the close of business on the day the securities are
being valued or, lacking any sales, at the last available bid price. Long-term
debt obligations are valued at the mean of representative quoted bid or asked
prices for such securities, or, if such prices are not available, at prices for
securities of comparable maturity, quality and type; however, when G.T. Capital
deems it appropriate, prices obtained from a bond pricing service will be used.
Short-term debt investments are amortized to maturity based on their cost,
provided that such valuations represent fair value. When market quotations for
futures and options positions held by a Portfolio are readily available, those
positions will be valued based upon such quotations.
Securities and other assets for which market quotations are not readily
available are valued at fair value determined in good faith by or under
direction of the Portfolios' Board of Trustees.
Certain of the Portfolios' securities, from time to time, may be traded
primarily on over-the-counter ("OTC") dealer markets which may trade on days
when the NYSE is closed (such as Saturday). As a result, the net asset values of
the Funds' shares may be affected significantly by such trading on days when
shareholders have no access to the Funds.
- --------------------------------------------------------------------------------
DIVIDENDS, OTHER DISTRIBUTIONS
AND FEDERAL INCOME TAXATION
- --------------------------------------------------------------------------------
DIVIDENDS AND OTHER DISTRIBUTIONS. Each Fund annually declares as a dividend all
its net investment income, if any, which includes dividends, accrued interest
and earned discount (including both original issue and market discounts) less
applicable expenses. Each Fund also normally distributes for each fiscal year
substantially all of its realized net short-term capital gain (the excess of
short-term capital gains over short-term capital losses), net capital gain (the
excess of net long-term capital gain over net short-term capital loss) and net
gains from foreign currency transactions, if any. Each Fund may make an
additional dividend or other distribution if necessary to avoid a 4% excise tax
on certain undistributed income and gain.
Dividends and other distributions paid by each Fund with respect to all classes
of its shares are calculated in the same manner and at the same time. The per
share income dividends on Advisor Class shares of a Fund will be higher than the
per share income dividends on shares of other classes of that Fund as a result
of the service and distribution fees applicable to those other shares.
SHAREHOLDERS MAY ELECT:
/ / to have all dividends and other distributions automatically reinvested in
additional Advisor Class shares of the distributing Fund (or other G.T.
Global Mutual Funds) or
/ / to receive dividends in cash and have other distributions automatically
reinvested in additional Advisor Class shares of the distributing Fund (or
other G.T. Global Mutual Funds) or
/ / to receive other distributions in cash and have dividends automatically
reinvested in additional
Prospectus Page 18
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
Advisor Class shares of the distributing Fund (or other G.T. Global Mutual
Funds) or
/ / to receive dividends and other distributions in cash.
Automatic reinvestments in additional Advisor Class shares are made at net asset
value. IF NO ELECTION IS MADE BY A SHAREHOLDER, ALL DIVIDENDS WITHOUT IMPOSITION
OF A SALES CHARGE AND OTHER DISTRIBUTIONS WILL BE AUTOMATICALLY REINVESTED IN
ADDITIONAL ADVISOR CLASS SHARES OF THE DISTRIBUTING FUND. Reinvestments in
another G.T. Global Mutual Fund may only be directed to an account with the
identical shareholder registration and account number. These elections may be
changed by a shareholder at any time; to be effective with respect to a
distribution, the shareholder or the shareholder's broker must contact the
Transfer Agent by mail or telephone at least 15 Business Days prior to the
payment date. THE FEDERAL INCOME TAX STATUS OF DIVIDENDS AND OTHER DISTRIBUTIONS
IS THE SAME WHETHER THEY ARE RECEIVED IN CASH OR REINVESTED IN ADDITIONAL
SHARES.
Any dividend or other distribution paid by a Fund has the effect of reducing the
net asset value per share on the ex-dividend date by the amount thereof.
Therefore, a dividend or other distribution paid shortly after a purchase of
shares would represent, in substance, a return of capital to the shareholder (to
the extent it is paid on the shares so purchased), even though subject to income
tax, as discussed below.
TAXES. Each Fund intends to qualify for treatment as a regulated investment
company under the Code. In each taxable year that a Fund so qualifies, the Fund
(but not its shareholders) will be relieved of federal income tax on that part
of its investment company taxable income (consisting generally of net investment
income, net gains from certain foreign currency transactions and net short-term
capital gain) and net capital gain that is distributed to its shareholders. Each
Portfolio expects that it also will not be liable for any income tax.
Dividends from a Fund's investment company taxable income (whether paid in cash
or reinvested in additional shares) are taxable to its shareholders as ordinary
income to the extent of the Fund's earnings and profits. Distributions of a
Fund's net capital gain, when designated as such, are taxable to its
shareholders as long-term capital gains, regardless of how long they have held
their Fund shares and whether such distributions are paid in cash or reinvested
in additional shares.
Each Fund provides federal tax information to its shareholders annually,
including information about dividends and other distributions paid during the
preceding year and, under certain circumstances, the shareholders' respective
shares of any foreign taxes paid by the Fund, in which event each shareholder
would be required to include in his or her gross income his or her pro rata
share of those taxes but might be entitled to claim a credit or deduction for
them.
Each Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other noncorporate
shareholders who have not furnished to the Fund a correct taxpayer
identification number or a properly completed claim for exemption on Form W-8 or
W-9. Withholding at that rate also is required from dividends and capital gain
distributions payable to such shareholders who otherwise are subject to backup
withholding. Fund accounts opened via a bank wire purchase (see "How to Invest
- -- Purchases Through the Distributor") are considered to have uncertified
taxpayer identification numbers unless a completed Form W-8 or W-9 or Account
Application is received by the Transfer Agent within seven days after the
purchase. A shareholder should contact the Transfer Agent if the shareholder is
uncertain whether a proper taxpayer identification number is on file with a
Fund.
A redemption of Fund shares may result in taxable gain or loss to the redeeming
shareholder, depending upon whether the redemption proceeds are more or less
than the shareholder's adjusted basis for the redeemed shares. An exchange of
Fund shares for shares of another G.T. Global Mutual Fund generally will have
similar tax consequences. In addition, if Fund shares are purchased within 30
days before or after redeeming other shares of the same Fund (regardless of
class) at a loss, all or a part of the loss will not be deductible and instead
will increase the basis of the newly purchased shares.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting each Fund and its shareholders. See "Taxes"
in the Statement of Additional Information for a further discussion. There may
be other federal, state, local or foreign tax considerations applicable to a
particular investor. Prospective investors therefore are urged to consult their
tax advisers.
Prospectus Page 19
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Company's Board of Trustees has overall responsibility for the operation of
the Funds. Pursuant to such responsibility, the Board has approved contracts
with various financial organizations to provide, among other things, day to day
management services required by the Funds. Each Portfolio's Board of Trustees
has overall responsibility for the operation of each Portfolio. See "Directors,
Trustees, and Executive Officers" in the Statement of Additional Information for
a complete description of the Trustees of the Funds and the Portfolios. A
majority of the disinterested members (as defined in the 1940 Act) of the Board
of the Company and of the Portfolios have adopted written procedures reasonably
appropriate to deal with potential conflicts of interest arising concerning the
Funds and their corresponding Portfolios up to and including creating a separate
Board of Trustees of the Portfolios.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by G.T. Capital as
each Portfolio's investment manager and administrator include, but are not
limited to, determining the composition of the investment portfolio of the
Portfolios and placing orders to buy, sell or hold particular securities. In
addition, G.T. Capital provides the following administrative services to the
Portfolios and the Funds: furnishing corporate officers and clerical staff;
providing office space, services and equipment; and supervising all matters
relating to the Portfolio's and the Fund's operations. For these services, each
Fund pays G.T. Capital administration fees at the annualized rate of 0.25% of
such Fund's average daily net assets. In addition, each such Fund bears its pro
rata portion of the investment management and administration fees paid by its
corresponding Portfolio to G.T. Capital. The Portfolios each pay such fees,
based on the average daily net assets of such Portfolio, directly to G.T.
Capital at the annualized rate of .475% on the first $500 million, .45% on the
next $500 million, .425% on the next $500 million and .40% on all amounts
thereafter. Effective July 1, 1995, G.T. Capital serves as each Fund's pricing
and accounting agent. The monthly fee for these services to G.T. Capital is a
percentage, not to exceed 0.03% annually, of the Fund's average daily net
assets. The annual fee rate is derived by applying 0.03% to the first $5 billion
of assets of all registered mutual funds advised by G.T. Capital ("G.T. Funds")
and 0.02% to the assets in excess of $5 billion and dividing the result by the
aggregate assets of the G.T. Funds.
G.T. Capital, organized in 1973, provides investment management and/or
administrative services to all the G.T. Global Mutual Funds as well as to other
institutional, corporate and individual clients. The offices of G.T. Capital are
located at 50 California Street, 27th Floor, San Francisco, California 94111.
G.T. Capital is the U.S. member of the G.T. Group, an international investment
advisory organization established in 1969 for the purpose of rendering
international portfolio management services to both institutional and individual
clients. Since the G.T. Group was established, it has gained a reputation as a
leader in identifying and investing in emerging and established markets around
the world. As of August 31, 1995, aggregate assets under G.T. Group management
exceeded $22 billion.
In addition to the San Francisco office, the G.T. Group maintains fully staffed
investment offices in London, Hong Kong, Tokyo, Singapore and Sydney. Many of
G.T. Capital's investment managers are natives of the countries in which they
invest, and have the advantage of being close to the financial markets they
follow and speaking the languages of local corporate and government leaders.
G.T. Capital's experienced management team is situated to react quickly to
changes in foreign markets that are in time zones different from those in the
United States.
G.T. Capital and the other companies in the G.T. Group are subsidiaries of BIL
GT Group Limited ("BIL GT Group"), a financial services holding company. BIL GT
Group in turn is controlled by the Prince of Liechtenstein Foundation, which
serves as the parent organization for the various business enterprises of the
Princely Family of Liechtenstein. Its principal business address is Herrengasse
12, FL-9490, Vaduz, Liechtenstein.
In managing the Portfolios, G.T. Capital employs a team approach, taking
advantage of the resources of its various investment offices around the world
Prospectus Page 20
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
in seeking to achieve each Portfolio's investment objective. In addition, in
managing the Portfolios these individuals utilize the research and related work
of other members of G.T. Capital's investment staff.
The investment professionals primarily responsible for the portfolio management
of each Portfolio are as follows:
SMALL CAP PORTFOLIO
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE PORTFOLIO LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Kevin L. Wenck Portfolio Manager since Portfolio Portfolio Manager for G.T. Capital
San Francisco inception since 1991. Prior thereto Mr. Wenck
was a Portfolio Manager for Matuschka
Co. (Greenwich, CT)
</TABLE>
VALUE PORTFOLIO
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE PORTFOLIO LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Soraya M. Betterton Portfolio Manager since Portfolio Portfolio Manager for G.T. Capital
San Francisco inception
</TABLE>
In placing orders for a Portfolio's securities transactions, G.T. Capital seeks
to obtain the best net results. G.T. Capital has no agreement or commitment to
place orders with any broker/dealer. Debt securities generally are traded on a
"net" basis with a dealer acting as principal for its own account without a
stated commission, although the price of the security usually includes a profit
to the dealer. U.S. government securities and money market instruments generally
are traded in the OTC markets. In underwritten offerings, securities usually are
purchased at a fixed price which includes an amount of compensation to the
underwriter. On occasion, securities may be purchased directly from an issuer,
in which case no commissions or discounts are paid. Broker/dealers may receive
commissions on futures and options transactions. Consistent with its obligation
to obtain the best net results, G.T. Capital may consider a broker/ dealer's
sale of shares of the G.T. Global Mutual Funds as a factor in considering
through whom portfolio transactions will be effected. Brokerage transactions for
the Portfolios may be executed through any of the BIL GT Group affiliates.
G.T. Capital anticipates that the annual turnover rate of each Portfolio will
not exceed 75%. However, G.T. Capital does not regard portfolio turnover as a
limiting factor and will buy or sell securities for each Portfolio as necessary
in response to market conditions to meet each Portfolio's objective of long-term
capital appreciation. The portfolio turnover rate is calculated by dividing the
lesser of sales or purchases of portfolio securities by each Portfolio's average
month-end portfolio value, excluding short-term investments. For purposes of
this calculation, portfolio securities exclude purchases and sales of debt
securities having a maturity at the date of purchase of one year or less. High
portfolio turnover involves correspondingly greater transaction costs in the
form of dealer spreads or brokerage commissions and other costs that a Portfolio
will bear directly and may result in the realization of net capital gains that
are taxable to that Fund's shareholders.
DISTRIBUTION OF FUND SHARES. G.T. Global is the distributor, or principal
underwriter, of each Fund's Advisor Class shares. Like G.T. Capital, G.T. Global
is a subsidiary of BIL GT Group with offices at 50 California Street, 27th
Floor, San Francisco, California 94111.
G.T. Global, at its own expense, may provide additional promotional incentives
to broker/dealers that sell shares of the Funds and/or shares of the other G.T.
Global Mutual Funds. In some instances additional compensation or promotional
incentives may be offered to broker/dealers that have sold or may sell
significant amounts of shares during specified periods of time. Such
compensation and incentives may include, but are not limited to, cash,
merchandise, trips and financial assistance to brokers in connection with
preapproved conferences or seminars, sales or training programs for invited
sales personnel, payment for travel expenses
Prospectus Page 21
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
(including meals and lodging) incurred by sales personnel and members of their
families or other invited guests to various locations for such seminars or
training programs, seminars for the public, advertising and sales campaigns
regarding one or more of the G.T. Global Mutual Funds, and/or other events
sponsored by the broker/dealer.
In addition, G.T. Capital makes ongoing payments to brokerage firms, financial
institutions (including banks) and others that facilitate the administration and
servicing of Advisor Class shareholder accounts.
The Glass-Steagall Act and other applicable laws, among other things, generally
prohibit federally chartered or supervised banks from engaging in the business
of underwriting or distributing securities. Accordingly, G.T. Global intends to
engage banks (if at all) only to perform administrative and shareholder
servicing functions. If a bank was prohibited from so acting, its shareholder
clients would be permitted to remain shareholders, and alternative means for
continuing the servicing of such shareholders would be sought. It is not
expected that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
CONFIRMATIONS AND REPORTS TO SHAREHOLDERS. Each time a transaction is made that
affects a shareholder's account in a Fund, such as an additional investment,
redemption or the payment of a dividend or other distribution, the shareholder
will receive from the Transfer Agent a confirmation statement reflecting the
transaction. Confirmations for transactions effected pursuant to a Fund's
automatic dividend reinvestment program may be provided quarterly. Shortly after
the end of the Funds' fiscal year on December 31 and fiscal half-year on June 30
of each year, shareholders will receive an annual and semiannual report,
respectively. Under certain circumstances, duplicate mailings of such reports to
the same household may be consolidated. For additional copies of financial
reports, please call 1-800-223-2138. These reports list the securities held by
each Fund and include each Fund's financial statements. In addition, the federal
income tax status of distributions made by the Funds to shareholders will be
reported after the end of the fiscal year on Form 1099-DIV.
ORGANIZATION. The Company is organized as a Massachusetts business trust and is
registered with the SEC as a diversified open-end management investment company.
Each Fund corresponds to a distinct investment portfolio and a distinct series
of the Company's shares of beneficial interest. From time to time, the Company's
Board of Trustees may, in its discretion, establish additional funds and issue
shares of additional series of the Company's shares of beneficial interest.
Shares of each Fund are entitled to one vote per share (with proportional voting
for fractional shares) and are freely transferable. Shareholders have no
preemptive or conversion rights.
On any matter submitted to a vote of shareholders, shares of each Fund will be
voted by that Fund's shareholders individually when the matter affects the
specific interest of that Fund only, such as approval of that Fund's investment
management arrangements. In addition, each class of shares of a Fund has
exclusive voting rights with respect to its distribution plan. The shares of all
the Company's Funds will be voted in the aggregate on other matters, such as the
election of Trustees and ratification of the selection by the Board of Trustees
of the Company's independent accountants.
The Company normally will not hold meetings of shareholders, except as required
under the 1940 Act. The Company would be required to hold a shareholders meeting
in the event that at any time less than a majority of the Trustees holding
office had been elected by shareholders. Trustees shall continue to hold office
until their successors are elected and have qualified. Shares of the Company's
Funds do not have cumulative voting rights, which means that the holders of a
majority of the shares voting for the election of Trustees can elect all the
Trustees. A Trustee may be removed upon a
Prospectus Page 22
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
majority vote of the shareholders qualified to vote in the election.
Shareholders holding 10% of the Company's outstanding voting securities may call
a meeting of shareholders for the purpose of voting upon the question of removal
of any Trustee or for any other purpose. The 1940 Act requires the Company to
assist shareholders in calling such a meeting.
Advisor Class shares are offered through this Prospectus to certain investors.
There are two other classes of shares offered to investors through a separate
prospectus: Class A shares and Class B shares.
CLASS A. Class A shares are sold at net asset value plus an initial sales charge
of up to 4.75% of the public offering price imposed at the time of purchase.
This initial sales charge is reduced or waived for certain purchases. Class A
shares of each Fund also bear annual service and distribution fees of up to
0.35% of the average daily net assets of that class.
CLASS B. Class B shares are sold at net asset value with no initial sales charge
at the time of purchase. Class B shares bear annual service and distribution
fees of up to 1.00% of the average daily net assets of that class, and investors
pay a contingent deferred sales charge of up to 5% of the lesser of the original
purchase price or the net asset value of such shares at the time of redemption.
This deferred sales charge is waived for certain redemptions and is reduced for
shares held more than one year.
The different expenses borne by each class of shares will result in different
net asset values and dividends. The per share net asset value of the Advisor
Class shares of a Fund generally will be higher than that of a Class A and B
shares of that Fund because of the higher expenses borne by the Class A and B
shares. The per share dividends on Advisor Class shares of a Fund will generally
be higher than the per share dividends on Class A and B shares of that Fund as a
result of the service and distribution fees applicable with respect to Class A
and B shares. Consequently, during comparable periods, the Funds expect the
total return on an investment in shares of the Advisor Class will be higher than
the total return on Class A or B shares.
Pursuant to the Company's Declaration of Trust, the Company may issue an
unlimited number of shares for each of the Funds, including an unlimited number
of Class A, Class B and Advisor Class shares of each Fund. Each share of a Fund
represents an interest in the Fund only, has no par value, represents an equal
proportionate interest in the Fund with other shares of the Fund and is entitled
to such dividends and distributions out of the income earned and gain realized
on the assets belonging to the Fund as may be declared by the Board of Trustees.
Each Class A, Class B and Advisor Class share of each Fund is equal as to
earnings, assets and voting privileges to each other share in such Fund, except
as noted above, and each class bears the expenses, if any, related to the
distribution of its shares. Shares of the Funds, when issued, are fully paid and
nonassessable.
ORGANIZATION OF THE PORTFOLIOS. Each Portfolio is organized as a subtrust of a
New York common law trust. The Declaration of Trust provides that the Small Cap
Fund, Value Fund and other entities investing in its corresponding Portfolio
(E.G., other investment companies, insurance company separate accounts and
common and commingled trust funds), if any, each will be liable for all
obligations of that Portfolio. However, the Trustees of the Company believe that
the risk of such Funds' incurring financial loss because of such liability is
limited to circumstances in which both inadequate insurance existed and each of
the Portfolios itself was unable to meet its obligations, and that neither the
Funds nor their shareholders will be exposed to a material risk of liability by
reason of the Funds investing in their corresponding Portfolios.
Whenever a Fund is requested to vote on any proposal of its corresponding
Portfolio, such Fund will hold a meeting of such Fund's shareholders and will
cast its vote as instructed by its shareholders. As is true for many investment
companies, a majority of the outstanding voting securities can control the
results of certain shareholder votes. Because a Portfolio investors' votes are
proportionate to their percentage interests in that Portfolio, one or more other
Portfolio investors could, in certain instances, approve an action against which
a majority of the outstanding voting securities of its corresponding Fund had
voted. This could result in that Fund redeeming its investment in its
corresponding Portfolio, which could result in increased expenses for that Fund.
Whenever the shareholders of a Fund are called to vote on matters related to its
corresponding Portfolio, the Trustees of the Company shall vote shares for which
they receive no voting instructions in the same proportion as the shares for
which they do receive voting instructions. Any information received from the
Small Cap Portfolio and Value Portfolio in the Portfolio's reports to
shareholders will be provided to the shareholders of its corresponding Fund.
Prospectus Page 23
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
Each investor in a Portfolio, including its corresponding Fund, may add to or
reduce his or her investment in that Portfolio on each day the NYSE is open for
trading. As of the close of regular trading on the NYSE of each such day, the
value of each such investor's beneficial interest in that Portfolio will be
determined by multiplying the net asset value of that Portfolio by the
percentage, effective for that day, which represents that investor's share of
the aggregate beneficial interests in that Portfolio. Any additions or
reductions, which are to be effected as of the close of the regular trading on
the NYSE, on such day, will then be effected. The investor's percentage of the
aggregate beneficial interests in that Portfolio will then be recomputed as the
percentage equal to the fraction (i) the numerator of which is the value of such
investor's investment in that Portfolio as of the close of regular trading on
the NYSE, on such day plus or minus, as the case may be, the amount of net
additions to or reductions from the investor's investment in that Portfolio
effected as of that time, and (ii) the denominator of which is the aggregate net
asset value of that Portfolio as of that time, on such day, plus or minus, as
the case may be, the amount of net additions to or reductions from the aggregate
investments in that Portfolio by all investors in that Portfolio. The percentage
so determined will then be applied to determine the value of the investor's
interest in that Portfolio as of the close of regular trading on the NYSE, on
the following day the NYSE is open for trading.
Each Portfolio is classified as a "diversified" fund under the 1940 Act, which
means that, with respect to 75% of the Portfolio's total assets: (i) no more
than 5% will be invested in the securities of any one issuer, and (ii) each
Portfolio will purchase no more than 10% of the outstanding voting securities of
any one issuer.
SHAREHOLDER INQUIRIES. Shareholder inquiries may be made by calling the Funds
toll free at (800) 223-2138 or by writing to the Funds at 50 California Street,
27th Floor, San Francisco, California 94111.
PERFORMANCE INFORMATION. Each Fund, from time to time, may include information
on its investment results and/or comparisons of its investment results to
various unmanaged indices or results of other mutual funds or groups of mutual
funds in advertisements, sales literature or reports furnished to present or
prospective shareholders.
In such materials, a Fund may quote its average annual total return
("Standardized Return"). Standardized Return is calculated separately for each
class of shares of each Fund. Standardized Return shows percentage rates
reflecting the average annual change in the value of an assumed investment in
the Fund at the end of a one-year period and at the end of five- and ten-year
periods, reduced by the maximum applicable sales charge imposed on sales of Fund
shares. If a one-, five- and/or ten-year period has not yet elapsed, data will
be provided as of the end of a shorter period corresponding to the life of the
Fund. Standardized Return assumes the reinvestment of all dividends and capital
gain distributions at net asset value on the reinvestment date established by
the Board of Trustees.
In addition, in order to more completely represent a Fund's performance or more
accurately compare such performance to other measures of investment return, a
Fund also may include in advertisements, sales literature and shareholder
reports other total return performance data ("Non-Standardized Return").
Non-Standardized Return reflects percentage rates of return encompassing all
elements of return (i.e., income and capital appreciation or depreciation); it
assumes reinvestment of all dividends and capital gain distributions.
Non-Standardized Return may be quoted for the same or different periods as those
for which Standardized Return is quoted; it may consist of an aggregate or
average annual percentage rate of return, actual year-by-year rates or any
combination thereof. Non-Standardized Return may or may not take sales charges
into account; performance data calculated without taking the effect of sales
charges into account will be higher than data including the effect of such
charges.
Each Fund's performance data reflect past performance and are not necessarily
indicative of future results. A Fund's investment results will vary from time to
time depending upon market conditions, the composition of its portfolio and its
operating expenses. These factors and possible differences in calculation
methods should be considered when comparing a Fund's investment results with
those published for other investment companies, other investment vehicles and
unmanaged indices. A Fund's results also should be considered relative to the
risks associated with its investment objective and policies. Each Fund will
include performance data for all classes of shares of the Fund in any
advertisement or information including performance data for such Fund. See
"Investment Results" in the Statement of Additional Information.
Each Fund's annual report contains additional information with respect to its
performance. The annual report is available to investors upon request and free
of charge.
Prospectus Page 24
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
TRANSFER AGENT. Shareholder servicing, reporting and general transfer agent
functions for the Funds are performed by G.T. Global Investor Services, Inc. The
Transfer Agent is an affiliate of G.T. Capital and G.T. Global, a subsidiary of
BIL GT Group and maintains offices at California Plaza, 2121 N. California
Boulevard, Suite 450, Walnut Creek, California 94596.
CUSTODIAN. State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110 is custodian of each Fund's and each Portfolio's assets.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 M Street, N.W.,
Washington, D.C. 20036-5891, acts as counsel to the Company and the Funds.
Kirkpatrick & Lockhart LLP also acts as counsel to G.T. Capital, G.T. Global and
G.T. Global Investor Services, Inc. in connection with other matters.
INDEPENDENT ACCOUNTANTS. Each Portfolio's and each Fund's independent
accountants are Coopers & Lybrand L.L.P., One Post Office Square, Boston,
Massachusetts 02109. Coopers & Lybrand L.L.P. conducts an annual audit of the
Funds and Portfolios, assists in the preparation of the Funds' and Portfolios'
federal and state income tax returns and consults with the Company, the Funds
and the Portfolios as to matters of accounting, regulatory filings, and federal
and state income taxation.
MULTIPLE TRANSLATIONS OF THE PROSPECTUS. This Prospectus may be translated into
other languages. In the event of any inconsistency or ambiguity as to the
meaning of any word or phrase contained in a translation, the English text shall
prevail.
Prospectus Page 25
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 26
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 27
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 28
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 29
<PAGE>
<TABLE>
<S> <C> <C>
[G.T. GLOBAL LOGO]
G.T. GLOBAL
MUTUAL FUNDS
P.O. Box 7345 ADVISOR CLASS
SAN FRANCISCO, CA 94120-7345 ACCOUNT APPLICATION
800/223-2138
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/ / INDIVIDUAL / / JOINT TENANT / / GIFT/TRANSFER FOR MINOR / / TRUST / / CORP.
ACCOUNT REGISTRATION / / NEW ACCOUNT / / ACCOUNT REVISION (Account No.: -------------------------------------)
NOTE: Trust registrations should specify name of trustee(s), beneficiary(ies) and date of trust instrument. Registration for
Uniform Gifts/Transfers to Minors accounts should be in the name of one custodian and one minor and include the state under
which the custodianship is created.
----------------------------------------------------------------
- ------------------------------------------------------------ Social Security Number / / or Tax I.D. Number / / (Check
Owner applicable box)
- ------------------------------------------------------------ If more than one owner, social security number or taxpayer
Co-owner 1 identification number should be provided for first owner listed.
- ------------------------------------------------------------ If a purchase is made under Uniform Gift/Transfer to Minors Act,
Co-owner 2 social security number of the minor must be provided.
Resident of / / U.S. / / Other (specify) ----------------
- -------------------------------------------------------------------------------------- ( )
Street Address ---------------------------
- -------------------------------------------------------------------------------------- Home Telephone
City, State, Zip Code ( )
---------------------------
Business Telephone
FUND SELECTION $500 minimum initial investment for each Fund is required. Checks should be made payable to "G.T. GLOBAL."
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INITIAL INITIAL
INVESTMENT INVESTMENT
407 / / G.T. GLOBAL WORLDWIDE GROWTH FUND $ 413 / / G.T. LATIN AMERICA GROWTH FUND $
---------- ----------
405 / / G.T. GLOBAL INTERNATIONAL GROWTH FUND $ 424 / / G.T. GLOBAL AMERICA SMALL CAP GROWTH $
---------- FUND ----------
416 / / G.T. GLOBAL EMERGING MARKETS FUND $ 406 / / G.T. GLOBAL AMERICA GROWTH FUND $
---------- ----------
411 / / G.T. GLOBAL HEALTH CARE FUND $ 423 / / G.T. GLOBAL AMERICA VALUE FUND $
---------- ----------
415 / / G.T. GLOBAL TELECOMMUNICATIONS FUND $ 404 / / G.T. GLOBAL JAPAN GROWTH FUND $
---------- ----------
419 / / G.T. GLOBAL INFRASTRUCTURE FUND $ 410 / / G.T. GLOBAL GROWTH & INCOME FUND $
---------- ----------
417 / / G.T. GLOBAL FINANCIAL SERVICES FUND $ 409 / / G.T. GLOBAL GOVERNMENT INCOME FUND $
---------- ----------
421 / / G.T. GLOBAL NATURAL RESOURCES FUND $ 408 / / G.T. GLOBAL STRATEGIC INCOME FUND $
---------- ----------
422 / / G.T. GLOBAL CONSUMER PRODUCTS $ 418 / / G.T. GLOBAL HIGH INCOME FUND $
AND SERVICES FUND ---------- ----------
402 / / G.T. GLOBAL NEW PACIFIC GROWTH FUND $ 401 / / G.T. GLOBAL DOLLAR FUND $
---------- ----------
403 / / G.T. GLOBAL EUROPE GROWTH FUND $
----------
TOTAL INITIAL INVESTMENT: $
----------
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AGREEMENTS & SIGNATURES
By the execution of this Account Application, I/we represent and warrant that
I/we have full right, power and authority and am/are of legal age in my/our
state of residence to make the investment applied for pursuant to this
Application. The person(s), if any, signing on behalf of the investor
represent and warrant that they are duly authorized to sign this Application
and to purchase, redeem or exchange shares of the Fund(s) on behalf of the
investor. I/WE HEREBY AFFIRM THAT I/WE HAVE RECEIVED A CURRENT ADVISOR CLASS
PROSPECTUS OF THE G.T. FUND(S) IN WHICH I/WE AM/ARE INVESTING AND I/WE AGREE
TO ITS TERMS AND CONDITIONS.
I/WE AND MY/OUR AGENTS, ASSIGNS AND SUCCESSORS UNDERSTAND AND AGREE THAT THE
ACCOUNT WILL BE SUBJECT TO THE TELEPHONE EXCHANGE AND TELEPHONE REDEMPTION
PRIVILEGES DESCRIBED IN THE CURRENT PROSPECTUS TO WHICH THIS APPLICATION IS
ATTACHED AND AGREE THAT G.T. GLOBAL FINANCIAL SERVICES, INC., G.T. GLOBAL
GROWTH SERIES, G.T. INVESTMENT FUNDS, INC., G.T. INVESTMENT PORTFOLIOS, INC.
AND THE FUNDS' TRANSFER AGENT, THEIR OFFICERS AND EMPLOYEES, WILL NOT BE
LIABLE FOR ANY LOSS OR DAMAGES ARISING OUT OF ANY SUCH TELEPHONE, TELEX OR
TELEGRAPHIC INSTRUCTIONS REASONABLY BELIEVED TO BE GENUINE, INCLUDING ANY SUCH
LOSS OR DAMAGES DUE TO NEGLIGENCE ON THE PART OF SUCH ENTITIES. THE
INVESTOR(S) CERTIFY(IES) AND AGREE(S) THAT THE CERTIFICATIONS, AUTHORIZATIONS,
DIRECTIONS AND RESTRICTIONS CONTAINED HEREIN WILL CONTINUE UNTIL G.T. GLOBAL
FINANCIAL SERVICES, INC., G.T. GLOBAL GROWTH SERIES, G.T. INVESTMENT FUNDS,
INC., G.T. INVESTMENT PORTFOLIOS, INC. OR THE FUNDS' TRANSFER AGENT RECEIVES
WRITTEN NOTICE OF ANY CHANGE OR REVOCATION. ANY CHANGE IN THESE INSTRUCTIONS
MUST BE IN WRITING AND IN SOME CASES, AS DESCRIBED IN THE PROSPECTUS, REQUIRES
THAT ALL SIGNATURES BE GUARANTEED.
PLEASE INDICATE THE NUMBER OF SIGNATURES REQUIRED TO PROCESS CHECKS OR
WRITTEN REDEMPTION REQUESTS: / / ONE / / TWO / / THREE / / FOUR.
(If you do not indicate the number of required signatures, ALL account
owners must sign checks and/or written redemption requests.)
Under penalties of perjury, I certify that the Taxpayer Identification
Number provided on this form is my (or my employer's, trust's, minor's or
other payee's) true, correct and complete Number and may be assigned to any
new account opened under the exchange privilege. I further certify that I am
(or the payee whose Number is given is) not subject to backup withholding
because: (a) I am (or the payee is) exempt from backup withholding; (b) the
Internal Revenue Service has not notified me that I am (or the payee is)
subject to backup withholding as a result of a failure to report all interest
or dividends; OR (c) the I.R.S. has notified me that I am (the payee is) no
longer subject to backup withholding;
OR, / / I am (the payee is) subject to backup withholding.
ALL ACCOUNT OWNERS MUST SIGN BELOW (Minors are not authorized signers)
Account revisions may require that signatures be guaranteed. Please see the
Prospectus.
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Date
X X
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X X
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<PAGE>
ACCOUNT PRIVILEGES
CHECKWRITING PRIVILEGE
Checkwriting privilege available on Advisor Class shares of G.T. Global Dollar
Fund and G.T. Global Government Income Fund.
/ / Check here if desired. You will be sent a book of checks.
CAPITAL GAINS AND DIVIDEND DISTRIBUTIONS
All capital gains and dividend distributions will be reinvested in additional
shares of Advisor class unless appropriate boxes below are checked:
/ / Pay capital gain distributions only in cash / / Pay dividends only in
cash / / Pay capital gain distributions AND dividends in cash.
SPECIAL CAPITAL GAINS AND DIVIDEND DISTRIBUTIONS OPTION
Pay distributions noted above to another G.T. Global Fund: Fund Name
- -----------------------------------------
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TELEPHONE EXCHANGE AND REDEMPTION AUTHORITY TO TRANSMIT REDEMPTION PROCEEDS TO
PRE-DESIGNATED ACCOUNT
I/We, either directly or through the Authorized Agent, if any, named By completing the following section, redemptions that
below, hereby authorize the Transfer Agent of the G.T. Global Mutual exceed $1,000 may be wired or mailed to a Pre-Designated
Funds, to honor any telephone, telex or telegraphic instructions Account at your bank. (Wiring instructions may be obtained
reasonably believed to be authentic for redemption and/or exchange from your bank.) A bank wire service fee may be charged.
between a similar class of shares of any of the Funds distributed by ----------------------------------------------------------
G.T. Global Financial Services, Inc. Name of Bank
----------------------------------------------------------
Bank Address
----------------------------------------------------------
Bank A.B.A Number Account Number
----------------------------------------------------------
Names(s) in which Bank Account is Established
A corporation (or partnership) must also submit a
"Corporate Resolution" (or "Certificate of Partnership")
indicating the names and titles of Officers authorized to
act on its behalf.
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FOR USE BY AUTHORIZED AGENT ONLY
We hereby submit this Account Application for the purchase of Advisor Class shares in accordance with the terms of our Advisor Class
Agreement with G.T. Global Financial Services, Inc. and with the Prospectus and Statement of Additional Information of each Fund
purchased.
- ------------------------------------------------------------------------------------------------------------------------------------
Advisor's Name
- ------------------------------------------------------------------------------------------------------------------------------------
Main Office Address Branch Number (if applicable) Representative's Number Representative's
Name
( )
- -------------------------------------------------------------------------------------------------------------------------
Branch Address Telephone
- -------------------------------------------------------------------------------------------------------------------------
Advisor's Authorized Signature Title
</TABLE>
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
[LOGO]
G.T. GLOBAL GROUP OF FUNDS
G.T. GLOBAL OFFERS A BROAD RANGE OF MUTUAL FUNDS TO COMPLEMENT MANY
INVESTORS' PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE
G.T. GLOBAL FUNDS, PLEASE CONTACT YOUR INVESTMENT COUNSELOR OR CALL G.T.
GLOBAL DIRECTLY AT 1-800-824-1580.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
G.T. GLOBAL: WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
G.T. GLOBAL: INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside
the U.S.
G.T. GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
/ / GLOBAL THEME FUNDS
G.T. GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
G.T. GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
G.T. GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
G.T. GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
G.T. GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
/ / REGIONALLY DIVERSIFIED FUNDS
G.T. GLOBAL: NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
G.T. GLOBAL: EUROPE GROWTH FUND
Focuses on investment opportunities in the new, unified Europe
G.T. LATIN AMERICA GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. domiciled companies
G.T. GLOBAL: AMERICA GROWTH FUND
Concentrates on small and medium-sized companies in the U.S.
G.T. GLOBAL: AMERICA VALUE FUND
Concentrates on equity securities of U.S. companies believed to be undervalued
G.T. GLOBAL: JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND INCOME FUND
G.T. GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world
INCOME FUNDS
G.T. GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
G.T. GLOBAL STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
G.T. GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
MONEY MARKET FUND
G.T. GLOBAL DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY G.T. GLOBAL GROWTH SERIES, GROWTH
PORTFOLIO, G.T. CAPITAL MANAGEMENT, INC. OR G.T. GLOBAL FINANCIAL SERVICES,
INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF
ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
AMEPV510005MC
<PAGE>
[LOGO]
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
ADVISOR CLASS
50 California Street, 27th Floor
San Francisco, California 94111
(415) 392-6181
Toll Free: (800) 824-1580
Statement of Additional Information
October 18, 1995
- --------------------------------------------------------------------------------
This Statement of Additional Information relates to the Advisor Class shares of
G.T. Global: America Small Cap Growth Fund ("Small Cap Fund") and G.T. Global:
America Value Fund ("Value Fund") (individually, "Fund," or collectively, a
"Funds"). Each Fund is a diversified series of G.T. Global Growth Series
("Company"), a registered open-end management investment company. The Small Cap
Fund and Value Fund invest all of their investable assets in the Small Cap
Portfolio and Value Portfolio (individually, "Portfolio," collectively,
"Portfolios"), respectively. This Statement of Additional Information concerning
the Funds, which is not a prospectus, supplements and should be read in
conjunction with the Funds' current Advisor Class Prospectus dated October 18,
1995, a copy of which is available without charge by writing to the above
address or calling the Funds at the toll-free telephone number printed above.
G.T. Capital Management, Inc. ("G.T. Capital") serves as each Portfolio's
investment manager and administrator. The distributor of the shares of each Fund
is G.T. Global Financial Services, Inc. ("G.T. Global"). The Funds' transfer
agent is G.T. Global Investor Services, Inc. ("G.T. Services" or "Transfer
Agent").
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
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Page No.
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Investment Objectives and Policies....................................................................................... 2
Options and Futures...................................................................................................... 4
Risk Factors............................................................................................................. 11
Investment Limitations................................................................................................... 12
Execution of Portfolio Transactions...................................................................................... 14
Trustees and Executive Officers.......................................................................................... 16
Management............................................................................................................... 18
Valuation of Shares...................................................................................................... 19
Information Relating to Sales and Redemptions............................................................................ 20
Taxes.................................................................................................................... 21
Additional Information................................................................................................... 23
Investment Results....................................................................................................... 24
Description of Debt Ratings.............................................................................................. 29
Financial Statements..................................................................................................... 31
</TABLE>
Statement of Additional Information Page 1
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
INVESTMENT OBJECTIVES
AND POLICIES
- --------------------------------------------------------------------------------
SELECTION OF INVESTMENTS
The investment objective of each Fund is long-term capital appreciation. The
Small Cap Fund and Value Fund each seeks to achieve its investment objective by
investing all of its investable assets in the Small Cap Portfolio and Value
Portfolio, respectively, each of which is a subtrust (a "series") of Growth
Portfolio (an open-end management investment company) with an investment
objective that is identical to that of its corresponding Fund. Whenever the
phrase "all of the Funds' investable assets" is used herein and in the
Prospectus, it means that the only investment securities that will be held by a
Fund will be that Fund's interest in its corresponding Portfolio. A Fund may
withdraw its investment in its corresponding Portfolio at any time, if the Board
of Trustees of the Company determines that it is in the best interests of such
Fund and its shareholders to do so. Upon any such withdrawal, a Fund's assets
would be invested in accordance with the investment policies described below and
in the Prospectus with respect to its corresponding Portfolio.
For investment purposes, an issuer is considered as domiciled in the United
States if it is incorporated under the laws of any of its states or territories
or the District of Columbia, and either (i) at least 50% of the value of its
assets is located in the United States, or (ii) it normally derives at least 50%
of its income from operations or sales in the United States.
INVESTMENTS IN OTHER INVESTMENT COMPANIES
The Portfolios may invest in the securities of closed-end investment companies
within the limits of the Investment Company Act of 1940, as amended ("1940
Act"). These limitations currently provide that, in general, each Portfolio may
purchase shares of a closed-end investment company unless (a) such a purchase
would cause a Portfolio to own more than 3% of the total outstanding voting
stock of the investment company or (b) such a purchase would cause a Portfolio
to have more than 5% of its assets invested in the investment company or more
than 10% of its assets invested in an aggregate of all such investment
companies. Investment in investment companies may involve the payment of
substantial premiums above the value of such companies' portfolio securities.
The Portfolios do not intend to invest in such vehicles or funds unless G.T.
Capital determines that the potential benefits of such investments justify the
payment of any applicable premiums. The yield of such securities will be reduced
by operating expenses of such companies including payments to the investment
managers of those investment companies.
WARRANTS OR RIGHTS
Warrants or rights may be acquired by a Portfolio in connection with other
securities or separately and provide the Portfolio with the right to purchase at
a later date other securities of the issuer. Investments in warrants may not
exceed 5% of the value of the Portfolio's net assets, and not more than 2% of
such assets may be invested in warrants or rights which are not listed on the
New York or American Stock Exchange. Warrants or rights acquired by a Portfolio
in units or attached to securities will be deemed to be without value for
purpose of this restriction. These limits are not fundamental policies of the
Portfolios and may be changed by a vote of the Portfolios' Board of Trustees
without shareholder approval.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Portfolio may make secured
loans of portfolio securities amounting to not more than 30% of its total
assets. Securities loans are made to broker/dealers or institutional investors
pursuant to agreements requiring that the loans continuously be secured by
collateral at least equal at all times to the value of the securities lent, plus
any accrued interest, "marked to market" on a daily basis. The collateral
received will consist of cash, U.S. short-term government securities, bank
letters of credit or such other collateral as may be permitted under a
Portfolios' investment policies and by regulatory agencies and approved by
Growth Portfolio's Board of Trustees. The Portfolios may pay reasonable
administrative and custodial fees in connection with the loans of their
securities. While the securities loans are outstanding, the Portfolios will
continue to receive the equivalent of the interest or dividends paid by the
issuer on the securities, as well as interest on the investment of the
collateral or a fee from the borrower. If the borrower failed to maintain the
requisite amount of collateral, the loan would terminate automatically and the
Portfolio could use the collateral to replace the securities while holding the
borrower liable for any excess of the replacement cost over the value of the
collateral. Each Portfolio has a right to call each loan at any time and obtain
the securities on five business days' notice. The Portfolios will not have the
right to vote equity securities while they are being lent, but they retain the
Statement of Additional Information Page 2
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
right to call for the return of the loaned securities at any time on reasonable
notice and may call in a loan in anticipation of any important vote. The
Portfolios also will be able to call such loans if G.T. Capital made the
investment decision that the loaned securities should be sold. On termination of
a loan, the borrower would be required to return the securities to the Portfolio
and any gain or loss in market price during the loan would inure to the
Portfolio. The risks in lending portfolio securities, as with other extensions
of secured credit, consist of possible delays in receiving additional collateral
or in recovery of the securities or possible loss of rights in the collateral
should the borrower fail financially. In the event of the default or bankruptcy
by such party, the Portfolios would seek promptly to liquidate the collateral.
To the extent that the proceeds from any such sale of such collateral upon a
default in the obligation to repurchase were less than the repurchase price, the
Portfolios would suffer a loss. The law regarding the rights of the Portfolios
is unsettled with respect to a borrower becoming subject to bankruptcy or
similar proceedings. Under these circumstances, there may be a restriction on
the Portfolios' ability to sell the collateral and the Portfolios could suffer a
loss. Loans, however, will be made only to firms deemed by G.T. Capital to be of
good standing and will not be made unless, in the judgment of G.T. Capital, the
consideration to be earned from such loans would justify the risk.
COMMERCIAL BANK OBLIGATIONS
For the purposes of each Portfolio's investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks are obligations of
the issuing bank and may be general obligations of the parent bank. Such
obligations, however, may be limited by the terms of a specific obligation and
by government regulation. Although a Portfolio typically will acquire
obligations issued and supported by the credit of U.S. banks having total assets
at the time of purchase of $1 billion or more, this $1 billion figure is not an
investment policy or restriction of any Portfolio. For the purposes of
calculation with respect to the $1 billion figure, the assets of a bank will be
deemed to include the assets of its U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS
Each Portfolio will invest only in repurchase agreements collateralized at all
times in an amount at least equal to the repurchase price plus accrued interest.
To the extent that the proceeds from any sale of such collateral upon a default
in the obligation to repurchase were less than the repurchase price, the Fund
would suffer a loss. Repurchase agreements carry certain risks not associated
with direct investments in securities, including possible decline in the market
value of the underlying securities and delays and costs to the Portfolio if the
other party to the repurchase agreement becomes bankrupt. If the financial
institution which is party to the repurchase agreement petitions for bankruptcy
or otherwise becomes subject to bankruptcy or other liquidation proceedings,
there may be restrictions on the Portfolio's ability to sell the collateral and
the Portfolio could suffer a loss. However, with respect to financial
institutions whose bankruptcy or liquidation proceedings are subject to the U.S.
Bankruptcy Code, the Portfolios intends to comply with provisions under the U.S.
Bankruptcy Code that would allow it immediately to resell the collateral. G.T.
Capital reviews and monitors the creditworthiness of such institutions under the
general supervision of Growth Portfolio's Board. There is no limitation on the
amount of the Portfolios' assets that may be subject to repurchase agreements at
any given time. The Portfolios will not enter into a repurchase agreement with a
maturity of more than seven days if, as a result, more than 15% of the value of
its net assets would be invested in such repurchase agreements and other
illiquid investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
Each Portfolio's borrowings will not exceed 33 1/3% of its total assets, i.e.,
each Portfolio's total assets at all times will equal at least 300% of the
amount of outstanding borrowings. No Portfolio will purchase securities while
borrowings are outstanding. If market fluctuations in the value of a Portfolio's
portfolio holdings or other factors cause the ratio of the Portfolio's total
assets to outstanding borrowings to fall below 300%, within three days
(excluding Sundays and holidays) of such event the Portfolio may be required to
sell portfolio securities to restore the 300% asset coverage, even though from
an investment standpoint such sales might be disadvantageous. Each Portfolio
also may borrow up to 5% of its total assets for temporary or emergency purposes
other than to meet redemptions. Any borrowing by a Portfolio may cause greater
fluctuation in the value of its shares than would be the case if the Portfolio
did not borrow.
Each Portfolio's fundamental investment limitations permit the Portfolio to
borrow money for leveraging purposes. Each Portfolio, however, currently is
prohibited, pursuant to a non-fundamental investment policy, from borrowing
money in order to purchase securities. Nevertheless, this policy may be changed
in the future by Growth Portfolio's Board of Trustees. In the event that a
Portfolio employs leverage in the future, it would be subject to certain
additional risks. Use of leverage creates an opportunity for greater growth of
capital but would exaggerate any increases or decreases in a Portfolio's net
asset value. When the income and gains on securities purchased with the proceeds
of borrowings exceed the costs of such borrowings, a Portfolio's earnings or net
asset value will increase faster than otherwise would be the case;
Statement of Additional Information Page 3
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
conversely, if such income and gains fail to exceed such costs, a Portfolio's
earnings or net asset value would decline faster than would otherwise be the
case.
Each Portfolio may enter into reverse repurchase agreements. A reverse
repurchase agreement is a borrowing transaction in which the Portfolio transfers
possession of a security to another party, such as a bank or broker/dealer in
return for cash, and agrees to repurchase the security in the future at an
agreed upon price, which includes an interest component. Each Portfolio also may
engage in "roll" borrowing transactions which involve the Portfolio's sale of
Government National Mortgage Association ("GNMA") certificates or other
securities together with a commitment (for which a Portfolio may receive a fee)
to purchase similar, but not identical, securities at a future date. Each
Portfolio will maintain, in a segregated account with a custodian, cash, U.S.
government securities or other liquid, high grade debt securities in an amount
sufficient to cover its obligations under "roll" transactions and reverse
repurchase agreements with broker/dealers. No segregation is required for
reverse repurchase agreements with banks.
- --------------------------------------------------------------------------------
OPTIONS AND FUTURES
- --------------------------------------------------------------------------------
SPECIAL RISKS OF OPTIONS AND FUTURES
The use of options and futures contracts involves special considerations and
risks, as described below. Risks pertaining to particular instruments are
described in the sections that follow.
(1) Successful use of most of these instruments depends upon G.T.
Capital's ability to predict movements of the overall securities markets,
which requires different skills than predicting changes in the prices of
individual securities. While G.T. Capital is experienced in the use of these
instruments, there can be no assurance that any particular strategy adopted
will succeed.
(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of the
investments being hedged. For example, if the value of an instrument used in
a short hedge increased by less than the decline in value of the hedged
investment, the hedge would not be fully successful. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which the hedging instrument is traded. The effectiveness of
hedges using hedging instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
investments being hedged.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly
or partially offsetting the negative effect of unfavorable price movements
in the investments being hedged. However, hedging strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. For example, if a Portfolio entered
into a short hedge because G.T. Capital projected a decline in the price of
a security in the Portfolio's securities portfolio, and the price of that
security increased instead, the gain from that increase might be wholly or
partially offset by a decline in the price of the hedging instrument.
Moreover, if the price of the hedging instrument declined by more than the
increase in the price of the security, the Portfolio could suffer a loss. In
either such case, the Portfolio would have been in a better position had it
not hedged at all.
(4) As described below, a Portfolio might be required to maintain assets
as "cover," maintain segregated accounts or make margin payments when it
takes positions in instruments involving obligations to third parties (I.E.,
instruments other than purchased options). If the Portfolio were unable to
close out its positions in such instruments, it might be required to
continue to maintain such assets or accounts or make such payments until the
position expired or matured. The requirements might impair the Portfolio's
ability to sell a portfolio security or make an investment at a time when it
would otherwise be favorable to do so, or require that the Portfolio sell a
portfolio security at a disadvantageous time. The Portfolio's ability to
close out a position in an instrument prior to expiration or maturity
depends on the existence of a liquid secondary market or, in the absence of
such a market, the ability and willingness of the other party to the
transaction ("contra party") to enter into a transaction closing out the
position. Therefore, there is no assurance that any position can be closed
out at a time and price that is favorable to a Portfolio.
Statement of Additional Information Page 4
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
WRITING CALL OPTIONS
A Portfolio may write (sell) call options on securities and indices. Call
options generally will be written on securities that, in the opinion of G.T.
Capital, are not expected to make any major price moves in the near future but
that, over the long term, are deemed to be attractive investments for the
Portfolio.
A call option gives the holder (buyer) the right to purchase a security at a
specified price (the exercise price) at any time until (American style) or on
(European style) a certain date (the expiration date). So long as the obligation
of the writer of a call option continues, he or she may be assigned an exercise
notice, requiring him or her to deliver the underlying security against payment
of the exercise price. This obligation terminates upon the expiration of the
call option, or such earlier time at which the writer effects a closing purchase
transaction by purchasing an option identical to that previously sold.
Portfolio securities on which call options may be written will be purchased
solely on the basis of investment considerations consistent with each
Portfolio's investment objective. When writing a call option, a Portfolio, in
return for the premium, gives up the opportunity for profit from a price
increase in the underlying security above the exercise price, and retains the
risk of loss should the price of the security decline. Unlike one who owns
securities not subject to an option, a Portfolio has no control over when it may
be required to sell the underlying securities, since most options may be
exercised at any time prior to the option's expiration. If a call option that a
Portfolio has written expires, the Portfolio will realize a gain in the amount
of the premium; however, such gain may be offset by a decline in the market
value of the underlying security during the option period. If the call option is
exercised, the Portfolio will realize a gain or loss from the sale of the
underlying security, which will be increased or offset by the premium received.
Each Portfolio does not consider a security covered by a call option to be
"pledged" as that term is used in the Portfolio's policy that limits the
pledging or mortgaging of its assets.
Writing call options can serve as a limited short hedge because declines in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security appreciates to a price
higher than the exercise price of the call option, it can be expected that the
option will be exercised and a Portfolio will be obligated to sell the security
at less than its market value.
The premium that a Portfolio receives for writing a call option is deemed to
constitute the market value of an option. The premium a Portfolio will receive
from writing a call option will reflect, among other things, the current market
price of the underlying investment, the relationship of the exercise price to
such market price, the historical price volatility of the underlying investment,
and the length of the option period. In determining whether a particular call
option should be written, G.T. Capital will consider the reasonableness of the
anticipated premium and the likelihood that a liquid secondary market will exist
for those options.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security from being called, or
to permit the sale of the underlying security. Furthermore, effecting a closing
transaction will permit a Portfolio to write another call option on the
underlying security with either a different exercise price or expiration date or
both.
Each Portfolio will pay transaction costs in connection with the writing of
options and in entering into closing purchase contracts. Transaction costs
relating to options activity normally are higher than those applicable to
purchases and sales of portfolio securities.
The exercise price of the options may be below, equal to or above the current
market values of the underlying securities at the time the options are written.
From time to time, a Portfolio may purchase an underlying security for delivery
in accordance with the exercise of an option, rather than delivering such
security from its portfolio. In such cases, additional costs will be incurred.
A Portfolio will realize a profit or loss from a closing purchase transaction if
the cost of the transaction is less or more, respectively, than the premium
received from writing the option. Because increases in the market price of a
call option generally will reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset in whole or in part by appreciation of the underlying
security owned by the Portfolio.
WRITING PUT OPTIONS
The Portfolios may write put options on securities and indices. A put option
gives the purchaser of the option the right to sell, and the writer (seller) the
obligation to buy, the underlying security at the exercise price at any time
until (American style) or on (European style) the expiration date. The operation
of put options in other respects, including their related risks and rewards, is
substantially identical to that of call options.
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A Portfolio generally would write put options in circumstances where G.T.
Capital wishes to purchase the underlying security for the Portfolio's portfolio
at a price lower than the current market price of the security. In such event,
the Portfolio would write a put option at an exercise price that, reduced by the
premium received on the option, reflects the lower price it is willing to pay.
Since the Portfolio also would receive interest on debt securities maintained to
cover the exercise price of the option, this technique could be used to enhance
current return during periods of market uncertainty. The risk in such a
transaction would be that the market price of the underlying security would
decline below the exercise price, less the premium received.
Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security depreciates to a price
lower than the exercise price of the put option, it can be expected that the put
option will be exercised and a Portfolio will be obligated to purchase the
security at more than its market value.
PURCHASING PUT OPTIONS
Each Portfolio may purchase put options on securities and indices. As the holder
of a put option, a Portfolio would have the right to sell the underlying
security at the exercise price at any time until (American style) or on
(European style) the expiration date. A Portfolio may enter into closing sale
transactions with respect to such options, exercise such options or permit such
options to expire.
A Portfolio may purchase a put option on an underlying security ("protective
put") owned by the Portfolio in order to protect against an anticipated decline
in the value of the security. Such hedge protection is provided only during the
life of the put option when the Portfolio, as the holder of the put option, is
able to sell the underlying security at the put exercise price regardless of any
decline in the underlying security's market price. For example, a put option may
be purchased in order to protect unrealized appreciation of a security when G.T.
Capital deems it desirable to continue to hold the security because of tax
considerations. The premium paid for the put option and any transaction costs
would reduce any profit otherwise available for distribution when the security
eventually is sold.
A Portfolio also may purchase put options at a time when the Portfolio does not
own the underlying security. By purchasing put options on a security it does not
own, a Portfolio seeks to benefit from a decline in the market price of the
underlying security. If the put option is not sold when it has remaining value,
and if the market price of the underlying security remains equal to or greater
than the exercise price during the life of the put option, the Portfolio will
lose its entire investment in the put option. In order for the purchase of a put
option to be profitable, the market price of the underlying security must
decline sufficiently below the exercise price to cover the premium and
transaction costs, unless the put option is sold in a closing sale transaction.
PURCHASING CALL OPTIONS
Each Portfolio may purchase call options on securities and indices. As the
holder of a call option, a Portfolio would have the right to purchase the
underlying security at the exercise price at any time until (American style) or
on (European style) the expiration date. A Portfolio may enter into closing sale
transactions with respect to such options, exercise such options or permit such
options to expire.
Call options may be purchased by a Portfolio for the purpose of acquiring the
underlying security for its portfolio. Utilized in this fashion, the purchase of
call options would enable a Portfolio to acquire the security at the exercise
price of the call option plus the premium paid. At times, the net cost of
acquiring the security in this manner may be less than the cost of acquiring the
security directly. This technique also may be useful to the Portfolios in
purchasing a large block of securities that would be more difficult to acquire
by direct market purchases. As long as it holds such a call option, rather than
the underlying security itself, a Portfolio is partially protected from any
unexpected decline in the market price of the underlying security and, in such
event, could allow the call option to expire, incurring a loss only to the
extent of the premium paid for the option.
Each Portfolio also may purchase call options on underlying securities it owns
in order to protect unrealized gains on call options previously written by it. A
call option could be purchased for this purpose where tax considerations make it
inadvisable to realize such gains through a closing purchase transaction. Call
options also may be purchased at times to avoid realizing losses that would
result in a reduction of a Portfolio's current return. For example, where a
Portfolio has written a call option on an underlying security having a current
market value below the price at which such security was purchased by the
Portfolio, an increase in the market price could result in the exercise of the
call option written by the Portfolio and the realization of a loss on the
underlying security. Accordingly, the Portfolio could purchase a call option on
the same underlying security, which could be exercised to fulfill the
Portfolio's delivery obligations under its written call (if
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it is exercised). This strategy could allow the Portfolio to avoid selling the
portfolio security at a time when it has an unrealized loss; however, the
Portfolio would have to pay a premium to purchase the call option plus
transaction costs.
Aggregate premiums paid for put and call options will not exceed 5% of such
Portfolio's total assets at the time of purchase.
Options may be either listed on an exchange or traded over-the-counter ("OTC").
Listed options are third-party contracts (I.E., performance of the obligations
of the purchaser and seller is guaranteed by the exchange or clearing
corporation), and have standardized strike prices and expiration dates. OTC
options are two-party contracts with negotiated strike prices and expiration
dates. A Portfolio will not purchase an OTC option unless it believes that daily
valuations for such options are readily obtainable. OTC options differ from
exchange-traded options in that OTC options are transacted with dealers directly
and not through a clearing corporation (which guarantees performance).
Consequently, there is a risk of non-performance by the dealer. Since no
exchange is involved, OTC options are valued on the basis of a quote provided by
the dealer. In the case of OTC options, there can be no assurance that a liquid
secondary market will exist for any particular option at any specific time.
The staff of the Securities and Exchange Commission ("SEC") considers purchased
OTC options to be illiquid securities. A Portfolio may also sell OTC options
and, in connection therewith, segregate assets or cover its obligations with
respect to OTC options written by the Portfolio. The assets used as cover for
OTC options written by a Portfolio will be considered illiquid unless the OTC
options are sold to qualified dealers who agree that the Portfolio may
repurchase any OTC option it writes at a maximum price to be calculated by a
formula set forth in the option agreement. The cover for an OTC option written
subject to this procedure would be considered illiquid only to the extent that
the maximum repurchase price under the formula exceeds the intrinsic value of
the option.
A Portfolio's ability to establish and close out positions in exchange-listed
options depends on the existence of a liquid market. A Portfolio intends to
purchase or write only those exchange-traded options for which there appears to
be a liquid secondary market. However, there can be no assurance that such a
market will exist at any particular time. Closing transactions can be made for
OTC options only by negotiating directly with the contra party, or by a
transaction in the secondary market if any such market exists. Although a
Portfolio will enter into OTC options only with contra parties that are expected
to be capable of entering into closing transactions with the Portfolio, there is
no assurance that the Portfolio will in fact be able to close out an OTC option
position at a favorable price prior to expiration. In the event of insolvency of
the contra party, the Portfolio might be unable to close out an OTC option
position at any time prior to its expiration.
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When a Portfolio writes a call on
an index, it receives a premium and agrees that, prior to the expiration date,
the purchaser of the call, upon exercise of the call, will receive from the
Portfolio an amount of cash if the closing level of the index upon which the
call is based is greater than the exercise price of the call. The amount of cash
is equal to the difference between the closing price of the index and the
exercise price of the call times a specified multiple (the "multiplier"), which
determines the total dollar value for each point of such difference. When a
Portfolio buys a call on an index, it pays a premium and has the same rights as
to such call as are indicated above. When a Portfolio buys a put on an index, it
pays a premium and has the right, prior to the expiration date, to require the
seller of the put, upon the Portfolio's exercise of the put, to deliver to the
Portfolio an amount of cash if the closing level of the index upon which the put
is based is less than the exercise price of the put, which amount of cash is
determined by the multiplier, as described above for calls. When a Portfolio
writes a put on an index, it receives a premium and the purchaser has the right,
prior to the expiration date, to require the Portfolio to deliver to it an
amount of cash equal to the difference between the closing level of the index
and the exercise price times the multiplier, if the closing level is less than
the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Portfolio writes a
call on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. A Portfolio can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, a Portfolio cannot, as a practical matter, acquire and
hold a portfolio containing exactly the same securities as underlie the index
and, as a result, bears a risk that the value of the securities held will vary
from the value of the index.
Even if a Portfolio could assemble a securities portfolio that exactly
reproduced the composition of the underlying index, it still would not be fully
covered from a risk standpoint because of the "timing risk" inherent in writing
index options. When
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an index option is exercised, the amount of cash that the holder is entitled to
receive is determined by the difference between the exercise price and the
closing index level on the date when the option is exercised. As with other
kinds of options, the Portfolio as the call writer will not know that it has
been assigned until the next business day at the earliest. The time lag between
exercise and notice of assignment poses no risk for the writer of a covered call
on a specific underlying security, such as common stock, because there the
writer's obligation is to deliver the underlying security, not to pay its value
as of a fixed time in the past. So long as the writer already owns the
underlying security, it can satisfy its settlement obligations by simply
delivering it, and the risk that its value may have declined since the exercise
date is borne by the exercising holder. In contrast, even if the writer of an
index call holds securities that exactly match the composition of the underlying
index, it will not be able to satisfy its assignment obligations by delivering
those securities against payment of the exercise price. Instead, it will be
required to pay cash in an amount based on the closing index value on the
exercise date; and by the time it learns that it has been assigned, the index
may have declined, with a corresponding decline in the value of its securities
portfolio. This "timing risk" is an inherent limitation on the ability of index
call writers to cover their risk exposure by holding securities positions.
If a Portfolio has purchased an index option and exercises it before the closing
index value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Portfolio will be required to pay the
difference between the closing index value and the exercise price of the option
(times the applicable multiplier) to the assigned writer.
INTEREST RATE AND STOCK INDEX FUTURES CONTRACTS
Each Portfolio may enter into interest rate or stock index futures contracts
("Futures" or "Futures Contracts") as a hedge against changes in prevailing
levels of interest rates or stock price levels in order to establish more
definitely the effective return on securities held or intended to be acquired by
the Portfolio. A Portfolio's hedging may include sales of Futures as an offset
against the effect of expected increases in interest rates or decreases in stock
prices, and purchases of Futures as an offset against the effect of expected
declines in interest rates or increases in stock prices.
The Portfolios only will enter into Futures Contracts that are traded on futures
exchanges and are standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading thereon in the United States are
regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC").
Although techniques other than sales and purchases of Futures Contracts could be
used to reduce a Portfolio's exposure to interest rate and stock market
fluctuations, the Portfolio may be able to hedge its exposure more effectively
and at a lower cost through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument for a
specified price at a designated date, time and place. A stock index Futures
Contract provides for the delivery, at a designated date, time and place, of an
amount of cash equal to a specified dollar amount times the difference between
the stock index value at the close of trading on the contract and the price at
which the Futures Contract is originally struck; no physical delivery of stocks
comprising the index is made. Brokerage fees are incurred when a Futures
Contract is bought or sold, and margin deposits must be maintained at all times
the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for
financial instruments, Futures Contracts usually are closed out before the
delivery date. Closing out an open Futures Contract sale or purchase is effected
by entering into an offsetting Futures Contract purchase or sale, respectively,
for the same aggregate amount of the identical financial instrument and the same
delivery date. If the offsetting purchase price is less than the original sale
price, the Portfolio realizes a gain; if it is more, the Portfolio realizes a
loss. Conversely, if the offsetting sale price is more than the original
purchase price, the Portfolio realizes a gain; if it is less, the Portfolio
realizes a loss. The transaction costs also must be included in these
calculations. There can be no assurance, however, that a Portfolio will be able
to enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If a Portfolio is not able to enter into an
offsetting transaction, the Portfolio will continue to be required to maintain
the margin deposits on the Futures Contract.
As an example of an offsetting transaction, the contractual obligations arising
from the sale of one September stock index Futures Contract on an exchange may
be fulfilled at any time before delivery under the Futures Contract is required
(I.E., on a specified date in September, the "delivery month") by the purchase
of the same September Futures Contract on the same exchange. In such instance,
the difference between the price at which the Futures Contract was sold and the
price paid for the offsetting purchase, after allowance for transaction costs,
represents the profit or loss to the Portfolio.
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Each Portfolio's Futures transactions will be entered into for hedging purposes;
that is, Futures Contracts will be sold to protect against a decline in the
price of securities that a Portfolio owns, or Futures Contracts will be
purchased to protect the Portfolio against an increase in the price of
securities it has committed to purchase or expects to purchase.
"Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by a Portfolio in order to initiate Futures trading and to maintain
the Portfolio's open positions in Futures Contracts. A margin deposit made when
the Futures Contract is entered into ("initial margin") is intended to ensure
the Portfolio's performance under the Futures Contract. The margin required for
a particular Futures Contract is set by the exchange on which the Futures
Contract is traded and may be significantly modified from time to time by the
exchange during the term of the Futures Contract.
Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Portfolio entered into the Futures
Contract will be made on a daily basis as the price of the underlying security
or index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.
RISKS OF USING FUTURES CONTRACTS. The prices of Futures Contracts are
volatile and are influenced by, among other things, actual and anticipated
changes in interest rates and in stock market movements, which in turn are
affected by fiscal and monetary policies and national and international
political and economic events.
There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities in the Portfolio's portfolio being
hedged. The degree of imperfection of correlation depends upon circumstances
such as variations in speculative market demand for Futures and for securities,
including technical influences in Futures trading; and differences between the
financial instruments being hedged and the instruments underlying the standard
Futures Contracts available for trading. A decision of whether, when and how to
hedge involves skill and judgment, and even a well-conceived hedge may be
unsuccessful to some degree because of unexpected market behavior or interest
rate trends.
Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and options on Futures Contract prices during a single trading day. The
daily limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option prices occasionally have moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.
If a Portfolio were unable to liquidate a Futures or option on Futures position
due to the absence of a liquid secondary market or the imposition of price
limits, it could incur substantial losses. The Portfolio would continue to be
subject to market risk with respect to the position. In addition, except in the
case of purchased options, the Portfolio would continue to be required to make
daily variation margin payments and might be required to maintain the position
being hedged by the Future or option or to maintain cash or securities in a
segregated account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
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OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities, except that
options on Futures Contracts give the purchaser the right, in return for the
premium paid, to assume a position in a Futures Contract (a long position if the
option is a call and a short position if the option is a put) at a specified
exercise price at any time during the period of the option. Upon exercise of the
option, the delivery of the Futures position by the writer of the option to the
holder of the option will be accompanied by delivery of the accumulated balance
in the writer's Futures margin account, which represents the amount by which the
market price of the Futures Contract, at exercise, exceeds (in the case of a
call) or is less than (in the case of a put) the exercise price of the option on
the Futures Contract. If an option is exercised on the last trading day prior to
the expiration date of the option, the settlement will be made entirely in cash
equal to the difference between the exercise price of the option and the closing
level of the securities or index upon which the Futures Contract is based on the
expiration date. Purchasers of options who fail to exercise their options prior
to the exercise date suffer a loss of the premium paid.
The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities or indices.
If a Portfolio writes an option on a Futures Contract, it will be required to
deposit initial and variation margin pursuant to requirements similar to those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.
A Portfolio may seek to close out an option position by selling an option
covering the same Futures Contract and having the same exercise price and
expiration date. The ability to establish and close out positions on such
options is subject to the maintenance of a liquid secondary market.
LIMITATION ON USE OF FUTURES AND OPTIONS ON FUTURES
To the extent that a Portfolio enters into Futures Contracts and options on
Futures Contracts, in each case other than for BONA FIDE hedging purposes (as
defined by the CFTC), the aggregate initial margin and premiums required to
establish these positions (excluding the amount by which options are
"in-the-money") will not exceed 5% of the liquidation value of the Portfolio's
portfolio, after taking into account unrealized profits and unrealized losses on
any contracts the Portfolio has entered into. In general, a call option on a
Futures Contract is "in-the-money" if the value of the underlying Futures
Contract exceeds the strike, I.E., exercise, price of the call; a put option on
a Futures Contract is "in-the-money" if the value of the underlying Futures
Contract is exceeded by the strike price of the put. This guideline may be
modified by the Portfolios' and the Company's Board of Trustees without a
shareholder vote. This limitation does not limit the percentage of a Portfolio's
assets at risk to 5%.
COVER
Transactions using Futures Contracts and options (other than options that a
Portfolio has purchased) expose the Portfolio to an obligation to another party.
A Portfolio will not enter into any such transactions unless it owns either (1)
an offsetting ("covered") position in securities or other options or Futures
Contracts, or (2) cash, receivables and short-term debt securities with a value
sufficient at all times to cover its potential obligations not covered as
provided in (1) above. Each Portfolio will comply with SEC guidelines regarding
cover for these instruments and, if the guidelines so require, set aside cash,
U.S. government securities or other liquid, high-grade debt securities in a
segregated account with its custodian in the prescribed amount.
Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Futures Contract or option is open, unless they
are replaced with other appropriate assets. If a large portion of a Portfolio's
assets are used for cover or segregated accounts, it could affect portfolio
management or the Portfolio's ability to meet redemption requests or other
current obligations.
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RISK FACTORS
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For a description of the risk factors attendant to the Portfolios' use of
options and futures, see "Options and Futures -- Special Risks of Options and
Futures."
ILLIQUID SECURITIES. A Portfolio may invest up to 15% of its net assets in
illiquid securities. Securities may be considered illiquid if a Portfolio cannot
reasonably expect within seven days to sell the securities for approximately the
amount at which the Portfolio values such securities. See "Investment
Limitations." The sale of illiquid securities if they can be sold at all,
generally will require more time and result in higher brokerage charges or
dealer discounts and other selling expenses than the sale of liquid securities
such as securities eligible for trading on U.S. securities exchanges or in the
OTC markets. Moreover, restricted securities, which may be illiquid for purposes
of this limitation, often sell, if at all, at a price lower than similar
securities that are not subject to restrictions on resale.
With respect to liquidity determinations generally, Growth Portfolio's Board of
Trustees has the ultimate responsibility for determining whether specific
securities, including restricted securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933, are
liquid or illiquid. The Board of Trustees has delegated the function of making
day-to-day determinations of liquidity to G.T. Capital in accordance with
procedures approved by the Portfolios' Board of Trustees. G.T. Capital takes
into account a number of factors in reaching liquidity decisions, including, but
not limited to: (i) the frequency of trading in the security; (ii) the number of
dealers who make quotes for the security; (iii) the number of dealers who have
undertaken to make a market in the security; (iv) the number of other potential
purchasers; and (v) the nature of the security and how trading is effected
(e.g., the time needed to sell the security, how offers are solicited, and the
mechanics of transfer.) G.T. Capital monitors the liquidity of securities in
each Portfolio's securities portfolio and periodically reports such
determinations to the Portfolio's Board of Trustees.
RISKS OF DEBT SECURITIES. Each Portfolio is permitted to purchase investment
grade debt securities. In selecting securities for each Fund, G.T. Capital
reviews and monitors the creditworthiness of each issuer and issue and analyzes
interest rate trends and specific developments which may affect individual
issuers, in addition to relying on ratings assigned by S&P, Moody's or another
nationally recognized statistical rating organization ("NRSRO") as indicators of
quality. Debt securities rated Baa by Moody's or BBB by S&P are investment
grade, although Moody's considers securities rated Baa to have speculative
characteristics. Changes in economic conditions or other circumstances are more
likely to lead to a weakened capacity for such securities to make principal and
interest payments than is the case for higher grade debt securities. Each
Portfolio is also permitted to purchase debt securities that are not rated by
S&P, Moody's or another NRSRO but that G.T. Capital determines to be of
comparable quality to that of rated securities in which such Portfolio may
invest. Such securities are included in the computation of any percentage
limitations applicable to the comparable rated securities.
Ratings of debt securities represent the rating agencies' opinions regarding
their quality, are not a guarantee of quality and may be reduced after a
Portfolio has acquired the security. G.T. Capital will consider such an event in
determining whether a Portfolio should continue to hold the security but is not
required to dispose of it. Credit ratings attempt to evaluate the safety of
principal and interest payments and do not reflect an assessment of the
volatility of the security's market value or the liquidity of an investment in
the security. Also, NRSROs may fail to make timely changes in credit ratings in
response to subsequent events, so that an issuer's current financial condition
may be better or worse than the rating indicates.
Statement of Additional Information Page 11
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
THE FUNDS
The Small Cap Fund and Value Fund each has the following fundamental investment
policy to enable it to invest in the Small Cap Portfolio and Value Portfolio
respectively:
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
All other fundamental investment policies, and the non-fundamental policies, of
each Fund and its corresponding Portfolio are identical. Therefore, although the
following discusses the investment policies of each Portfolio and its Board of
Trustees, it applies equally to each Fund and its Board of Trustees.
Each Portfolio has adopted the following fundamental investment limitations as
fundamental policies which (unless otherwise noted) may not be changed without
approval by the holders of the lesser of (i) 67% of that Portfolio's shares
represented at a meeting at which more than 50% of the outstanding shares are
represented, and (ii) more than 50% of the Portfolio's outstanding shares
whenever a Fund is requested to vote on a change in the investment limitations
of its corresponding Portfolio, such Fund will hold a meeting of its
shareholders and will cast its votes as instructed by the shareholders. No
Portfolio may:
(1) Invest in companies for the purpose of exercising control or
management;
(2) Purchase or sell real estate; provided that a Portfolio may invest
in securities secured by real estate or interests therein or issued by
companies that invest in real estate or interests therein;
(3) Purchase or sell interests in oil, gas or other mineral exploration
or development programs, except that the Portfolio may invest in the
securities of companies that engage in these activities;
(4) Purchase or sell commodities or commodity contracts, except that the
Portfolio may purchase and sell futures contracts and options;
(5) Mortgage, pledge or in any other manner transfer as security for any
indebtedness, any of its assets except to secure permitted borrowings.
Collateral arrangements with respect to initial or variation margin for
futures contracts and options will not be deemed to be a pledge of a
Portfolio's assets;
(6) Borrow money in excess of 33 1/3% of the Portfolio's total assets
(including the amount borrowed), less all liabilities and indebtedness
(other than borrowing). Transactions involving options, futures contracts,
options on futures contracts, and collateral arrangements relating thereto
will not be deemed to be borrowings;
(7) Purchase securities on margin or effect short sales, except that a
Portfolio may obtain such short-term credits as may be necessary for the
clearance of purchases or sales of securities and except in connection with
the use of options, futures contracts or options thereon. The Portfolios may
make deposits of margin in connection with futures contracts and options
thereon;
(8) Participate on a joint or a joint and several basis in any trading
account in securities. (The "bunching" of orders for the sale or purchase of
marketable portfolio securities with other accounts under the management of
G.T. Capital to save brokerage costs or average prices among them is not
deemed to result in a securities trading account);
(9) Make loans, except that the Portfolio may purchase debt securities
and enter into repurchase agreements and make loans of portfolio securities;
(10) Purchase or retain the securities of an issuer if, to the knowledge
of the Portfolio after reasonable inquiry, any of the Trustees or officers
of the Portfolio or the Portfolio's investment adviser or distributor
individually own
Statement of Additional Information Page 12
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
beneficially more than 1/2 of 1% of the outstanding securities of such
issuer and together own beneficially more than 5% of the securities;
(11) Underwrite securities of other issuers, except to the extent that,
in connection with the disposition of portfolio securities, the Portfolio
may be deemed an underwriter under federal or state securities laws; and
(12) Invest more than 25% of the value of the Portfolio's total assets in
securities of issuers conducting their principal business activities in any
one industry, except that this limitation shall not apply to securities
issued or guaranteed as to principal and interest by the U.S. government or
any of its agencies or instrumentalities.
In addition, each Portfolio has adopted as a fundamental investment policy a
classification as a "diversified" portfolio under the 1940 Act. This means that,
with respect to 75% of the Portfolio's total assets, no more than 5% will be
invested in the securities of any one issuer, and the Portfolio will purchase no
more than 10% of the outstanding voting securities of any one issuer. This
policy cannot be changed without approval by the holders of a majority of the
Portfolio's outstanding voting securities as defined above and in the
Prospectus.
The following investment restrictions of each Portfolio are not fundamental
policies and may be changed by vote of the Portfolio's Board of Trustees without
shareholder approval. Each Portfolio may not:
(1) Invest more than 15% of its net assets in illiquid securities, a
term which means securities that cannot be disposed of within seven days in
the normal course of business at approximately the amount at which the
Portfolio has valued the securities and includes, among other things,
repurchase agreements maturing in more than seven days;
(2) Invest more than 5% of its assets in securities of companies which,
together with any predecessors, have been in operation for less than three
years;
(3) Borrow money except for temporary or emergency purposes (not for
leveraging) not in excess of 33 1/3% of the value of the Portfolio's total
assets;
(4) Enter into a futures contract or an option on a futures contract, in
each case other than for BONA FIDE hedging purposes (as defined by the
CFTC), if the aggregate initial margin and premiums required to establish
all of these positions (excluding the amount by which options are
"in-the-money") exceeds 5% of the liquidation value of the Portfolio's
portfolio, after taking into account unrealized profits and unrealized
losses on any contracts the Portfolio has entered into; or
(5) Purchase securities of other investment companies, except to the
extent permitted by the 1940 Act, in the open market at no more than
customary commission rates. This limitation does not apply to securities
received or acquired as dividends, through offers of exchange, or as a
result of reorganization, consolidation, or merger.
----------------------------
A Portfolio will not knowingly exercise rights or otherwise acquire securities
when to do so would jeopardize the Portfolio's status under the 1940 Act as a
diversified investment company. If a percentage restriction on investment or
utilization of assets in a fundamental policy or restriction is adhered to at
the time an investment is made, a later change in percentage ownership of a
security or kind of securities resulting from changing market values or a
similar type of event will not be considered a violation of a Portfolio's
investment policies or restrictions. A Portfolio may exchange securities,
exercise conversion or subscription rights, warrants, or other rights to
purchase common stock or other equity securities and may hold, except to the
extent limited by the 1940 Act, any such securities so acquired without regard
to the Portfolio's investment policies and restrictions. The original cost of
the securities so acquired will be included in any subsequent determination of a
Portfolio's compliance with the investment percentage limitations referred to
above and in the Prospectus.
Investors should refer to the Prospectus for further information with respect to
each Fund's investment objective, which may not be changed without the approval
of Fund shareholders, and its corresponding Portfolio's investment objective,
which may be changed without the approval of its shareholders, and other
investment policies, techniques and limitations which may or may not be changed
without shareholder approval.
Statement of Additional Information Page 13
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
EXECUTION OF PORTFOLIO TRANSACTIONS
- --------------------------------------------------------------------------------
Subject to policies established by Growth Portfolio's Board of Trustees, G.T.
Capital is responsible for the execution of the Portfolios' securities
transactions and the selection of brokers/dealers who execute such transactions
on behalf of the Portfolios. In executing portfolio transactions, G.T. Capital
seeks the best net results for each Portfolio, taking into account such factors
as the price (including the applicable brokerage commission or dealer spread),
size of the order, difficulty of execution and operational facilities of the
firm involved. Although G.T. Capital generally seeks reasonably competitive
commission rates and spreads, payment of the lowest commission or spread is not
necessarily consistent with the best net results. While the Portfolios may
engage in soft dollar arrangements for research services, as described below,
the Portfolios have no obligation to deal with any broker/dealer or group of
broker/dealers in the execution of portfolio transactions.
Consistent with the interests of the Portfolios, G.T. Capital may select brokers
to execute the Portfolios' securities transactions on the basis of the research
services they provide to G.T. Capital for its use in managing the Portfolios and
its other advisory accounts. Such services may include furnishing analyses,
reports and information concerning issuers, industries, securities, geographic
regions, economic factors and trends, portfolio strategy, and performance of
accounts, and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). Research and brokerage
services received from such broker is in addition to, and not in lieu of, the
services required to be performed by G.T. Capital under the Management Contract
(defined below). A commission paid to such broker may be higher than that which
another qualified broker would have charged for effecting the same transaction,
provided that G.T. Capital determines in good faith that such commission is
reasonable in terms either of that particular transaction or the overall
responsibility of G.T. Capital to the Portfolios and its other clients and that
the total commissions paid by each Fund will be reasonable in relation to the
benefits received by the Portfolios over the long term. Research services may
also be received from dealers who execute Portfolio transactions in
over-the-counter markets.
G.T. Capital may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by the Portfolio toward payment of the Portfolio's
expenses, such as custodian fees.
Investment decisions for each Portfolio and for other investment accounts
managed by G.T. Capital are made independently of each other in light of
differing conditions. However, the same investment decision occasionally may be
made for two or more of such accounts, including one or more Portfolios. In such
cases, simultaneous transactions may occur. Purchases or sales are then
allocated as to price or amount in a manner deemed fair and equitable to all
accounts involved. While in some cases this practice could have a detrimental
effect upon the price or value of the security as far as a Portfolio is
concerned, in other cases G.T. Capital believes that coordination and the
ability to participate in volume transactions will be beneficial to the
Portfolios.
Under a policy adopted by the Portfolios' Boards of Trustees, and subject to the
policy of obtaining the best net results, G.T. Capital may consider a
broker/dealer's sale of the shares of the Funds and the other funds for which
G.T. Capital serves as investment manager and/or administrator in selecting
broker/dealers for the execution of portfolio transactions. This policy does not
imply a commitment to execute portfolio transactions through all broker/dealers
that sell shares of the Funds and such other funds.
Each Portfolio contemplates that, consistent with the policy of obtaining the
best net results, brokerage transactions may be conducted through certain
companies that are members of the BIL GT Group. The Portfolios' Boards of
Trustees have adopted procedures in conformity with Rule 17e-1 under the 1940
Act to ensure that all brokerage commissions paid to such affiliates are
reasonable and fair in the context of the market in which they are operating.
Any such transactions will be effected and related compensation paid only in
accordance with applicable SEC regulations.
Statement of Additional Information Page 14
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
PORTFOLIO TRADING AND TURNOVER
Although the Portfolios generally do not intend to trade for short-term profits,
the securities in a Portfolio's portfolio will be sold whenever G.T. Capital
believes it is appropriate to do so, without regard to the length of time a
particular security may have been held, except when doing so could violate the
Short-Short Limitation described below in "Taxes."
Each Portfolio engages in portfolio trading when G.T. Capital has concluded that
the sale of a security owned by the Portfolio and/or the purchase of another
security of better value can enhance principal and/or increase income. A
security may be sold to avoid any prospective decline in market value, or a
security may be purchased in anticipation of a market rise. Consistent with each
Portfolio's investment objective, a security also may be sold and a comparable
security purchased coincidentally in order to take advantage of what is believed
to be a disparity in the normal yield and price relationship between the two
securities.
Each Portfolio anticipates that its annual portfolio turnover rate should not
exceed 75%; however, the portfolio turnover rate will not be a limiting factor
when management deems portfolio changes appropriate. A 75% portfolio turnover
rate would occur if the lesser of the value of purchases or sales of portfolio
securities for a Portfolio for a year (excluding purchases of U.S. Treasury and
other securities with a maturity at the date of purchase of one year or less)
were equal to 75% of the average monthly value of the securities, excluding
short-term investments, held by that Fund during such year. Higher portfolio
turnover involves correspondingly greater brokerage commissions and other
transaction costs that a Portfolio will bear directly.
Statement of Additional Information Page 15
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
TRUSTEES AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The Company's Trustees and Executive Officers are listed below.
<TABLE>
<CAPTION>
Name, Position(s) with the Principal Occupations and Business
Company and Address Experience for Past 5 Years
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
David A. Minella*, 42 Director of BIL GT Group Limited (holding company of the various international G.T.
Trustee, Chairman of the Board and companies) since 1990; President, Asset Management Division, BIL GT Group Limited since
President 1995; Director and President of G.T. Capital since 1989; Director and President of G.T.
50 California St. Global since 1987; and Director and President of G.T. Services since 1990. Mr. Minella
San Francisco, CA 94111 also is a director or trustee of each of the other investment companies registered under
the 1940 Act that is managed or administered by G.T. Capital.
C. Derek Anderson, 54 Chairman and Chief Executive Officer, Anderson Capital Management, Inc. from 1988 to
Trustee present; Chairman and Chief Executive Officer, Plantagenet Holdings, Ltd. from 1991 to
220 Sansome Street present; Director, Munsingwear, Inc.; Director, American Heritage Group Inc.; and
Suite 400 Director, various other companies. Mr. Anderson also is a director or trustee of each of
San Francisco, CA 94104 the other investment companies registered under the 1940 Act that is managed or
administered by G.T. Capital.
Frank S. Bayley, 55 A partner of Baker & McKenzie (a law firm), and serves as Director and Chairman of C.D.
Trustee Stimson Company (a private investment company), and Trustee, Seattle Art Museum. Mr.
2 Embarcadero Center Bayley also is a director or trustee of each of the other investment companies registered
Suite 2400 under the 1940 Act that is managed or administered by G.T. Capital.
San Francisco, CA 94111
Arthur C. Patterson, 52 Managing Partner of Accel Partners (a venture capital firm). Mr. Patterson also serves as
Trustee a director of various computing and software companies. Mr. Patterson also is a director
One Embarcadero Center or trustee of each of the other investment companies registered under the 1940 Act that is
Suite 3820 managed or administered by G.T. Capital.
San Francisco, CA 94111
Ruth H. Quigley, 59 Private investor. From 1984 to 1986, Ms. Quigley was President of Quigley Friedlander &
Trustee Co., Inc. (a financial advisory services firm). Ms. Quigley also is a director or trustee
1055 California Street of each of the other investment companies registered under the 1940 Act that is managed or
San Francisco, CA 94108 administered by G.T. Capital.
F. Christian Wignall, 39 Senior Vice President, Chief Investment Officer -- Global Equities and a Director of G.T.
Vice President and Chief Investment Capital since 1987, and Chairman of the Investment Policy Committee of the affiliated
Officer -- international G.T. companies since 1990.
Global Equities
50 California Street
San Francisco, CA 94111
Gary Kreps, 40 Senior Vice President and Chief Investment Officer -- Global Fixed Income Investments and
Vice President and Chief Investment a director of G.T. Capital since 1992. Prior to joining G.T. Capital, Mr. Kreps was Senior
Officer -- Global Fixed Income Vice President of the Putnam Companies from 1988 to 1992.
50 California Street
San Francisco, CA 94111
</TABLE>
Statement of Additional Information Page 16
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
<TABLE>
<CAPTION>
Name, Position(s) with the Principal Occupations and Business
Company and Address Experience for Past 5 Years
- --------------------------------------- ------------------------------------------------------------------------------------------
Helge K. Lee, 48 Senior Vice President, General Counsel and Secretary of G.T. Capital, G.T. Global and G.T.
Vice President and Secretary Services since May, 1994. Mr. Lee was the Senior Vice President, General Counsel and
50 California Street Secretary of Strong/Corneliuson Management, Inc. and Secretary of each of the Strong Funds
San Francisco, CA 94111 from October, 1991 through May, 1994. For more than five years prior to October, 1991, he
was a shareholder in the law firm of Godfrey & Kahn, S.C., Milwaukee, Wisconsin.
<S> <C>
Peter R. Guarino, 36 Assistant General Counsel of G.T. Capital, G.T. Global and G.T. Services since 1991. From
Assistant Secretary 1989 to 1991, Mr. Guarino was an attorney at The Dreyfus Corporation. Prior thereto, he
50 California Street was associated with Colonial Management Associates, Inc.
San Francisco, CA 94111
David J. Thelander, 40 Assistant General Counsel of G.T. Capital since January 1995. From 1993 to 1994, Mr.
Assistant Secretary Thelander was an associate at Kirkpatrick & Lockhart LLP (a law firm). Prior thereto he
50 California Street was an attorney with the U.S. Securities and Exchange Commission.
San Francisco, CA 94111
James R. Tufts, 37 Senior Vice President -- Finance and Administration of G.T. Capital, G.T. Global and G.T.
Chief Financial Officer Services since 1994. Prior thereto, Mr. Tufts was Vice President -- Finance of G.T.
50 California Street Capital and G.T. Global since 1987; Vice President -- Finance of G.T. Services since 1990;
San Francisco, CA 94111 and a Director of G.T. Capital, G.T Global and G.T. Services since 1991.
Kenneth W. Chancey, 50 Vice President of G.T. Capital and G.T. Global since 1992. Mr. Chancey was Vice President
Vice President and Principal Accounting of Putnam Fiduciary Trust Company from 1989 to 1992.
Officer
50 California Street
San Francisco, CA 94111
<FN>
- --------------
* Mr. Minella is an "interested person" of the Company as defined by the 1940
Act due to his affiliation with the G.T. companies.
</TABLE>
The Board of Trustees has a Nominating and Audit Committee, comprised of Ms.
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Company and its
Funds and recommending firms to serve as independent auditors of the Company.
Each of the Trustees and officers of the Company is also a Director and officer
of G.T. Investment Portfolios, Inc., G.T. Investment Funds, Inc. and G.T. Global
Developing Markets Fund, Inc. and a Trustee and officer of G.T. Greater Europe
Fund, G.T. Global Variable Investment Trust, G.T. Global Variable Investment
Series, Global High Income Portfolio and Global Investment Portfolio, which also
are registered investment companies managed by G.T. Capital. Each Trustee and
Officer serves in total as a Director and or Trustee and Officer, respectively,
of 10 registered investment companies with 41 series managed or administered by
G.T. Capital. The Company pays each Trustee who is not a director, officer or
employee of G.T. Capital or any affiliated company $5,000 per annum plus $300
per Fund for each meeting of the Board attended by the Trustee, and reimburses
travel and other expenses incurred in connection with attendance at such
meetings. Other Trustees and officers receive no compensation or expense
reimbursements from the Company. For the fiscal year ended December 31, 1994,
the Company paid Mr. Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley
Trustee's fees and expense reimbursements of $22,801, $23,518, $19,104 and
$19,941, respectively. For the year ended December 31, 1994, Mr. Anderson, Mr.
Bayley, Mr. Patterson and Ms. Quigley, who are not directors, officers or
employees of G.T. Capital or any affiliated company, received total compensation
of $86,260.80, $91,278.72, $74,492.00 and $78,665.19, respectively, from the 38
G.T. Funds for which he or she served as a Director or Trustee. Fees and
expenses disbursed to the Trustees contained no accrued or payable pension or
retirement benefits. As of the date of this Statement of Additional Information,
the officers and Trustees and their families as a group owned in the aggregate
beneficially or of record less than 1% of the outstanding shares of any Fund or
of all the Company's Funds, except in Worldwide Growth Fund, in the aggregate.
Statement of Additional Information Page 17
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES RELATING TO THE FUNDS AND THE
PORTFOLIOS
G.T. Capital serves as each Portfolio's investment manager and administrator
under an Investment Management and Administration Contract ("Portfolio
Management Contract") between each Portfolio and G.T. Capital. G.T. Capital
serves as administrator to each Fund under an administration contract between
the Company and G.T. Capital ("Administration Contract"). The Administration
Contract will not be deemed an advisory contract, as defined under the 1940 Act.
As investment manager and administrator, G.T. Capital makes all investment
decisions for each Portfolio and, as administrator, administers each Portfolio's
and Fund's affairs. Among other things, G.T. Capital furnishes the services and
pays the compensation and travel expenses of persons who perform the executive,
administrative, clerical and bookkeeping functions of the Portfolio and the
Funds, and provides suitable office space, and necessary small office equipment
and utilities. For these services, each Fund will pay administration fees to
G.T. Capital at the annualized rate of 0.25% of the Fund's average daily net
assets. In addition, each Fund bears a pro rata portion of the investment
management and administration fee paid by its corresponding Portfolio to G.T.
Capital. Each Portfolio pays such fees based on its average daily net assets,
computed daily and paid monthly, at the annualized rate of 0.475% on the first
$500 million, 0.45% on the next $500 million, 0.425% on the next $500 million,
and 0.40% on all amounts thereafter.
The Portfolio Management Contract and the Administration Contract each have an
initial two-year term with respect to each Portfolio and its corresponding Fund.
The Portfolio Management Contract may be renewed with respect to a Portfolio for
additional one-year terms thereafter, provided that any such renewal has been
specifically approved at least annually by: (i) the Portfolios' Board of
Trustees, or by the vote of a majority of the Portfolio's outstanding voting
securities (as defined in the 1940 Act), and (ii) a majority of Trustees who are
not parties to the Management Contract or "interested persons" of any such party
(as defined in the 1940 Act), cast in person at a meeting called for the
specific purpose of voting on such approval. The Portfolio Management Contract
most recently was approved on June 20, 1995 by the Board of Trustees of the
Portfolios, including a majority of Trustees who are not parties to the
Portfolio Management Contract or "interested persons" of any such party and by
G.T. Capital as the initial shareholder of the Funds on October 16, 1995. The
Porfolio Management Contract provides that with respect to each Portfolio, and
the Administration Contract provides that with respect to each Fund, either the
Company, each Portfolio or G.T. Capital may terminate the Contract without
penalty upon sixty days' written notice to the other party. The Portfolio
Management Contract terminates automatically in the event of its assignment (as
defined in the 1940 Act).
Under the Portfolio Management Contract, G.T. Capital has agreed to reimburse
each Portfolio if that Portfolio's annual ordinary expenses exceed the most
stringent limits prescribed by any state in which its corresponding Fund's
shares are offered for sale. Currently, the most restrictive applicable
limitation provides that a Fund's expenses may not exceed an annual rate of
2 1/2% of the first $30 million of average net assets, 2% of the next $70
million of average net assets and 1 1/2% of assets in excess of that amount.
Expenses which are not subject to this limitation are interest, taxes, brokerage
commissions, the amortization of organizational expenses, payments of
distribution fees, in part, and extraordinary expenses. In addition, G.T.
Capital and G.T. Global voluntarily have undertaken to limit the expenses of
each Fund (exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the maximum annual level of 2.00% and 2.65% of the average daily
net assets of each Fund's Class A and Class B shares, respectively.
Statement of Additional Information Page 18
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
DISTRIBUTION SERVICES
Each Fund's Advisor Class shares are offered continuously through the Funds'
principal underwriter and distributor, G.T. Global, on a "best efforts" basis
without a sales charge or a contingent deferred sales charge.
TRANSFER AGENCY SERVICES
G.T. Global Investor Services, Inc. ("Transfer Agent") has been retained by the
Funds to perform shareholder servicing, reporting and general transfer agent
functions for the Funds. For these services, the Transfer Agent receives an
annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. The Transfer Agent also is reimbursed
by the Funds for its out-of-pocket expenses for such items as postage, forms,
telephone charges, stationery and office supplies.
EXPENSES OF THE FUNDS
Each Fund and each Portfolio pays all expenses not assumed by G.T. Capital, G.T.
Global and other agents. These expenses include, in addition to the advisory,
distribution, transfer agency and brokerage fees discussed above, legal and
audit expenses, custodian fees, trustees' fees, organizational fees, fidelity
bond and other insurance premiums, taxes, extraordinary expenses and expenses of
reports and prospectuses sent to existing investors. The allocation of general
Company expenses and expenses shared by the Funds with one another, are made on
a basis deemed fair and equitable, and may be based on the relative net assets
of the Funds or the nature of the services performed and relative applicability
to each Fund. Expenditures, including costs incurred in connection with the
purchase or sale of portfolio securities, which are capitalized in accordance
with generally accepted accounting principles applicable to investment
companies, are accounted for as capital items and not as expenses.
- --------------------------------------------------------------------------------
VALUATION OF SHARES
- --------------------------------------------------------------------------------
As described in the Prospectus, each Fund's net asset value per share for each
class of shares is determined at the close of regular trading on The New York
Stock Exchange, Inc. ("NYSE") (currently, 4:00 P.M. Eastern time, unless
weather, equipment failure or other factors contribute to an earlier closing
time). Currently, the NYSE is closed on weekends and on certain days relating to
the following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, July 4th, Labor Day, Thanksgiving Day and Christmas Day.
Each Portfolios securities and other assets are valued as follows:
Equity securities, which are traded on stock exchanges, are valued at the last
sale price on the exchange on which such securities are traded, as of the close
of business on the day the securities are being valued or, lacking any sales, at
the last available bid price. In cases where securities are traded on more than
one exchange, the securities are valued on the exchange determined by G.T.
Capital to be the primary market. Securities traded in the OTC market are valued
at the last available bid price prior to the time of valuation. Securities and
other assets for which market quotations are not readily available (including
restricted securities that are subject to limitations as to their sale) are
valued at fair value as determined in good faith by or under the direction of
the Portfolios' Board of Trustees.
Long-term debt obligations are valued at the mean of representative quoted bid
or asked prices for such securities or, if such prices are not available, at
prices for securities of comparable maturity, quality and type; however, when
G.T. Capital deems it appropriate, prices obtained for the day of valuation from
a bond pricing service will be used. Short-term debt investments are amortized
to maturity based on their cost, adjusted for foreign exchange translation,
provided that such valuations represent fair value.
Options on indices and securities purchased by the Portfolios are valued at
their last bid price in the case of listed options or at the average of the last
bid prices obtained from dealers in the case of OTC options. When market
quotations for futures and options on futures held by a Portfolio are readily
available, those positions will be valued based upon such quotations.
Securities and other assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Portfolios' Board of Trustees. The valuation procedures applied
in any specific
Statement of Additional Information Page 19
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
instance are likely to vary from case to case. However, consideration generally
is given to the financial position of the issuer and other fundamental
analytical data relating to the investment and to the nature of the restrictions
on disposition of the securities (including any registration expenses that might
be borne by a Portfolio in connection with such disposition). In addition, other
factors, such as the cost of the investment, the market value of any
unrestricted securities of the same class (both at the time of purchase and at
the time of valuation), the size of the holding, the prices of any recent
transactions or offers with respect to such securities and any available
analysts' reports regarding the issuer, generally are considered.
The fair value of any other assets is added to the value of all securities
positions to arrive at the value of a Fund's total assets (which, for each Fund
is the value of its investment in its corresponding Portfolio). A Fund's
liabilities, including accruals for expenses, are deducted from its total
assets. Once the total value of a Fund's net assets is so determined, that value
is then divided by the total number of shares outstanding (excluding treasury
shares), and the result, rounded to the nearer cent, is the net asset value per
share.
Events affecting the values of portfolio securities that occur between the time
their prices are determined and the close of regular trading on the NYSE will
not be reflected in the Funds' net asset values unless G.T. Capital, under the
supervision of the Company's Board of Trustees, determines that the particular
event would materially affect net asset value. As a result, a Fund's net asset
value may be significantly affected by such trading on days when a shareholder
has no access to the Fund.
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INFORMATION RELATING TO SALES
AND REDEMPTIONS
- --------------------------------------------------------------------------------
PAYMENT AND TERMS OF OFFERING
Payment for Advisor Class shares purchased should accompany the purchase order,
or funds should be wired to the Transfer Agent as described in the Prospectus.
Payment, other than by wire transfer, must be made by check or money order drawn
on a U.S. bank. Checks or money orders must be payable in U.S. dollars.
As a condition of this offering, if an order to purchase either class of shares
is cancelled due to nonpayment (for example, because a check is returned for
"not sufficient funds"), the person who made the order will be responsible for
any loss incurred by a Fund by reason of such cancellation, and if such
purchaser is a shareholder, that Fund shall have the authority as agent of the
shareholder to redeem shares in his or her account at their then-current net
asset value per share to reimburse that Fund for the loss incurred. Investors
whose purchase orders have been cancelled due to nonpayment may be prohibited
from placing future orders.
The Funds reserve the right at any time to waive or increase the minimum
requirements applicable to initial or subsequent investments with respect to any
person or class of persons. An order to purchase shares is not binding on a Fund
until it has been confirmed in writing by the Transfer Agent (or other
arrangements made with the Fund, in the case of orders utilizing wire transfer
of funds, as described above) and payment has been received. To protect existing
shareholders, the Funds reserve the right to reject any offer for a purchase of
shares by any individual.
SALES OUTSIDE THE UNITED STATES
Sales of Fund shares made through brokers outside the United States will be at
net asset value plus a sales commission, if any, established by that broker or
by local law. Such commission, if any, may be more or less than the sales
charges listed in the sales charge table included in the Prospectus.
EXCHANGES BETWEEN FUNDS
Shares of a Fund may be exchanged for shares of other G.T. Global Mutual Funds,
based on their respective net asset values without imposition of any sales
charges provided that the registration remains identical. Advisor Class shares
may be exchanged only for Advisor Class shares of other G.T. Global Mutual
Funds. The exchange privilege is not an option or right to purchase shares but
is permitted under the current policies of the respective G.T. Global Mutual
Funds. The privilege may be discontinued or changed at any time by any of the
Funds upon 60 days' prior written notice to the shareholders of such Fund and is
available only in states where the exchange may be made legally. Before
purchasing
Statement of Additional Information Page 20
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
shares through the exercise of the exchange privilege, a shareholder should
obtain and read a copy of the Prospectus of the Fund to be purchased and should
consider the investment objective(s) of that Fund.
TELEPHONE REDEMPTIONS
A corporation or partnership wishing to utilize telephone redemption services
must submit a "Corporate Resolution" or "Certificate of Partnership" indicating
the names, titles and the required number of signatures of persons authorized to
act on its behalf. The certificate must be signed by a duly authorized
officer(s) and, in the case of a corporation, the corporate seal must be
affixed. All shareholders may request that redemption proceeds be transmitted by
bank wire directly to the shareholder's predesignated account at a domestic bank
or savings institution if the proceeds are at least $1,000. Costs in connection
with the administration of this service, including wire charges, will be borne
by the Funds. Proceeds of less than $ 1,000 will be mailed to the shareholder's
registered address of record. The Funds and the Transfer Agent reserve the right
to refuse any telephone instructions and may discontinue the aforementioned
redemption options upon 30 days' written notice.
SUSPENSION OF REDEMPTION PRIVILEGES
The Funds may suspend redemption privileges or postpone the date of payment for
more than seven days after a redemption order is received during any period: (1)
when the NYSE is closed other than customary weekend and holiday closings, or
when trading on the NYSE is restricted as directed by the SEC; (2) when an
emergency exists, as defined by the SEC, which will prohibit the Funds from
disposing of portfolio securities owned by them or in fairly determining the
value of their assets; or (3) as the SEC may otherwise permit.
REDEMPTIONS IN KIND
It is possible that conditions may arise in the future which would, in the
opinion of the Company's Board of Trustees, make it undesirable for a Fund to
pay for all redemptions in cash. In such cases and to the extent permitted by
Rule 18f-1 under the 1940 Act, the Board may authorize payment to be made in
portfolio securities or other property of a Fund, so called "redemptions in
kind." Payment of redemptions in kind will be made in readily marketable
securities. Such securities would be valued at the same value assigned to them
in computing the net asset value per share. Shareholders receiving such
securities would incur brokerage costs in selling any such securities so
received and would be subject to any increase or decrease in the value of the
securities until they were sold.
- --------------------------------------------------------------------------------
TAXES
- --------------------------------------------------------------------------------
TAXATION OF THE FUNDS
Each Fund is treated as a separate corporation for federal income tax purposes.
In order to qualify or continue to qualify for treatment as a regulated
investment company ("RIC") under the Code, each Fund must distribute to its
shareholders for each taxable year at least 90% of its investment company
taxable income (consisting generally of net investment income and net short-term
capital gain ("Distribution Requirement") and must meet several additional
requirements. With respect to each Fund, these requirements include the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities loans
and gains from the sale or other disposition of securities or other income
(including gains from options or Futures) derived with respect to its
business of investing in securities ("Income Requirement"); (2) the Fund must
derive less than 30% of its gross income each taxable year from the sale or
other disposition of securities, or any options or futures that were held for
less than three months and that are not directly related to the Fund's principal
business of investing in securities (or options and futures with respect to
securities) ("Short-Short Limitation"); (3) at the close of each quarter of the
Fund's taxable year, at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. government securities, securities of
other RICs and other securities, with these other securities limited, with
respect to any one issuer, to an amount that does not exceed 5% of the value of
the Fund's total assets and that does not represent more than 10% of the
issuer's outstanding voting securities; and (4) at the close of each quarter of
the Fund's taxable year, not more than 25% of the value of its total assets may
be invested in securities (other than U.S. government securities or the
securities of other RICs) of any one issuer. Each Fund, as an investor in its
corresponding Portfolio, is deemed to own a proportionate share of the
Portfolios
Statement of Additional Information Page 21
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
assets, and to earn a proportionate share of the Portfolio's income, for
purposes whether the Fund satisfies all of the requirements described above to
qualify as a RIC.
Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the
extent it fails to distribute by the end of any calendar year substantially all
of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
TAXATION OF THE PORTFOLIOS
Each Portfolio is treated as a separate partnership for federal income tax
purposes and is not a "publicly traded partnership." As a result, each Portfolio
is not subject to federal income tax; instead, each Fund, as an investor in its
corresponding Portfolio, is required to take into account in determining its
federal income tax liability its share of the Portfolio's income, gains, losses,
deductions and credits, without regard to whether it has received any cash
distributions from the Portfolio. Each Portfolio also is not subject to New York
income or franchise tax.
Because, as noted above, each Fund is deemed to own a proportionate share of its
corresponding Portfolio's assets, and to earn a proportionate share of its
corresponding Portfolio's income, for purposes of determining whether the Fund
satisfies the requirements to qualify as a RIC, each such Portfolio intends to
conduct its operations so that its corresponding Fund will be able to satisfy
all those requirements.
Distributions to each Fund from its corresponding Portfolio (whether pursuant to
a partial or complete withdrawal or otherwise) will not result in the Fund's
recognition of any gain or loss for federal income tax purposes, except that (1)
gain will be recognized to the extent any cash that is distributed exceeds the
Fund's basis for its interest in its corresponding Portfolio before the
distribution, (2) income or gain will be recognized if the distribution is in
liquidation of the Fund's entire interest in its corresponding Portfolio and
includes a disproportionate share of any unrealized receivables held by the
Portfolio, and (3) loss will be recognized if a liquidation distribution
consists solely of cash and/or unrealized receivables. Each Fund's basis for its
interest in its corresponding Portfolio generally will equal the amount of cash
and the basis of any property the Fund invests in the Portfolio, increased by
the Fund's share of the Portfolio's net income and gains and decreased by (a)
the amount of cash and the basis of any property the Portfolio distributes to
the Fund and (b) the Fund's share of the Portfolio's losses.
NON-U.S. SHAREHOLDERS
Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") will be
subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply if a dividend paid by a Fund to a foreign shareholder
is "effectively connected with the conduct of a U.S. trade or business," in
which case the reporting and withholding requirements applicable to domestic
shareholders will apply. Distributions of net capital gain are not subject to
withholding, but in the case of a foreign shareholder who is a nonresident alien
individual, such distributions ordinarily will be subject to U.S. income tax at
a rate of 30% (or lower treaty rate) if the individual is physically present in
the United States for more than 182 days during the taxable year and the
distributions are attributable to a fixed place of business maintained by the
individual in the United States.
OPTIONS AND FUTURES
The use of hedging transactions, such as selling (writing) and purchasing
options and Futures involves complex rules that will determine, for federal
income tax purposes, the character and timing of recognition of the gains and
losses a Portfolio realizes in connection therewith. Income from transactions in
options and Futures derived by a Portfolio with respect to its business of
investing in securities, will qualify as permissible income under the Income
Requirement for that Portfolio and its corresponding Fund. However, income from
the disposition by a Portfolio of options and Futures will be subject to the
Short-Short Limitation if they are held for less than three months. Income from
the disposition by a Portfolio of options and Futures, that are not directly
related to the Portfolio's principal business of investing in securities (or
options and Futures with respect thereto) also will be subject to the
Short-Short Limitation if they are held for less than three months.
If a Portfolio satisfies certain requirements, any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease in
value (whether realized or not) of the offsetting hedging position during the
period of the hedge for purposes of determining whether the Portfolio (or its
corresponding Fund) satisfies the Short-Short Limitation. Thus, only the net
gain (if any) from the designated hedge will be included in gross income for
purposes of that limitation. Each Portfolio intends that, when it engages in
hedging transactions, it will qualify for this treatment, but at the present
time it is not clear whether this treatment will be available for all those
transactions. To the extent this treatment is not available, a
Statement of Additional Information Page 22
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
Portfolio may be forced to defer the closing out of certain options and Futures,
beyond the time when it otherwise would be advantageous to do so, in order for
the Portfolio (or its corresponding Fund) to qualify or continue to qualify as a
RIC.
Futures that are subject to section 1256 of the Code (other than those that are
part of a "mixed straddle") ("Section 1256 Contracts") and that are held by a
Portfolio at the end of its taxable year generally will be deemed to have been
sold at market value for federal income tax purposes. Sixty percent of any net
gain or loss recognized on these deemed sales, and 60% of any net realized gain
or loss from any actual sales of Section 1256 Contracts, will be treated as
long-term capital gain or loss, and the balance will be treated as short-term
capital gain or loss.
TAXATION OF THE FUNDS' SHAREHOLDERS
Dividends and other distributions declared by a Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
A portion of the dividends from a Fund's investment company taxable income
(whether paid in cash or reinvested in additional shares) may be eligible for
the dividends-received deduction allowed to corporations. The eligible portion
may not exceed the aggregate dividends received by a Fund (directly or through a
Portfolio) from U.S. corporations. However, dividends received by a corporate
shareholder and deducted by it pursuant to the dividends-received deduction may
be subject indirectly to the alternative minimum tax.
If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual or nonresident alien fiduciary of a trust or
estate, foreign corporation or foreign partnership ("foreign shareholder") will
be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply if a dividend paid by a Fund to a foreign shareholder
is "effectively connected with the conduct of a U.S. trade or business," in
which case the reporting and withholding requirements applicable to domestic
shareholders will apply. Distributions of net capital gain are not subject to
withholding, but in the case of a foreign shareholder who is a nonresident alien
individual, those distributions ordinarily will be subject to U.S. income tax at
a rate of 30% (or lower treaty rate) if the individual is physically present in
the United States for more than 182 days during the taxable year and the
distributions are attributable to a fixed place of business maintained by the
individual in the United States.
The foregoing is a general and abbreviated summary of certain federal income tax
considerations affecting the Funds and their shareholders and the Portfolios.
Investors are urged to consult their own tax advisers for more detailed
information and for information regarding any foreign, state and local taxes
applicable to distributions received from a Fund.
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
BIL GT GROUP
Other subsidiaries of the BIL GT Group include the Bank in Liechtenstein AG, an
international financial services institution founded in 1920, with over $17
billion in assets under administration and principal offices in Vaduz,
Liechtenstein, Bank in Liechtenstein (Frankfurt) GmbH, and Bilfinanz und
Verwaltung AG located in Zurich, Switzerland. In total, BIL GT Group encompasses
over $43 billion in assets under management and administration.
CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, acts as custodian of the Portfolios' and the Funds' assets.
Statement of Additional Information Page 23
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
INDEPENDENT ACCOUNTANTS
The Company's and the Portfolios' independent accountants are Coopers & Lybrand
L.L.P., One Post Office Square, Boston, Massachusetts 02109. Coopers & Lybrand
L.L.P. conducts annual audits of the Funds, assists in the preparation of the
Funds' federal and state income tax returns and consults with the Company and
the Funds as to matters of accounting, regulatory filings and federal and state
income taxation.
USE OF NAME
G.T. Capital has granted the Company the right to use the "G.T." name and has
reserved the right to withdraw its consent to the use of such name by the
Company and/or any of the Funds at any time, or to grant the use of such name to
any other company.
SHAREHOLDER LIABILITY
Under certain circumstances, shareholders of a Fund may be held personally
liable for the obligations of the Fund. The Company's Declaration of Trust
provides that shareholders shall not be subject to any personal liability for
the acts or obligations of a Fund or the Company and that every written
agreement, obligation or other undertaking made or issued by a Fund or the
Company shall contain a provision to the effect that shareholders are not
personally liable thereunder. The Declaration of Trust provides for
indemnification out of the Company's assets under certain circumstances, and
further provides that the Company shall, upon request, assume the defense of any
act or obligation of a Fund or the Company and that the Fund in which the
shareholder holds shares will indemnify the shareholder for all legal and other
expenses incurred therewith. Thus, the risk of any shareholder's incurring
financial loss beyond his or her investment, because of this theoretical
shareholder liability, is limited to circumstances in which the Fund or the
Company itself would be unable to meet its obligations.
- --------------------------------------------------------------------------------
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
A Fund's "Standardized Return", as referred to in the Prospectus (see "Other
Information -- Performance Information" in the Prospectus), is calculated
separately for Class A, Class B and Advisor Class shares of each Fund as
follows: Standardized Return ("T") is computed by using the value at the end of
the period ("EV") of a hypothetical initial investment of $1,000 ("P") over a
period of years ("n") according to the following formula as required by the
Securities and Exchange Commission: P(1+T)n = EV. The following assumptions will
be reflected in computations made in accordance with this formula: (1) for Class
A shares, deduction of the maximum sales charge of 4.75% from the $1,000 initial
investment; (2) for Class B shares, deduction of the applicable contingent
deferred sales charge imposed on a redemption of Class B shares held for the
period; (3) reinvestment of dividends and distributions at net asset value on
the reinvestment date determined by the Board; and (4) a complete redemption at
the end of any period illustrated.
As discussed in the Prospectus, each Fund may quote Non-Standardized Total
Returns that do not reflect the effect of sales charges. Non-Standardized
Returns may be quoted for the same or different time periods for which
Standardized Returns are quoted.
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of a
Fund, so that current or past yield or total return should not be considered
representative of what an investment in a Fund may earn in any future period.
These factors and possible differences in the methods used in calculating
investment results should be considered when comparing a Fund's investment
results with those published for other investment companies and other investment
vehicles. A Fund's results also should be considered relative to the risks
associated with such Fund's investment objective and policies. A Fund will
include performance data for all classes of shares of that Fund in any
advertisement or information including performance data for the Fund.
In advertising and sales materials, G.T. Global may make reference to or discuss
its products, services and accomplishments. Among these accomplishments are that
in 1983 G.T. Global provided assistance to the government of Hong Kong in
linking its currency to the U.S. dollar, and that in 1987 Japan's Ministry of
Finance licensed G.T. Management (Japan) Ltd. as one of the first foreign
discretionary investment managers for Japanese investors. Such accomplishments,
however, should not be viewed as an endorsement of G.T. Global by the government
of Hong Kong, Japan's Ministry of
Statement of Additional Information Page 24
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
Finance or any other government or government agency. Nor do any such
accomplishments of G.T. Global provide any assurance that the G.T. Global Mutual
Funds' investment objectives will be achieved.
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of a
Fund, so that current or past yield or total return should not be considered
representative of what an investment in a Fund may earn in any future period.
These factors and possible differences in the methods used in calculating
investment results should be considered when comparing a Fund's investment
results with those published for other investment companies and other investment
vehicles. A Fund's results also should be considered relative to the risks
associated with such Fund's investment objective and policies. A Fund will
include performance data for all classes of shares of that Fund in any
advertisement or information including performance data for the Fund.
In advertising and sales materials, G.T. Global may make reference to or discuss
its products, services and accomplishments. Among these accomplishments are that
in 1983 G.T. Global provided assistance to the government of Hong Kong in
linking its currency to the U.S. dollar, and that in 1987 Japan's Ministry of
Finance licensed G.T. Management (Japan) Ltd. as one of the first foreign
discretionary investment managers for Japanese investors. Such accomplishments,
however, should not be viewed as an endorsement of G.T. Global by the government
of Hong Kong, Japan's Ministry of Finance or any other government or government
agency. Nor do any such accomplishments of G.T. Global provide any assurance
that the G.T. Global Mutual Funds' investment objectives will be achieved.
IMPORTANT POINTS TO NOTE ABOUT THE FOLLOWING WORLD FINANCIAL AND ECONOMIC DATA
The following information is based on sources believed to be reliable, but which
may be subject to revision and which has not been independently verified by the
Company or G.T. Global. The authors and publishers of such material are not to
be considered as "experts" under the Securities Act of 1933, on account of the
inclusion of such information herein.
G.T. Global believes that this information may be useful to investors
considering whether and to what extent to diversify their investments through
the purchase of mutual funds. However, this data is not a representation of the
past performance of any of these Funds, nor is it a prediction of such
performance. The performance of the Funds will differ from the historical
performance of the indices represented above. The performance of indices does
not take expenses into account, while each Fund incurs expenses in its
operations, which will reduce performance. Each Fund is actively managed, I.E.,
G.T. Capital, as each Fund's investment manager, actively purchases and sells
securities in seeking each Fund's investment objective. Moreover, each Fund may
invest a portion of its assets in corporate bonds, while the below data relates
only to government bonds. Each of these factors will cause the performance of
each Fund to differ from the indices shown below.
Each Fund and G.T. Global may from time to time compare the Fund with the
following:
(1) The Lehman Bros. Government/Corporate Bond Index, which is a
comprehensive measure of all public obligations of the U.S. Treasury
(excluding flower bonds and foreign targeted issues), all publicly issued
debt of agencies of the U.S. Government (excluding mortgage backed
securities), and all public, fixed rate, non-convertible investment grade
domestic corporate debt rated at least Baa by Moody's Investors Service,
Inc. or BBB by Standard and Poor's Ratings Group, or, in the case of
nonrated bonds, BBB by Fitch Investors Service (excluding Collateralized
Mortgage Obligations).
(2) The Consumer Price Index, which is a measure of the average change
in prices over time in a fixed market basket of goods and services (e.g.,
food, clothing, shelter, fuels, transportation fares, charges for doctors'
and dentists' services, prescription medicines, and other goods and services
that people buy for day-to-day living). There is inflation risk which does
not affect a security's value but its purchasing power i.e. the risk of
changing price levels in the economy that affects security prices or the
price of goods and services.
(3) Data and mutual fund rankings published or prepared by Lipper
Analytical Data Services, Inc. ("Lipper"), CDA/Wiesenberger Investment
Company Services ("CDA/Wiesenberger"), Morningstar, Inc. and/or other
companies that rank and/or compare mutual funds by overall performance,
investment objectives, assets, expense levels, periods of existence and/or
other factors. In this regard each Fund may be compared to the Fund's "peer
group" as defined by Lipper, CDA/Wiesenberger, Morningstar and/or other
firms, as applicable, or to specific funds or groups of funds within or
without such peer group. Lipper generally ranks funds on the basis of total
return, assuming reinvestment of distributions, but does not take sales
charges or redemption fees into consideration, and is prepared without
regard to tax consequences. In addition to the mutual fund rankings, the
Fund's performance may be compared to mutual fund performance indices
prepared by Lipper. Morningstar is a mutual fund rating service that also
rates mutual funds on the basis of risk-adjusted performance. Morningstar
ratings are calculated from a fund's three, five and ten year average annual
returns with appropriate fee adjustments and a risk factor that reflects
fund performance relative
Statement of Additional Information Page 25
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G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
to the three-month U.S. Treasury bill monthly returns. Ten percent of the
funds in an investment category receive five stars and 22.5% receive four
stars. The ratings are subject to change each month.
(4) Standard & Poor's 500 Composite Stock Price Index which is a widely
recognized index composed of the capitalization-weighted average of the
price of 500 of the largest publicly traded stocks in the U.S.
(5) Salomon Brothers Broad Investment Grade Index which is a widely used
index composed of U.S. domestic government, corporate and mortgage-backed
fixed income securities.
(6) Dow Jones Industrial Average.
(7) CNBC/Financial News Composite Index.
(8) Morgan Stanley Capital International World Indices, including, among
others, the Morgan Stanley Capital International U.S. Index.
(9) Datastream and Worldscope each is an on-line database retrieval
service for information including, but not limited to, international
financial and economic data.
(10) Various publications including, but not limited to ratings agencies
such as Moody's Investors Service, Fitch Investors Service, Standard &
Poor's.
(11) Wilshire Associates which is an on-line database for international
financial and economic data including performance measure for a wide range
of securities.
(12) Bank Rate National Monitor Index, which is an average of the quoted
rates for 100 leading banks and thrifts in ten U.S. cities.
(13) Average of Savings Accounts, which is a measure of all kinds of
savings deposits, including longer-term certificates (based on figures
supplied by the U.S. League of Savings Institutions). Savings accounts offer
a guaranteed rate of return on principal, but no opportunity for capital
growth. During a portion of the period, the maximum rates paid on some
savings deposits were fixed by law.
Indices, economic and financial data prepared by the research departments of
such financial organizations as Salomon Brothers, Inc., Lehman Brothers, Merrill
Lynch, Pierce, Fenner & Smith, Inc., J. P. Morgan, Morgan Stanley, Smith Barney
Shearson, S.G. Warburg, Jardine Flemming, Barings Securities, The Bank for
International Settlements, Bloomberg, L.P., and Ibbottson Associates may be
used, as well as information reported by the Federal Reserve and the respective
Central Banks of various nations. In addition, G.T. Global may use performance
rankings, ratings and commentary reported periodically in national financial
publications, including but not limited to Money Magazine, Smart Money, Global
Finance, EuroMoney, Financial World, Forbes, Fortune, Business Week, Latin
Finance, the Wall Street Journal, Emerging Markets Weekly, Kiplinger's Guide To
Personal Finance, Barron's, The Financial Times, USA Today, The New York Times,
Far Eastern Economic Review, The Economist, Investors Business Daily,
Congressional Quarterly and Investors Business Digest. Each Fund may compare its
performance to that of other compilations or indices of comparable quality to
those listed above and other indices which may be developed and made available
in the future.
From time to time, each Fund and G.T. Global may refer to the number of
shareholders in the Funds or the aggregate number of shareholders in all G.T.
Global Mutual Funds or the dollar amount of each Fund's assets under management
in advertising materials.
G.T. Global believes each Fund is an appropriate investment for long-term
investment goals including, but not limited to funding retirement, paying for
education or purchasing a house. G.T. Global may provide information designed to
help individuals understand their investment goals and explore various financial
strategies. For example, G.T. Global may describe general principles of
investing, such as asset allocation, diversification and risk tolerance. Each
Fund does not represent a complete investment program and the investors should
consider each Fund as appropriate for a portion of their overall investment
portfolio with regard to their long-term investment goals. There is no assurance
that any such information will lead to achieving these goals or guarantee future
results.
From time to time, G.T. Global may refer to or advertise the names of such
companies, or their products although there can be no assurance that any G.T.
Global Mutual Fund may own the securities of these companies.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical returns
of the capital markets in the United States, including common stocks, small
capitalization stocks, long-term corporate bonds, intermediate-term government
bonds,
Statement of Additional Information Page 26
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
long-term government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance of these
capital markets are based on the returns of different indices.
G.T. Global Funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any of
these capital markets. The risks associated with the security types in any
capital market may or may not correspond directly to those of the funds.
Ibbotson calculates total returns in the same method as the funds. The funds may
also compare performance to that of other compilations or indices that may be
developed and made available in the future.
Each Fund may quote various measures of volatility and benchmark correlation
such as beta, standard deviation and R(2) in advertising. In addition, each Fund
may compare these measures to those of other funds. Measures of volatility seek
to compare each Fund's historical share price fluctuations or total returns
compared to those of a benchmark. All measures of volatility and correlation are
calculated using averages of historical data.
Each Fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging programs. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals, thereby
purchasing fewer shares when prices are high and more shares when prices are
low. While such a strategy does not assure a profit or guard against loss in a
declining market, the investor's average cost per share can be lower than if
fixed numbers of shares are purchased at the same intervals. In evaluating such
a plan, investors should consider their ability to continue purchasing shares
through periods of low price levels.
Each Fund may be available for purchase through retirement plans or other
programs offering deferral of or exemption from income taxes, which may produce
superior after tax returns over time. For example, a $10,000 investment earning
a taxable return of 10% annually would have an after-tax value of $17,976 after
ten years, assuming tax was deducted from the return each year at a 39.6% rate.
An equivalent tax-deferred investment would have an after-tax value of $19,626
after ten years, assuming tax was deducted at a 39.6% rate from the deferred
earnings at the end of the ten-year period.
Each Fund may describe in its sales material and advertisements how an investor
may invest in the G.T. Global Funds through various retirement accounts and
plans that offer deferral of income taxes on investment earnings and may also
enable an investor to make pre-tax contributions. Because of their advantages,
these retirement accounts and plans may produce returns superior to comparable
non-retirement investments. The Funds may also discuss these accounts and plans
which include:
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS): Any individual who receives earned income
from employment (including self-employment) can contribute up to $2,000 each
year to an IRA (or if less, 100% of compensation). If your spouse is not
employed, a total of $2,250 may be contributed each year to IRAs set up for you
and your spouse (subject to the maximum of $2,000 to either IRA). Some
individuals may be able to take an income tax deduction for the contribution.
Regular contributions may not be made for the year you become 70 1/2, or
thereafter. Please consult your tax advisor for more information.
ROLLOVER IRAS: Individuals who receive distributions from qualified retirement
plans (other than required distributions) and who wish to keep their savings
growing tax-deferred can rollover (or make a direct transfer of) their
distribution to a Rollover IRA. These accounts can also receive rollovers or
transfers from an existing IRA. If an "eligible roll-over distribution" from a
qualified employer-sponsored retirement plan is not directly rolled over to an
IRA (or certain qualified plans), withholding at the rate of 20% will be
required for federal income tax purposes. A distribution from a qualified plan
that is not an "eligible rollover distribution," including a distribution that
is one of a series of substantially equal periodic payments, generally is
subject to regular wage withholding or withholding at the rate of 10% (depending
on the type and amount of the distribution), unless you elect not to have any
withholding apply. Please consult your tax advisor for more information.
SEP-IRAS AND SALARY-REDUCTION SEP-IRAS: Simplified employee pension (SEP) plans
and salary-reduction SEPs provide self-employed individuals (and any eligible
employees) with benefits similar to Keogh-type plans or 401(k) plans, but with
fewer administrative requirements and therefore potential lower annual
administration expenses.
403(B)(7) CUSTODIAL ACCOUNTS: Employees of public schools and most other
not-for-profit organizations can make pre-tax salary reduction contributions to
these accounts.
PROFIT-SHARING (INCLUDING 401(K)) AND MONEY PURCHASE PENSION PLANS: Corporations
can sponsor these qualified defined contribution plans for their employees. A
401(k) plan, a type of profit-sharing plan, additionally permits the eligible,
participating employees to make pre-tax salary reduction contributions to the
plan (up to certain limitations).
Statement of Additional Information Page 27
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
G.T. Global may from time to time in its sales materials and advertising discuss
the risks inherent in investing. The major types of investment risks are market
risk, industry risk, credit risk, interest risk and inflation risk. Risk
represents the possibility that you may lose some or all of your investment over
a period of time. A basic tenet of investing is the greater the potential
reward, the greater the risk.
From time to time, the Funds and G.T. Global will quote information including
but not limited to data regarding: individual countries, regions, world stock
exchanges, and economic and demographic statistics from sources G.T. Global
deems reliable including but not limited to the economic and financial data of
the referenced financial organizations such as:
1) Stock market capitalization: Morgan Stanley Capital International World
Indices, International Finance Corporation and Datastream.
2) Stock market trading volume: Morgan Stanley Capital International World
Indices, International Finance Corporation, New York Stock Exchange, S&P
500, DJ, NASDAQ.
3) The number of listed companies: International Finance Corporation, G.T.
Guide to World Equity Markets, Salomon Brothers, Inc., S.G. Warburg and
Barings Securities, NYSE, AMEX, NASDAQ.
4) Wage rates: U.S. Department of Labor Statistics and Morgan Stanley Capital
International World Indices.
5) International industry performance: Morgan Stanley Capital International
World Indices, Wilshire Associates and Salomon Brothers, Inc.
6) Stock market performance: Morgan Stanley Capital International World
Indices, International Finance Corporation and Datastream, S&P 500, DJIA,
Wilshire Assoc.
7) The Consumer Price Index and inflation rate: The World Bank, Datastream and
International Finance Corporation, Ibbotson Assoc.
8) Gross Domestic Product (GDP): Datastream and The World Bank.
9) GDP growth rate: International Finance Corporation, The World Bank and
Datastream.
10) Population: The World Bank, Datastream and United Nations.
11) Average annual growth rate (%) of population: The World Bank, Datastream and
United Nations.
12) Age distribution within populations: Organization for Economic Cooperation
and Development and United Nations.
13) Total exports and imports by year: International Finance Corporation, The
World Bank and Datastream.
14) Top three companies by country or market: International Finance Corporation,
G.T. Guide to World Equity Markets, Salomon Brothers Inc., S.G. Warburg and
Barings Securities.
15) Foreign direct investments to developing countries: The World Bank and
Datastream.
16) Supply, consumption, demand and growth in demand of certain products,
services and industries, including, but not limited to electricity, water,
transportation, construction materials, natural resources, financial
services, health care services and supplies, consumer products and services
and telecommunications equipment and services (sources of such information
may include, but would not be limited to, The World Bank, OECD, IMF,
Bloomberg and Datastream).
17) Additional general sources for economic information on U.S. companies and
industries include, but would not be limited to, U.S. Department of
Commerce, Small Business Administration, Internal Revenue Service and
Marketing Intelligence Services, Ltd.
In advertising and sales materials, G.T. Global may make reference to or discuss
its products, services and accomplishments. Among these accomplishments are that
in 1983 G.T. Global provided assistance to the government of Hong Kong in
linking its currency to the U.S. dollar, and that in 1987 Japan's Ministry of
Finance licensed G.T. Management (Japan) Ltd. as one of the first foreign
discretionary investment managers for Japanese investors. Such accomplishments,
however, should not be viewed as an endorsement of G.T. Global by the government
of Hong Kong, Japan's Ministry of Finance or any other government or government
agency. Nor do any such accomplishments of G.T. Global provide any assurance
that the G.T. Global Mutual Funds' investment objectives will be achieved.
THE G.T. ADVANTAGE
G.T. Capital has developed a unique team approach to its global money management
which we call the G.T. Advantage. G.T Capital's money management style combines
the best of the "top-down" and "bottom-up" investment manager strategies. The
top-down approach is implemented by G.T. Capital's Investment Policy Committee,
which sets broad guidelines for asset allocation and currency management, based
on G.T. Capital's own macroeconomic forecasts and
Statement of Additional Information Page 28
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
research from our worldwide offices. The bottom-up approach utilizes regional
teams of individual portfolio managers to implement the committee's guidelines
by selecting local securities that offer strong growth and income potential.
- --------------------------------------------------------------------------------
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
COMMERCIAL PAPER RATINGS
Standard & Poor's ("S&P"). "A-1" and "A-2" are the two highest commercial paper
rating categories:
A-1. This highest category indicates that the degree of safety regarding timely
payment is strong. Issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.
A-2. Capacity for timely payment on issues with this designation is
satisafactory. However, the relative degree of safety is not as high as for
issues designated A-1.
Moody's Investors Service, Inc. ("Moody's"). "Prime-1" and "Prime-2" are the two
highest commercial paper rating categories.
Prime-1. Issuers (or supporting institutions) assigned this highest rating have
a superior ability for repayment of short-term debt obligations. Prime-1
repayment ability will often be evidenced by the following chargacgteristics:
leading market positions in well established industries; high rates of return on
funds employed; conservative capitalization structure with moderate reliance on
debt and ample asset protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; well established access to
a range of financial markets and assured sources of alternate liquidity.
Prime-2. Issuers (or supporting institutions) assigned this rating have a strong
ability for repayment of short-term debt obligations. This will normally be
evidenced by mny of the chargacteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affect by external conditions. Ample alternate liquidity is maintained.
DESCRIPTION OF BOND RATINGS
MOODY'S rates the long-term debt securities issued by various entities from
"Aaa" to "C." Investment grade ratings are as follows:
Aaa -- Best quality. These securities carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large, or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa -- High quality by all standards. Together with the Aaa group they
comprise what generally are known as high yield bonds. They are rated
lower than the best bond because margins of protection may not be as
large as in Aaa securities, fluctuation of protective elements may be of
greater amplitude, or there may be other elements present which make the
long-term risks appear somewhat greater than for securities rated Aaa.
A -- Upper medium grade obligations. These bonds possess many favorable
investment attributes. Factors giving security to principal and interest
are considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Baa -- Medium grade obligations (i.e., they are neither highly protected
nor poorly secured). Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and, in fact, have
speculative characteristics as well.
S&P rates the long-term securities debt of various entities in categories
ranging from "AAA" to "D" according to quality. Investment grade ratings are as
follows:
Statement of Additional Information Page 29
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
AAA -- Highest rating. Capacity to pay interest and repay principal is
extremely strong.
AA -- High grade. Very strong capacity to pay interest and repay
principal. Generally, these bonds differ from AAA issues only in a small
degree.
A -- Have a strong capacity to pay interest and repay principal, although
they are somewhat more susceptible to the adverse effects of change in
circumstances and economic conditions, than debt in higher rated
categories.
BBB -- Regarded as having adequate capacity to pay interest and repay
principal. These bonds normally exhibit adequate protection parameters,
but adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity to pay interest and repay principal than
for debt in higher rated categories.
Further, both Moody's and S&P provide sovereign assessments and implied debt
ratings to sovereign governments. These assessments and ratings are broad
qualitative statements about that government's capacity to meet its senior debt
obligations. These assessments and ratings are then translated to the letter
grade debt ratings described above.
Statement of Additional Information Page 30
<PAGE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of G.T. Global: America Small Cap Growth Fund
and G.T. Global: America Value Fund at October 17, 1995 appear on the following
pages.
Statement of Additional Information Page 31
<PAGE>
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors of
G.T. Global Growth Series and the
Shareholders of G.T. Global Growth Series:
G.T. Global: America Small Cap Growth Fund
We have audited the accompanying statement of assets and liabilities of G.T.
Global Growth Series (G.T. Global: America Small Cap Growth Fund) as of October
17, 1995. This financial statement is the responsibility of the Fund's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of the investment held by the custodian of October 17, 1995. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the statement of assets and liabilities referred to above
present fairly, in all material respects, the financial position of G.T. Global
Growth Series (G.T. Global: America Small Cap Growth Fund) as of October 17,
1995, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
OCTOBER 17, 1995
Statement of Additional Information Page 32
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
G.T. GLOBAL AMERICA SMALL CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 17, 1995
<TABLE>
<S> <C>
ASSETS
Investment in Small Cap Portfolio.............................................................. $ 100,000
Deferred organization expense.................................................................. 63,500
---------
$ 163,500
---------
LIABILITIES
Payable for deferred organization expenses..................................................... $ 63,500
---------
NET ASSETS..................................................................................... $ 100,000
---------
CLASS A
Net asset value per share (33,333/2,916.273 shares outstanding).............................. $ 11.43
---------
CLASS B
Net asset value per share (33,333/2,916.273 shares outstanding).............................. $ 11.43
---------
ADVISOR
Net asset value per share (33,334/2,916.360 shares outstanding).............................. $ 11.43
---------
</TABLE>
Statement of Additional Information Page 33
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
NOTES TO STATEMENT OF
ASSETS AND LIABILITIES
OCTOBER 17, 1995
- --------------------------------------------------------------------------------
NOTE 1
G.T. Global: America Small Cap Growth Fund ("Fund") is a separate series of G.T.
Global Growth Series ("Company"). The Company is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"). The Fund is classified as a diversified, open-end
management investment company.
The Fund invests substantially all its investable assets in its corresponding
Portfolio (Small Cap Growth Portfolio), which is registered as an open-end
management investment company under the 1940 Act and has an investment
objective, policies and limitations substantially identical to those of the
Fund.
NOTE 2
Costs incurred by the Fund in connection with its organization, estimated at
$63,500, will be deferred and amortized on a straight-line basis for a five-year
period beginning at the commencement of the Fund's operations. G.T. Capital has
advanced certain of the Fund's organization costs incurred to date and the Fund
will reimburse G.T. Capital for the amount of these advances. In the event that
G.T. Capital redeems any of the initial 2,916.273 Class A, 2,916.273 Class B
shares or 2,916.360 Advisor Class shares of the Fund within the five-year
amortization period, the Fund's unamortized organization expenses allocable to
the shares redeemed will be deducted from G.T. Capital's redemption proceeds.
NOTE 3
G.T. Capital serves as the administrator of the Fund. The Fund pays G.T. Capital
administration fees, calculated daily and paid monthly, at an annualized rate of
0.25% of the Fund's average daily net assets. In addition, the Fund bears its
pro rata portion of the investment management and administration fees paid by
its corresponding Portfolio to G.T. Capital. The Portfolio pays such fees, based
on the average daily net assets of the Portfolio, at the annualized rate of
0.475% on the first $500 million, 0.45% on the next $500 million, and 0.425% on
the next $500 million, and 0.40% on amounts thereafter.
G.T. Global Financial Services, Inc. ("G.T. Global"), an affiliate of G.T.
Capital, serves as the Fund's distributor. The Fund offers Class A shares, Class
B shares and Advisor Class shares for purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. G.T. Global collects the sales charges imposed on Class A shares,
and reallows a portion of such charges to dealers through which the sales are
made. G.T. Global also makes ongoing shareholder servicing and trail commission
payments to dealers whose clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, G.T. Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to contingent deferred sales shares ("CDSCs"), in
accordance with the Fund's current prospectus. In addition, G.T. Global makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class B shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Trustees had
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses G.T. Global for a portion of its shareholder servicing and
distribution expenses. Under the Class A Plan, the Fund may pay G.T. Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for G.T. Global's expenditures incurred in
servicing and maintaining shareholder accounts, and may pay G.T. Global a
distribution fee at the annualized rate of up to 0.35% of the average daily net
assets of the Fund's Class A shares, less any amounts paid by the Fund as the
aforementioned service fee, for G.T. Global's expenditures incurred in providing
services as distributor. All expenses for which G.T. Global is reimbursed under
the Class A Plan will have been incurred within one year of such reimbursement.
Under the Fund's Class B Plan, the Fund may pay G.T. Global a service fee at the
annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for G.T. Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay G.T. Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for G.T. Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that plan continues in effect.
Statement of Additional Information Page 34
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors of
G.T. Global Growth Series and the
Shareholders of G.T. Global Growth Series:
G.T. Global: America Value Fund
We have audited the accompanying statement of assets and liabilities of G.T.
Global Growth Series (G.T. Global: America Value Fund) as of October 17, 1995.
This financial statement is the responsibility of the Fund's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of the investment held by the custodian of October 17, 1995. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the statement of assets and liabilities referred to above
present fairly, in all material respects, the financial position of G.T. Global
Growth Series (G.T. Global: America Value Fund) as of October 17, 1995, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
OCTOBER 17, 1995
Statement of Additional Information Page 35
<PAGE>
G.T. GLOBAL: AMERICA VALUE FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
G.T. GLOBAL AMERICA VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 17, 1995
<TABLE>
<S> <C>
ASSETS
Investment in Value Portfolio.................................................................. $ 100,000
Deferred organization expense.................................................................. 63,500
---------
$ 163,500
---------
LIABILITIES
Payable for deferred organization expenses..................................................... $ 63,500
---------
NET ASSETS..................................................................................... $ 100,000
---------
CLASS A
Net asset value per share (33,333/2,916.273 shares outstanding).............................. $ 11.43
---------
CLASS B
Net asset value per share (33,333/2,916.273 shares outstanding).............................. $ 11.43
---------
ADVISOR
Net asset value per share (33,334/2,916.360 shares outstanding).............................. $ 11.43
---------
</TABLE>
Statement of Additional Information Page 36
<PAGE>
G.T. GLOBAL: AMERICA VALUE FUND
NOTES TO STATEMENT OF
ASSETS AND LIABILITIES
OCTOBER 17, 1995
- --------------------------------------------------------------------------------
NOTE 1
G.T. Global: America Value Fund ("Fund") is a separate series of G.T. Global
Growth Series ("Company"). The Company is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended
("1940 Act"). The Fund is classified as a diversified, open-end management
investment company.
The Fund invests substantially all its investable assets in its corresponding
Portfolio (Value Portfolio), which is registered as an open-end management
investment company under the 1940 Act and has an investment objective, policies
and limitations substantially identical to those of the Fund.
NOTE 2
Costs incurred by the Fund in connection with its organization, estimated at
$63,500, will be deferred and amortized on a straight-line basis for a five-year
period beginning at the commencement of the Fund's operations. G.T. Capital has
advanced certain of the Fund's organization costs incurred to date and the Fund
will reimburse G.T. Capital for the amount of these advances. In the event that
G.T. Capital redeems any of the initial 2,916.273 Class A, 2,916.273 Class B
shares or 2,916.360 Advisor Class shares of the Fund within the five-year
amortization period, the Fund's unamortized organization expenses allocable to
the shares redeemed will be deducted from G.T. Capital's redemption proceeds.
NOTE 3
G.T. Capital serves as the administrator of the Fund. The Fund pays G.T. Capital
administration fees, calculated daily and paid monthly, at an annualized rate of
0.25% of the Fund's average daily net assets. In addition, the Fund bears its
pro rata portion of the investment management and administration fees paid by
its corresponding Portfolio to G.T. Capital. The Portfolio pays such fees, based
on the average daily net assets of the Portfolio, at the annualized rate of
0.475% on the first $500 million, 0.45% on the next $500 million, and 0.425% on
the next $500 million, and 0.40% on amounts thereafter.
G.T. Global Financial Services, Inc. ("G.T. Global"), an affiliate of G.T.
Capital, serves as the Fund's distributor. The Fund offers Class A shares, Class
B shares and Advisor Class shares for purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. G.T. Global collects the sales charges imposed on Class A shares,
and reallows a portion of such charges to dealers through which the sales are
made. G.T. Global also makes ongoing shareholder servicing and trail commission
payments to dealers whose clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, G.T. Global, from its own resources, pays commissions to dealers through
which the sales are made. Certain redemptions of Class B shares made within six
years of purchase are subject to contingent deferred sales shares ("CDSCs"), in
accordance with the Fund's current prospectus. In addition, G.T. Global makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class B shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Company's Board of Trustees had
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses G.T. Global for a portion of its shareholder servicing and
distribution expenses. Under the Class A Plan, the Fund may pay G.T. Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Fund's Class A shares for G.T. Global's expenditures incurred in
servicing and maintaining shareholder accounts, and may pay G.T. Global a
distribution fee at the annualized rate of up to 0.35% of the average daily net
assets of the Fund's Class A shares, less any amounts paid by the Fund as the
aforementioned service fee, for G.T. Global's expenditures incurred in providing
services as distributor. All expenses for which G.T. Global is reimbursed under
the Class A Plan will have been incurred within one year of such reimbursement.
Under the Fund's Class B Plan, the Fund may pay G.T. Global a service fee at the
annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for G.T. Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay G.T. Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for G.T. Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that plan continues in effect.
Statement of Additional Information Page 37
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 38
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 39
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 40
<PAGE>
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
G.T. GLOBAL: AMERICA VALUE FUND
[LOGO]
G.T. GLOBAL GROUP OF FUNDS
G.T. GLOBAL OFFERS A BROAD RANGE OF MUTUAL FUNDS TO COMPLEMENT MANY
INVESTORS' PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE
G.T. GLOBAL FUNDS, PLEASE CONTACT YOUR INVESTMENT COUNSELOR OR CALL G.T.
GLOBAL DIRECTLY AT 1-800-824-1580.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
G.T. GLOBAL: WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
G.T. GLOBAL: INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside
the U.S.
G.T. GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
/ / GLOBAL THEME FUNDS
G.T. GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
G.T. GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
G.T. GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
G.T. GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
G.T. GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
G.T. GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
/ / REGIONALLY DIVERSIFIED FUNDS
G.T. GLOBAL: NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
G.T. GLOBAL: EUROPE GROWTH FUND
Focuses on investment opportunities in the new, unified Europe
G.T. LATIN AMERICA GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
G.T. GLOBAL: AMERICA SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. domiciled companies
G.T. GLOBAL: AMERICA GROWTH FUND
Concentrates on small and medium-sized companies in the U.S.
G.T. GLOBAL: AMERICA VALUE FUND
Concentrates on equity securities of U.S. companies believed to be undervalued
G.T. GLOBAL: JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND INCOME FUND
G.T. GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world
INCOME FUNDS
G.T. GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
G.T. GLOBAL STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
G.T. GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
MONEY MARKET FUND
G.T. GLOBAL DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS STATEMENT OF
ADDITIONAL INFORMATION AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY G.T.
GLOBAL GROWTH SERIES, GROWTH PORTFOLIO, G.T. CAPITAL MANAGEMENT, INC. OR
G.T. GLOBAL FINANCIAL SERVICES, INC. THIS STATEMENT OF ADDITIONAL
INFORMATION DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF ANY
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
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