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LGT ASSET MANAGEMENT
OVER 25 YEARS
OF INVESTING
WORLDWIDE
GT GLOBAL
AMERICA FUNDS
SEMIANNUAL REPORT
JUNE 30, 1996
[LOGO]
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[Logo]
GT GLOBAL
AMERICA FUNDS
SEMIANNUAL REPORT
JUNE 30,1996
[Logo]
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GT GLOBAL
AMERICA FUNDS
TABLE OF CONTENTS
INTRODUCTION..................1
MARKET REVIEW AND OUTLOOK.....2
GT GLOBAL
AMERICA SMALL CAP
GROWTH FUND...................3
GT GLOBAL
AMERICA GROWTH FUND...........6
GT GLOBAL
AMERICA VALUE FUND............9
FINANCIALS..................F-1
INSIDE BACK
LIST OF FUNDS.............COVER
The views of the Funds' management are as of the date of the letter and
portfolio holdings described in this semiannual report are as of June 30,
1996; these views and portfolio holdings may have changed subsequent to these
dates.
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GT GLOBAL AMERICA FUNDS
The three GT Global America Funds provide investors with access to a broad range
of securities of U.S. companies. The Funds seek long-term capital appreciation
by investing in the stocks of small, medium or large companies.
The Funds invest in companies of various sizes because, historically, different
U.S. stock market indices, representing companies with different market
capitalizations (caps), have shown different risk and return characteristics.
(Of course, past performance is no guarantee of future performance.)
- - Small-sized companies--often those traded on NASDAQ--have typically shown
better total returns than their larger counterparts, although with a
correspondingly higher range of price fluctuation. In recent years, as
indicated in the chart, NASDAQ-traded stocks have lagged behind mid-cap
stocks. However, longer historical studies have shown that the total return
of small cap stocks more than doubled that of the Standard & Poor's 500
index from 1950 to the present.(2)
- - Medium-sized companies--like those included in the Standard & Poor's Midcap
400 stock index--have outperformed their larger and smaller counterparts
since 1987.
- - Large-sized companies--like those represented in the Standard & Poor's 500
stock index--have generally shown less volatility than small and medium-
sized companies, while still providing consistent returns.
HISTORIC GROWTH OF $10,000(1)
S&P Midcap 400 S&P 500 NASDAQ
6/30/87 10,410 10,557 10,195
10,679 11,066 10,441
11,039 11,453 10,923
10,877 11,254 10,666
8,282 8,805 7,762
7,846 8,053 7,326
8,504 8,717 7,934
8,864 9,070 8,274
9,396 9,449 8,809
9,609 9,213 8,994
9,634 9,300 9,105
9,404 9,330 8,891
10,134 9,823 9,475
9,838 9,770 9,299
9,578 9,393 9,040
9,999 9,855 9,308
10,041 10,111 9,182
9,814 9,920 8,918
10,269 10,155 9,156
10,943 10,877 9,634
10,945 10,563 9,596
11,248 10,874 9,764
11,831 11,418 10,264
12,350 11,820 10,711
12,372 11,831 10,450
13,059 12,877 10,895
13,488 13,077 11,267
13,720 13,096 11,354
13,118 12,767 10,938
13,376 12,978 10,949
13,911 13,363 10,919
12,710 12,444 9,982
13,128 12,550 10,223
13,474 12,959 10,456
12,893 12,611 10,085
14,115 13,771 11,019
14,268 13,771 11,098
13,916 13,699 10,521
12,436 12,407 9,152
11,738 11,887 8,271
11,351 11,807 7,919
12,408 12,515 8,620
13,192 12,947 8,975
14,207 13,484 9,944
15,441 14,392 10,877
16,214 14,821 11,579
16,182 14,826 11,637
16,888 15,398 12,150
16,098 14,788 11,426
17,038 15,452 12,053
17,616 15,755 12,620
17,628 15,578 12,649
18,289 15,763 13,035
17,634 15,071 12,577
12/31/91 19,784 16,874 14,076
20,105 16,539 14,890
20,382 16,697 15,208
19,687 16,450 14,495
19,421 16,909 13,893
19,563 16,925 14,052
19,077 16,763 13,531
19,991 17,423 13,944
19,468 17,005 13,519
19,818 17,292 14,003
20,259 17,328 14,529
21,346 17,852 15,670
22,137 18,158 16,252
22,384 18,286 16,717
22,028 18,478 16,103
22,861 18,949 16,568
22,229 18,467 15,879
23,195 18,887 16,818
23,390 19,039 16,900
23,311 18,937 16,918
24,224 19,589 17,834
24,562 19,529 18,312
24,606 19,908 18,708
24,016 19,651 18,111
25,213 19,980 18,649
25,765 20,630 19,217
25,344 20,010 19,026
24,261 19,229 17,848
24,404 19,451 17,618
24,121 19,692 17,650
23,380 19,311 16,948
24,132 19,920 17,337
25,343 20,668 18,380
24,960 20,255 18,352
25,196 20,678 18,665
24,008 19,861 18,013
24,317 20,252 18,053
24,535 20,743 18,130
25,768 21,492 19,055
29,303 22,217 19,619
26,800 22,839 20,262
27,389 23,668 20,756
28,590 24,331 22,410
30,046 25,104 24,036
30,546 25,096 24,490
31,376 26,259 25,053
30,532 26,128 24,873
31,811 27,201 25,429
31,821 27,835 25,259
32,248 28,743 25,443
33,285 28,942 26,409
33,776 29,327 26,442
34,768 29,721 28,581
35,182 30,400 29,851
6/30/96 34,748 30,640 28,449
Together, the GT Global America Funds seek to take advantage of these market
segments.
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GT GLOBAL AMERICA SMALL CAP GROWTH FUND
Investing primarily in companies with a market capitalization of up to $500
million at the time of purchase. Because small companies tend to react quickly
to overall economic cycles, their stocks historically have provided a
diversification vehicle for a portfolio concentrated in larger, more
stable companies.
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GT GLOBAL AMERICA GROWTH FUND
Investing primarily in small to medium U.S. companies that have a market
capitalization of $2 billion or less at the time of purchase, although currently
there are no stocks in the portfolio with a total market cap of less than $50
million.
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GT GLOBAL AMERICA VALUE FUND
Investing primarily in medium to large U.S. companies with a total market
capitalization of over $500 million at the time of purchase. The Fund seeks to
identify companies we believe are undervalued and therefore offer above-average
capital appreciation potential.
(1) Past performance is not a guarantee of future results. The indices are
unmanaged, do not incur expenses and are not available for investment.
Total returns include reinvested dividends. Investment return and
principal value will fluctuate. There can be no assurance that historic
trends will benefit future performance of the GT Global America Funds.
(2) Source: Ibbottson Associates
1
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MARKET REVIEW AND OUTLOOK
U.S. markets have been unusually strong over the past 18 months, despite mid-
July's stock market correction. During the reporting period, January 1, 1996, to
June 30, 1996, the Dow rose almost 53%, the S&P 500 was up 51.46% and the NASDAQ
59% (all figures include reinvested dividends).
In July, U.S. markets showed their first major correction since the first half
of 1994. By the end of the month, the three U.S. indices had fallen
substantially from the peaks they reached in late May: The Dow had fallen 6%,
the S&P had fallen 7%, and the NASDAQ had declined 15%--the biggest percentage
decline in the NASDAQ since the Gulf War.
What caused the selloff? The most obvious explanation is a simple price-to-
earnings (P/E) compression. In late May, the leading stocks on the NASDAQ had
P/E multiples well above their earnings growth rates. Investors had flocked to
those stocks offering the best earnings growth--and earnings surprises--because
these stocks had worked well for the previous year-and-a-half. Most P/E
multiples were 1.5 times the underlying earnings growth rate. The majority of
these leading stocks have now fallen anywhere from 10% to 70% in price.
Interestingly, the correction in these stocks was not due to these companies
reporting earnings disappointments, as most reported earnings were above
expectations for the second quarter. Furthermore, the catalyst for these steep
declines was not an increase in interest rates, or a change in Federal Reserve
policy. Yields on the 30-year bond have tried to rise above 7.22%, but have
effectively remained in a trading band around 7% for the last two months.
Rather, the correction was triggered by earnings disappointments from other
major high-tech stocks such as Motorola ($0.54 vs. $0.69 expected) and Hewlett
Packard ($1.37 vs. $1.45 expected).
What is the message? First, the market needed a correction, as valuations were
simply too high, in our opinion. Second, the market has had a delayed reaction
to this year's rise in long interest rates from
6% to 7%.
And the outlook for the future? Since earnings growth for the market as a whole
is anemic (approximately 0%-5%), little hope seems to exist for a higher market
based on strong earnings growth (although, it should be noted that, of the
companies in the S&P 500 that have reported--approximately 300-- 55% had
positive earnings growth and 34% had negative). This leaves the direction of
interest rates as a determining factor, in our opinion. If rates remain at
current levels or go lower, the market may edge higher. We believe growth stocks
would likely lead the way as their valuations are now reasonable: most of the
leading growth companies have P/Es below their earnings growth rate. However, if
rates rise, we believe the market must surely go lower.
In summary, we are in the sixth year of a bull market, earnings growth is anemic
and equities are fairly valued, so we are cautiously and closely watching the
direction of the yield on the 30-year bond and the direction of short-term
interest rates.
AUGUST 7, 1996
2
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GT GLOBAL AMERICA SMALL CAP GROWTH FUND
PERFORMANCE SUMMARY
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INVESTMENT OBJECTIVE
The Fund seeks long-term capital appreciation by investing primarily in equity
securities of small capitalization companies domiciled in the United States. We
define small companies as those having a market capitalization of up to $500
million at the time of purchase.
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GT GLOBAL AMERICA GT Global America Russell
SMALL CAP GROWTH FUND A Small Cap Growth Fund B 2000 Index
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10/18/95 9,525 10,000 10,000
9,558 10,035 9,746
9,742 10,219 10,156
9,833 10,306 10,424
1/31/96 9,900 10,367 10,412
10,458 10,954 10,737
10,867 11,374 10,955
11,883 12,441 11,541
12,325 12,887 11,996
6/30/96 11,608 11,635 11,504
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The chart above shows the performance of the GT Global America Small Cap Growth
Fund, Class A and B shares, since the Fund's inception on October 18, 1995,
versus the Russell 2000 Index. The chart assumes a hypothetical $10,000 initial
investment in the Fund's Class A shares and reflects all Fund expenses and the
maximum 4.75% sales charge. This represents a cumulative return of 16.08%. A
$10,000 investment in the Fund's Class B shares at inception would have returned
a cumulative 16.35% as of June 30, 1996. This figure reflects the applicable
contingent deferred sales charge (5% in the first year, decreasing to 0% after
six years) and assumes complete redemption at June 30, 1996. A $10,000
investment in Advisor Class shares at inception would have been worth $12,213.
The Fund is a professionally managed mutual fund while the index is unmanaged,
does not incur expenses and is not available for investment.
AVERAGE ANNUAL TOTAL RETURNS(1)
JUNE 30, 1996
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SHARE CLASS(3) WITHOUT SALES CHARGE(2) WITH SALES CHARGE
LIFE OF FUND LIFE OF FUND
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CLASS A 21.87 16.08
CLASS B 21.35 16.35
ADVISOR CLASS 22.13 N/A
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(1) Figures assume reinvestment of all dividends and capital gain distributions
at net asset value.
(2) Performance data do not reflect the maximum 4.75% sales charge and the
contingent deferred sales charge (5% in the first year, decreasing to 0%
after six years) for Class A and Class B shares, respectively, which, if
included, would have reduced the performance quoted.
(3) The Fund began operations on October 18, 1995. Advisor Class shares are not
sold directly to the general public and are only available through certain
employee benefit plans, financial institutions and other entities that have
entered into specific agreements with GT Global. Please see the
"Alternative Purchase Plan" section in the Fund's prospectus.
The above data represent past performance of the Fund's shares, which does not
guarantee future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
3
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INTERVIEW WITH PORTFOLIO MANAGER
SORAYA BETTERTON
Soraya Betterton assumed responsibility for the GT Global America Small Cap
Growth Fund on May 13, 1996. Ms. Betterton has been a portfolio manager for LGT
Asset Management since 1986, and was an investment analyst from 1984 to 1986. In
addition to managing the Small Cap Growth Fund, Ms. Betterton manages the GT
Global Latin America Growth Fund and GT Global America Value Fund, as well as
various other GT Global retail funds. Originally from England, she received her
B.A. from Oxford University.
Q THE FUND HAS HAD IMPRESSIVE RESULTS. HOW DID IT PERFORM IN THE SIX-MONTH
PERIOD FROM JANUARY 1, 1996, TO JUNE 30, 1996?
A We're pleased with the Fund's performance. Its total return for the six
months ended June 30, 1996, was 18.05% for Class A shares (12.44% including the
maximum 4.75% sales charge). Total return for Class B shares was 17.74% (12.74%
including the effect of the maximum 5% contingent deferred sales charge). During
the same period the Russell 2000 Index(4) returned 10.36%.
Q WHICH STOCKS WERE STRONG CONTRIBUTORS?
A Several of the Fund's largest holdings contributed to its outperformance.
These included Extended Stay America, a company offering extended-stay lodging
(up 14.6% during the period), EIS International, a telecommunications company
(up 59.4%), Falcon Building Products, a manufacturer and distributor of products
for construction and home improvement markets (up 27.3%), Harvey's Casinos, a
casino operator (up 18.6%), and Plasma and Materials Tech, a plasma processing
equipment manufacturer (up 33.3%).
Companies we believe have bright prospects include EIS International, Belmont
Homes, Lindsay Manufacturing, and Winstar Communications. EIS International
specializes in outbound call processing systems whose main functions are
automatic call initiation and rescheduling of non-completed calls. All the top
10 telemarketing companies are EIS customers and the company made two
acquisitions in the first quarter of this year, one of which gives the company a
product for the incoming call processing market, which is six times the size of
the outgoing market.
Belmont Homes builds single- and double-section manufactured housing,
predominantly in the southeastern states. The market for manufactured housing is
growing very fast because the quality of homes has improved markedly over the
past few years and the price is significantly cheaper than a conventional home.
Belmont has 290 dealers scattered throughout its territories and sales grew over
40% in 1995.
Lindsay Manufacturing is one of only two manufacturers of pivot irrigation
systems in the U.S. Pivot systems use less labor and water than either flood or
surface irrigation and have therefore been gaining market share over the last
few years. Still, pivot systems have only 8% of the market in the U.S., so there
is growth potential. Lindsay is installing robotics in its plant, which will
lower costs significantly. Export markets have also been growing rapidly with
the increase in popularity of pivot irrigation systems in developing countries.
Winstar Communications is a telecommunications company providing a wireless
alternative for the completion of long-distance calls, bypassing the "local
loop" service provided by local telephone companies over copper wire. The
company owns licenses in cities that cover over 50% of the market, making it by
far the largest company in this business. Other, later entrants have also had to
pay considerably more for their licenses.
Q CAN YOU DESCRIBE YOUR INVESTMENT PROCESS? WHAT ARE YOUR CRITERIA FOR
EVALUATING A COMPANY?
A Our investment approach is disciplined and systematic, based on research of
the economic fundamentals of the companies being purchased or sold. We believe
investment opportunities are created by economic changes that the market
eventually discounts. In the U.S. market we implement this philosophy by
concentrating on a search for undiscounted earnings growth. In looking for
appropriate securities for the Fund, we screen for the following major
characteristics: potential for profit margin expansion, potential for revenue
growth acceleration, management incentives, secure competitive advantage,
depressed investor psychology and tightening of supply/demand conditions in the
company's industry.
Based on our research, a projected earnings growth is assigned to each security.
When our projected earnings growth is in excess of market expectations, the
security is appropriate for inclusion in the portfolio. Conversely, when the
projected earnings growth is below market expectations, the stock is generally
viewed as neutral and is not included in the portfolio.
(4) The Russell 2000 Index is composed of 2,000 U.S.-domiciled common stocks
designed to measure small company stock performance. The index represents
roughly 10% of the U.S. stock market, and market capitalization of index
companies ranged from $90 million to $1.17 billion as of June 1996. It
includes the effect of reinvested dividends and is measured in U.S.
dollars. However, the index is not available for investment and therefore
its performance is not affected by sales charges or professional management
fees.
4
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GT GLOBAL AMERICA SMALL CAP GROWTH FUND (5)
ALLOCATION OF NET ASSETS
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JUNE 30, 1996
SERVICES 25.7%
CAPITAL GOODS 17.2
TECHNOLOGY 10.7
CONSUMER DURABLES 9.3
FINANCE 7.7
HEALTH CARE 6.4
MATERIALS/BASIC INDUSTRY 2.6
SHORT TERM & OTHER 20.4
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GT GLOBAL AMERICA SMALL CAP GROWTH FUND % of
KEY PORTFOLIO HOLDINGS(6) Net Assets
QUALITY DINING, INC. Operates quick-service and casual dining 4.4
restaurants in 20 states. Restaurants include Burger King,
Grady's American Grill, Chili's Grill & Bar, Bruegger's
Bagel Bakeries and Spageddies Italian Kitchen restaurants.
Quality Dining also franchises Bruegger's Bagel Bakeries.
EIS INTERNATIONAL, INC. A telecommunications company that 3.7
rovides outbound call center automation. Its call center
solutions combine computer and telephone hardware and
software systems to meet a variety of applications,
including direct consumer marketing, collections, market
research, fund-raising and customer service.
RADISYS CORPORATION Designs and produces embedded computer 3.3
solutions used by original equipment manufacturers for
products in the manufacturing automation, telecommunications,
medical devices, transportation, test and measurement,
and retail automation equipment industries.
THE SPORTS AUTHORITY, INC. Operates large-format sporting 3.0
oods stores in the U.S. and Canada. The stores sell a
variety of sporting goods, including brand-name sporting
equipment and athletic and active footwear and apparel.
REDMAN INDUSTRIES, INC. Produces manufactured housing in 3.0
a broad range of prices and sizes. Redman Industries
operates 17 manufacturing facilities and sells through over
900 independent dealers in 40 states.
SYRATECH CORPORATION Designs, manufactures, imports and 2.9
distributes tabletop and giftware products, including
sterling silver, silverplated and stainless steel flatware,
holloware and ornamental items. Syratech's products are sold
through a variety of stores nationwide.
NEOPROBE CORPORATION Neoprobe is developing a system for the 2.9
diagnosis and treatment of cancer. Its patented
radioimmuoguided surgery (RIGS) system detects cancerous
tissue that cannot be uncovered by traditional
preoperative tests.
PLASMA & MATERIALS TECHNOLOGIES, INC. Develops and markets 2.9
advanced plasma processing equipment for semiconductor
and flat panel display manufacturing. It sells its equipment
through a combination of a direct sales force and a worldwide
network of distributors.
LINDSAY MANUFACTURING COMPANY Designs, manufactures and 2.8
markets irrigation systems domestically and internationally.
The systems, sold under the Zimmatic trademark, are
electrically powered and provide automatic and continuous
irrigation of agricultural crops.
COHR, INC. Provides equipment servicing, group purchasing and 2.8
other outsourcing services and products to hospitals,
integrated health systems and alternate site providers.
(5) Allocations will change based on current market conditions.
(6) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
5
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GT GLOBAL AMERICA GROWTH FUND
INVESTMENT OBJECTIVE
The Fund seeks long-term growth of capital by investing primarily in the equity
securities of small to medium-sized companies in the United States that have a
market capitalization of $2 billion or less at the time of purchase.
PERFORMANCE SUMMARY
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GT GLOBAL AMERICA S&P Midcap Russell
GROWTH FUND A 400 Index 2000
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6/9/87 9,525 10,000 10,000
9,916 10,250 10,178
10,230 10,538 10,495
10,697 10,921 10,803
10,439 10,710 10,604
7,468 8,178 7,358
7,229 7,774 6,963
8,153 8,375 7,522
8,315 8,758 7,849
9,011 9,315 8,556
8,887 9,466 8,957
9,087 9,515 9,160
8,811 9,316 8,911
9,630 9,988 9,547
9,392 9,719 9,456
9,020 9,493 9,214
9,277 9,857 9,458
9,030 9,925 9,353
8,753 9,732 9,041
9,062 10,125 9,395
9,724 10,814 9,814
9,837 10,850 9,886
10,344 11,091 10,119
11,306 11,691 10,560
12,217 12,255 11,014
11,782 12,200 10,763
12,765 12,925 11,182
13,127 13,384 11,454
13,416 13,531 11,490
13,292 12,961 10,809
13,437 13,248 10,878
14,025 13,721 10,921
12,638 12,560 9,967
13,424 13,011 10,276
14,396 13,292 10,680
14,134 12,776 10,331
16,144 14,023 11,062
16,209 14,081 11,091
15,576 13,758 10,605
13,511 12,331 9,187
12,255 11,577 8,370
11,971 11,224 7,859
12,681 12,302 8,458
12,987 13,017 8,791
13,621 14,045 9,583
14,484 15,307 10,657
15,215 16,005 11,405
14,997 16,000 11,375
15,521 16,737 11,917
14,363 15,887 11,228
15,248 16,844 11,621
15,980 17,457 12,049
15,456 17,400 12,143
15,150 18,082 12,464
14,178 17,473 11,888
12/31/91 15,492 19,538 12,839
17,323 19,884 13,880
17,488 20,200 14,285
16,468 19,439 13,802
15,964 19,206 13,317
16,106 19,388 13,494
15,174 18,835 12,860
16,315 19,770 13,307
15,756 19,297 12,931
16,249 19,567 13,229
17,565 20,036 13,646
19,867 21,156 14,691
20,410 21,866 15,203
20,577 22,139 15,717
19,265 21,829 15,354
19,063 22,583 15,852
17,823 21,992 15,417
19,075 22,994 16,099
18,622 23,109 16,199
18,860 23,065 16,422
19,897 24,017 17,131
19,826 24,271 17,615
20,815 24,350 18,068
20,899 23,811 17,480
22,113 24,916 18,077
22,396 25,496 18,643
23,027 25,134 18,576
23,245 23,970 17,597
23,786 24,148 17,702
24,005 23,920 17,503
23,928 23,096 16,912
23,760 23,878 17,190
25,241 25,128 18,147
25,446 24,659 18,086
25,511 24,929 18,013
25,176 23,805 17,285
25,581 24,022 17,748
25,755 24,273 17,523
27,042 25,546 18,253
28,054 25,989 18,566
29,110 26,511 18,978
29,804 27,150 19,305
31,713 28,255 20,306
33,448 29,729 21,476
33,680 30,279 21,920
33,882 31,013 22,312
32,537 30,215 21,314
33,246 31,535 22,209
31,523 31,457 22,795
31,622 31,913 22,770
32,267 32,998 23,480
32,598 33,393 23,958
34,929 34,413 25,239
35,028 34,878 26,234
6/30/96 33,639 34,355 25,157
The chart above shows the performance of the GT Global America Growth Fund,
Class A shares, since the Fund's inception versus the S&P Midcap 400 Index and
the Russell 2000 Index. The chart assumes a hypothetical $10,000 initial
investment in the Fund's Class A shares and reflects all Fund expenses and the
maximum 4.75% sales charge. This represents a cumulative return of 236.39% and
an average annual total return of 14.33% for the Fund. A $10,000 investment in
the Fund's Class B shares at inception on April 1, 1993, would have been valued
at $11,794 on June 30, 1996. This figure reflects the applicable contingent
deferred sales charge (5% in the first year, decreasing to 0% after six years).
A $10,000 investment in Advisor Class shares at inception on June 1, 1995, would
have been worth $11,324. The Fund is a professionally managed mutual fund while
the indices are unmanaged, do not incur expenses and are not available for
investment.
AVERAGE ANNUAL TOTAL RETURNS(1)
JUNE 30, 1996
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SHARE CLASS WITHOUT SALES CHARGE(2) WITH SALES CHARGE
1-YEAR 5-YEAR LIFE OF 1-YEAR 5-YEAR LIFE OF
FUND FUND
- ------------------------------------------------------------------------------
Class A(3) 6.07 18.55 14.95 1.04 17.41 14.33
Class B(3) 5.37 N/A 18.57 0.75 N/A 17.94
Advisor Class(4) 6.38 N/A 13.24 N/A N/A N/A
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HISTORICAL PERFORMANCE(2)
ANNUAL TOTAL RETURNS
- ------------------------------------------------------------------------------
1987 1988 1989 1990 1991 1992 1993 1994 1995
CLASS A -14.40(3) 11.14 54.77 -7.40 19.29 31.74 8.34 15.69 23.23
CLASS B N/A N/A N/A N/A N/A N/A 16.08(3) 15.06 22.42
(1) Figures assume reinvestment of all dividends and capital gain
distributions at net asset value.
(2) Performance data do not reflect the maximum 4.75% sales charge and the
contingent deferred sales charge (5% in the first year, decreasing to 0%
after six years) for Class A and Class B shares, respectively, which, if
included, would have reduced the performance quoted.
(3) The Fund began operations on June 9, 1987; Class B shares commenced on
April 1, 1993.
(4) The Fund began offering Advisor Class shares on June 1, 1995. Advisor
Class shares are not sold directly to the general public and are only
available through certain employee benefit plans, financial institutions
and other entities that have entered into specific agreements with GT
Global. Please see the "Alternative Purchase Plan" section in the Fund's
prospectus.
The above data represent past performance of the Fund's shares, which does not
guarantee future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
6
<PAGE>
INTERVIEW WITH PORTFOLIO MANAGER
DEREK WEBB
Derek Webb, the new portfolio manager for the GT Global America Growth Fund,
assumed responsibility for the Fund on May 13, 1996. Mr. Webb has been a
portfolio manager for LGT Asset Management since 1994, and was a research
analyst from 1992 to 1994. He has managed both the GT Global Natural Resources
Fund and the GT Global Consumer Products and Services Fund since their
launches in 1994. Mr. Webb, who is a Chartered Financial Analyst, received an
M.B.A. from Wharton Business School and began his career on Wall Street in
1983.
Q THE FUND HAS HAD IMPRESSIVE LONG-TERM RESULTS. HOW HAS IT PERFORMED IN THE
LAST SIX MONTHS?
A The Fund's total return for the six months ending June 30, 1996, was
6.76% for Class A shares (1.69% including the maximum 4.75% sales charge).
Total return for Class B shares was 6.45% (1.45% including the effect of
the maximum 5% contingent deferred sales charge). During the same period
the S&P Midcap 400 Index5 returned 9.21% and the Russell 2000 Index6
returned 10.36%.
The primary factor contributing to the Fund's
underperformance was an overweighting of as much as 20% in semiconductor
companies and companies that supply the semiconductor industry. During the
period, the price for DRAM (dynamic random access memory) chips, which are
manufactured by the semiconductor industry and used in many personal
computers, fell dramatically, driving the Philadelphia Semiconductor Index
down 13%. We subsequently decreased our weighting in this sector.
Q WHICH STOCKS DID WELL OVER THE PERIOD?
A Three stocks did especially well, although they were each sold before
the end of the period for various reasons. Compuware Corporation, a company
that develops and maintains systems software products, was up 98% over the
six-month period. AnnTaylor Stores, a specialty retailer of quality women's
apparel, shoes and accessories, was up 72%, and Friedman's, a fine jewelry
retailer, was up 40%.
Q CAN YOU DESCRIBE YOUR INVESTMENT PROCESS? WHAT IS YOUR CRITERIA FOR
EVALUATING A COMPANY?
A We use a disciplined process, whereby we screen approximately 4,000
stocks in the U.S. market to look for companies with the following four
criteria: 1) high earnings growth; 2) repeated earnings surprises in the
last two quarters; 3) positive earnings revisions by Wall Street analysts,
and 4) high relative strength of the stock price. We believe screening for
these components allows us to zero in on the most attractive stocks in the
U.S. market.
Stocks that meet these technical criteria are then reviewed
fundamentally. We look for a superior product, service or strategy, a
strong balance sheet, high return on equity, high free cash flow, and a
price-to-earnings ratio below the earnings growth rate. Conversely, stocks
are generally sold when their earnings growth decelerates, when earnings
are below expectations, when analysts' consensus earnings are revised
downward, or when other stocks show better technical characteristics.
BUY DISCIPLINE
TOTAL STOCKS IN U.S.
APPROX. 10,000
---------------------------
MEANINGFUL ANALYST COVERAGE Stocks with promising:
APPROX. 4,000 / / EPS momentum
--------------------------- / / EPS surprises
PASS TECHNICAL SCREENING / / EPS revisions
APPROX. 400 / / Relative price
--------------------------- strength
PASS
FUNDAMENTALS Stocks with the
50-70 strongest fundamentals:
/ / Offer superior product,
service or strategy
/ / High ROE and high
free cash flow
/ / Show EPS growth
greater than P/E ratio
Q WHAT EFFECT DO YOU BELIEVE YOUR MANAGEMENT STRATEGY WILL HAVE ON THE
PORTFOLIO?
A With the investment process we are now using, we expect the portfolio
will be more fully invested than in the past. Also, we believe our strategy
will help overcome the Fund's tendency to underperform in up markets such
as last year's. Finally, the Fund previously had a bias primarily towards
small cap stocks, along with some mid-cap stocks, causing it to most
closely track indices such as the NASDAQ, the Russell 2000 and the S&P
Midcap 400. However, the Fund can, and in the future we expect it will,
invest in a broader range of equity securities available in the U.S.
(5)The S&P Midcap 400 Index is composed of the capitalization-weighted
average price of 400 selected common stocks of medium-size domestic
companies. It includes the effect of reinvested dividends and is measured
in U.S. dollars.
(6)The Russell 2000 Index is composed of 2,000 U.S.-domiciled common
stocks designed to measure small company stock performance. The index
represents roughly 10% of the U.S. stock market, and market capitalization
of index companies ranged from $90 million to $1.17 billion as of June
1996. It includes the effect of reinvested dividends and is measured in
U.S. dollars. These indices are not available for investment and therefore
their performance is not affected by sales charges or professional
management fees.
7
GT GLOBAL AMERICA GROWTH FUND(7)
ALLOCATION OF NET ASSETS
JUNE 30, 1996 JUNE 30, 1995
------------- -------------
SERVICES 21.8% 14.4%
CONSUMER NON-DURABLES 19.2 7.3
ENERGY 14.5 -
TECHNOLOGY 10.2 30.2
CAPITAL GOODS 4.0 1.4
HEALTH CARE 3.5 5.3
FINANCE 2.0 12.9
MATERIALS/BASIC INDUSTRY 2.0 1.3
CONSUMER DURABLES 0.7 1.2
SHORT TERM & OTHER 22.1 26.0
GT GLOBAL AMERICA GROWTH FUND % of
KEY PORTFOLIO HOLDINGS(8) Net Assets
----------
PHILIP MORRIS COMPANIES, INC. Has five principal operating
companies which include Philip Morris USA, Philip 5.2
Morris International, Inc., Kraft Foods, Inc., Miller
Brewing Company and Philip Morris Capital Corporation.
LANDMARK GRAPHICS CORPORATION A supplier of computer-aided
exploration systems. Geoscientists use the systems 3.0
to analyze data to explore for and discover petroleum reserves.
NIKE, INC. Designs, develops and markets a wide variety of
high-quality footwear and apparel products. Apparel 3.0
includes tennis, running, cycling and fitness wear as well as
athletic bags and accessory items.
TJX COMPANIES, INC. Operates chains of off-price apparel
stores-- T.J. Maxx, Winners Apparel Ltd., 2.9
HomeGoods and Marshalls--and a mail order catalog business,
Chadwick's of Boston.
SUN MICROSYSTEMS, INC. A supplier of high-performance workstations,
servers and networking software. The company primarily designs 2.8
its products for the engineering, scientific, commercial and
technical markets.
WATERS CORPORATION Develops, manufactures and distributes liquid
cromotography instruments, chromatography columns, sample injectors, 2.6
data management software and related equipment. Chromatography is
used in analyzing the chemical, physical and biological composition of
materials such as food, pharmaceuticals and water.
CONTINENTAL AIRLINES, INC. Provides passenger and cargo air service
throughout the world. Through its subsidiary, System One Holdings, 2.4
Inc., the company operates a computer reservation system for the
airline industry.
FILA HOLDING S.P.A. SPON ADR Fila Holding S.p.A. and its subsidiaries
design and market athletic and casual footwear and activewear, 2.4
casualwear and sportswear for men, women and children. The company also
licenses the production and sale of other branded products such as
sunglasses and golf clubs.
CALLAWAY GOLF COMPANY Designs, develops, manufactures and markets
innovative golf clubs to both skilled and average golf players. 2.3
The company also offers golf-related equipment and supplies manufactured
by other companies but bearing the Callaway trademark.
WORLDCOM, INC. Offers domestic and international voice, data and video 2.3
products and services to business customers, other carriers and the
residential market. The company operates a nationwide digital fiber
optic network in the U.S. and has worldwide network capacity.
(7) Allocations will change based on current market conditions.
(8) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
8
<PAGE>
GT GLOBAL AMERICA VALUE FUND
INVESTMENT OBJECTIVE
AND CURRENT STRATEGY
The Fund seeks long-term capital appreciation by investing primarily in
equity securities of medium to large capitalization issuers domiciled in the
United States. We define medium to large companies as having a market
capitalization greater than $500 million at the time of purchase. The Fund
looks for companies we believe are undervalued and therefore offer
above-average potential for capital appreciation.
PERFORMANCE SUMMARY
GT GLOBAL AMERICA VALUE A GT Global America Value B S&P 500
10/18/95 9,525 10,000 10,000
9,542 10,009 9,905
10,358 10,866 10,340
10,633 11,155 10,539
1/31/96 10,967 11,487 10,898
10,942 11,461 10,999
11,183 11,706 11,105
11,658 12,196 11,268
12,242 12,808 11,559
6/30/96 11,983 12,028 11,603
The chart above shows the performance of the GT Global America Value Fund,
Class A and B shares, since the Fund's inception on October 18, 1995, versus
the S&P500 Index. The chart assumes a hypothetical $10,000 initial investment
in the Fund's Class A shares and reflects all Fund expenses and the maximum
4.75% sales charge. This represents a cumulative return of 19.83%. A $10,000
investment in the Fund's Class B shares at inception would have returned a
cumulative 20.28% as of June 30, 1996. This figure reflects the applicable
contingent deferred sales charge (5% in the first year, decreasing to 0%
after six years) and assumes complete redemption at June 30, 1996. A $10,000
investment in Advisor Class shares at inception would have been worth
$12,625. The Fund is a professionally managed mutual fund while the index is
unmanaged, does not incur expenses and is not available for investment.
AVERAGE ANNUAL TOTAL RETURNS(1)
JUNE 30, 1996
SHARE CLASS(3) WITHOUT SALES CHARGE2 WITH SALES CHARGE
LIFE OF FUND LIFE OF FUND
CLASS A 25.81 19.83
CLASS B 25.28 20.28
ADVISOR CLASS 26.25 N/A
(1) Figures assume reinvestment of all dividends and capital gain
distributions at net asset value.
(2) Performance data do not reflect the maximum 4.75% sales charge and the
contingent deferred sales charge (5% in the first year, decreasing to 0%
after six years) for Class A and Class B shares, respectively, which, if
included, would have reduced the performance quoted.
(3 The Fund began operations on October 18, 1995. Advisor Class shares are
not sold directly to the general public and are only available through
certain employee benefit plans, financial institutions and other entities
that have entered into specific agreements with GT Global. Please see the
"Alternative Purchase Plan" section in the Fund's prospectus.
The above data represent past performance of the Fund's shares, which does
not guarantee future results. The investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
9
<PAGE>
INTERVIEW WITH PORTFOLIO MANAGER
SORAYA BETTERTON
Soraya Betterton has been a portfolio manager for LGT Asset Management since
1986 and an investment analyst from 1984 to 1986. Originally from England,
Ms. Betterton received her B.A. from Oxford University.
Q HOW DID THE FUND PERFORM?
A The Fund performed well. Its total return for the six months ended June
30, 1996, was 12.70% for Class A shares (7.34% including the maximum 4.75%
sales charge). Total return for Class B shares was 12.31% (7.31% including
the effect of the maximum 5% contingent deferred sales charge). During the
same period, its benchmark index, the S&P 500,(4) returned 10.10%.
Q WERE ANY STOCKS PARTICULARLY STRONG
CONTRIBUTORS?
A Yes, several of the Fund's largest holdings contributed to the good
performance. General Electric's stock price increased 21.2% during the
period; Monsanto, which manufactures and sells chemical and agricultural
products, pharmaceuticals, low-calorie sweeteners, plastics and man-made
fibers, increased 34.0%; Boeing, the aerospace firm, rose 11.9%; Eastman
Kodak, the imaging products company, increased 17.3%, and HFS Inc., a hotel
franchiser, 71.3%. Service Corp., which operates funeral and cemetery-related
businesses, rose 31.4%.
Q CAN YOU DESCRIBE SOME OF THE CHANGES IN THE FUND'S PORTFOLIO DURING THE
PERIOD?
A New positions included Eastman Kodak, which we believe has the
opportunity to cut costs now that it has repaired its balance sheet; Kodak's
overhead costs have been much higher than in comparable companies. Meanwhile,
Kodak is investing successfully in new digital technology, sales of which
have grown at over 30% per year during the past two years.
The Fund also purchased Sonat Offshore, which owns and leases oil rigs. Most
of Sonat's fleet is made up of the most sophisticated deep-water drilling
rigs available. Demand for these rigs is very strong as technological
developments have brought down the cost of drilling in deep water. Day rates
for Sonat's fleet have been rising for about nine months and are expected to
rise slightly in 1996. Day rates are currently well below "replacement
cost" rates required to make manufacture of new rigs profitable.
We took new positions, too, in Allen Group, a manufacturer of equipment for
the cellular telephone market benefiting from growth of cellular networks
around the world, as well as Belmont Homes, a builder of manufactured
housing. Demand for manufactured housing, which provides low-cost,
high-quality homes for low-income households, is growing rapidly.
While we also purchased more Boeing, the aircraft manufacturer, we reduced
exposure to interest-sensitive investments, especially financials, due to our
deteriorating outlook for fixed-income markets.
Q WHAT IS YOUR INVESTMENT PROCESS? CAN YOU DESCRIBE THE CRITERIA YOU USE TO
EVALUATE A COMPANY?
A Our investment approach is disciplined and systematic, based on research
of the economic fundamentals of the companies being purchased or sold. We
believe investment opportunities are created by economic changes the market
eventually discounts. In the U.S. market we implement this philosophy by
concentrating on a search for undervalued opportunities.
In looking for appropriate securities for the Fund, we screen for the
following major characteristics: potential for profit margin expansion
(particularly through restructuring or reorganization); management
incentives; secure competitive advantage; depressed investor psychology; and
tightening of supply/demand conditions in the company's industry.
Based on our research, a projected earnings is assigned to each security.
When our projected earnings is in excess of market expectations, the security
is appropriate for inclusion in the portfolio. Conversely, when the projected
earnings is below market expectations, the stock is generally viewed as
neutral and not included in the portfolio.
(4) The S&P 500 Index is composed of the capitalization-weighted average
price of the 500 largest publicly traded U.S. companies. It includes the
effect of reinvested dividends and is measured in U.S. dollars. However,
the index is not available for investment and, therefore, its performance
is not affected by sales charges or professional management fees.
10
<PAGE>
GT GLOBAL AMERICA VALUE FUND(5)
ALLOCATION OF NET ASSETS
June 30, 1996
SERVICES 19.4%
CAPITAL GOODS 14.4
MULTI-INDUSTRY/MISC. 13.2
FINANCE 10.7
HEALTH CARE 8.6
CONSUMER NON-DURABLES 5.3
ENERGY 4.8
MATERIALS/BASIC INDUSTRY 3.7
TECHNOLOGY 3.5
SHORT TERM & OTHER 16.4
<TABLE>
<CAPTION>
GT GLOBAL AMERICA VALUE FUND % of
KEY PORTFOLIO HOLDINGS(6) Net Assets
<S> <C>
HFS, INC. A hotel franchiser of Days Inn, Ramada, Howard Johnson, Super 8, Park Inn International, Villager Lodge, 4.6
Knights Inn and Winngate Inn hotels. HFS also operates Entry 21 and Electronic Realty Associates real estate
franchises.
EASTMAN KODAK COMPANY Develops, manufactures and markets consumer and commercial imaging products 4.4
worldwide. The various divisions provide a number of products and services including cameras, photofinishing, film
audiovisual equipment and plastics.
KMART CORPORATION An international retailer with nearly 2,400 retail outlets including Kmart and Builders Square. 4.2
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. An international supplier of fine papers to the tobacco industry and a 4.0
diversified producer of premium specialty papers for use in tea bags, coffee filters, alkaline batteries, vacuum cleaner
bags and business forms.
STORAGE USA, INC. A real estate investment trust that acquires, owns, develops and manages self-storage facilities 3.8
throughout the U.S. The facilities are designed to offer low-cost, enclosed and easily accessible storage space for
personal and business use on a month-to-month basis.
EIS INTERNATIONAL, INC. A telecommunications company that provides outbound call center automation. EIS's call 3.5
center solutions combine computer and telephone hardware and software systems to meet a variety of call center
applications, including direct consumer marketing, collections, market research, fund-raising and customer service.
LOCKHEED MARTIN CORPORATION Operates in four major sectors: aeronautics, electronics, information and 3.4
technology services, space and strategic missiles.
POLAROID CORPORATION Designs, manufactures and markets instant photographic cameras and filmed, magnetic 3.3
data, light polarizing filters and lenses, and various other commercial, optical and chemical products.
LINDSAY MANUFACTURING COMPANY Designs, manufactures and markets irrigation systems domestically and 3.2
internationally. The systems, sold under the Zimmatic trademark, are electrically powered and provide automatic and
continuous irrigation of agricultural crops.
GREEN TREE FINANCIAL CORPORATION A financial services company that works with dealers nationwide to provide 3.0
point-of-sale financing for manufactured homes, site-built home improvements, consumer products and over-the-road
tractors and trailers. The company also offers consumers home equity mortgages and revolving credit, and provides
financial products to dealers in the U.S.
</TABLE>
(5) Allocations will change based on current market conditions.
(6) There is no assurance the Fund will continue to hold these or any other
securities mentioned in this report.
11
<PAGE>
LGT ASSET MANAGEMENT'S WORLDWIDE INVESTMENT OFFICES
[WORLD MAP]
LGT Asset Management is a member of the $46 billion Liechtenstein Global
Trust. LGT Asset Management maintains fully staffed investment offices in
London, Frankfurt, Hong Kong, Tokyo, Singapore, Sydney, San Francisco and
Toronto.
<PAGE>
GT GLOBAL
AMERICA FUNDS
FINANCIAL
STATEMENTS
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS SHARES VALUE ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Services (21.8%)
TJX Companies, Inc. ................................................ 610,300 $ 20,597,620 2.9
RETAILERS-APPAREL
Continental Airlines, Inc. "B"-/- .................................. 270,000 16,672,500 2.4
TRANSPORTATION - AIRLINES
WorldCom, Inc.-/- .................................................. 287,300 15,909,238 2.3
TELEPHONE - LONG DISTANCE
Vons Cos., Inc.-/- ................................................. 398,500 14,893,938 2.1
RETAILERS-FOOD
Safeway, Inc.-/- ................................................... 450,500 14,866,500 2.1
RETAILERS-FOOD
HFS, Inc. .......................................................... 200,500 14,035,000 2.0
LEISURE & TOURISM
Ross Stores, Inc. .................................................. 400,800 13,927,800 2.0
RETAILERS-APPAREL
Borders Group, Inc.-/- ............................................. 421,900 13,606,275 1.9
RETAILERS-OTHER
Trans World Airlines (TWA)-/- ...................................... 632,500 9,013,125 1.3
TRANSPORTATION - AIRLINES
Claire's Stores, Inc. .............................................. 266,700 7,367,588 1.0
RETAILERS-APPAREL
Sturm, Ruger & Co., Inc. ........................................... 138,200 6,426,300 0.9
LEISURE & TOURISM
Rio Hotel and Casino, Inc.-/- ...................................... 356,600 5,482,725 0.8
LEISURE & TOURISM
A.H. Belo Corp. "A" ................................................ 25,900 964,775 0.1
BROADCASTING & PUBLISHING
------------
153,763,384
------------
Consumer Non-Durables (19.2%)
Philip Morris Cos., Inc. ........................................... 356,000 37,024,000 5.2
FOOD
Nike, Inc. "B" ..................................................... 203,700 20,930,175 3.0
TEXTILES & APPAREL
Fila Holding S.p.A. - ADR(::) {\/} ................................. 193,000 16,646,250 2.4
TEXTILES & APPAREL
Callaway Golf Co. .................................................. 483,200 16,066,400 2.3
RECREATION
Liz Claiborne, Inc. ................................................ 386,500 13,382,563 1.9
TEXTILES & APPAREL
Harley-Davidson, Inc. .............................................. 315,500 12,974,938 1.8
RECREATION
Foodmaker, Inc.-/- ................................................. 1,087,900 9,383,138 1.3
FOOD
Nautica Enterprises, Inc.-/- ....................................... 111,100 3,194,125 0.5
TEXTILES & APPAREL
Regal Cinemas, Inc.-/- ............................................. 62,000 2,836,500 0.4
RECREATION
Oakley, Inc.-/- {\/} ............................................... 46,600 2,108,650 0.3
OTHER CONSUMER GOODS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F1
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS SHARES VALUE ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Consumer Non-Durables (Continued)
K2, Inc.-/- ........................................................ 30,000 $ 813,750 0.1
RECREATION
------------
135,360,489
------------
Energy (14.5%)
Landmark Graphics Corp.{::} -/- .................................... 1,114,300 21,450,275 3.0
ENERGY EQUIPMENT & SERVICES
Reading & Bates Corp.-/- ........................................... 681,300 15,073,763 2.1
ENERGY EQUIPMENT & SERVICES
Baker Hughes, Inc. ................................................. 453,800 14,918,675 2.1
ENERGY EQUIPMENT & SERVICES
Coastal Corp. ...................................................... 356,900 14,900,575 2.1
GAS PRODUCTION & DISTRIBUTION
ENSCO International, Inc.-/- ....................................... 412,800 13,416,000 1.9
ENERGY EQUIPMENT & SERVICES
Rowan Cos., Inc.-/- ................................................ 627,400 9,254,150 1.3
ENERGY EQUIPMENT & SERVICES
Marine Drilling Co., Inc.-/- ....................................... 714,700 7,236,338 1.0
ENERGY EQUIPMENT & SERVICES
Global Marine, Inc.-/- ............................................. 483,500 6,708,563 1.0
ENERGY EQUIPMENT & SERVICES
------------
102,958,339
------------
Technology (10.2%)
Sun Microsystems, Inc.-/- .......................................... 337,800 19,887,975 2.8
COMPUTERS & PERIPHERALS
Adaptec, Inc.-/- ................................................... 303,400 14,373,575 2.0
COMPUTERS & PERIPHERALS
Intel Corp. ........................................................ 191,200 14,041,250 2.0
SEMICONDUCTORS
MEMC Electronic Materials, Inc.-/- ................................. 338,700 13,124,625 1.9
SEMICONDUCTORS
Cognos, Inc.(::) -/- {\/} .......................................... 405,100 9,317,300 1.3
SOFTWARE
FTP Software, Inc.-/- .............................................. 137,800 1,136,850 0.2
SOFTWARE
------------
71,881,575
------------
Capital Goods (4.0%)
Stratacom, Inc.-/- ................................................. 262,200 14,748,750 2.1
TELECOM EQUIPMENT
UCAR International, Inc.-/- ........................................ 327,800 13,644,675 1.9
ELECTRICAL PLANT/EQUIPMENT
------------
28,393,425
------------
Health Care (3.5%)
Waters Corp.-/- .................................................... 546,600 18,037,800 2.6
MEDICAL TECHNOLOGY & SUPPLIES
Orthologic Corp.-/- ................................................ 466,500 5,947,875 0.8
MEDICAL TECHNOLOGY & SUPPLIES
Abaxis, Inc.-/- .................................................... 121,300 561,013 0.1
MEDICAL TECHNOLOGY & SUPPLIES
------------
24,546,688
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS SHARES VALUE ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Finance (2.0%)
Leader Financial Corp. ............................................. 234,200 $ 10,480,450 1.5
BANKS-REGIONAL
Equity Inns, Inc. .................................................. 298,500 3,432,750 0.5
REAL ESTATE INVESTMENT TRUST
------------
13,913,200
------------
Materials/Basic Industry (2.0%)
Cytec Industries, Inc.-/- .......................................... 161,300 13,791,150 2.0
------------
CHEMICALS
Consumer Durables (0.7%)
Syratech Corp.-/- .................................................. 208,500 4,691,250 0.7
APPLIANCES & HOUSEHOLD
------------ -----
TOTAL EQUITY INVESTMENTS (cost $547,182,996) ......................... 549,299,500 77.9
------------ -----
<CAPTION>
MARKET % OF NET
REPURCHASE AGREEMENT SHARES VALUE ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Dated June 28, 1996, with State Street Bank & Trust Co., due July 1,
1996, for an effective yield of 5.2%, collateralized by
$190,190,000 U.S. Treasury Notes, 6% due 5/31/98 (market value of
collateral is $190,443,327, including accrued interest). (cost
$186,696,867) ..................................................... 186,696,867 26.5
------------ -----
TOTAL INVESTMENTS (cost $733,879,863) * .............................. 735,996,367 104.4
Other Assets and Liabilities ......................................... (30,894,357) (4.4)
------------ -----
NET ASSETS ........................................................... $705,102,010 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
(::) The country of origin for Fila Holding S.p.A. - ADR is Italy and
the country of origin for Cognos, Inc. is Canada.
{::} See Note 5 of Notes to Financial Statements.
* For Federal income tax purposes, cost is $737,810,165 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 17,742,200
Unrealized depreciation: (19,555,998)
-------------
Net unrealized depreciation: $ (1,813,798)
-------------
-------------
</TABLE>
Abbreviation:
ADR--American Depository Receipt
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND -- CONSOLIDATED
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS SHARES VALUE ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Services (25.7%)
Quality Dining, Inc.-/- ............................................ 28,400 $ 930,100 4.4
RESTAURANTS
Sports Authority, Inc.-/- .......................................... 19,500 638,625 3.0
RETAILERS-OTHER
Extended Stay America, Inc.-/- ..................................... 16,600 522,900 2.5
LEISURE & TOURISM
WinStar Communications, Inc.-/- .................................... 20,900 521,194 2.5
WIRELESS COMMUNICATIONS
Intercel, Inc.-/- .................................................. 25,000 500,000 2.4
WIRELESS COMMUNICATIONS
Measurex Corp. ..................................................... 16,900 494,325 2.3
CONSUMER SERVICES
Harveys Casino Resorts ............................................. 23,000 488,750 2.3
LEISURE & TOURISM
Proffitt's, Inc.-/- ................................................ 13,456 477,688 2.3
RETAILERS-OTHER
Players International, Inc.-/- ..................................... 30,300 295,425 1.4
LEISURE & TOURISM
Stein Mart, Inc.-/- ................................................ 14,700 268,275 1.3
RETAILERS-OTHER
Rio Hotel and Casino, Inc.-/- ...................................... 11,700 179,888 0.9
LEISURE & TOURISM
Marker International-/- ............................................ 10,000 77,500 0.4
WHOLESALE & INTERNATIONAL TRADE
------------
5,394,670
------------
Capital Goods (17.2%)
Plasma & Materials Technologies, Inc.-/- ........................... 40,400 606,000 2.9
ELECTRICAL PLANT/EQUIPMENT
Lindsay Manufacturing Co. .......................................... 14,800 595,700 2.8
MACHINERY & ENGINEERING
Belmont Homes, Inc.-/- ............................................. 26,400 570,900 2.7
CONSTRUCTION
Tekelec-/- ......................................................... 40,000 525,000 2.5
TELECOM EQUIPMENT
Belden, Inc. ....................................................... 15,700 471,000 2.2
ELECTRICAL PLANT/EQUIPMENT
PPT Vision, Inc.-/- ................................................ 24,400 301,950 1.4
ELECTRICAL PLANT/EQUIPMENT
Microwave Power Devices, Inc.-/- ................................... 50,100 300,600 1.4
TELECOM EQUIPMENT
American Buildings Co.-/- .......................................... 9,500 277,875 1.3
CONSTRUCTION
------------
3,649,025
------------
Technology (10.7%)
EIS International, Inc.-/- ......................................... 31,000 790,500 3.7
TELECOM TECHNOLOGY
RadiSys Corp.-/- ................................................... 20,400 693,600 3.3
COMPUTERS & PERIPHERALS
</TABLE>
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND -- CONSOLIDATED
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS SHARES VALUE ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Technology (Continued)
Dallas Semiconductor Corp. ......................................... 24,300 $ 440,438 2.1
SEMICONDUCTORS
Active Voice Corp.-/- .............................................. 28,000 336,000 1.6
SOFTWARE
------------
2,260,538
------------
Consumer Durables (9.3%)
Redman Industries, Inc.-/- ......................................... 30,700 637,025 3.0
HOUSING
Syratech Corp.-/- .................................................. 27,600 621,000 2.9
APPLIANCES & HOUSEHOLD
REX Stores Corp.-/- ................................................ 24,700 379,763 1.8
CONSUMER ELECTRONICS
Southern Energy Homes, Inc.-/- ..................................... 16,000 344,000 1.6
HOUSING
------------
1,981,788
------------
Finance (7.7%)
Storage USA, Inc. .................................................. 15,500 499,873 2.4
REAL ESTATE
Game Financial Corp.-/- ............................................ 26,500 371,000 1.8
CONSUMER FINANCE
AmVestors Financial Corp. .......................................... 15,900 250,425 1.2
INSURANCE-LIFE
Mid-America Apartment Communities, Inc. ............................ 9,800 248,675 1.2
REAL ESTATE
Leader Financial Corp. ............................................. 3,000 134,250 0.6
SAVINGS&LOANS
Equity Inns, Inc. .................................................. 9,800 112,700 0.5
REAL ESTATE INVESTMENT TRUST
------------
1,616,923
------------
Health Care (6.4%)
Neoprobe Corp.-/- .................................................. 34,500 608,063 2.9
BIOTECHNOLOGY
Cohr, Inc.-/- ...................................................... 25,000 593,750 2.8
MEDICAL TECHNOLOGY & SUPPLIES
Abaxis, Inc.-/- .................................................... 30,000 138,750 0.7
MEDICAL TECHNOLOGY & SUPPLIES
------------
1,340,563
------------
Materials/Basic Industry (2.6%)
Falcon Building Products, Inc.-/- .................................. 32,700 392,400 1.9
BUILDING MATERIALS & COMPONENTS
Commercial Intertech Corp. ......................................... 5,500 141,625 0.7
METALS -- NON-FERROUS
------------
534,025
------------ -----
TOTAL EQUITY INVESTMENTS (cost $15,994,733) .......................... 16,777,532 79.6
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND -- CONSOLIDATED
<TABLE>
<CAPTION>
MARKET % OF NET
REPURCHASE AGREEMENT VALUE ASSETS
- ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
Dated June 28,1996, with State Street Bank & Trust Co., due July 1,
1996, for an effective yield of 5.2%, collateralized by $3,715,000
Federal Home Loan Mortgage Corp., 6.07% due 11/20/98 (market value
of collateral is $3,701,949, including accrued interest). (cost
$3,627,571) ...................................................... $ 3,627,571 17.2
------------ -----
TOTAL INVESTMENTS (cost $19,622,304) * ............................... 20,405,103 96.8
Other Assets and Liabilities ......................................... 671,178 3.2
------------ -----
NET ASSETS ........................................................... $ 21,076,281 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
* For Federal income tax purposes, cost is $19,622,304 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 1,296,815
Unrealized depreciation: (514,016)
-------------
Net unrealized appreciation: $ 782,799
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL AMERICA VALUE FUND -- CONSOLIDATED
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS SHARES VALUE ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Services (19.4%)
HFS, Inc. .......................................................... 4,000 $ 280,000 4.6
LEISURE & TOURISM
Kmart Corp. ........................................................ 20,500 253,688 4.2
RETAILERS-OTHER
TJX Companies, Inc. ................................................ 5,000 168,750 2.8
RETAILERS-APPAREL
Corporate Express, Inc.-/- ......................................... 4,200 168,000 2.8
RETAILERS-OTHER
Service Corporation International .................................. 2,750 158,125 2.6
CONSUMER SERVICES
Federated Department Stores, Inc.-/- ............................... 4,200 143,325 2.4
RETAILERS-APPAREL
------------
1,171,888
------------
Capital Goods (14.4%)
Lockheed Martin Corp. .............................................. 2,440 204,960 3.4
AEROSPACE/DEFENSE
Lindsay Manufacturing Co. .......................................... 4,800 193,200 3.2
MACHINERY & ENGINEERING
Belden, Inc. ....................................................... 5,000 150,000 2.5
ELECTRICAL PLANT/EQUIPMENT
Boeing Co. ......................................................... 1,675 145,934 2.4
AEROSPACE/DEFENSE
Belmont Homes, Inc.-/- ............................................. 6,300 136,238 2.2
CONSTRUCTION
Allen Group, Inc. .................................................. 1,900 41,325 0.7
TELECOM EQUIPMENT
------------
871,657
------------
Multi-Industry/Miscellaneous (13.2%)
Eastman Kodak Co. .................................................. 3,420 265,905 4.4
MISCELLANEOUS
Polaroid Corp. ..................................................... 4,315 196,872 3.3
MISCELLANEOUS
ITT Corp. (ITT Destinations, Inc.)-/- .............................. 2,610 172,913 2.9
CONGLOMERATE
General Electric Co. ............................................... 1,380 119,370 2.0
CONGLOMERATE
ITT Industries, Inc. ............................................... 1,440 36,180 0.6
CONGLOMERATE
------------
791,240
------------
Finance (10.7%)
Storage USA, Inc. .................................................. 7,200 232,200 3.8
REAL ESTATE
Green Tree Financial Corp. ......................................... 5,780 180,625 3.0
CONSUMER FINANCE
Transaction Network Service ........................................ 4,800 103,200 1.7
OTHER FINANCIAL
</TABLE>
The accompanying notes are an integral part of the financial statements.
F7
<PAGE>
GT GLOBAL AMERICA VALUE FUND -- CONSOLIDATED
<TABLE>
<CAPTION>
MARKET % OF NET
EQUITY INVESTMENTS SHARES VALUE ASSETS
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Finance (Continued)
ITT Hartford Group, Inc. ............................................. 1,465 $ 78,011 1.3
INSURANCE - MULTI-LINE
Citicorp ........................................................... 530 43,791 0.7
BANKS-MONEY CENTER
Investors Financial Services Corp. ................................. 500 11,625 0.2
OTHER FINANCIAL
------------
649,452
------------
Health Care (8.6%)
Amgen, Inc. ........................................................ 3,170 171,180 2.8
BIOTECHNOLOGY
Beverly Enterprises-/- ............................................. 12,000 144,000 2.4
HEALTH CARE SERVICES
Vivra, Inc. ........................................................ 3,900 128,213 2.1
HEALTH CARE SERVICES
U.S. Surgical Corp. ................................................ 2,540 78,740 1.3
MEDICAL TECHNOLOGY & SUPPLIES
------------
522,133
------------
Consumer Non-Durables (5.3%)
Schweitzer-Mauduit International, Inc. ............................. 8,600 241,875 4.0
TOBACCO
Revlon, Inc. "A"-/- ................................................ 2,400 69,900 1.2
PERSONAL CARE/COSMETICS
Estee Lauder Cos. "A" .............................................. 200 8,450 0.1
PERSONAL CARE/COSMETICS
------------
320,225
------------
Energy (4.8%)
Sonat Offshore Drilling Co. ........................................ 3,000 151,500 2.5
OIL
Global Marine, Inc.-/- ............................................. 10,200 141,525 2.3
ENERGY EQUIPMENT & SERVICES
------------
293,025
------------
Materials/Basic Industry (3.7%)
Kimberly-Clark Corp. ............................................... 1,625 125,531 2.1
FOREST PRODUCTS
Monsanto Co. ....................................................... 3,025 98,312 1.6
CHEMICALS
------------
223,843
------------
Technology (3.5%)
EIS International, Inc.-/- ......................................... 8,200 209,100 3.5
TELECOM TECHNOLOGY
------------ -----
TOTAL EQUITY INVESTMENTS (cost $4,751,088) ........................... 5,052,563 83.6
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
F8
<PAGE>
GT GLOBAL AMERICA VALUE FUND -- CONSOLIDATED
<TABLE>
<CAPTION>
MARKET % OF NET
REPURCHASE AGREEMENT VALUE ASSETS
- ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
Dated June 28, 1996, with State Street Bank & Trust Co., due July 1,
1996, for an effective yield of 5.2%, collateralized by $880,000
Federal Home Loan Mortgage Corp., 6.07% due 11/20/98 (market value
of collateral is $876,909, including accrued interest). (cost
$855,371) ......................................................... $ 855,371 14.2
------------ -----
TOTAL INVESTMENTS (cost $5,606,459) * ................................ 5,907,934 97.8
Other Assets and Liabilities ......................................... 132,745 2.2
------------ -----
NET ASSETS ........................................................... $ 6,040,679 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
* For Federal income tax purposes, cost is $5,606,459 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 389,296
Unrealized depreciation: (87,821)
-------------
Net unrealized appreciation: $ 301,475
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F9
<PAGE>
GT GLOBAL AMERICA FUNDS
STATEMENTS OF ASSETS
AND LIABILITIES
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
------------------------------------------
AMERICA
AMERICA SMALL CAP AMERICA
GROWTH GROWTH VALUE
FUND FUND-CONSOLIDATED FUND-CONSOLIDATED
---------- -------------- --------------
<S> <C> <C> <C>
Assets:
Investments in securities, at value (cost $547,182,996; $15,994,733;
and $4,751,088, respectively) (Note 1)................................ $549,299,500 $16,777,532 $5,052,563
Repurchase agreement, at value and cost (Note 1)....................... 186,696,867 3,627,571 855,371
U.S. currency.......................................................... 54 85 421
Dividends receivable................................................... 633,670 13,040 6,914
Receivable for Fund shares sold........................................ 2,447,215 267,284 8,639
Receivable for securities sold......................................... 11,212,848 317,169 4,621
Receivable from LGT Asset Management, Inc. (Note 2).................... -- 124,181 137,252
Unamortized organizational costs (Note 1).............................. -- 76,084 76,084
Cash held as collateral for securities loaned (Note 1)................. 13,530,300 -- --
---------- -------------- --------------
Total assets......................................................... 763,820,454 21,202,946 6,141,865
---------- -------------- --------------
Liabilities:
Payable for custodian fees (Note 1).................................... 16,835 522 168
Payable for fund accounting fees (Note 2).............................. 14,167 1,486 612
Payable for Fund shares repurchased.................................... 7,109,007 43,323 34,755
Payable for investment management and administration fees (Note 2)..... 410,777 46,019 17,383
Payable for organization expenses (Note 2)............................. -- -- 1,884
Payable for printing and postage expenses.............................. 123,895 5,516 5,844
Payable for professional fees.......................................... 12,599 4,296 6,318
Payable for registration and filing fees............................... 32,702 3,722 3,290
Payable for securities purchased....................................... 36,904,221 -- 12,112
Payable for service and distribution expenses (Note 2)................. 381,510 11,961 3,829
Payable for transfer agent fees (Note 2)............................... 165,454 4,034 9,191
Payable for Trustees' fees and expenses (Note 2)....................... 10,573 3,889 3,889
Other accrued expenses................................................. 6,404 1,797 1,811
Collateral for securities loaned (Note 1).............................. 13,530,300 -- --
---------- -------------- --------------
Total liabilities.................................................... 58,718,444 126,565 101,086
Minority interest (Notes 1 & 2)........................................ -- 100 100
---------- -------------- --------------
Net assets............................................................... $705,102,010 $21,076,281 $6,040,679
---------- -------------- --------------
---------- -------------- --------------
Class A:
Net asset value and redemption price per share ($375,575,186 DIVIDED BY
18,447,140; $10,273,983 DIVIDED BY 737,346; and $1,800,932 DIVIDED BY
125,215 shares outstanding, respectively)............................... $ 20.36 $ 13.93 $ 14.38
---------- -------------- --------------
---------- -------------- --------------
Maximum offering price per share (100/95.25 of $20.36; 100/95.25 of
$13.93; and 100/95.25 of $14.38, respectively) *........................ $ 21.38 $ 14.62 $ 15.10
---------- -------------- --------------
---------- -------------- --------------
Class B:+
Net asset value and offering price per share ($327,924,323 DIVIDED BY
16,414,586; $10,570,666 DIVIDED BY 762,231; and $4,086,937 DIVIDED BY
285,346 shares outstanding, respectively)............................... $ 19.98 $ 13.87 $ 14.32
---------- -------------- --------------
---------- -------------- --------------
Advisor Class:
Net asset value, offering price per share, and redemption price per share
($1,602,501 DIVIDED BY 78,741; $231,632 DIVIDED BY 16,583; and $152,810
DIVIDED BY 10,590 shares outstanding, respectively)..................... $ 20.35 $ 13.97 $ 14.43
---------- -------------- --------------
---------- -------------- --------------
Net assets consist of:
Paid in capital (Note 4)............................................... $638,787,133 $19,761,244 $5,479,058
Undistributed/Accumulated net investment income (loss)................. 1,430,071 (21,005) (10,241)
Accumulated net realized gain on investments........................... 62,768,302 553,243 270,387
Net unrealized appreciation of investments............................. 2,116,504 782,799 301,475
---------- -------------- --------------
Total -- representing net assets applicable to capital shares
outstanding............................................................. $705,102,010 $21,076,281 $6,040,679
---------- -------------- --------------
---------- -------------- --------------
<FN>
- ----------------
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F10
<PAGE>
GT GLOBAL AMERICA FUNDS
STATEMENTS OF OPERATIONS
Six months ended June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
------------------------------------------
AMERICA
AMERICA SMALL CAP AMERICA
GROWTH GROWTH VALUE
FUND FUND-CONSOLIDATED FUND-CONSOLIDATED
---------- -------------- --------------
<S> <C> <C> <C>
Investment income: (Note 1)
Interest income........................................................ $4,728,066 $ 72,106 $ 18,189
Dividend income........................................................ 2,649,123 44,068 26,059
Other income........................................................... -- 1,047 --
---------- -------------- --------------
Total investment income.............................................. 7,377,189 117,221 44,248
---------- -------------- --------------
Expenses:
Amortization of organization costs (Note 1)............................ -- 8,827 8,827
Audit fees............................................................. 24,570 12,730 12,730
Custodian fees (Note 1)................................................ 25,311 6,236 7,236
Fund accounting fees (Note 2).......................................... 88,855 1,537 577
Insurance expenses..................................................... 5,461 -- --
Investment management and administration fees (Note 2)................. 2,540,960 43,971 16,412
Legal fees............................................................. 5,824 28,778 21,132
Printing and postage expenses.......................................... 113,932 59,686 54,686
Registration and filing fees (Note 1).................................. 69,918 25,006 25,006
Service and distribution expenses: (Note 2)
Class A.............................................................. 638,132 10,672 2,690
Class B.............................................................. 1,710,097 30,202 14,740
Transfer agent fees (Note 2)........................................... 966,860 28,471 18,438
Trustees' fees and expenses (Note 2)................................... 10,920 8,280 8,280
Other expenses......................................................... 10,000 2,081 2,035
---------- -------------- --------------
Total expenses before reductions and reimbursement..................... 6,210,840 266,477 192,789
Expense reductions (Notes 1 & 6)..................................... (4,826) -- --
Expenses reimbursed by LGT Asset Management, Inc. (Note 2)........... -- (124,181) (137,252)
---------- -------------- --------------
Total net expenses..................................................... 6,206,014 142,296 55,537
---------- -------------- --------------
Net investment income (loss)............................................. 1,171,175 (25,075) (11,289)
---------- -------------- --------------
Net realized and unrealized gain on investments: (Note 1)
Net realized gain on investments....................................... 54,982,093 553,243 270,387
Net change in unrealized appreciation of investments................... (10,090,613) 778,006 246,798
---------- -------------- --------------
Net realized and unrealized gain on investments.......................... 44,891,480 1,331,249 517,185
---------- -------------- --------------
Net increase in net assets resulting from operations..................... $46,062,655 $1,306,174 $ 505,896
---------- -------------- --------------
---------- -------------- --------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F11
<PAGE>
GT GLOBAL AMERICA FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL
-------------------------------------------------------------------------------------------------
AMERICA
SMALL CAP GROWTH AMERICA
FUND-CONSOLIDATED VALUE FUND-CONSOLIDATED
------------------------------- -------------------------------
AMERICA OCTOBER 18, OCTOBER 18,
GROWTH FUND 1995 1995
------------------------------- (COMMENCEMENT (COMMENCEMENT
SIX MONTHS SIX MONTHS OF OPERATIONS) SIX MONTHS OF OPERATIONS)
ENDED YEAR ENDED ENDED TO ENDED TO
JUNE 30, 1996 DECEMBER 31, JUNE 30, 1996 DECEMBER 31, JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 (UNAUDITED) 1995
-------------- --------------- -------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in net
assets
Operations:
Net investment income
(loss)...................... $ 1,171,175 $ 5,981,525 $ (25,075) $ 4,070 $ (11,289) $ 1,048
Net realized gain on
investments and foreign
currency transactions....... 54,982,093 93,317,375 553,243 -- 270,387 --
Net change in unrealized
appreciation of
investments................. (10,090,613) (4,611,894) 778,006 4,793 246,798 54,677
-------------- --------------- -------------- --------------- -------------- ---------------
Net increase in net assets
resulting from
operations................ 46,062,655 94,687,006 1,306,174 8,863 505,896 55,725
-------------- --------------- -------------- --------------- -------------- ---------------
Class A:
Distributions to shareholders:
(Note 1)
From net investment income... -- (3,774,599) -- -- -- --
From net realized gain on
investments................. -- (46,598,539) -- -- -- --
Class B:
Distributions to shareholders:
(Note 1)
From net investment income... -- (1,969,042) -- -- -- --
From net realized gain on
investments................. -- (41,818,697) -- -- -- --
Advisor Class:
Distributions to shareholders:
(Note 1)
From net investment income... -- (18,429) -- -- -- --
From net realized gain on
investments................. -- (170,545) -- -- -- --
-------------- --------------- -------------- --------------- -------------- ---------------
Total distributions........ -- (94,349,851) -- -- -- --
-------------- --------------- -------------- --------------- -------------- ---------------
Capital share transactions:
(Note 4)
Increase from capital shares
sold and reinvested......... 685,233,115 1,840,086,218 28,176,592 4,974,031 6,897,864 2,211,337
Decrease from capital shares
repurchased................. (772,314,089) (1,371,300,487) (12,412,451) (1,076,928) (3,569,037) (161,106)
-------------- --------------- -------------- --------------- -------------- ---------------
Net increase (decrease)
from capital share
transactions.............. (87,080,974) 468,785,731 15,764,141 3,897,103 3,328,827 2,050,231
-------------- --------------- -------------- --------------- -------------- ---------------
Total increase (decrease) in
net
assets........................ (41,018,319) 469,122,886 17,070,315 3,905,966 3,834,723 2,105,956
Net assets:
Beginning of period.......... 746,120,329 276,997,443 4,005,966 100,000 2,205,956 100,000
-------------- --------------- -------------- --------------- -------------- ---------------
End of period *.............. $705,102,010 $ 746,120,329 $ 21,076,281 $ 4,005,966 $ 6,040,679 $ 2,205,956
-------------- --------------- -------------- --------------- -------------- ---------------
-------------- --------------- -------------- --------------- -------------- ---------------
*Includes
undistributed/accumulated
net investment income
(loss)........................ $ 1,430,071 $ 258,896 $ (21,005) $ 4,070 $ (10,241) $ 1,048
-------------- --------------- -------------- --------------- -------------- ---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F12
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
GT GLOBAL AMERICA GROWTH FUND
------------------------------------------------------------------------
CLASS A+
------------------------------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
1996 ----------------------------------------------------------
(UNAUDITED) (C) 1995 1994 (C) 1993 1992 1991
------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 19.07 $ 17.69 $ 17.17 $ 17.12 $ 14.13 $ 11.89
------------ ---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss).......... 0.07 0.24 0.04 (0.21) (0.11) 0.01
Net realized and unrealized gain on
investments.......................... 1.22 3.93 2.55 1.56 4.54 2.28
------------ ---------- ---------- ---------- ---------- ----------
Net increase from investment
operations......................... 1.29 4.17 2.59 1.35 4.43 2.29
------------ ---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ -- (0.21) (0.02) -- -- (0.01)
From net realized gain on
investments.......................... -- (2.58) (2.05) (1.30) (1.44) (0.04)
------------ ---------- ---------- ---------- ---------- ----------
Total distributions................. -- (2.79) (2.07) (1.30) (1.44) (0.05)
------------ ---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 20.36 $ 19.07 $ 17.69 $ 17.17 $ 17.12 $ 14.13
------------ ---------- ---------- ---------- ---------- ----------
------------ ---------- ---------- ---------- ---------- ----------
Total investment return (d)............. 6.76 %(b) 23.23% 15.69% 8.3% 31.7% 19.3%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 375,575 $ 396,291 $ 196,937 $ 116,468 $ 166,712 $ 88,041
Ratio of net investment income (loss) to
average net assets..................... 0.64 %(a) 1.24% 0.17% (0.7)% (1.1)% 0.0%
Ratio of expenses to average net
assets................................. 1.44 %(a) 1.46% 1.58% 1.6% 1.8% 1.7%
Portfolio turnover rate++++............. 263 %(a) 71% 102% 92% 114% 156%
Average commission rate paid on
portfolio transactions++++............. $ 0.0535 N/A N/A N/A N/A N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) These selected per share data were calculated based upon weighted
average shares outstanding during the year.
(d) Total investment return does not include sales charges.
+ All capital shares issued and outstanding as of March 31, 1993, were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
the basis of the Fund as a whole without distinguishing between the
classes of shares issued.
The accompanying notes are an integral part of the financial statements.
F13
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
GT GLOBAL AMERICA GROWTH FUND
-------------------------------------------------------------------------------
CLASS B++ ADVISOR CLASS+++
--------------------------------------------------- --------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED DECEMBER APRIL 1, 1993 ENDED JUNE 1, 1995
JUNE 30, 31, TO JUNE 30, TO
1996 ---------------------- DECEMBER 31, 1996 DECEMBER 31,
(UNAUDITED) (C) 1995 1994 (C) 1993 (UNAUDITED) 1995
------------ ---------- ---------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 18.77 $ 17.50 $ 17.09 $ 15.90 $ 19.05 $ 20.61
------------ ---------- ---------- ------------- ----------- -------------
Income from investment operations:
Net investment income (loss).......... (0.01) 0.10 (0.09) (0.29) 0.10 0.21
Net realized and unrealized gain on
investments.......................... 1.22 3.87 2.55 2.78 1.20 1.09
------------ ---------- ---------- ------------- ----------- -------------
Net increase from investment
operations......................... 1.21 3.97 2.46 2.49 1.30 1.30
------------ ---------- ---------- ------------- ----------- -------------
Distributions to shareholders:
From net investment income............ -- (0.12) -- -- -- (0.28)
From net realized gain on
investments.......................... -- (2.58) (2.05) (1.30) -- (2.58)
------------ ---------- ---------- ------------- ----------- -------------
Total distributions................. -- (2.70) (2.05) (1.30) -- (2.86)
------------ ---------- ---------- ------------- ----------- -------------
Net asset value, end of period.......... $ 19.98 $ 18.77 $ 17.50 $ 17.09 $ 20.35 $ 19.05
------------ ---------- ---------- ------------- ----------- -------------
------------ ---------- ---------- ------------- ----------- -------------
Total investment return (d)............. 6.45 %(b) 22.42% 15.06% 16.1%(b) 6.82%(b) 6.01%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 327,924 $ 348,435 $ 80,060 $ 1,982 $ 1,603 $ 1,394
Ratio of net investment income (loss) to
average net assets..................... (0.01)%(a) 0.59% (0.48)% (1.3)%(a) 0.99%(a) 1.59%(a)
Ratio of expenses to average net
assets................................. 2.09 %(a) 2.11% 2.23% 2.2%(a) 1.09%(a) 1.11%(a)
Portfolio turnover rate++++............. 263 %(a) 71% 102% 92% 263%(a) 71%
Average commission rate paid on
portfolio transactions++++............. $ 0.0535 N/A N/A N/A $ 0.0535 N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) These selected per share data were calculated based upon weighted
average shares outstanding during the year.
(d) Total investment return does not include sales charges.
+ All capital shares issued and outstanding as of March 31, 1993, were
reclassified as Class A shares.
++ Commencing April 1, 1993, the Fund began offering Class B shares.
+++ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++++ Portfolio turnover rate and average commission rate are calculated on
the basis of the Fund as a whole without distinguishing between the
classes of shares issued.
The accompanying notes are an integral part of the financial statements.
F14
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
---------------------------------------------------------------------------------------------------------
CLASS A CLASS B ADVISOR CLASS
--------------------------------- --------------------------------- ---------------------------------
SIX MONTHS OCTOBER 18, 1995 SIX MONTHS OCTOBER 18, 1995 SIX MONTHS OCTOBER 18, 1995
ENDED (COMMENCEMENT ENDED (COMMENCEMENT ENDED (COMMENCEMENT
JUNE 30, OF OPERATIONS) JUNE 30, OF OPERATIONS) JUNE 30, OF OPERATIONS)
1996 TO DECEMBER 31, 1996 TO DECEMBER 31, 1996 TO DECEMBER 31,
(UNAUDITED) (D) 1995 (D) (UNAUDITED) (D) 1995 (D) (UNAUDITED) (D) 1995 (D)
-------------- ---------------- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value,
beginning of period.. $ 11.80 $ 11.43 $ 11.78 $ 11.43 $ 11.81 $ 11.43
-------------- ---------------- -------------- ---------------- -------------- ----------------
Income from investment
operations:
Net investment
income (loss)...... (0.01) ** 0.04* (0.05) ** 0.02* 0.02** 0.05*
Net realized and
unrealized gain on
investments........ 2.14 0.33 2.14 0.33 2.14 0.33
-------------- ---------------- -------------- ---------------- -------------- ----------------
Net increase from
investment
operations....... 2.13 0.37 2.09 0.35 2.16 0.38
-------------- ---------------- -------------- ---------------- -------------- ----------------
Net asset value, end
of period............ $ 13.93 $ 11.80 $ 13.87 $ 11.78 $ 13.97 $ 11.81
-------------- ---------------- -------------- ---------------- -------------- ----------------
-------------- ---------------- -------------- ---------------- -------------- ----------------
Total investment
return (c)........... 18.05% (b) 3.24% (b) 17.74% (b) 3.06% (b) 18.29% (b) 3.32% (b)
Ratios and
supplemental data:
Net assets, end of
period (in 000's).... $ 10,274 $ 1,931 $ 10,571 $ 2,024 $ 232 $ 52
Ratio of net
investment income
(loss) to average net
assets:
With reimbursement by
LGT Asset Management,
Inc. (Note 2)........ (0.09)% (a) 1.68% (a) (0.74)% (a) 1.03% (a) 0.26% (a) 2.03% (a)
Without reimbursement
by LGT Asset
Management, Inc...... (2.11)% (a) (20.52)% (a) (2.76)% (a) (21.17)% (a) (1.76)% (a) (20.17)% (a)
Ratio of expenses to
average net assets:
With reimbursement by
LGT Asset Management,
Inc. (Note 2)........ 2.00% (a) 2.00% (a) 2.65% (a) 2.65% (a) 1.65% (a) 1.65% (a)
Without reimbursement
by LGT Asset
Management, Inc...... 4.02% (a) 24.20% (a) 4.67% (a) 24.85% (a) 3.67% (a) 23.85% (a)
Portfolio turnover
rate+................ 170% (a) N/A 170% (a) N/A 170% (a) N/A
Average commission
rate paid on
portfolio
transactions+........ $ 0.0488 N/A $ 0.0488 N/A $ 0.0488 N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not Annualized
(c) Total Investment Return does not include sales charges.
(d) Calculated based upon weighted average shares outstanding during the
period.
* Before reimbursement by LGT Asset Management, Inc. the net investment
income per share would have been reduced by $0.18, $0.21, and $0.36
for Class A, Class B, and Advisor Class, respectively, from October
18, 1995 to December 31, 1995.
** Before reimbursement by LGT Asset Management, Inc. the net investment
income loss per share would have been $(0.15), $(0.18), and $(0.10)
for Class A, Class B, and Advisor Class, respectively, for the period
ended June 30, 1996.
+ Portfolio turnover rate and average commission rate paid on portfolio
transactions are calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
F15
<PAGE>
GT GLOBAL AMERICA VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
GT GLOBAL AMERICA VALUE FUND-CONSOLIDATED
---------------------------------------------------------------------------------------------------------
CLASS A CLASS B ADVISOR CLASS
--------------------------------- --------------------------------- ---------------------------------
SIX MONTHS OCTOBER 18, 1995 SIX MONTHS OCTOBER 18, 1995 SIX MONTHS OCTOBER 18, 1995
ENDED (COMMENCEMENT ENDED (COMMENCEMENT ENDED (COMMENCEMENT
JUNE 30, OF OPERATIONS) JUNE 30, OF OPERATIONS) JUNE 30, OF OPERATIONS)
1996 TO DECEMBER 31, 1996 TO DECEMBER 31, 1996 TO DECEMBER 31,
(UNAUDITED) (D) 1995 (D) (UNAUDITED) (D) 1995 (D) (UNAUDITED) (D) 1995 (D)
-------------- ---------------- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value,
beginning of
period............... $ 12.76 $ 11.43 $ 12.75 $ 11.43 $ 12.77 $ 11.43
-------------- ---------------- -------------- ---------------- -------------- ----------------
Income from investment
operations:
Net investment
income (loss)...... (0.00) * * 0.03* (0.05) * * 0.01* 0.02* * 0.04*
Net realized and
unrealized gain on
investments........ 1.62 1.30 1.62 1.31 1.64 1.30
-------------- ---------------- -------------- ---------------- -------------- ----------------
Net increase from
investment
operations....... 1.62 1.33 1.57 1.32 1.66 1.34
-------------- ---------------- -------------- ---------------- -------------- ----------------
Net asset value, end
of period............ $ 14.38 $ 12.76 $ 14.32 $ 12.75 $ 14.43 $ 12.77
-------------- ---------------- -------------- ---------------- -------------- ----------------
-------------- ---------------- -------------- ---------------- -------------- ----------------
Total investment
return (c)........... 12.70% (b) 11.64% (b) 12.31% (b) 11.55% (b) 13.00% (b) 11.72% (b)
Ratios and
supplemental data:
Net assets, end of
period
(in 000's)........... $ 1,801 $ 870 $ 4,087 $ 1,254 $ 153 $ 81
Ratio of net
investment income
(loss) to average net
assets:
With reimbursement by
LGT Asset Management,
Inc. (Note 2)........ (0.08)% (a) 1.10% (a) (0.73)% (a) 0.45% (a) 0.27% (a) 1.45% (a)
Without reimbursement
by LGT Asset
Management, Inc...... (6.02)% (a) (47.44)% (a) (6.67)% (a) (48.09)% (a) (5.67)% (a) (47.09)% (a)
Ratio of expenses to
average net assets:
With reimbursement by
LGT Asset Management,
Inc. (Note 2)........ 2.00% (a) 2.00% (a) 2.65% (a) 2.65% (a) 1.65% (a) 1.65% (a)
Without reimbursement
by LGT Asset
Management, Inc...... 7.94% (a) 50.54% (a) 8.59% (a) 51.19% (a) 7.59% (a) 50.19% (a)
Portfolio turnover
rate+................ 277% (a) 0% 277% (a) 0% 277% (a) 0%
Average commission
rate paid on
portfolio
transactions+........ $ 0.0494 N/A $ 0.0494 N/A $ 0.0494 N/A
</TABLE>
- ----------------
(a) Annualized
(b) Not Annualized
(c) Total investment return does not include sales charges.
(d) Calculated based upon weighted average shares outstanding during the
period.
* Before reimbursement by LGT Asset Management, Inc, the net investment
loss per share would have been $(1.11), $(1.13), and $(1.10) for Class
A, Class B, and Advisor Class, respectively, from October 18, 1995 to
December 31, 1995.
* * Before reimbursement by LGT Asset Management, Inc. the net investment
loss per share would have been $(.40), $(.45), and $(.38) for Class A,
Class B, and Advisor Class, respectively, for the period ended June
30, 1996.
+ Portfolio turnover rate and average commission rate paid on portfolio
transactions are calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
F16
<PAGE>
GT GLOBAL AMERICA FUNDS
NOTES TO
FINANCIAL STATEMENTS
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global America Growth Fund, GT Global America Small Cap Growth Fund, and GT
Global America Value Fund ("Funds"), are separate series of GT 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"), as a diversified, open-end management investment company. The Company has
eight series of shares in operation, each series corresponding to a distinct
portfolio of investments.
The GT Global America Small Cap Growth Fund and GT Global America Value Fund
invest substantially all of their investable assets in Small Cap Growth
Portfolio and Value Portfolio ("Portfolios"), respectively. Each of these
Portfolios is organized as a New York Trust and is registered under the 1940 Act
as a diversified, open-end management investment company.
The Portfolios have investment objectives, policies, and limitations
substantially identical to those of their corresponding Funds. Therefore, the
financial statements of the GT Global America Small Cap Growth Fund, the GT
Global America Value Fund, and their respective Portfolios have been presented
on a consolidated basis, and represent all activities of both the respective
Funds and Portfolios. Through June 30, 1996, all of the shares of beneficial
interest of each Portfolio were owned either by its respective fund or LGT Asset
Management, Inc. ("LGT"), which has a nominal ($100) investment in each
Portfolio.
The Funds offer Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Funds are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Funds. Each
class of shares differs in its respective distribution expenses, and may differ
in its transfer agent, registration, and certain other class-specific fees and
expenses.
The following is a summary of significant accounting policies consistently
followed by the Funds and Portfolios in the preparation of the financial
statements. The policies are in conformity with generally accepted accounting
principles, and the financial statements may include certain estimates made by
management.
(A) PORTFOLIO VALUATION
The Funds calculate the net asset value of and complete orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded or on the principal over-the-counter market 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 LGT to be the primary
market.
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when LGT
deems it appropriate, prices obtained for the day of valuation from a bond
pricing service will be used. Short-term investments with a maturity of 60 days
or less are valued at amortized cost, adjusted for market fluctuation, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Company's Board of Trustees.
(B) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by a Fund or Portfolio (the
phrase "Fund or Portfolio" hereinafter includes the GT Global America Growth
Fund and each of the two Portfolios), it is the Fund's or Portfolio's policy to
always receive, as collateral, United States government securities or other high
quality debt securities of which the value, including accrued interest, is at
least equal to the amount to be repaid to the Fund or Portfolio under each
agreement at its maturity. LGT is responsible for determining that the value of
these underlying securities remains at least equal to the resale price.
(C) OPTION ACCOUNTING PRINCIPLES
When a Fund or Portfolio writes a call or put option, an amount equal to the
premium received is included in the Fund's or Portfolio's "Statement of Assets
and Liabilities" as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option. The current market value of an option listed on a traded exchange
is valued at its last bid price, or, in the case of an over-the-counter option,
is valued at the average of the last bid prices obtained from brokers, unless a
quotation from only one broker is available, in which case only that broker's
price will be used. If an option expires on its stipulated expiration date or if
the Fund or Portfolio enters into a closing purchase transaction, a gain or loss
is realized without regard to any unrealized gain or loss on the underlying
security, and the liability related to such option is extinguished. If a written
call option is exercised, a gain or loss is realized from the sale of the
underlying security and the proceeds of the sale are increased by the premium
originally received. If a written put option is exercised, the cost of the
underlying security purchased would be decreased by the premium originally
received. The Fund or Portfolio can write options only on a covered basis,
which, for a call, requires that the Fund or Portfolio hold the underlying
security, and, for a put, requires the Fund or Portfolio to set aside cash, U.S.
government securities or other liquid,
F17
<PAGE>
GT GLOBAL AMERICA FUNDS
high grade debt securities in an amount not less than the exercise price or
otherwise provide adequate cover at all times while the put option is
outstanding. The Fund or Portfolio may use options to manage its exposure to the
stock market and to fluctuations in interest rates.
The premium paid by the Fund or Portfolio for the purchase of a call or put
option is included in the Fund's or Portfolio's "Statement of Assets and
Liabilities" as an investment and subsequently "marked-to-market" to reflect the
current market value of the option. If an option which the Fund or Portfolio has
purchased expires on the stipulated expiration date, the Fund or Portfolio
realizes a loss in the amount of the cost of the option. If the Fund or
Portfolio enters into a closing sale transaction, the Fund or Portfolio realizes
a gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund or Portfolio
exercises a call option, the cost of the securities acquired by exercising the
call is increased by the premium paid to buy the call. If the Fund or Portfolio
exercises a put option, it realizes a gain or loss from the sale of the
underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund or Portfolio may forego
the opportunity of profit if the market value of the underlying security or
index increases and the option is exercised. The risk in writing a put option is
that the Fund or Portfolio may incur a loss if the market value of the
underlying security or index decreases and the option is exercised. In addition,
there is the risk the Fund or Portfolio may not be able to enter into a closing
transaction because of an illiquid secondary market.
(D) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Fund or Portfolio is required to pledge to the broker an amount of cash or
securities equal to the minimum "initial margin" requirements of the exchange on
which the contract is traded. Pursuant to the contract, the Fund or Portfolio
agrees to receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known as
"variation margin" and are recorded by the Fund or Portfolio as unrealized gains
or losses. When the contract is closed, the Fund or Portfolio records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed. The potential risk
to the Fund or Portfolio is that the change in value of the underlying
securities may not correlate to the change in value of the contracts. The Fund
or Portfolio may use futures contracts to manage its exposure to the stock
market and to fluctuations in interest rates.
(E) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Fund or Portfolio
may trade securities on other than normal settlement terms. This may increase
the risk if the other party to the transaction fails to deliver and causes the
Fund or Portfolio to subsequently invest at less advantageous prices.
(F) PORTFOLIO SECURITIES LOANED
Cash collateral is received by the Fund or Portfolio against loaned securities
in the amount at least equal to 102% of the market value of the loaned
securities at the inception of each loan. This collateral must be maintained at
not less than 100% of the market value of the loaned securities during the
period of the loan. At June 30, 1996, stocks with an aggregate value of
approximately $13,192,650 in GT Global America Growth Fund were on loan to
brokers. The loans were secured by cash collateral of $13,530,300 received by
the Fund. For the period ended June 30, 1996, the GT Global America Growth Fund
received securities lending fees of $2,377 which were used to reduce the Fund's
custodian fees.
(G) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the GT Global America Small Cap Growth Fund, the GT Global
America Value Fund, and their respective Portfolios in connection with their
organization, their initial registration with the Securities and Exchange
Commission and with various states and the initial public offering of their
shares aggregated $63,500 for each Fund and $25,000 for each Portfolio. These
expenses are being amortized on a straight-line basis over a five-year period.
(H) TAXES
It is the policy of the Funds and Portfolios to meet the requirements for
qualification as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended ("Code"). It is also the intention of the Funds to make
distributions sufficient to avoid imposition of any excise tax under Section
4982 of the Code. Therefore, no provision has been made for Federal taxes on
income, capital gains, or unrealized appreciation of securities held, and excise
tax on income and capital gains.
(I) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by each Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund or Portfolios and timing
differences.
(J) RESTRICTED SECURITIES
A Fund or Portfolio is permitted to invest in privately placed restricted
securities. These securities may be resold in transactions exempt from
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult.
F18
<PAGE>
GT GLOBAL AMERICA FUNDS
(K) INDEXED SECURITIES
A Fund or Portfolio may invest in indexed securities whose value is linked
either directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
2. RELATED PARTIES
LGT is the Funds' and Portfolios' investment manager and administrator. GT
Global America Small Cap Growth Fund and GT Global America Value Fund each pays
LGT administration fees at the annualized rate of 0.25% of such Fund's average
daily net assets. Each Portfolio pays investment management and administration
fees to LGT at the annualized rate of 0.475% on the first $500 million of
average daily net assets of the Portfolio; 0.45% on the next $500 million;
0.425% on the next $500 million; and 0.40% on amounts thereafter. GT Global
America Growth Fund pays investment management and administration fees to LGT at
the annualized rate of 0.725% on the first $500 million of average daily net
assets on the Fund; 0.70% on the next $500 million; 0.675% on the next $500
million and 0.65% on amounts thereafter. These fees are computed daily and paid
monthly, and are subject to reduction in any year to the extent that the Fund's
or Portfolio's expenses (exclusive of brokerage commissions, taxes, interest,
distribution-related expenses and extraordinary expenses) exceed the most
stringent limits prescribed by the laws or regulations of any state in which the
Fund's shares are offered for sale, based on the average total net asset value
of the Fund.
GT Global, Inc. ("GT Global"), an affiliate of LGT, serves as the Funds'
distributor. The Funds offer Class A, Class B, 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. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period ended June 30, 1996, GT Global retained the
following sales charges: $56,394 for the GT Global America Growth Fund, $6,804
for the GT Global America Small Cap Growth Fund, and $792 for the GT Global
America Value Fund. Purchases of Class A shares exceeding $500,000 may be
subject to a contingent deferred sales charge ("CDSC") upon redemption, in
accordance with the Fund's current prospectus. GT Global collected such CDSCs in
the amount of $14,457 for the period ended June 30, 1996 for the GT Global
America Growth Fund. GT 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, GT 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 CDSCs, in accordance with the Fund's current
prospectus. For the period ended June 30, 1996, GT Global collected CDSCs in the
amount of: $1,085,415 for the GT Global America Growth Fund, $7,927 for the GT
Global America Small Cap Growth Fund, and $2,057 for the GT Global America Value
Fund. In addition, GT 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 has
adopted separate distribution plans with respect to the Funds' Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which a Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, a Fund may pay GT 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 GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT 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 GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global is reimbursed under the Class A Plan will have
been incurred within one year of such reimbursement.
Pursuant to the Funds' Class B Plan, a Fund may pay GT 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 GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT 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 GT 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.
LGT and GT Global voluntarily have undertaken to limit each Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary items)
to the maximum annual level of 2.00%, 2.65%, and 1.65% of the average daily net
assets of the Fund's Class A, Class B, and Advisor Class shares, respectively.
If necessary, this limitation will be effected by waivers by LGT of investment
management and administration fees, waivers by GT Global of payments under the
Class A Plan and/or Class B Plan and/or reimbursements by LGT or GT Global of
portions of the Fund's other operating expenses.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of LGT and GT
Global, is the transfer agent of the Funds. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services 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. GT Services also is reimbursed by the
Funds for its out-of-pocket expenses for such items as postage, forms, telephone
charges, stationery and office supplies.
LGT is the pricing and accounting agent for the Funds. The monthly fee for these
services to LGT is a percentage, not to exceed 0.03%
F19
<PAGE>
GT GLOBAL AMERICA FUNDS
annually, of a 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 LGT and 0.02% to the assets in excess of $5 billion and
allocating the result according to a Fund's average daily net assets.
The Company pays each of its Trustees who is not an employee, officer or
director of LGT, GT Global or GT Services $5,000 per year plus $300 for each
meeting of the board or any committee thereof attended by the Trustee. Each
Portfolio pays each of its Trustees who is not an employee, officer or director
of LGT, GT Global or GT Services $500 per year plus $150 for each meeting of the
board or any committee thereof attended by the Trustees.
At June 30, 1996, all of the shares of beneficial interest of each Portfolio
were owned either by its Fund or LGT.
3. PURCHASES AND SALES OF SECURITIES
For the period ended June 30, 1996, purchases of investment securities by the GT
Global America Growth Fund, Small Cap Growth Portfolio, and Value Portfolio,
other than U.S. government obligations and short-term investments, aggregated
$710,149,010, $19,622,304 and $8,297,244, respectively. Sales of investment
securities by the GT Global America Growth Fund, Small Cap Growth Portfolio, and
Value Portfolio, other than U.S. government obligations and short-term
investments, aggregated $762,707,590, $8,353,341 and $5,172,356, respectively.
There were no purchases or sales of U.S. government obligations by a Fund or
Portfolio during the period.
4. CAPITAL SHARES
At June 30, 1996, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the
Funds were as follows:
CAPITAL SHARE TRANSACTIONS
GT GLOBAL AMERICA GROWTH FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1996 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1995
---------------------------- -----------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 30,158,980 $ 605,252,312 64,255,259 $ 1,354,329,879
Shares issued in connection with
reinvestment of distributions......... -- -- 2,163,720 42,170,721
------------ -------------- ------------ ---------------
30,158,980 605,252,312 66,418,979 1,396,500,600
Shares repurchased...................... (32,493,283) (650,633,886) (56,768,364) (1,210,272,338)
------------ -------------- ------------ ---------------
Net increase (decrease)................. (2,334,303) $ (45,381,574) 9,650,615 $ 186,228,262
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1996 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1995
---------------------------- -----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 3,966,050 $ 77,461,281 19,673,669 $ 406,685,987
Shares issued in connection with
reinvestment of distributions......... -- -- 1,832,696 35,169,188
------------ -------------- ------------ ---------------
3,966,050 77,461,281 21,506,365 441,855,175
Shares repurchased...................... (6,111,005) (119,251,111) (7,522,345) (160,828,667)
------------ -------------- ------------ ---------------
Net increase (decrease)................. (2,144,955) $ (41,789,830) 13,984,020 $ 281,026,508
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
<CAPTION>
SIX MONTHS ENDED JUNE 1, 1995
JUNE 30, 1996 (COMMENCEMENT OF SALE OF
(UNAUDITED) SHARES) TO DECEMBER 31, 1995
---------------------------- -----------------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold............................. 124,350 $ 2,519,522 72,809 $ 1,541,469
Shares issued in connection with
reinvestment of distributions......... -- -- 9,711 188,974
------------ -------------- ------------ ---------------
124,350 2,519,522 82,520 1,730,443
Shares repurchased...................... (118,784) (2,429,092) (9,345) (199,482)
------------ -------------- ------------ ---------------
Net increase............................ 5,566 $ 90,430 73,175 $ 1,530,961
------------ -------------- ------------ ---------------
------------ -------------- ------------ ---------------
</TABLE>
F20
<PAGE>
GT GLOBAL AMERICA FUNDS
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
OCTOBER 18, 1995
SIX MONTHS ENDED (COMMENCEMENT OF
JUNE 30, 1996 OPERATIONS) TO
(UNAUDITED) DECEMBER 31, 1995
------------------------- -----------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ----------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Shares sold............................. 1,075,020 $ 14,724,872 189,034 $ 2,222,360
Share repurchased....................... (501,221) (7,046,138) (28,403) (333,346)
----------- ------------ --------- ------------
Net increase............................ 573,799 $ 7,678,734 160,631 $ 1,889,014
----------- ------------ --------- ------------
----------- ------------ --------- ------------
<CAPTION>
OCTOBER 18, 1995
SIX MONTHS ENDED (COMMENCEMENT OF
JUNE 30, 1996 OPERATIONS) TO
(UNAUDITED) DECEMBER 31, 1995
------------------------- -----------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ----------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Shares sold............................. 987,723 $ 13,271,761 232,055 $ 2,734,475
Share repurchased....................... (397,232) (5,339,753) (63,231) (743,582)
----------- ------------ --------- ------------
Net increase............................ 590,491 $ 7,932,008 168,824 $ 1,990,893
----------- ------------ --------- ------------
----------- ------------ --------- ------------
<CAPTION>
OCTOBER 18, 1995
SIX MONTHS ENDED (COMMENCEMENT OF
JUNE 30, 1996 OPERATIONS) TO
(UNAUDITED) DECEMBER 31, 1995
------------------------- -----------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ----------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Shares sold............................. 14,098 $ 179,859 1,456 $ 17,196
Share repurchased....................... (1,887) (26,560) -- --
----------- ------------ --------- ------------
Net increase............................ 12,211 $ 153,299 1,456 $ 17,196
----------- ------------ --------- ------------
----------- ------------ --------- ------------
</TABLE>
GT GLOBAL AMERICA VALUE FUND
<TABLE>
<CAPTION>
OCTOBER 18, 1995
SIX MONTHS ENDED (COMMENCEMENT OF
JUNE 30, 1996 OPERATIONS) TO
(UNAUDITED) DECEMBER 31, 1995
------------------------- -----------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ----------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Shares sold............................. 232,547 $ 3,157,844 70,225 $ 874,678
Share repurchased....................... (175,545) (2,374,290) (4,928) (61,818)
----------- ------------ --------- ------------
Net increase............................ 57,002 $ 783,554 65,297 $ 812,860
----------- ------------ --------- ------------
----------- ------------ --------- ------------
<CAPTION>
OCTOBER 18, 1995
SIX MONTHS ENDED (COMMENCEMENT OF
JUNE 30, 1996 OPERATIONS) TO
(UNAUDITED) DECEMBER 31, 1995
------------------------- -----------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ----------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Shares sold............................. 272,365 $ 3,646,505 103,345 $ 1,292,349
Share repurchased....................... (85,414) (1,156,395) (7,866) (99,288)
----------- ------------ --------- ------------
Net increase............................ 186,951 $ 2,490,110 95,479 $ 1,193,061
----------- ------------ --------- ------------
----------- ------------ --------- ------------
<CAPTION>
OCTOBER 18, 1995
SIX MONTHS ENDED (COMMENCEMENT OF
JUNE 30, 1996 OPERATIONS) TO
(UNAUDITED) DECEMBER 31, 1995
------------------------- -----------------------
ADVISOR CLASS SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------- ----------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Shares sold............................. 7,037 $ 93,515 3,461 $ 44,310
Share repurchased....................... (2,824) (38,352) -- --
----------- ------------ --------- ------------
Net increase............................ 4,213 $ 55,163 3,461 $ 44,310
----------- ------------ --------- ------------
----------- ------------ --------- ------------
</TABLE>
5. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by a Fund
or Portfolio are defined in the Investment Company Act of 1940, as amended, as
an "affiliated company". Investments in affiliated companies at June 30, 1996 by
the GT Global America Growth Fund amounted to $21,450,275. Transactions with
affiliated companies during the six months ended June 30, 1996 were as follows:
<TABLE>
<CAPTION>
NET
PURCHASES REALIZED DIVIDEND
COST SALES COST GAIN INCOME
------------ ------------- ---------- ------------
<S> <C> <C> <C> <C>
Landmark Graphics Corp.................. $ 20,662,404 $ -- $ -- $ --
</TABLE>
6. EXPENSE REDUCTIONS
LGT has directed certain portfolio trades to brokers who paid a portion of a
Fund's or Portfolio's expenses. For the period ended June 30, 1996, the expenses
of GT Global America Growth Fund were reduced by $2,449 under these
arrangements.
F21
<PAGE>
GT GLOBAL AMERICA FUNDS
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL AMERICA FUNDS
GT GLOBAL MUTUAL FUNDS
GT GLOBAL OFFERS A BROAD RANGE OF MUTUAL FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE GT GLOBAL
MUTUAL FUNDS, PLEASE CONTACT YOUR FINANCIAL ADVISOR OR CALL GT GLOBAL
DIRECTLY AT 1-800-824-1580. THE PROSPECTUS CONTAINS MORE COMPLETE
INFORMATION, INCLUDING CHARGES, EXPENSES AND THE RISKS OF GLOBAL & EMERGING
MARKETS INVESTING. INVESTORS SHOULD READ THE PROSPECTUS CAREFULLY BEFORE
INVESTING.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
GT GLOBAL WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
GT GLOBAL INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside
the U.S.
GT GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
/ / GLOBAL THEME FUNDS
GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture, or sell
telecommunications services or equipment
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve, or maintain a country's infrastructure
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore, or develop natural resources
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
/ / REGIONALLY DIVERSIFIED FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim
GT GLOBAL EUROPE GROWTH FUND
Focuses on investment opportunities in the new, unified Europe
GT GLOBAL LATIN AMERICA GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
GT GLOBAL AMERICA GROWTH FUND
Concentrates on small and medium-sized companies in the U.S.
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. companies
GT GLOBAL AMERICA VALUE FUND
Concentrates on large cap equity securities of U.S. companies believed to be
undervalued
GT GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH & INCOME FUND
GT GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world
INCOME FUNDS
GT GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
GT GLOBAL STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
GT GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
MONEY MARKET FUND
GT GLOBAL DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
[LOGO]
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
<PAGE>
[LOGO]
GT Global, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624
DATED MATERIAL
PLEASE EXPEDITE
GT GLOBAL AMERICA GROWTH FUND
AMEAR60295M
