<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS -- APRIL 29, 1996, AS REVISED OCTOBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
GT GLOBAL NEW PACIFIC GROWTH FUND GT GLOBAL WORLDWIDE GROWTH FUND
("PACIFIC FUND") ("WORLDWIDE FUND")
GT GLOBAL EUROPE GROWTH FUND GT GLOBAL AMERICA GROWTH FUND
("EUROPE FUND") ("AMERICA GROWTH FUND")
GT GLOBAL JAPAN GROWTH FUND GT GLOBAL AMERICA SMALL CAP GROWTH FUND
("JAPAN FUND") ("AMERICA SMALL CAP FUND")
GT GLOBAL INTERNATIONAL GROWTH FUND GT GLOBAL AMERICA VALUE FUND
("INTERNATIONAL FUND") ("AMERICA VALUE FUND")
</TABLE>
Collectively the above-named Funds are known as the GT Global Equity Funds. Each
GT Global Equity Fund (individually, a "Fund," collectively, the "Funds"),
except America Small Cap Fund and America Value Fund, seeks its investment
objective of long-term growth of capital by investing in the securities of
issuers domiciled in the Fund's Primary Investment Area. THE AMERICA SMALL CAP
FUND AND THE AMERICA VALUE FUND SEEK LONG-TERM CAPITAL APPRECIATION BY INVESTING
ALL OF THEIR INVESTABLE ASSETS IN THE SMALL CAP GROWTH PORTFOLIO AND THE VALUE
PORTFOLIO, RESPECTIVELY (INDIVIDUALLY, THE "AMERICA SMALL CAP PORTFOLIO" AND
"AMERICA VALUE PORTFOLIO," OR THE "PORTFOLIO," AND, COLLECTIVELY, THE
"PORTFOLIOS"), WHICH IN TURN, INVEST IN SECURITIES OF ISSUERS DOMICILED IN THEIR
RESPECTIVE PRIMARY INVESTMENT AREAS. EACH PORTFOLIO'S INVESTMENT OBJECTIVE AND
PRIMARY INVESTMENT AREA IS IDENTICAL TO THAT OF ITS CORRESPONDING FUND. AS THIS
STRUCTURE IS DIFFERENT FROM MANY OTHER MUTUAL FUNDS WHICH DIRECTLY ACQUIRE AND
MANAGE THEIR OWN PORTFOLIOS, INVESTORS SHOULD CAREFULLY CONSIDER THIS INVESTMENT
APPROACH. For additional information on the Funds and the Portfolios and a
description of each Primary Investment Area, see "Investment Objectives and
Policies; Risk Factors," and "Management."
There can be no assurance that any Fund or Portfolio will achieve its investment
objective.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED BY,
ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
Each Fund is organized as a "diversified" series of G.T. Global Growth Series
(the "Company"). The Portfolios are organized as subtrusts of Growth Portfolio.
Both the Funds and the Portfolios are managed and/ or administered by Chancellor
LGT Asset Management, Inc. (the "Manager"). The Manager and its worldwide
affiliates are part of Liechtenstein Global Trust, a provider of global asset
management and private banking products and services to individual and
institutional investors.
This Prospectus sets forth concisely the information an investor should know
before investing and should be read carefully and retained for future reference.
A Statement of Additional Information, dated April 29, 1996, as revised October
31, 1996, has been filed with the Securities and Exchange Commission and, as
supplemented or amended from time to time, is incorporated herein by reference.
The Statement of Additional Information is available without charge by writing
to the Funds at 50 California Street, 27th Floor, San Francisco 94111, or by
calling (800) 824-1580.
FOR FURTHER INFORMATION, CALL (800) 824-1580 OR CONTACT YOUR FINANCIAL ADVISOR.
[LOGO]
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
GT GLOBAL EQUITY FUNDS
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Prospectus Summary........................................................................ 3
Financial Highlights...................................................................... 11
Alternative Purchase Plan................................................................. 25
Investment Objectives and Policies; Risk Factors.......................................... 26
How To Invest............................................................................. 35
How to Make Exchanges..................................................................... 42
How to Redeem Shares...................................................................... 43
Shareholder Account Manual................................................................ 45
Calculation of Net Asset Value............................................................ 46
Dividends, Other Distributions and Federal Income Taxation................................ 47
Management................................................................................ 48
Other Information......................................................................... 53
</TABLE>
Prospectus Page 2
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C>
GT GLOBAL NEW PACIFIC GROWTH FUND GT GLOBAL WORLDWIDE GROWTH FUND
GT GLOBAL EUROPE GROWTH FUND GT GLOBAL AMERICA GROWTH FUND
GT GLOBAL JAPAN GROWTH FUND GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL INTERNATIONAL GROWTH FUND GT GLOBAL AMERICA VALUE FUND
</TABLE>
The following summary is qualified in its entirety by the more detailed
information appearing in the body of this Prospectus. Cross-references in this
summary are to headings in the body of the Prospectus.
<TABLE>
<S> <C> <C>
Investment Objectives: The Pacific Fund, Europe Fund, Japan Fund, International Fund,
Worldwide Fund and America Growth Fund seek long-term growth of
capital; the America Small Cap Fund and America Value Fund seek
long- term capital appreciation
Principal Investments: Each Fund invests primarily in equity securities of issuers within
its Primary Investment Area
America Small Cap Fund invests all of its investable assets in the
America Small Cap Portfolio, that, in turn, invests primarily in
the equity securities of small capitalization ("small cap")
companies domiciled in the United States
America Value Fund invests all of its investable assets in the
America Value Portfolio, that, in turn, invests primarily in those
equity securities of medium to large cap issuers domiciled in the
United States which the Manager believes are undervalued and
therefore offer above-average potential for capital appreciation
Investment Manager: Chancellor LGT Asset Management, Inc. (the "Manager") is part of
Liechtenstein Global Trust, a provider of global asset management
and private banking products and services to individual and
institutional investors, entrusted with approximately $80 billion
in total assets
Alternative Purchase Plan: Investors may select Class A or Class B shares, each subject to
different expenses and a different sales charge structure
Class A Shares: Offered at net asset value plus any applicable sales charge
(maximum is 4.75% of public offering price) and subject to service
and distribution fees at the annualized rate of up to 0.35% of the
average daily net assets of each Fund's Class A shares
Class B Shares: Offered at net asset value (a maximum contingent deferred sales
charge of 5% of the lesser of the shares' net asset value or the
original purchase price is imposed on certain redemptions made
within six years of date of purchase) and subject to service and
distribution fees at the annualized rate of up to 1.00% of the
average daily net assets of each Fund's Class B shares
Shares Available Through: Most brokerage firms nationwide, or directly through the Funds'
distributor
</TABLE>
Prospectus Page 3
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Exchange Privileges: Shares of a class of one Fund may be exchanged without a sales
charge for shares of the corresponding class of other GT Global
Mutual Funds, which are open-end management investment companies
advised and/or administered by the Manager
Dividends and Other
Distributions: Dividends paid annually from net investment income and realized
net short-term capital gains; other distributions paid annually
from net capital gain and net gains from foreign currency
transactions, if any
Reinvestment: Dividends and other distributions may be reinvested automatically
in Fund shares of the distributing class or in shares of the
corresponding class of other GT Global Mutual Funds without a
sales charge
First Purchase: $500 minimum ($100 for individual retirement accounts ("IRAs") and
reduced amounts for certain other retirement plans)
Subsequent Purchases: $100 minimum (reduced amounts for IRAs and certain other
retirement plans)
Net Asset Values: Class A and Class B shares of the Pacific Fund, Europe Fund, Japan
Fund, International Fund, Worldwide Fund and America Growth Fund
are quoted daily in the financial section of most newspapers;
Class A and Class B shares of America Small Cap Fund and America
Value Fund are expected to be quoted daily in the financial
section of most newspapers
Other Features:
Class A Shares: Letter of Intent Dollar Cost Averaging Program
Quantity Discounts Systematic Withdrawal Plan
Right of Accumulation Automatic Investment Plan
Reinstatement Privilege Portfolio Rebalancing Program
Class B Shares: Reinstatement Privilege Automatic Investment Plan
Systematic Withdrawal Plan Dollar Cost Averaging Program
Portfolio Rebalancing Program
</TABLE>
Prospectus Page 4
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
INVESTMENT MANAGER AND ADMINISTRATOR. The Manager is the investment manager and
administrator for the Portfolios and for the Pacific Fund, Europe Fund, Japan
Fund, International Fund, Worldwide Fund and America Growth Fund and is also the
administrator for the America Small Cap Fund and the America Value Fund. The
Manager and its worldwide asset management affiliates maintain fully-staffed
investment offices in Frankfurt, Hong Kong, London, New York, San Francisco,
Singapore, Sydney, Tokyo and Toronto. The Manager is part of Liechtenstein
Global Trust, a provider of global asset management and private banking products
and services to individual and institutional investors. As of October 31, 1996,
assets entrusted to Liechtenstein Global Trust total approximately $80 billion.
The companies comprising Liechtenstein Global Trust are indirect subsidiaries of
the Prince of Liechtenstein Foundation. See "Management."
INVESTMENT OBJECTIVES AND POLICIES. The Pacific Fund, Europe Fund, Japan Fund,
International Fund, Worldwide Fund and America Growth Fund seek long-term growth
of capital. The America Small Cap Fund and America Value Fund seek long-term
capital appreciation. Each Fund is hereinafter referred to individually as a
"Fund" and collectively as "Funds." Each Fund is a diversified series of G.T.
Global Growth Series ("Company"), a registered open-end management investment
company.
The Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund
and America Growth Fund seek their investment objective by investing, under
normal circumstances, at least 65% of their total assets in equity securities of
issuers domiciled in that Fund's Primary Investment Area. The Primary Investment
Area of each Fund corresponds to that Fund's name. Under normal conditions, 20%
to 60% of the Worldwide Fund's assets are invested in equity securities of U.S.
issuers. The Pacific Fund, Europe Fund, Japan Fund, International Fund,
Worldwide Fund and America Growth Fund may invest up to 35% of their total
assets in the equity securities of issuers domiciled outside of their Primary
Investment Area. The Pacific Fund, Europe Fund, Japan Fund, International Fund,
Worldwide Fund and America Growth Fund may invest up to 35% of their assets in
investment grade debt securities.
The America Growth Fund currently expects to invest a majority of its assets in
the securities of mid-and small-size companies. In selecting securities for
inclusion in the America Growth Fund's portfolio, the Manager normally initially
focuses on companies with total equity market capitalizations of $2 billion or
less.
The America Small Cap Fund seeks its investment objective by investing all of
its investable assets in the America Small Cap Portfolio, that, in turn,
invests, under normal circumstances, at least 65% of its total assets in equity
securities of small cap companies domiciled in the United States. For purposes
of the foregoing, "small cap" companies are companies that, at the time of
purchase of their securities by the Portfolio, have market capitalizations of up
to $500 million. The remainder of the America Small Cap Portfolio's assets may
be invested in common stocks, convertible preferred stocks, convertible debt
securities and warrants of companies that are larger than small cap companies as
defined above, non-convertible preferred stocks, non-convertible debt
securities, government securities and high quality money market instruments such
as government obligations, high grade commercial paper, bank certificates of
deposit and bankers' acceptances of issuers domiciled in the United States.
Investments in securities of small cap companies may be more vulnerable than
securities of larger companies to adverse business or economic developments.
Securities of small cap companies may also be less liquid and their prices more
volatile than those of larger companies.
The America Value Fund seeks its investment objective by investing all of its
investable assets in the America Value Portfolio, that, in turn, invests, under
normal circumstances, at least 65% of its total assets in equity securities of
medium to large cap issuers domiciled in the United States which the Manager
believes to be undervalued in relation to long-term earning power or other
factors. For purposes of the foregoing, "medium to large cap" issuers are
issuers with a market capitalization
Prospectus Page 5
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
greater than $500 million at the time of purchase by the America Value
Portfolio. The remainder of the America Value Portfolio may be invested in
common stocks, convertible preferred stocks, convertible debt securities and
warrants of companies that are smaller than the issuers defined above,
non-convertible preferred stocks, non-convertible debt securities, government
securities and high quality money market instruments such as government
obligations, high grade commercial paper, bank certificates of deposit and
bankers' acceptances of issuers domiciled in the United States. The America
Small Cap Portfolio and America Value Portfolio are hereinafter referred to
individually as a "Portfolio," or together, as the "Portfolios."
Equity securities in which the Funds or Portfolios may invest include common
stocks, preferred stocks, convertible debt securities and warrants to acquire
such securities. In selecting securities, the Manager attempts to identify those
countries (where multiple markets are permitted) and industries (in each case)
where economic and political factors, including currency movements, are likely
to produce above-average growth rates, and then seeks those companies within the
countries and industries so identified that are best positioned and managed to
take advantage of such factors. See "Investment Objectives and Policies; Risk
Factors."
INVESTMENT TECHNIQUES AND RISK FACTORS. The Pacific Fund, Europe Fund, Japan
Fund, International Fund, Worldwide Fund and America Growth Fund may engage in
certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment and currency risk associated with their
present or planned investments. For temporary defensive purposes, the Pacific
Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund and America
Growth Fund may hold U.S. or foreign currency and/or may invest any portion of
their assets in debt securities or high quality money market instruments of U.S.
or foreign issuers. The Pacific Fund, Europe Fund, Japan Fund, International
Fund, Worldwide Fund and America Growth Fund also may hold cash and invest in
high quality foreign or domestic money market instruments pending investment of
proceeds from new sales of Fund shares, or to meet their ordinary daily cash
needs. See "Investment Objectives and Policies; Risk Factors."
Each Portfolio may engage in certain options and futures transactions to attempt
to hedge against the overall level of investment risk associated with its
present or planned investments. For temporary defensive purposes, each Portfolio
may hold U.S. dollars and/or may invest any portion of its assets in domestic
debt securities or high quality money market instruments. Each Portfolio also
may hold U.S. dollars and/or invest in domestic debt securities or high quality
money market instruments pending investment of proceeds from new sales of Fund
shares or to meet its ordinary daily cash needs. See "Investment Objectives and
Policies; Risk Factors."
There is no assurance that any Fund or Portfolio will achieve its investment
objective. Each Fund's net asset value will fluctuate, reflecting fluctuations
in the market value of its, or its corresponding Portfolio's, securities.
Changes in foreign currency exchange rates also may affect a Fund's net asset
value, earnings and gains and losses realized on sales of securities.
Investments in foreign securities involve risks relating to political and
economic developments abroad and the differences between the regulations to
which U.S. and foreign issuers are subject. Individual foreign economies also
may differ favorably or unfavorably from the U.S. economy. Securities of foreign
companies may be less liquid and their prices more volatile than those of
securities of comparable U.S. companies. Certain foreign countries may impose
withholding taxes on income earned and/or gains realized by a Fund in connection
with investments in such countries. Participation of the Pacific Fund, Europe
Fund, Japan Fund, International Fund, Worldwide Fund and America Growth Fund in
the currency, options and futures markets involves certain risks and transaction
costs. In addition, each Portfolio's participation in the options and futures
markets involves certain risks and transaction costs. See "Investment Objectives
and Policies; Risk Factors."
Prospectus Page 6
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
PURCHASES AND REDEMPTIONS. Each Fund's shares of beneficial interest are
available through broker/ dealers that have entered into agreements to sell
shares with the Funds' distributor, GT Global, Inc. ("GT Global"). Shares also
may be acquired directly through GT Global or through exchanges of shares of
other GT Global Mutual Funds. See "How to Invest" and "Shareholder Account
Manual." Shares may be redeemed either through broker/dealers or the Funds'
transfer agent, GT Global Investor Services, Inc. ("Transfer Agent"). See "How
to Redeem Shares" and "Shareholder Account Manual."
Prospectus Page 7
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
SUMMARY OF INVESTOR COSTS. The expenses and maximum transactions costs
associated with investing in the Class A and Class B shares of each Fund are
reflected in the following tables+*:
<TABLE>
<CAPTION>
GT GLOBAL GT GLOBAL GT GLOBAL GT GLOBAL
WORLDWIDE INTERNATIONAL NEW PACIFIC EUROPE
GROWTH GROWTH GROWTH GROWTH
FUND FUND FUND FUND
----------------- ----------------- ----------------- -----------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION COSTS*:
Maximum sales charge on purchases
(% of offering price)............................ 4.75% None 4.75% None 4.75% None 4.75% None
Sales charges on reinvested distributions......... None None None None None None None None
Deferred sales charges............................ None 5.00% None 5.00% None 5.00% None 5.00%
Redemption charges................................ None None None None None None None None
Exchange fees:
-- On first four exchanges each year............ None None None None None None None None
-- On each additional exchange.................. $7.50 $7.50 $7.50 $7.50 $7.50 $7.50 $7.50 $7.50
ANNUAL FUND OPERATING EXPENSES
(AS A % OF AVERAGE NET ASSETS):
Investment management and administration fees..... 0.98% 0.98% 0.98% 0.98% 0.97% 0.97% 0.97% 0.97%
12b-1 distribution and service fees............... 0.35% 1.00% 0.35% 1.00% 0.35% 1.00% 0.35% 1.00%
Other expenses (after reimbursements)............. 0.60% 0.60% 0.45% 0.45% 0.62% 0.62% 0.57% 0.57%
------- ------- ------- ------- ------- ------- ------- -------
Total Fund Operating Expenses..................... 1.93% 2.58% 1.78% 2.43% 1.94% 2.59% 1.89% 2.54%
------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
GT GLOBAL GT GLOBAL GT GLOBAL AMERICA GT GLOBAL
JAPAN AMERICA SMALL AMERICA
GROWTH CAP GROWTH GROWTH VALUE
FUND FUND FUND FUND
----------------- ----------------- ----------------- -----------------
CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION COSTS*:
Maximum sales charge on purchases
(% of offering price)............................ 4.75% None 4.75% None 4.75% None 4.75% None
Sales charges on reinvested distributions......... None None None None None None None None
Deferred sales charges............................ None 5.00% None 5.00% None 5.00% None 5.00%
Redemption charges................................ None None None None None None None None
Exchange fees:
-- On first four exchanges each year............ None None None None None None None None
-- On each additional exchange.................. $7.50 $7.50 $7.50 $7.50 $7.50 $7.50 $7.50 $7.50
ANNUAL FUND OPERATING EXPENSES
(AS A % OF AVERAGE NET ASSETS):
Investment management and administration fees..... 0.98% 0.98% 0.73% 0.73% 0.72% 0.72% 0.73% 0.73%
12b-1 distribution and service fees............... 0.35% 1.00% 0.35% 1.00% 0.35% 1.00% 0.35% 1.00%
Other expenses (after reimbursements)............. 0.60% 0.60% 0.92% 0.92% 0.39% 0.39% 0.92% 0.92%
------- ------- ------- ------- ------- ------- ------- -------
Total Fund Operating Expenses..................... 2.14% 2.79% 2.00% 2.65% 1.46% 2.11% 2.00% 2.65%
------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
- --------------
* Sales charge waivers are available for Class A and Class B shares, and
reduced sales charge purchase plans are available for Class A shares. The
maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase; the charge generally
declines by 1% annually thereafter, reaching zero after six years. See "How
to Invest."
+ The Funds offer Advisor Class shares to certain categories of investors. See
"Alternative Purchase Plan." Advisor Class shares are not subject to a
distribution or service fee. "Total Fund Operating Expenses" for Advisor
Class shares are estimated to approximate 1.58% for Worldwide Growth Fund,
1.43% for International Growth Fund, 1.59% for New Pacific Growth Fund,
1.54% for Europe Growth Fund, 1.79% for Japan Growth Fund, 1.11% for America
Growth Fund, 1.65% for America Small Cap Fund and 1.65% for America Value
Fund.
Prospectus Page 8
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES++:
An investor directly or indirectly would have paid the following expenses at the
end of the periods shown on a $1,000 investment, assuming a 5% annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
GT Global Worldwide Growth Fund
<S> <C> <C> <C> <C>
Class A shares (1)......................................................... $66 $105 $149 $279
Class B shares
Assuming a complete redemption at end of period (2)...................... 76 111 163 325
Assuming no redemption................................................... 26 81 143 325
GT Global International Growth Fund
Class A shares (1)......................................................... 64 101 141 261
Class B shares
Assuming a complete redemption at end of period (2)...................... 74 107 154 306
Assuming no redemption................................................... 24 77 134 306
GT Global New Pacific Growth Fund
Class A shares (1)......................................................... 66 106 150 280
Class B shares
Assuming a complete redemption at end of period (2)...................... 76 112 163 326
Assuming no redemption................................................... 26 82 143 326
GT Global Europe Growth Fund
Class A shares (1)......................................................... 66 104 147 274
Class B shares
Assuming a complete redemption at end of period (2)...................... 75 110 160 319
Assuming no redemption................................................... 25 80 140 319
GT Global Japan Growth Fund
Class A shares (1)......................................................... 68 112 160 304
Class B shares
Assuming a complete redemption at end of period (2)...................... 78 118 174 351
Assuming no redemption................................................... 28 88 154 351
GT Global America Small Cap Growth Fund
Class A shares (1)......................................................... 67 108 N/A N/A
Class B shares
Assuming a complete redemption at end of period (2)...................... 77 114 N/A N/A
Assuming no redemption................................................... 27 84 N/A N/A
GT Global America Growth Fund
Class A shares (1)......................................................... 61 91 124 222
Class B shares
Assuming a complete redemption at end of period (2)...................... 71 97 137 265
Assuming no redemption................................................... 21 67 117 265
GT Global America Value Fund
Class A shares (1)......................................................... 67 108 N/A N/A
Class B shares
Assuming a complete redemption at end of period (2)...................... 77 114 N/A N/A
Assuming no redemption................................................... 27 84 N/A N/A
</TABLE>
- --------------
(1) Assumes payment of maximum sales charge by the investor.
(2) Assumes deduction of applicable contingent deferred sales charge.
++ THESE TABLES ARE INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUNDS. Expenses for the
Worldwide Fund, International Fund, Pacific Fund, Europe Fund, Japan Fund
and America Growth Fund are based on the Funds' fiscal year ended December
31, 1995. Long-term shareholders may pay more than the economic equivalent
of the maximum front-end sales charges permitted by the National Association
of Securities Dealers, Inc. ("NASD") rules regarding investment companies.
"Other expenses" include custody, transfer agent, legal, audit and other
operating expenses. See "Management" herein and the Statement of Additional
Information for more information. THE "HYPOTHETICAL EXAMPLE" SET FORTH ABOVE
IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES; EACH FUND'S ACTUAL
EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
Without reimbursements, "Investment management and administration fees,"
"Other expenses" and "Total Fund Operating Expenses" for Class A shares of
the America Small Cap Fund and its corresponding Portfolio would have been
0.73%, 23.12% and 24.20%, respectively, and the amount of expenses an
investor would pay, assuming redemption after one and three years, would be
$278 and $774, respectively. Without reimbursements, "Investment management
and administration fees," "Other expenses" and "Total Fund Operating
Expenses" for Class B shares of the America Small Cap Fund and its Portfolio
would have been 0.73%, 23.12%
Prospectus Page 9
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
and 24.85%, respectively, and the amount of the expenses an investor would
pay, assuming redemption after one and three years would be $299 and $813,
respectively. Assuming no redemption, the amount of expenses an investor
would pay after one and three years, would be $249 and $783, respectively.
Without reimbursements, "Investment management and administration fees,"
"Other expenses" and "Total Fund Operating Expenses" for Class A shares of
the America Value Fund and its Portfolio would have been 0.73%, 49.46% and
50.54%, respectively, and the amount of expenses an investor would pay,
assuming redemption after one and three years, would be $529 and $1,565,
respectively. Without reimbursements, "Investment management and
administration fees," "Other expenses" and "Total Fund Operating Expenses"
for Class B shares of America Value Fund and its Portfolio would have been
.73%, 49.46% and 51.19%, respectively, and the amount of expenses an
investor would pay, assuming redemption after one and three years, would be
$562 and $1,644, respectively. Assuming no redemption, the amount of
expenses an investor would pay after one and three years, would be $512 and
$1,614, respectively.
The above tables and the assumption in the Hypothetical Example of a 5%
annual return are required by regulation of the Securities and Exchange
Commission applicable to all mutual funds; the 5% annual return is not a
prediction of and does not represent the Funds' projected or actual
performance.
The Annual Fund Operating Expenses for the America Small Cap Fund and its
corresponding Portfolio and the America Value Fund and its corresponding
Portfolio are annualized projections based upon current administration fees
for such Funds and management and administration fees for such Portfolios,
and estimated amounts for Other expenses. The Board of Trustees of the
Company believes that the aggregate per share expenses of such Funds and
their corresponding Portfolios will be approximately equal to the expenses
such Funds would incur if their assets were invested directly in the type of
securities being held by their corresponding Portfolios. If investors other
than such Funds invest in their corresponding Portfolios, such Funds could
achieve economies of scale which could reduce expenses.
Prospectus Page 10
<PAGE>
GT GLOBAL EQUITY FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The tables below provide condensed information concerning income and capital
changes for one share of each Fund for the periods shown. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes for the
Worldwide Fund, the International Fund, the Pacific Fund, the Europe Fund, the
America Fund and the Japan Fund for the fiscal year ended December 31, 1995, and
the financial statements and notes for the America Small Cap Fund and the
America Value Fund for the period October 18, 1995 (commencement of operations)
to December 31, 1995, have been audited by Coopers & Lybrand L.L.P., independent
accountants, whose reports thereon appear in the Statement of Additional
Information. Information presented below for the periods ended December 31, 1991
and prior thereto was audited by other auditors, which served as the Funds'
independent certified public accountants for those periods.
GT GLOBAL WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
--------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1995 1994 1993* 1992 1991 1990
--------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value,
beginning of period..... $15.53 $17.47 $14.47 $14.07 $11.83 $13.63
--------- --------- --------- --------- --------- --------
Net investment income
(loss).................. (0.00) (0.00) 0.04 0.07 0.10 0.11
Net realized and
unrealized gain (loss)
on
investments............. 1.74 (1.16) 3.92 0.39 2.29 (1.82)
--------- --------- --------- --------- --------- --------
Net increase (decrease)
in net asset value
resulting from
investment operations... 1.74 (1.16) 3.96 0.46 2.39 (1.71)
--------- --------- --------- --------- --------- --------
Distributions:
Net investment
income................ (0.00) (0.00) (0.00) (0.00) (0.15) (0.09)
Net realized gain on
investments........... (0.45) (0.78) (0.96) (0.06) (0.00) (0.00)
--------- --------- --------- --------- --------- --------
Total
distributions....... (0.45) (0.78) (0.96) (0.06) (0.15) (0.09)
--------- --------- --------- --------- --------- --------
Net asset value, end of
period.................. $16.82 $15.53 $17.47 $14.47 $14.07 $11.83
--------- --------- --------- --------- --------- --------
--------- --------- --------- --------- --------- --------
Total investment return
(c)(a).................. 11.23% (6.65)% 27.6% 3.3% 20.3% (12.5)%
--------- --------- --------- --------- --------- --------
--------- --------- --------- --------- --------- --------
Ratios and supplemental
data:
Net assets, end of period
(in 000's).............. $145,982 $182,467 $193,997 $141,310 $126,868 $85,894
Ratio of net investment
income (loss) to average
net assets.............. (0.06)% (0.01)% 0.9% 0.5% 0.8% 0.7%
Ratio of expenses to
average net assets:
With expense reduction
(b)................... 1.87% 1.81% 1.9% 2.1% 2.0% 2.1%
Without expense
reductions (b)........ 1.93% 1.84% --%(d) --%(d) --%(d) --%(d)
Portfolio turnover
rate+++................. 113% 86% 92% 95% 122% 107%
<FN>
- ------------------
+ 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.
+++ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Calculated based upon weighted average shares outstanding during the
period.
(a) Not annualized for periods of less than one year.
(b) Annualized for periods of less than one year.
(c) Total investment return does not include sales charges.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
</TABLE>
Prospectus Page 11
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL WORLDWIDE GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B++
----------------------------------- -----------------------------------
JUNE 9, 1987
(COMMENCEMENT
OF
YEAR ENDED DECEMBER OPERATIONS) YEAR ENDED DECEMBER APRIL 1, 1993
31, THROUGH 31, TO
------------------- DECEMBER 31, ------------------- DECEMBER 31,
1989 1988 1987 1995 1994 1993*
-------- -------- ------------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value,
beginning of period..... $10.18 $8.84 $10.00 $15.34 $17.39 $15.67
-------- -------- ------------- -------- -------- -------------
Net investment income
(loss).................. (0.01) 0.02 (0.05) (0.12) (0.11) (0.04)
Net realized and
unrealized gain (loss)
on investments.......... 3.82 1.42 (1.11) 1.73 (1.16) 2.72
-------- -------- ------------- -------- -------- -------------
Net increase (decrease)
in net asset value
resulting from
investment operations... 3.81 1.44 (1.16) 1.61 (1.27) 2.68
-------- -------- ------------- -------- -------- -------------
Distributions:
Net investment
income................ (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Net realized gain on
investments........... (0.36) (0.10) (0.00) (0.45) (0.78) (0.96)
-------- -------- ------------- -------- -------- -------------
Total
distributions....... (0.36) (0.10) (0.00) (0.45) (0.78) (0.96)
-------- -------- ------------- -------- -------- -------------
Net asset value, end of
period.................. $13.63 $10.18 $8.84 $16.50 $15.34 $17.39
-------- -------- ------------- -------- -------- -------------
-------- -------- ------------- -------- -------- -------------
Total investment return
(c)(a).................. 37.6% 16.3% (11.60)% 10.52% (7.32)% 17.3%
-------- -------- ------------- -------- -------- -------------
-------- -------- ------------- -------- -------- -------------
Ratios and supplemental
data:
Net assets, end of period
(in 000's).............. $38,263 $11,673 $6,570 $56,095 $52,567 $20,592
Ratio of net investment
income (loss) to average
net assets (b).......... (0.1)% 0.2% (1.4)% (0.71)% (0.66)% (0.4)%
Ratio of expenses to
average net assets:
With expense reduction
(b)................... 2.0% 2.0% 2.8% 2.52% 2.46% 2.5%
Without expense
reduction (b)......... --% --% --% 2.58% 2.49% --%(d)
Portfolio turnover
rate+++................. 91% 181% 271% 113% 86% 92%
</TABLE>
- --------------
+ 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.
+++ Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
* Calculated based upon weighted average shares outstanding during the period.
(a) Not annualized.
(b) Annualized.
(c) Total investment return does not include sales charges.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 12
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL INTERNATIONAL GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
----------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------
1995 1994 1993* 1992 1991 1990
--------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $9.17 $11.02 $8.21 $8.74 $7.82 $9.25
--------- ---------- ---------- ---------- ---------- ----------
Net investment income (loss)............ 0.03 (0.04) 0.03 0.11 0.14 0.10
Net realized and unrealized gain (loss)
on investments......................... 0.32 (0.82) 2.78 (0.62) 0.89 (1.42)
--------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset
value resulting from investment
operations............................. 0.35 (0.86) 2.81 (0.51) 1.03 (1.32)
--------- ---------- ---------- ---------- ---------- ----------
Distributions:
Net investment income................. (0.00) (0.04) (0.00) (0.02) (0.11) (0.11)
Net realized gain on investments...... (0.24) (0.95) (0.00) (0.00) (0.00) (0.00)
In excess of net realized gain on
investments.......................... (0.20) (0.00) (0.00) (0.00) (0.00) (0.00)
--------- ---------- ---------- ---------- ---------- ----------
Total distributions............... (0.44) (0.99) (0.00) (0.02) (0.11) (0.11)
--------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $9.08 $9.17 $11.02 $8.21 $8.74 $7.82
--------- ---------- ---------- ---------- ---------- ----------
--------- ---------- ---------- ---------- ---------- ----------
Total investment return***.............. 3.88% (7.78)% 34.2% (5.8)% 13.2% (14.3)%
--------- ---------- ---------- ---------- ---------- ----------
--------- ---------- ---------- ---------- ---------- ----------
Ratios and supplemental data:
Net assets, end of period (in 000's).... $308,816 $430,701 $523,397 $421,693 $463,851 $343,949
Ratio of net investment income (loss) to
average net assets..................... 0.24% (0.04)% 0.3% 1.2% 1.5% 1.4%
Ratio of expenses to average net assets:
With expense reduction................ 1.70% 1.70% 1.8% 1.9% 1.9% 1.9%
Without expense reduction............. 1.78% 1.75% --%(c) --%(c) --%(c) --%(c)
Portfolio turnover rate++............... 75% 96% 90% 89% 83% 58%
</TABLE>
- --------------
+ Commencing April 1, 1993, the Fund began offering Class B shares. All
capital shares issued and outstanding as of March 31, 1993 were reclassified
as Class A shares.
++ Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
* Calculated based upon weighted average shares outstanding during the year.
** The per share data reflects a 3 for 1 stock split effective August 14, 1989.
*** Total investment return does not reflect the maximum sales charge on
purchases of Class A shares and the contingent deferred sales charge imposed
on certain redemptions of Class B shares.
(a) Not annualized for periods of less than one year.
(b) Annualized for periods of less than one year.
(c) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 13
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL INTERNATIONAL GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
---------------------------------------------------- -------------------------------------
APRIL 1,
YEAR ENDED DECEMBER 31, 1993
YEAR ENDED DECEMBER 31, TO
---------------------------------------------------- ----------------------- DECEMBER
1989** 1988** 1987** 1986** 1995 1994 31, 1993*
---------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning of
period....................... $6.77 $5.71 $6.13 $4.16 $9.07 $10.98 $8.74
---------- --------- --------- --------- --------- --------- ---------
Net investment income
(loss)....................... 0.01 (0.01) (0.01) (0.05) (0.04) (0.10) (0.01)
Net realized and unrealized
gain (loss) on investments... 2.60 1.12 0.35 2.22 0.32 (0.82) 2.25
---------- --------- --------- --------- --------- --------- ---------
Net increase (decrease) in net
asset value resulting from
investment operations........ 2.61 1.11 0.34 2.17 0.28 (0.92) 2.24
---------- --------- --------- --------- --------- --------- ---------
Distributions:
Net investment income....... (0.00) (0.00) (0.00) (0.00) (0.00) (0.04) (0.00)
Net realized gain on
investments................ (0.13) (0.05) (0.76) (0.20) (0.24) (0.95) (0.00)
In excess of net realized
gain on investments........ (0.00) (0.00) (0.00) (0.00) (0.20) (0.00) (0.00)
---------- --------- --------- --------- --------- --------- ---------
Total distributions..... (0.13) (0.05) (0.76) (0.20) (0.44) (0.99) (0.00)
---------- --------- --------- --------- --------- --------- ---------
Net asset value, end of
period....................... $9.25 $6.77 $5.71 $6.13 $8.91 $9.07 $10.98
---------- --------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- --------- ---------
Total investment
return***(a)................. 38.6% 19.4% 6.2% 53.7% 3.15% (8.36)% 25.6%
---------- --------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- --------- ---------
Ratios and supplemental data:
Net assets, end of period (in
000's)....................... $ 136,975 $ 29,792 $ 17,178 $ 12,052 $ 69,654 $ 71,794 $30,745
Ratio of net investment income
(loss) to average net assets
(b).......................... 0.1% (0.2)% (0.3)% (0.9)% (0.41)% (0.69)% (0.4)%
Ratio of expenses to average
net assets:
With expense reduction
(b)........................ 1.9% 2.1% 1.9% 1.9% 2.35% 2.35% 2.4%
Without expense reduction
(b)........................ --%(c) --%(c) --%(c) --%(c) 2.43% 2.40%(c) --%(c)
Portfolio turnover rate++..... 82% 115% 198% 122% 75% 96% 90%
</TABLE>
- --------------
+ Commencing April 1, 1993, the Fund began offering Class B shares. All
capital shares issued and outstanding as of March 31, 1993 were reclassified
as Class A shares.
++ Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
* Calculated based upon weighted average shares outstanding during the year.
** The per share data reflects a 3 for 1 stock split effective August 14, 1989.
*** Total investment return does not reflect the maximum sales charge on
purchases of Class A shares and the contingent deferred sales charge imposed
on certain redemptions of Class B shares.
(a) Not annualized for periods of less than one year.
(b) Annualized for periods of less than one year.
(c) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 14
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
-------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1995(D) 1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning of
period....................... $12.10 $15.86 $10.31 $11.30 $10.57 $12.61
----------- ----------- ----------- ----------- ----------- -----------
Net investment income
(loss)....................... 0.11 0.02 (0.03) 0.07 0.11 0.13
Net realized and unrealized
gain (loss) on
investments.................. 0.79 (3.15) 6.23 (0.97) 1.25 (1.51)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
asset value resulting from
investment operations........ 0.90 (3.13) 6.20 (0.90) 1.36 (1.38)
----------- ----------- ----------- ----------- ----------- -----------
Distributions:
Net investment income....... (0.10) (0.01) (0.00) (0.06) (0.08) (0.12)
Net realized gain on
investments................ (0.43) (0.55) (0.65) (0.03) (0.55) (0.54)
In excess of net realized
gain on investments........ (0.00) (0.07) (0.00) (0.00) (0.00) (0.00)
----------- ----------- ----------- ----------- ----------- -----------
Total distributions....... (0.53) (0.63) (0.65) (0.09) (0.63) (0.66)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of
period....................... $12.47 $12.10 $15.86 $10.31 $11.30 $10.57
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Total investment return**..... 7.45% (19.73)% 60.6% (8.0)% 13.1% (11.0)%
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Ratio and supplemental data:
Net assets, end of period (in
000's)....................... $ 383,722 $ 404,680 $ 498,898 $ 281,418 $ 333,800 $ 234,793
Ratio of net investment income
(loss) to average net
assets....................... 0.91% 0.11% (0.3)% 0.6% 1.0% 1.1%
Ratio of expenses to average
net assets:
With expense reductions..... 1.89% 1.81% 1.9% 2.0% 2.0% 2.1%
Without expense
reductions................. 1.94% --%(c) --%(c) --%(c) --%(c) --%(c)
Portfolio turnover rate++..... 63% 87% 117% 72% 85% 75%
</TABLE>
- --------------
+ Commencing April 1, 1993, the Fund began offering Class B shares. All
capital shares issued and outstanding as of March 31, 1993 were reclassified
as Class A shares.
++ Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
* The per share data reflects a 2 for 1 stock split effective August 14, 1989.
** Total investment return does not reflect the maximum sales charge on
purchases of Class A shares and the contingent deferred sales charge imposed
on certain redemptions of Class B shares.
(a) Not annualized for periods of less than one year.
(b) Annualized for periods of less than one year.
(c) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
(d) Calculated based upon weighted average shares outstanding during the period.
Prospectus Page 15
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
---------------------------------------------------------- ------------------------------------------
APRIL 1,
YEAR ENDED DECEMBER 31, 1993
YEAR ENDED DECEMBER 31, TO
---------------------------------------------------------- --------------------------- DECEMBER
1989* 1988* 1987* 1986* 1995(D) 1994 31, 1993
----------- ---------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value,
beginning of
period............... $8.74 $7.25 $14.98 $8.82 $11.96 $15.79 $11.27
----------- ---------- ----------- ----------- ----------- ----------- ----------
Net investment income
(loss)............... (0.01) 0.01 (0.01) (0.05) 0.03 (0.06) (0.10)
Net realized and
unrealized gain
(loss) on
investments.......... 4.21 1.66 0.51 6.22 0.75 (3.15) 5.27
----------- ---------- ----------- ----------- ----------- ----------- ----------
Net increase
(decrease) in net
asset value resulting
from investment
operations........... 4.20 1.67 0.50 6.17 0.78 (3.21) 5.17
----------- ---------- ----------- ----------- ----------- ----------- ----------
Distributions:
Net investment
income............. (0.00) (0.00) (0.00) (0.01) (0.02) (0.00) (0.00)
Net realized gain on
investments and
foreign currency... (0.33) (0.18) (8.23) (0.00) (0.43) (0.55) (0.65)
In excess of net
realized gain on
investments........ (0.00) (0.00) (0.00) (0.00) (0.00) (0.07) (0.00)
----------- ---------- ----------- ----------- ----------- ----------- ----------
Total
distributions.... (0.33) (0.18) (8.23) (0.01) (0.45) (0.62) (0.65)
----------- ---------- ----------- ----------- ----------- ----------- ----------
Net asset value, end
of period............ $12.61 $8.74 $7.25 $14.98 $12.29 $11.96 $15.79
----------- ---------- ----------- ----------- ----------- ----------- ----------
----------- ---------- ----------- ----------- ----------- ----------- ----------
Total investment
return** (a)......... 48.1% 23.2% 5.7% 69.9% 6.54% (20.30)% 46.3%
----------- ---------- ----------- ----------- ----------- ----------- ----------
----------- ---------- ----------- ----------- ----------- ----------- ----------
Ratio and supplemental
data:
Net assets, end of
period (in 000's).... $ 170,071 $ 56,342 $ 38,780 $ 50,647 $ 130,887 $ 120,171 $ 72,122
Ratio of net
investment income
(loss) to
average net assets
(b).................. (0.1)% 0.0% (0.2)% (0.5)% 0.26% (0.54)% (0.9)%
Ratio of expenses to
average
net assets:
With expense
reductions (b)..... 2.0% 2.2% 1.9% 1.4% 2.54% 2.46% 2.5%
Without expense
reductions (b)..... --%(c) --%(c) --%(c) --%(c) 2.59% --%(c) --%(c)
Portfolio turnover
rate++............... 70% 107% 215% 229% 63% 87% 117%
</TABLE>
- --------------
+ Commencing April 1, 1993, the Fund began offering Class B shares. All
capital shares issued and outstanding as of March 31, 1993 were reclassified
as Class A shares.
++ Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
* The per share data reflects a 2 for 1 stock split effective August 14, 1989.
** Total investment return does not reflect the maximum sales charge on
purchases of Class A shares and the contingent deferred sales charge imposed
on certain redemptions of Class B shares.
(a) Not annualized for periods of less than one year.
(b) Annualized for periods of less than one year.
(c) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
(d) Calculated based upon weighted average shares outstanding during the period.
Prospectus Page 16
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL EUROPE GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
-------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------
1995(D) 1994* 1993* 1992* 1991 1990
------------- ----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning
of period.................. $10.03 $10.84 $8.51 $9.59 $9.33 $10.94
------------- ----------- ----------- ----------- ------------- -------------
Net investment income....... 0.04 0.06 0.05 0.11*** 0.21 0.10
Net realized and unrealized
gain (loss) on investments
and foreign currency....... 0.95 (0.69) 2.36 (1.19) 0.19 (1.71)
------------- ----------- ----------- ----------- ------------- -------------
Net increase (decrease) in
net asset value resulting
from investment
operations................. 0.99 (0.63) 2.41 (1.08) 0.40 (1.61)
------------- ----------- ----------- ----------- ------------- -------------
Distributions:
Net investment income..... (0.10) (0.05) (0.06) (0.00) (0.14) (0.00)
Net realized gain on
investments.............. (0.04) (0.00) (0.00) (0.00) (0.00) (0.00)
In excess of net
investment income........ (0.00) (0.00) (0.02) (0.00) (0.00) (0.00)
In excess of net realized
gain on
investments.............. (0.00) (0.13) (0.00) (0.00) (0.00) (0.00)
------------- ----------- ----------- ----------- ------------- -------------
Total distributions... (0.14) (0.18) (0.08) (0.00) (0.14) (0.00)
------------- ----------- ----------- ----------- ------------- -------------
Net asset value, end of
year....................... $10.88 $10.03 $10.84 $8.51 $9.59 $9.33
------------- ----------- ----------- ----------- ------------- -------------
------------- ----------- ----------- ----------- ------------- -------------
Total investment
return****................. 9.86% (5.80)% 28.3% (11.3)% 4.3% (14.7)%
------------- ----------- ----------- ----------- ------------- -------------
------------- ----------- ----------- ----------- ------------- -------------
Ratios and supplemental
data:
Net assets, end of period
(in 000's)................. $483,375 $646,313 $854,701 $781,607 $1,211,709 $1,428,677
Ratio of net investment
income (loss) to average
net assets................. 0.38% 0.61% 0.6% 1.2%*** 1.7% 1.1%
Ratio of expenses to average
net assets:
With expense reductions... 1.83% 1.73% 1.9% 2.0%*** 1.8% 1.9%
Without expense
reduction................ 1.89% 1.81%(c) --%(c) --%(c) --%(c) --%(c)
Portfolio turnover rate++... 108% 91% 67% 65% 55% 34%
</TABLE>
- ------------------
+ Commencing April 1, 1993, the Fund began offering Class B shares. All
capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Calculated based upon weighted average shares outstanding during the year.
** The per share data reflects a 2 for 1 stock split effective August 14,
1989.
*** Includes reimbursement by the Manager of Fund operating expenses of less
than one cent per share. Without such reimbursement, the ratio of expenses
to average net assets would have been 2.1% and the ratio of net investment
income to average net assets would have been 1.2%.
**** Total investment return does not reflect the maximum sales charge on
purchases of Class A shares and the contingent deferred sales charge
imposed on certain redemptions of Class B shares.
(a) Not annualized for periods of less than one year.
(b) Annualized for periods of less than one year.
(c) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
(d) Calculated based upon weighted average shares outstanding during the
period.
Prospectus Page 17
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL EUROPE GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
------------------------------------------------------ ----------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
APRIL 1,
YEAR ENDED DECEMBER 31, 1993
YEAR ENDED DECEMBER 31, TO
------------------------------------------------------ ------------------------- DECEMBER
1989** 1988** 1987** 1986** 1995(D) 1994* 31, 1993*
----------- --------- ---------- --------- ---------- ---------- ----------
Per Share Operating
Performance:
Net asset value, beginning
of period................. $7.77 $7.76 $9.62 $6.82 $9.97 $10.79 $9.02
----------- --------- ---------- --------- ---------- ---------- ----------
Net investment income
(loss).................... (0.02) (0.07) (0.00)+++ (0.03)+++ (0.03) (0.00) 0.00
Net realized and unrealized
gain (loss) on investments
and foreign currency...... 3.19 0.87 0.57 2.83 0.94 (0.69) 1.85
----------- --------- ---------- --------- ---------- ---------- ----------
Net increase (decrease) in
net asset value resulting
from investment
operations................ 3.17 0.80 0.57 2.80 0.91 (0.69) 1.85
----------- --------- ---------- --------- ---------- ---------- ----------
Distributions:
Net investment income.... (0.00) (0.00) (0.00) (0.00) (0.03) (0.00) (0.06)
In excess of net
investment income....... (0.00) (0.02)
Net realized gain on
investments............. (0.00) (0.79) (2.43) (0.00) (0.04)
In excess of net realized
gain on investments..... (0.00) (0.00) (0.00) (0.00) (0.00) (0.13) (0.00)
----------- --------- ---------- --------- ---------- ---------- ----------
Total
distributions....... (0.00) (0.79) (2.43) (0.00) (0.07) (0.13) (0.08)
----------- --------- ---------- --------- ---------- ---------- ----------
Net asset value, end of
period.................... $10.94 $7.77 $7.76 $9.62 $10.81 $9.97 $10.79
----------- --------- ---------- --------- ---------- ---------- ----------
----------- --------- ---------- --------- ---------- ---------- ----------
Total investment return****
(a)....................... 40.7% 11.1% 6.6% 41.0% 9.20% (6.38)% 20.5%
----------- --------- ---------- --------- ---------- ---------- ----------
----------- --------- ---------- --------- ---------- ---------- ----------
Ratios and supplemental
data:
Net assets, end of period
(in 000's)................ $ 382,428 $ 8,376 $ 10,227 $ 9,809 $ 73,025 $ 81,602 $ 34,048
Ratio of net investment
income (loss) to average
net assets (b)............ (0.6)% (1.0)% (0.00)%+++ (0.4)%+++ (0.27)% (0.04)% (0.1)%(b)
Ratio of expenses to
average
net assets:
With expense reductions
(b)..................... 1.9% 3.6% 2.0%+++ 2.0%+++ 2.48% 2.38% 2.6%
Without expense
reductions (b).......... --%(c) --%(c) --%(c) --%(c) 2.54% 2.46%(c) --%(c)
Portfolio turnover
rate++.................... 43% 153% 193% 102% 108% 91% 67%
</TABLE>
- ------------------
+ Commencing April 1, 1993, the Fund began offering Class B shares. All
capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
+++ Includes waivers of investment management and administration fees and
partial reimbursement of operating expenses by the Manager.
* Calculated based upon weighted average shares outstanding during the year.
** The per share data reflects a 2 for 1 stock split effective August 14,
1989.
*** Includes reimbursement by the Manager of Fund operating expenses of less
than one cent per share. Without such reimbursement, the ratio of expenses
to average net assets would have been 2.1% and the ratio of net investment
income to average net assets would have been 1.2%.
**** Total investment return does not reflect the maximum sales charge on
purchases of Class A shares and the contingent deferred sales charge
imposed on certain redemptions of Class B shares.
(a) Not annualized for periods of less than one year.
(b) Annualized for periods of less than one year.
(c) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
(d) Calculated based upon weighted average shares outstanding during the
period.
Prospectus Page 18
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
CLASS A(D) CLASS B(D)
---------------------------- ----------------------------
<S> <C> <C>
OCTOBER 18, 1995 OCTOBER 18, 1995
(COMMENCEMENT OF OPERATIONS) (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1995 THROUGH DECEMBER 31, 1995
---------------------------- ----------------------------
Per Share Operating Performance:
Net asset value, beginning of year......................... $11.43 $11.43
------- -------
Net investment income (loss)............................... 0.04* 0.02*
Net realized and unrealized gain (loss) on investments..... 0.33 0.33
------- -------
Net increase (decrease) in net asset value resulting from
investment operations..................................... 0.37 0.35
------- -------
Net asset value, end of year............................... $11.80 $11.78
------- -------
Total investment return (c)(a)............................. 3.24% 3.06%
------- -------
Ratios and supplemental data:
Net assets, end of period (in 000's)....................... $1,931 $2,024
Ratio of net investment income (loss) to average net
assets:
With reimbursement by the Manager (b).................... 1.68% 1.03%
Without reimbursement by the Manager (b)................. (20.52)% (21.17)%
Ratio of expenses to average net assets:
With reimbursement by the Manager (b).................... 2.00% 2.65%
Without reimbursement by the Manager (b)................. 24.20% 24.85%
</TABLE>
- ------------------
* Before reimbursement by the Manager the net investment loss per share would
have been $(0.47), $(0.49), and $(0.46) for Class A, Class B, and Advisor
Class, respectively, from October 18, 1995 to December 31, 1995.
(a) Not annualized.
(b) Annualized.
(c) Total investment return does not include sales charges.
(d) Calculated based upon weighted average shares outstanding during the period.
Prospectus Page 19
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL AMERICA GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
-----------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------
1995 1994(C) 1993 1992 1991 1990
----------- ----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning of
year......................... $17.69 $17.17 $17.12 $14.13 $11.89 $12.84
----------- ----------- ----------- ----------- ---------- ----------
Net investment income
(loss)....................... 0.24 0.04 (0.21) (0.11) 0.01 (0.01)
Net realized and unrealized
gain (loss) on
investments.................. 3.93 2.55 1.56 4.54 2.28 (0.94)
----------- ----------- ----------- ----------- ---------- ----------
Net increase (decrease) in net
asset value resulting from
investment operations........ 4.17 2.59 1.35 4.43 2.29 (0.95)
----------- ----------- ----------- ----------- ---------- ----------
Distributions:
Net investment income....... (0.21) (0.02) (0.00) (0.00) (0.01) (0.00)
Net realized gain on
investments................ (2.58) (2.05) (1.30) (1.44) (0.04) (0.00)
----------- ----------- ----------- ----------- ---------- ----------
Total distributions....... (2.79) (2.07) (1.30) (1.44) (0.05) (0.00)
----------- ----------- ----------- ----------- ---------- ----------
Net asset value, end of
year......................... $19.07 $17.69 $17.17 $17.12 $14.13 $11.89
----------- ----------- ----------- ----------- ---------- ----------
----------- ----------- ----------- ----------- ---------- ----------
Total investment return (d)... 23.23% 15.69% 8.3% 31.7% 19.3% (7.4)%
----------- ----------- ----------- ----------- ---------- ----------
----------- ----------- ----------- ----------- ---------- ----------
Ratios and supplemental data:
Net assets, end of period (in
000's)....................... $ 396,291 $ 196,937 $ 116,468 $ 166,712 $ 88,041 $ 65,413
Ratio of net investment income
(loss) to average
net assets................... 1.24% 0.17% (0.7)% (1.1)% 0.0% (0.1)%
Ratio of expenses to average
net assets................... 1.46% 1.58% 1.6% 1.8% 1.7% 2.0%
Portfolio turnover rate++..... 71% 102% 92% 114% 156% 145%
</TABLE>
- --------------
+ Commencing April 1, 1993, the Fund began offering Class B shares. All
capital shares issued and outstanding as of March 31, 1993 were reclassified
as Class A shares.
++ Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
* Includes reimbursement by the Manager of Fund operating expenses of $0.11.
Without such reimbursement, the ratio of expenses to average net assets
would have been 3.3% and the ratio of net investment income to average net
assets would have been (1.2)%.
(a) Not annualized for periods of less than one year.
(b) Annualized for periods of less than one year.
(c) The selected per share data were calculated based upon weighted average
shares outstanding.
(d) Total investment return does not include sales charge.
(e) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 20
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL AMERICA GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
----------------------------------- --------------------------------------
JUNE 9,
1987
(COMMENCEMENT APRIL 1,
OF 1993
YEAR ENDED OPERATIONS) YEAR ENDED DECEMBER 31, TO
DECEMBER 31, THROUGH DECEMBER
--------------------- DECEMBER ------------------------ 31,
1989 1988 31, 1987 1995 1994(C) 1993*
--------- --------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year.......... $8.76 $8.56 $10.00 $17.50 $17.09 $15.90
--------- --------- --------- --------- ---------- ---------
Net investment income (loss)................ 0.10* (0.40) (0.19) 0.10 (0.09) (0.29)
Net realized and unrealized gain (loss) on
investments................................ 4.65 1.35 (1.25) 3.87 2.55 2.78
--------- --------- --------- --------- ---------- ---------
Net increase (decrease) in net asset value
resulting from investment operations....... 4.75 0.95 (1.44) 3.97 2.46 2.49
--------- --------- --------- --------- ---------- ---------
Distributions:
Net investment income..................... (0.10) (0.00) (0.00) (0.12) (0.00) (0.00)
Net realized gain on investments.......... (0.57) (0.75) (0.00) (2.58) (2.05) (1.30)
--------- --------- --------- --------- ---------- ---------
Total distributions..................... (0.67) (0.75) (0.00) (2.70) (2.05) (1.30)
--------- --------- --------- --------- ---------- ---------
Net asset value, end of year................ $12.84 $8.76 $8.56 $18.77 $17.50 $17.09
--------- --------- --------- --------- ---------- ---------
--------- --------- --------- --------- ---------- ---------
Total investment return (d)(a).............. 54.8% 11.1% (14.4)% 22.42% 15.06% 16.1%
--------- --------- --------- --------- ---------- ---------
--------- --------- --------- --------- ---------- ---------
Ratios and supplemental data:
Net assets, end of period (in 000's)........ $ 9,930 $ 1,548 $ 1,039 $ 348,435 $ 80,060 $ 1,982
Ratio of net investment income (loss) to
average
net assets (b)............................. 1.2%* (4.7)% (2.7)% 0.59% (0.48)% (1.3)%
Ratio of expenses to average
net assets (b)............................. 1.9%* 5.1% 3.8% 2.11% 2.23% 2.2%
Portfolio turnover rate++................... 133% 184% 505% 71% 102% 92%
</TABLE>
- --------------
+ Commencing April 1, 1993, the Fund began offering Class B shares. All
capital shares issued and outstanding as of March 31, 1993 were reclassified
as Class A shares.
++ Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
* Includes reimbursement by the Manager of Fund operating expenses of $0.11.
Without such reimbursement, the ratio of expenses to average net assets
would have been 3.3% and the ratio of net investment income to average net
assets would have been (1.2)%.
(a) Not annualized for periods of less than one year.
(b) Annualized for periods of less than one year.
(c) The selected per share data were calculated based upon weighted average
shares outstanding.
(d) Total investment return does not include sales charge.
(e) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 21
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL AMERICA VALUE FUND
<TABLE>
<CAPTION>
CLASS A(D) CLASS B(D)
---------------------------- ----------------------------
<S> <C> <C>
OCTOBER 18, 1995 OCTOBER 18, 1995
(COMMENCEMENT OF OPERATIONS) (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1995 THROUGH DECEMBER 31, 1995
---------------------------- ----------------------------
Per Share Operating Performance:
Net asset value, beginning of year....................... $11.43 $11.43
------- -------
Net investment income (loss)............................. 0.03* 0.01*
Net realized and unrealized gain (loss) on investments... 1.30 1.31
------- -------
Net increase (decrease) in net asset value resulting from
investment operations................................... 1.33 1.32
------- -------
Net asset value, end of year............................. $12.76 $12.75
------- -------
Total investment return (c)(a)........................... 11.64%(a) 11.55%(a)
------- -------
Ratios and supplemental data:
Net assets, end of period (in 000's)..................... $ 870 $1,254
Ratio of net investment income (loss) to average net
assets:
With reimbursement by the Manager (b).................. 1.10% 0.45%
Without reimbursement by the Manager (b)............... (47.44)% (48.09)%
Ratio of expenses to average net assets:
With reimbursement by the Manager (b).................. 2.00% 2.65%
Without reimbursement by the Manager (b)............... 50.54% 51.19%
</TABLE>
- ------------------
* Before reimbursement by the Manager 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.
(a) Not annualized.
(b) Annualized.
(c) Total investment return does not include sales charges.
(d) Calculated based upon weighted average shares outstanding during the period.
Prospectus Page 22
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL JAPAN GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
-------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------
1995* 1994 1993 1992* 1991 1990
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $12.15 $11.61 $8.70 $11.16 $11.48 $16.39
---------- ---------- ---------- ---------- ---------- ----------
Net investment income (loss)............ (0.04) (0.04) (0.14) (0.00)*** (0.09) (0.05)++
Net realized and unrealized gain (loss)
on investments......................... 0.26 0.79 3.05 (2.40) (0.23) (4.60)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net asset
value resulting from investment
operations............................. 0.22 0.75 2.91 (2.40) (0.32) (4.65)
---------- ---------- ---------- ---------- ---------- ----------
Distributions:
Net realized gain on investments and
foreign currency..................... (1.37) (0.21) (0.00) (0.06) (0.00) (0.26)
---------- ---------- ---------- ---------- ---------- ----------
Total distributions............... (1.37) (0.21) (0.00) (0.06) (0.00) (0.26)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $11.00 $12.15 $11.61 $8.70 $11.16 $11.48
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Total investment return****............. 1.94% 6.56% 33.5% (21.5)% (2.8)% (28.7)%
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 111,105 $ 98,066 $ 88,487 $ 93,865 $ 61,519 $ 51,693
Ratio of net investment income (loss) to
average net assets..................... (0.40)% (0.32)% (0.3)% (0.0)%*** (1.5)% (1.2)%++
Ratio of expenses to average net assets:
With expense reductions............... 1.99% 1.91% 2.1% 2.2%*** 2.2% 2.2%++
Without expense reductions............ 2.14% 2.03%(c) --%(c) --%(c) --%(c) --%(c)
Portfolio turnover rate++............... 67% 49% 104% 115% 251% 138%
</TABLE>
- --------------
+ Commencing April 1, 1993, the Fund began offering Class B shares. All
capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Calculated based upon weighted average shares outstanding during the
period.
** The per share data reflects a 2 for 1 stock split effective August 15,
1988.
*** Includes reimbursement by the Manager of Fund operating expenses of $0.01.
Without such reimbursement, the ratio of expenses to average net assets
would have been 2.3% and the ratio of net investment loss to average net
assets would have been (0.1)%.
**** Total investment return does not reflect the maximum sales charge on
purchases of Class A shares and the contingent deferred sales charge
imposed on certain redemptions of Class B shares.
++ Includes reimbursement by the Manager of Fund operating expenses of
$0.01. Without such reimbursement, the ratio of expenses to average net
assets would have been 2.4% and the ratio of net investment loss to average
net assets would have been (1.35)%.
(a) Not annualized.
(b) Annualized.
(c) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 23
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL JAPAN GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
------------------------------------------------------ -----------------------------------------
APRIL 1,
YEAR ENDED DECEMBER 31, 1993
YEAR ENDED DECEMBER 31, TO
------------------------------------------------------ --------------------------- DECEMBER
1989 1988** 1987** 1986** 1995* 1994 31, 1993
---------- ---------- ---------- --------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning
of period................ $10.57 $10.36 $9.88 $6.20 $12.02 $11.57 $9.85
---------- ---------- ---------- --------- ----------- ----------- ---------
Net investment income
(loss)................... (0.19) (0.20) (0.15) (0.14) (0.12) (0.13) (0.18)
Net realized and
unrealized gain (loss) on
investments.............. 6.57 2.44 4.52 3.91 0.25 0.79 1.90
---------- ---------- ---------- --------- ----------- ----------- ---------
Net increase (decrease) in
net asset value resulting
from investment
operations............... 6.38 2.24 4.37 3.77 0.13 0.66 1.72
---------- ---------- ---------- --------- ----------- ----------- ---------
Distributions:
Net realized gain on
investments and foreign
currency............... (0.56) (2.03) (3.89) (0.09) (1.37) (0.21) (0.00)
---------- ---------- ---------- --------- ----------- ----------- ---------
Total
distributions...... (0.56) (2.03) (3.89) (0.09) (1.37) (0.21) (0.00)
---------- ---------- ---------- --------- ----------- ----------- ---------
Net asset value, end of
period................... $16.39 $10.57 $10.36 $9.88 $10.78 $12.02 $11.57
---------- ---------- ---------- --------- ----------- ----------- ---------
---------- ---------- ---------- --------- ----------- ----------- ---------
Total investment
return**** (a)........... 60.7% 21.9% 52.1% 61.3% 1.20% 5.81% 17.5%
---------- ---------- ---------- --------- ----------- ----------- ---------
---------- ---------- ---------- --------- ----------- ----------- ---------
Ratios and supplemental
data:
Net assets, end of period
(in 000's)............... $48,405 $18,591 $10,049 $7,313 $41,274 $27,355 $3,699
Ratio of net investment
income (loss) to average
net assets (b)........... (1.6)% (1.5)% (2.4)% (1.6)% (1.05)% (0.97)% (0.9)%
Ratio of expenses to
average
net assets:
With expense reductions
(b).................... 2.1% 2.2% 3.0% 2.2% 2.64% 2.56% 2.7%
Without expense
reductions (b)......... --%(c) --%(c) --%(c) --%(c) 2.79% 2.68% --%(c)
Portfolio turnover
rate++................... 108% 150% 319% 207% 67% 49% 104%
</TABLE>
- --------------
+ Commencing April 1, 1993, the Fund began offering Class B shares. All
capital shares issued and outstanding as of March 31, 1993 were
reclassified as Class A shares.
++ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Calculated based upon weighted average shares outstanding during the
period.
** The per share data reflects a 2 for 1 stock split effective August 15,
1988.
*** Includes reimbursement by the Manager of Fund operating expenses of $0.01.
Without such reimbursement, the ratio of expenses to average net assets
would have been 2.3% and the ratio of net investment loss to average net
assets would have been (0.1)%.
**** Total investment return does not reflect the maximum sales charge on
purchases of Class A shares and the contingent deferred sales charge
imposed on certain redemptions of Class B shares.
++ Includes reimbursement by the Manager of Fund operating expenses of
$0.01. Without such reimbursement, the ratio of expenses to average net
assets would have been 2.4% and the ratio of net investment loss to average
net assets would have been (1.35)%.
(a) Not annualized for periods of less than one year.
(b) Annualized for periods of less than one year.
(c) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 24
<PAGE>
GT GLOBAL EQUITY FUNDS
ALTERNATIVE PURCHASE PLAN
- --------------------------------------------------------------------------------
DIFFERENCES BETWEEN THE CLASSES. The primary distinction between the two classes
of each Fund's shares offered through this Prospectus lies in their sales charge
structures and ongoing expenses, as summarized below. Class A and Class B shares
of each Fund represent interests in the same Fund and have the same rights,
except that each class bears the separate expenses of its Rule 12b-1
distribution plan and has exclusive voting rights with respect to such plan, and
each class has a separate exchange privilege. See "Management" and "How to
Exchange Shares." Each class has distinct advantages and disadvantages for
different investors, and investors should choose the class that better suits
their circumstances and objectives.
CLASS A SHARES. Class A shares are sold at net asset value plus an initial sales
charge of up to 4.75% of the public offering price imposed at the time of
purchase. This initial sales charge is reduced or waived for certain purchases.
Purchases of $500,000 or more must be for Class A shares. Class A shares of each
Fund also bear annual service and distribution fees of up to 0.35% of the
average daily net assets of that class.
CLASS B SHARES. Class B shares are sold at net asset value with no initial sales
charge at the time of purchase. Therefore, the entire amount of an investor's
purchase payment is invested in a Fund. Class B shares bear annual service and
distribution fees of up to 1.00% of the average daily net assets of that class,
and Class B shareholders pay a contingent deferred sales charge of up to 5% of
the lesser of the original purchase price or the net asset value of such shares
at the time of redemption. The higher service and distribution fees paid by the
Class B shares of a Fund will cause that class to have a higher expense ratio
and to pay lower dividends per share than Class A shares of the same Fund.
FACTORS TO CONSIDER IN CHOOSING A CLASS OF SHARES. In deciding which class of a
Fund to purchase, investors should consider the foregoing factors as well as the
following:
INTENDED HOLDING PERIOD. Over time, the cumulative expense of the 1.00% annual
service and distribution fees on the Class B shares of a Fund will approximate
or exceed the expense of the applicable 4.75% maximum initial sales charge plus
the 0.35% service and distribution fees on that Fund's Class A shares. For
example, if net asset value remains constant, the Class B shares' aggregate
service and distribution fees would be equal to the Class A shares' initial
maximum sales charge and service and distribution fees approximately seven years
after purchase. Thereafter, Class B shares would experience higher cumulative
expenses. Investors who expect to maintain their investment in a Fund over the
long-term but do not qualify for a reduced initial sales charge might elect the
Class A initial sales charge alternative, because the indirect expense to the
shareholder of the accumulated service and distribution fees on the Class B
shares will exceed the initial sales charge paid by the shareholder plus the
indirect expense to the shareholder of the accumulated service and distribution
fees of Class A shares. Class B investors, however, enjoy the benefit of
permitting all their dollars to work from the time the investments are made. Any
positive investment return on this additional invested amount would partially or
wholly offset the higher annual expenses borne by Class B shares. Because the
Funds' future returns cannot be predicted, however, there can be no assurance
that such a positive return will be achieved.
Finally, Class B shareholders pay a contingent deferred sales charge if they
redeem during the first six years after purchase, unless a sales charge waiver
applies. Investors expecting to redeem during this period should consider the
cost of the applicable contingent deferred sales charge in addition to the
annual Class B service and distribution fees, as compared with the cost of the
applicable initial sales charge and annual service and distribution fees
applicable to the Class A shares.
The "Hypothetical Example of Effect of Expenses" under "Prospectus Summary"
shows for each Fund the cumulative expenses an investor would pay over time on a
hypothetical investment in Class A and Class B shares of each Fund, assuming an
annual return of 5%.
REDUCED SALES CHARGES. Class A share purchases of $50,000 or more and Class A
share purchases made
Prospectus Page 25
<PAGE>
GT GLOBAL EQUITY FUNDS
under a Fund's reduced sales charge plans may be made at a reduced initial sales
charge. See "How to Invest" for a complete list of reduced sales charges
applicable to Class A purchases.
WAIVER OF SALES CHARGES. The entire initial sales charge on Class A shares of a
Fund is waived for certain eligible purchasers and these purchasers' entire
purchase price would be immediately invested in that Fund. Investors eligible
for complete initial sales charge waivers should purchase Class A shares. The
contingent deferred sales charge is waived for certain redemptions of Class B
shares of a Fund. A 1% contingent deferred sales charge is imposed on certain
redemptions of Class A shares on which no initial sales charge was assessed.
Investors should understand that the contingent deferred sales charge on the
Class B shares and the initial sales charge on the Class A shares are both
intended to compensate GT Global and selling broker/dealers for their
distribution services. Broker/dealers may receive different levels of
compensation for selling a particular class of shares of a Fund.
See "How to Invest," "How to Redeem Shares" and "Management" for a more complete
description of the initial and contingent deferred sales charges, service fees
and distribution fees for Class A and Class B shares of each Fund and
"Dividends, Other Distributions and Federal Income Taxation" and "Calculation of
Net Asset Value" for other differences between these two classes.
ADVISOR CLASS SHARES. Advisor Class shares are offered through a separate
Prospectus to (a) trustees or other fiduciaries purchasing shares for employee
benefit plans which are sponsored by organizations which have at least 1,000
employees; (b) any account with assets of at least $10,000 if (i) a financial
planner, trust company, bank trust department or registered investment adviser
has investment discretion over such account, and (ii) the account holder pays
such person as compensation for its advice and other services an annual fee of
at least .50% on the assets in the account ("Advisory Account"); (c) any account
with assets of a least $10,000 if (i) such account is established under a "wrap
fee" program, and (ii) the account holder pays the sponsor of such program an
annual fee of at least .50% on the assets in the account; (d) accounts advised
by one of the companies comprising or affiliated with Liechtenstein Global
Trust; and (e) any of the companies comprising or affiliated with Liechtenstein
Global Trust.
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
AND POLICIES; RISK FACTORS
- --------------------------------------------------------------------------------
The Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund
and America Growth Fund seek long-term growth of capital. The America Small Cap
Fund and America Value Fund seek long-term capital appreciation.
The Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund
and America Growth Fund seek their objective by investing, under normal
circumstances, at least 65% of their total assets in equity securities of
issuers domiciled in their Primary Investment Area, as described below. The
America Small Cap Fund seeks its investment objective by investing all of its
investable assets in the America Small Cap Portfolio, that, in turn, normally
invests at least 65% of its total assets in equity securities of small cap
companies domiciled in its Primary Investment Area, as described below. The
America Value Fund seeks its investment objective by investing all of its
investable assets in the America Value Portfolio, that, in turn, normally
invests at least 65% of its total assets in equity securities of medium to large
cap issuers, domiciled in its Primary Investment Area as described below, that
the Manager believes to be undervalued in relation to long-term earning power or
other factors. There is no assurance that any Fund or Portfolio will achieve its
investment objective.
Equity securities in which a Fund or Portfolio (which, for purposes of the
following discussion under "Investment Objectives and Policies; Risk Factors,"
the phrase "Fund or Portfolio" includes only the Pacific Fund, Europe Fund,
Japan Fund, International Fund, Worldwide Fund, America Growth Fund, America
Small Cap Portfolio and America Value Portfolio) may invest include common
stocks,
Prospectus Page 26
<PAGE>
GT GLOBAL EQUITY FUNDS
preferred stocks, convertible debt securities and warrants to acquire such
securities.
The Funds' Primary Investment Areas include the following countries:
GT GLOBAL NEW PACIFIC GROWTH FUND ("PACIFIC FUND") -- Australia, Hong Kong,
India, Indonesia, Malaysia, New Zealand, Pakistan, the Philippines, Singapore,
South Korea, Taiwan and Thailand
GT GLOBAL EUROPE GROWTH FUND ("EUROPE FUND") -- Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands,
Norway, Portugal, Spain, Sweden, Switzerland, Turkey and the United Kingdom
GT GLOBAL JAPAN GROWTH FUND ("JAPAN FUND") -- Japan
GT GLOBAL INTERNATIONAL GROWTH FUND ("INTERNATIONAL FUND") -- all countries
listed for each other Fund, and Argentina, Brazil, Canada, Chile, Colombia,
Israel, Mexico, Peru and Venezuela, but not the United States
GT GLOBAL WORLDWIDE GROWTH FUND ("WORLDWIDE FUND") -- same as International
Fund, but including the United States
GT GLOBAL AMERICA GROWTH FUND ("AMERICA GROWTH FUND") -- the United States
GT GLOBAL AMERICA SMALL CAP GROWTH FUND ("AMERICA SMALL CAP FUND") -- the United
States
GT GLOBAL AMERICA VALUE FUND ("AMERICA VALUE FUND") -- the United States
From time to time, the Company's Board of Trustees may add or delete countries
from a Fund's Primary Investment Area. See "Other Policies."
As indicated by these Primary Investment Areas, the WORLDWIDE FUND is designed
for those investors desiring to delegate equity investment decisions, including
allocation of assets among the world's different markets, currency strategies
and individual stock selection, to the Manager's professional team of investment
specialists. The INTERNATIONAL FUND is intended for investors seeking to
complement their U.S. equity investments with a professionally managed
international portfolio. The PACIFIC FUND and the EUROPE FUND are regional funds
for investors interested in a more geographically concentrated investment but
still desiring to diversify across multiple markets. Finally, the JAPAN FUND,
the AMERICA GROWTH FUND, AMERICA SMALL CAP FUND and AMERICA VALUE FUND are
designed for investors wishing to concentrate their investment in a particular
market, or size of market, but still desiring the professional management,
liquidity and diversification afforded by a mutual fund.
The Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund
and America Growth Fund may invest up to 35% of their total assets in the equity
securities of issuers domiciled outside of their Primary Investment Area. Such
investments may include, e.g.: (a) securities of issuers in countries that are
not located in the Primary Investment Area but are linked by tradition, economic
markets, cultural similarities or geography to the countries in such Primary
Investment Area; and (b) securities of issuers located elsewhere in the world
which have operations in the Primary Investment Area or which stand to benefit
from political and economic events in the Primary Investment Area. For example,
the Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund
and America Growth Fund may invest in a company outside of its Primary
Investment Area when the Manager believes at the time of investment that the
value of the company's securities may be enhanced by conditions or developments
in that Primary Investment Area even though the company's production facilities
are located outside of that Primary Investment Area.
In managing the Pacific Fund, Europe Fund, Japan Fund, International Fund,
Worldwide Fund and America Growth Fund, the Manager seeks to identify those
countries and industries where economic and political factors, including
currency movements, are likely to produce above-average growth rates. The
Manager further attempts to identify those companies in such countries and
industries that are best positioned and managed to take advantage of these
economic and political factors. The Manager intends to invest in such markets
only after balancing the potential for growth of selected companies in each
market relative to the risks of investing in each such country. Among the
factors to be considered are that several of the markets included in the Primary
Investment Areas of the Pacific Fund, Europe Fund, International Fund, and
Worldwide Fund are so-called developing countries, and their economies and
markets are less developed and more prone to uncertainty, instability and risk
than those of the other markets in which such Funds invest.
Under normal circumstances, the assets of the Worldwide Fund and International
Fund are invested in the equity securities of issuers domiciled in at least
three different countries, and 20% to
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GT GLOBAL EQUITY FUNDS
60% of the Worldwide Fund's assets normally are invested in the equity
securities of U.S. issuers. The America Growth Fund currently expects to invest
a majority of its assets in the securities of mid-and small-size companies. In
selecting securities for inclusion in the America Growth Fund's portfolio, the
Manager normally initially focuses on companies with total equity market
capitalization of $2 billion or less.
Up to 35% of total assets in the Pacific Fund, Europe Fund, Japan Fund,
International Fund, Worldwide Fund and America Growth Fund may be invested in
debt securities. These debt obligations include U.S. and foreign government
securities and corporate debt securities, including Samurai and Yankee bonds,
Eurobonds and Depository Receipts. The issuers of such debt securities may or
may not be domiciled in the Primary Investment Area of a particular Fund
purchasing the securities. The Pacific Fund, Europe Fund, Japan Fund,
International Fund, Worldwide Fund and America Growth Fund will limit their
purchases of debt securities to investment grade obligations. "Investment grade"
debt refers to those securities rated within one of the four highest ratings
categories by Moody's Investors Service, Inc. ("Moody's") or by Standard &
Poor's Ratings Group ("S&P"), or, if not similarly rated by any other nationally
recognized statistical rating organization ("NRSRO"), deemed by the Manager to
be of equivalent quality. Debt rated Baa by Moody's, which is the lowest
category of investment grade debt, is considered by Moody's to have speculative
characteristics. See the Statement of Additional Information for a full
description of Moody's and S&P ratings.
The Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund
and America Growth Fund may use instruments (including forward currency
contracts), and the America Small Cap Fund, the America Value Fund and the
Portfolios also may use instruments, often referred to as "derivatives." See
"Options, Futures and Forward Currency Transactions."
The America Small Cap Fund seeks its investment objective by investing all of
its investable assets in the America Small Cap Portfolio, that, in turn,
normally invests at least 65% of its total assets in equity securities,
including common stocks, convertible preferred stocks, convertible debt
securities and warrants of small cap companies domiciled in the Primary
Investment Area of the America Small Cap Fund, the United States. For purposes
of the foregoing, "small cap" companies are companies that, at the time of
purchase of their securities by the America Small Cap Portfolio, have market
capitalizations of up to $500 million. Market capitalization means the total
market value of a company's outstanding common stock. There is no necessary
correlation between market capitalization and the financial attributes (such as
level of assets, revenues or income) often used to measure a company's size. The
remainder of the America Small Cap Portfolio's assets may be invested in common
stocks, convertible preferred stocks, convertible debt securities and warrants
of companies domiciled in the United States that are not small cap companies as
defined above, non-convertible preferred stocks, non-convertible debt
securities, U.S. government securities and high quality money market
instruments, such as U.S. government obligations, high grade commercial paper,
bank certificates of deposit and bankers' acceptances of issuers domiciled in
the United States.
The America Value Fund seeks its investment objective by investing all of its
investable assets in the America Value Portfolio, that, in turn, normally
invests at least 65% of its total assets in equity securities, including common
stocks, convertible preferred stocks, convertible debt securities and warrants
of medium to large cap issuers domiciled in the Fund's Primary Investment Area,
the United States, that the Manager believes to be undervalued in relation to
long-term earning power or other factors. For purposes of the foregoing, "medium
to large cap" issuers are issuers with a market capitalization greater than $500
million at the time of purchase by the America Value Portfolio. The remainder of
the America Value Portfolio's assets may be invested in common stocks,
convertible preferred stocks, convertible debt securities and warrants of
companies domiciled in the United States that are smaller than the issuers
defined above, non-convertible preferred stocks, non-convertible debt
securities, U.S. government securities and high quality money market
instruments, such as U.S. government obligations, high grade commercial paper,
bank certificates of deposit and bankers' acceptances of issuers domiciled in
the United States.
In selecting issuers for the America Value Portfolio, the Manager attempts to
identify securities of issuers whose prospects and growth potential, in the
Manager's opinion, are currently undervalued by investors. In the Manager's
view, an issuer may show favorable prospects as a result of many factors,
including, but not limited to, changes in
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GT GLOBAL EQUITY FUNDS
management, shifts in supply and demand conditions in the industry in which it
operates, technological advances, new products or product cycles, or changes in
macroeconomic trends. The securities of such issuers may be undervalued by the
market due to many factors, including market decline, tax-loss selling, poor
economic conditions, limited coverage by the investment community, investors'
reluctance to overlook perceived financial, operational, managerial or other
problems affecting the issuer or the industry in which it operates, and other
factors. The Manager will attempt to identify those undervalued issuers with the
potential for attractive returns.
For purposes of the Portfolios, an issuer is considered domiciled in the United
States if it is incorporated under the laws of any of its states or territories
or the District of Columbia, and either (i) at least 50% of the value of its
assets is located in the United States, or (ii) it normally derives at least 50%
of its income from operations or sales in the United States.
The debt obligations that the Portfolios may invest in are limited to U.S.
government securities and corporate debt securities of issuers domiciled in the
United States. The Portfolios will limit their purchases of debt securities to
investment grade obligations, as defined above.
OTHER POLICIES. Because the development of the world's economies and stock
markets is rapidly evolving, from time to time the Board of Trustees may add or
delete countries from a Fund's Primary Investment Area. In the past, new markets
such as Indonesia, South Korea and Taiwan have been added in the Primary
Investment Area of the Pacific Fund, and Greece, Ireland, Portugal and Turkey
have been added in the Primary Investment Area of the Europe Fund. On the other
hand, Japan has been eliminated from the Primary Investment Area of the Pacific
Fund.
With respect to certain countries, currently including Taiwan, investments by a
Fund may only be made through investment in other investment companies that in
turn are authorized to invest in the securities of such countries. Each Fund or
Portfolio may invest up to 10% of its assets in other investment companies. As a
shareholder in an investment company, a Fund or Portfolio would bear its ratable
share of that investment company's expenses, including its advisory and
administration fees. At the same time, the Fund or Portfolio would continue to
pay its own management fees and other expenses.
Each Fund or Portfolio retains the flexibility to respond promptly to changes in
market and economic conditions. Accordingly, in the interest of preserving
shareholders' capital and consistent with each Fund's or Portfolio's investment
objective, the Manager may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. Under a defensive strategy, the Pacific Fund, Europe Fund,
Japan Fund, International Fund, Worldwide Fund and America Growth Fund may hold
cash (U.S. dollars, foreign currencies or multinational currency units) and/or
invest any portion or all of its assets in debt securities or high quality money
market instruments issued by corporations, or the U.S. or a foreign government.
In addition, for temporary defensive purposes, such as during times of
international political or economic uncertainty, most or all investments of the
Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund and
America Growth Fund may be made in the United States and denominated in U.S.
dollars. For temporary defensive purposes, each Portfolio may hold U.S. dollars
and/or may invest any portion of its assets in domestic debt securities or high
quality money market instruments. To the extent a Fund or Portfolio adopts a
temporary defensive position, it will not be invested so as to achieve directly
its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Pacific Fund, Europe Fund, Japan Fund,
International Fund, Worldwide Fund and America Growth Fund may hold cash (U.S.
dollars, foreign currencies or multinational currency units) and may invest in
high quality foreign or domestic money market instruments. Each Portfolio also
may hold U.S. dollars and/or invest in domestic debt securities or high quality
money market instruments pending investment of proceeds from new sales of
America Small Cap Fund or America Value Fund shares, or to meet its ordinary
daily cash needs. Money market instruments in which the Funds or Portfolios may
invest include, but are not limited to, the following: government securities;
high grade commercial paper; bank certificates of deposit; bankers' acceptances;
and repurchase agreements related to any of the foregoing. High grade commercial
paper refers to commercial paper rated P-1 by Moody's or A-1 by S&P at the time
of investment or, if unrated, deemed by the Manager to be of comparable quality.
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GT GLOBAL EQUITY FUNDS
From time to time, it may be advantageous for each Fund or Portfolio to borrow
money rather than sell existing portfolio positions to meet redemption requests.
Accordingly, each Fund or Portfolio may borrow from banks or may borrow through
reverse repurchase agreements and "roll" transactions in connection with meeting
requests for the redemptions of the Fund's shares. Each Fund or Portfolio also
may borrow up to 5% of its total assets for temporary or emergency purposes
other than to meet redemptions. However, no Fund or Portfolio will borrow for
leveraging purposes, nor will any Fund or Portfolio purchase securities while
borrowings are outstanding. See "Investment Objectives and Policies" in the
Statement of Additional Information.
The Funds or Portfolios may lend their portfolio securities, for the purpose of
realizing additional income, to broker/dealers or to other institutional
investors. At all times a loan is outstanding, the borrower must maintain with
the Funds' or Portfolios' custodian collateral consisting of cash, U.S.
government securities or other liquid, high grade debt securities equal to at
least the value of the borrowed securities, plus any accrued interest. Each Fund
or Portfolio will receive any interest paid on the loaned securities and a fee
and/or a portion of the interest earned on the collateral. Each Fund or
Portfolio limits its loans of portfolio securities to an aggregate of 30% of the
value of its total assets, measured at the time any such loan is made. The risks
in lending portfolio securities, as with other extensions of secured credit,
consist of possible delay in receiving additional collateral or in recovery of
the securities and possible loss of rights in the collateral should the borrower
fail financially.
The Funds or Portfolios may purchase debt securities on a "when-issued" basis
and may purchase or sell such securities on a "forward commitment" basis in
order to hedge against anticipated changes in interest rates and prices. The
price, which generally is expressed in yield terms, is fixed at the time the
commitment is made, but delivery and payment for the securities take place at a
later date. When-issued securities and forward commitments may be sold prior to
the settlement date, but the Funds or Portfolios will purchase or sell
when-issued securities or enter into forward commitments only with the intention
of actually receiving or delivering the securities, as the case may be. No
income accrues on securities which have been purchased pursuant to a forward
commitment or on a when-issued basis prior to delivery to the Fund or Portfolio.
If the Fund or Portfolio disposes of the right to acquire a when-issued security
prior to its acquisition or disposes of its right to deliver or receive against
a forward commitment, it may incur a gain or loss. At the time a Fund or
Portfolio enters into a transaction on a when-issued or forward commitment
basis, a segregated account consisting of cash or liquid securities equal to the
value of the when-issued or forward commitment securities will be established
and maintained with its custodian and will be marked to market daily. There is a
risk that the securities may not be delivered and that a Fund or Portfolio may
incur a loss.
The Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund
and America Growth Fund also may invest in securities of foreign issuers in the
form of American Depository Receipts ("ADRs") or other similar securities
convertible into securities of foreign issuers. These securities may not
necessarily be denominated in the same currency as the securities into which
they may be converted. ADRs are receipts typically issued by a United States
bank or trust company evidencing ownership of the underlying securities.
Generally, ADRs in registered form are designed for use in U.S. securities
markets. See "Investment Objectives and Policies" in the Statement of Additional
Information.
Each Fund or Portfolio may invest up to 15% of its net assets in illiquid
securities.
RISK FACTORS. Each Fund's net asset value will fluctuate, reflecting
fluctuations in the market value of its securities and its net currency
exposure, or fluctuations in the market value of the securities of its
corresponding Portfolio.
As of December 31, 1995, companies outside the U.S. comprised approximately 66%
of the world's stock market capitalization, according to Morgan Stanley Capital
International. Moreover, from time to time, the equity securities of issuers
located outside the U.S. have outperformed substantially those of U.S. issuers.
Accordingly, the Manager believes that the Funds' policies (except those of the
America Growth Fund, America Small Cap Fund and America Value Fund) of investing
in equity securities of issuers outside the U.S. may enable them to produce
returns greater than those produced by funds investing solely in the securities
of domestic issuers.
Foreign investing entails certain risks. The securities of non-U.S. issuers
generally will not be registered with, nor will the issuers thereof be subject
to, the
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GT GLOBAL EQUITY FUNDS
reporting requirements of the SEC. Accordingly, there may be less publicly
available information about foreign securities and issuers than is available
about domestic securities and issuers. Foreign companies generally are not
subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic companies.
Securities of some foreign companies are less liquid and their prices may be
more volatile than securities of comparable domestic companies. A Fund's
interest and dividends from foreign issuers may be subject to non-U.S.
withholding taxes, thereby reducing its net investment income. In addition,
certain costs attributable to foreign investing, such as custody charges, are
higher than those attributable to domestic investing.
With respect to some foreign countries, there is the possibility of
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the Funds, political or social instability, or diplomatic
developments which could affect the Funds' investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, rate of savings and capital reinvestment, resource self-sufficiency
and balance of payments positions.
The Manager allocates investments among fixed income securities of particular
issuers on the basis of its views as to the best values then currently available
in the marketplace. Such values are a function of yield, maturity, issue
classification and quality characteristics, coupled with expectations regarding
the economy, movements in the general level and term of interest rates, currency
values, political developments, and variations in the supply of funds available
for investment in the world bond market relative to the demands placed upon it.
If market interest rates decline, fixed income securities generally appreciate
in value and vice versa. Fixed income securities denominated in currencies other
than the U.S. dollar or in multinational currency units are evaluated on the
strength of the particular currency against the U.S. dollar as well as on the
current and expected levels of interest rates in the country or countries. In
addition to the foregoing, the Pacific Fund, Europe Fund, Japan Fund,
International Fund, Worldwide Fund and America Growth Fund may seek to take
advantage of differences in relative values of fixed income securities among
various countries.
Since the Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide
Fund and America Growth Fund may invest substantially in securities denominated
in currencies other than the U.S. dollar, and since such Funds may hold foreign
currencies, the Pacific Fund, Europe Fund, Japan Fund, International Fund,
Worldwide Fund and America Growth Fund will be affected favorably or unfavorably
by exchange control regulations or changes in the exchange rates between such
currencies and the U.S. dollar. Changes in currency exchange rates will
influence the value of shares of the Pacific Fund, Europe Fund, Japan Fund,
International Fund, Worldwide Fund and America Growth Fund, and also may affect
the value of dividends and interest earned by such Funds and gains and losses
they realize. Currencies generally are evaluated on the basis of fundamental
economic criteria (e.g., relative inflation and interest rate levels and trends,
growth rate forecasts, balance of payments status and economic policies) as well
as technical and political data. Exchange rates are determined by the forces of
supply and demand in the foreign exchange markets. These forces are affected by
the international balance of payments and other economic and financial
conditions, government intervention, speculation and other factors. If the
currency in which a security is denominated appreciates against the U.S. dollar,
the dollar value of the security will increase. Conversely, a decline in the
exchange rate of the currency would adversely affect the value of the security
expressed in dollars.
SMALL CAP COMPANIES. Small cap companies may be more vulnerable than larger
companies to adverse business, economic, or market developments. Small cap
companies may also have more limited product lines, markets or financial
resources than companies with larger capitalizations, and may be more dependent
on a relatively small management group. In addition, small cap companies may not
be well-known to the investing public, may not have institutional ownership and
may have only cyclical, static or moderate growth prospects. Most small cap
company stocks pay low or no dividends. Securities of small cap companies are
generally less liquid and their prices more volatile than those of securities of
larger companies. The securities of some small cap companies may not be widely
traded; the America Growth Fund's and the America Small Cap Portfolio's position
in securities of such companies may be substantial in relation to the market for
such securities. Accordingly, it may be difficult for the America Growth Fund
and the
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GT GLOBAL EQUITY FUNDS
America Small Cap Portfolio to dispose of securities of these small cap
companies at prevailing market prices in order to meet redemptions.
SPECIAL CONSIDERATIONS AFFECTING EMERGING MARKETS. Investing in the securities
of issuers domiciled in emerging markets may entail special risks relating to
the potential political and economic instability and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, converting of currencies into U.S. dollars and on repatriation of
capital invested. In the event of such expropriation, nationalization or other
confiscation by any country, a Fund could lose its entire investment in any such
country.
Emerging securities markets are substantially smaller, less developed, less
liquid and more volatile than the securities markets of the United States and
other more developed countries. The limited size of emerging securities markets
and limited trading volume in issuers compared to the volume of trading in U.S.
securities could cause prices to be erratic for reasons apart from factors that
affect the quality of the securities. In addition, settlement mechanisms in
emerging securities markets may be less efficient and reliable than in more
developed markets. Also, most Latin American countries have experienced
substantial, and in some periods extremely high, rates of inflation for many
years. Inflation and rapid fluctuations in inflation rates and corresponding
currency devaluations have had and may continue to have negative effects on the
economies and securities markets of certain Latin American countries.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Pacific Fund, Europe
Fund, Japan Fund, International Fund, Worldwide Fund and America Growth Fund may
use forward currency contracts, futures contracts, options on securities,
options on indices, options on currencies and options on futures contracts to
implement strategies to attempt to hedge its portfolio, I.E., reduce the overall
level of investment risk normally associated with such Fund. In addition, each
Portfolio may use options on securities, options on indices, futures contracts
and options on futures contracts to implement strategies to attempt to hedge its
portfolio, I.E., reduce the overall level of investment risk normally associated
with a Portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). Each Fund or Portfolio may enter into such
instruments up to the full value of its portfolio assets. There can be no
assurance that these hedging efforts will succeed. These techniques are
described below and are further detailed in the Statement of Additional
Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Pacific Fund, Europe Fund, Japan Fund, International Fund,
Worldwide Fund and America Growth Fund may enter into forward currency contracts
for the purchase or sale of a specified currency at a specified future date.
Such contracts may involve the purchase or sale of a foreign currency against
the U.S. dollar or may involve two foreign currencies. The Pacific Fund, Europe
Fund, Japan Fund, International Fund, Worldwide Fund and America Growth Fund may
enter into forward currency contracts either with respect to specific
transactions or with respect to such Fund's portfolio positions. For example,
when the Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide
Fund and America Growth Fund anticipate making a purchase or sale of a security,
such Funds may enter into a forward currency contract in order to set the rate
(either relative to the U.S. dollar or another currency) at which a currency
exchange transaction related to the purchase or sale will be made. Further, when
the Manager believes that a particular currency may decline compared to the U.S.
dollar or another currency, the Pacific Fund, Europe Fund, Japan Fund,
International Fund, Worldwide Fund and America Growth Fund may enter into a
forward contract to sell the currency the Manager expects to decline in an
amount approximating the value of some or all of such Fund's portfolio
securities denominated in a foreign currency. The Pacific Fund, Europe Fund,
Japan Fund, International Fund, Worldwide Fund and America Growth Fund also may
purchase and sell put and call options on currencies, futures contracts on
currencies and options on futures contracts on currencies to hedge against
movements in exchange rates.
In addition, each Fund or Portfolio may purchase and sell put and call options
on equity and debt securities to hedge against the risk of fluctuations in the
prices of securities held by the Fund or Portfolio or that the Manager intends
to include in the Fund's or Portfolio's portfolio. The Funds or Portfolios also
may buy and sell put and call options on stock indexes. Such stock index options
serve to hedge against overall fluctuations in the securities markets or market
sectors generally, rather than
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GT GLOBAL EQUITY FUNDS
anticipated increases or decreases in the value of a particular security.
Further, the Funds or Portfolios may sell stock index futures contracts and may
purchase put options or write call options on such futures contracts to protect
against a general stock market or market sector decline that could adversely
affect the Fund's or Portfolio's portfolio. The Funds or Portfolios also may buy
stock index futures contracts and purchase call options or write put options on
such contracts to hedge against a general stock market or market sector advance
and thereby attempt to lessen the cost of future securities acquisitions. A Fund
or Portfolio may use interest rate futures contracts and options thereon to
hedge the debt portion of its portfolio against changes in the general level of
interest rates.
In addition, each Fund or Portfolio may purchase and sell put and call options
on securities, currencies and indices that are traded on recognized securities
exchanges and over-the-counter ("OTC") markets.
These practices may result in the loss of principal under certain conditions. In
addition, certain provisions of the Internal Revenue Code of 1986, as amended
("Code"), limit the extent to which a Fund or Portfolio may enter into forward
contracts, futures contracts or engage in options transactions. See "Taxes" in
the Statement of Additional Information.
Although a Fund or Portfolio might not employ any of the foregoing strategies,
the use of forward currency contracts, options and futures would involve certain
investment risks and transaction costs to which it might not otherwise be
subject. These risks include: (1) dependence on the Manager's ability to predict
movements in the prices of individual securities, fluctuations in the general
securities markets and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
forward contracts, options, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts and
options thereon or to use forward currency contracts are different from those
needed to select the securities in which the Funds or Portfolios invest; (4)
lack of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible inability of a Fund or Portfolio to purchase or sell a portfolio
security at a time when it would otherwise be favorable for it to do so, or the
possible need for a Fund or Portfolio to sell a security at a disadvantageous
time, due to the need for the Fund or Portfolio to maintain "cover" or to set
aside securities in connection with hedging transactions; and (6) the possible
need to defer closing out certain options, futures contracts and forward
currency contracts in order to qualify or continue to qualify for the beneficial
tax treatment afforded regulated investment companies under the Code. See
"Dividends, Other Distributions and Taxes" herein and "Taxes" in the Statement
of Additional Information. If the Manager incorrectly forecasts securities
market movements, currency exchange rates or interest rates in utilizing a
strategy for a Fund or Portfolio, the Fund or Portfolio would be in a better
position if it had not hedged at all.
The Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund
and America Growth Fund may also conduct their foreign currency exchange
transactions on a spot (I.E., cash) basis at the spot rate prevailing in the
foreign currency exchange market.
OTHER INFORMATION. Each Fund's investment objective of long-term capital growth
or long-term capital appreciation may not be changed without the approval of a
majority of the Fund's outstanding voting securities. As defined in the 1940 Act
and as used in this Prospectus, a "majority of a Fund's outstanding voting
securities" means the lesser of (i) 67% of the Fund's shares represented at a
meeting at which more than 50% of the Fund's outstanding shares are represented,
or (ii) more than 50% of the Fund's outstanding shares. In addition, each Fund
has adopted certain investment limitations as fundamental policies which also
may not be changed without shareholder approval. A complete description of these
limitations is included in the Statement of Additional Information.
Unless specifically noted, the Funds' and the Portfolios' investment policies
described in this Prospectus and in the Statement of Additional Information,
including each Fund's policy of normally investing at least 65% of its assets in
the equity securities of issuers domiciled in its Primary Investment Area, or
policies with respect to investment in its market sector's securities and the
percentage limitations with respect to such investments, are not fundamental
policies and may be changed by vote of the Company's or the Portfolio's Board of
Trustees, as applicable,
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GT GLOBAL EQUITY FUNDS
without shareholder approval, provided that any such policies as so amended do
not conflict with the Fund's or the Portfolio's fundamental investment
limitations. Each Fund's or Portfolio's policies regarding lending and the
percentage of that Fund's or Portfolio's assets that may be committed to
borrowing and diversification of investments are fundamental policies and may
not be changed without shareholder approval. See "Investment Limitations" in the
Statement of Additional Information.
OTHER INFORMATION REGARDING THE PORTFOLIOS. The America Small Cap Fund and
America Value Fund may each withdraw its investment in its corresponding
Portfolio at any time, if the Board of Trustees of the Company determines that
it is in the best interests of that Fund and its shareholders to do so. Upon
such withdrawal, the Board would consider what action might be taken, including
the investment of all the investable assets of that Fund in another pooled
investment entity having substantially the same investment objective as that
Fund or the retention by that Fund of its own investment adviser to manage that
Fund's assets in accordance with the investment objective, policies and
limitations discussed herein with respect to each such Fund and its investment
in its corresponding Portfolio.
The approval of the America Small Cap Fund and America Value Fund and of other
investors in their corresponding Portfolio, if any, is not required to change
the investment objective, policies or limitations of that Portfolio, unless
otherwise specified. Written notice shall be provided to shareholders of such
Fund thirty days prior to any changes in its corresponding Portfolio's
investment objective. If the objective of that Portfolio changes and the
shareholders of the corresponding Fund do not approve a parallel change in such
Fund's investment objective, that Fund would seek an alternative investment
vehicle or directly retain its own investment adviser.
As previously described, investors should be aware that the America Small Cap
Fund and America Value Fund, unlike mutual funds which directly acquire and
manage their own portfolios of securities, seek to achieve their investment
objective by investing all of their investable assets in the America Small Cap
Portfolio and America Value Portfolio, respectively, each of which is a separate
investment company, as previously described. Since the America Small Cap Fund
and America Value Fund will invest only in its corresponding Portfolio, that
Fund's shareholders will acquire only an indirect interest in the investments of
that Portfolio.
In addition to selling its interest to its corresponding Fund, the America Small
Cap Portfolio and America Value Portfolio may each sell its interests to other
non-affiliated investment companies and/or other institutional investors. All
institutional investors in a Portfolio will pay a proportionate share of that
Portfolio's expenses and will invest in that Portfolio on the same terms and
conditions. However, if another investment company invests all of its assets in
a Portfolio, it would not be required to sell its shares at the same public
offering price as the Portfolio's corresponding Fund and may charge different
sales commissions. Therefore, investors in the America Small Cap Fund and
America Value Fund may experience different returns from investors in another
investment company which invests exclusively in its corresponding Portfolio. As
of the date of this Prospectus, the America Small Cap Fund and America Value
Fund are the only institutional investors in their corresponding Portfolios.
However, the America Small Cap Portfolio and America Value Portfolio expect to
offer beneficial interests to other institutional investors in the future.
Although interests in the Portfolios are not currently available, either
directly or indirectly, to individual investors through other funds, information
regarding any such funds will be available from GT Global at the appropriate
toll-free telephone number
provided in the Shareholder Account Manual.
Investors in the America Small Cap Fund and America Value Fund should be aware
that such Fund's investment in its corresponding Portfolio may be materially
affected by the actions of large investors in such Portfolio, if any. For
example, as with all open-end investment companies, if a large investor were to
redeem its interest in a Portfolio, that Portfolio's remaining investors could
experience higher pro rata operating expenses, thereby producing lower returns.
As a result, that Portfolio's security holdings may become less diverse,
resulting in increased risk. Institutional investors in a Portfolio that have a
greater pro rata ownership interest in that Portfolio than its corresponding
Fund could have effective voting control over the operation of that Portfolio. A
change in a Portfolio's fundamental objective, policies and restrictions which
is not approved by the shareholders of its corresponding Fund could require such
Fund to redeem its interest in the Portfolio. Any such redemption could result
in a distribution in kind of portfolio securities (as
Prospectus Page 34
<PAGE>
GT GLOBAL EQUITY FUNDS
opposed to a cash distribution) by that Portfolio. Should such a distribution
occur, the America Small Cap Fund and America Value Fund could incur brokerage
fees or other transaction costs in converting such securities to cash. In
addition, a distribution in kind could result in a less diversified portfolio of
investments for the America Small Cap Fund and America Value Fund and could
adversely affect the liquidity of such Funds.
See "Management" for a description of the investment management fee and other
expenses associated with the investment of the America Small Cap Fund and
America Value Fund in their corresponding Portfolios. This Prospectus and the
Statement of Additional Information dated April 29, 1996, as revised October 31,
1996, contain more detailed information about the organizational structure of
the America Small Cap Fund and America Value Fund and their corresponding
Portfolios, including information related to: (i) the investment objective,
policies and restrictions of such Funds and their Portfolios; (ii) the Board of
Trustees and officers of the Company, the Trustees and officers of the
Portfolios, the administrator of such Funds and the investment manager and
administrator of the Portfolios; (iii) portfolio transactions and brokerage
commissions; (iv) such Funds' shares, including the rights and liabilities of
its shareholders; (v) additional performance information, including the method
used to calculate yield and total return; and (vi) the determination of the
value of the shares of such Funds.
- --------------------------------------------------------------------------------
HOW TO INVEST
- --------------------------------------------------------------------------------
GENERAL. Each Fund is authorized to issue three classes of shares. Class A
shares of the Funds are sold to investors subject to an initial sales charge,
while Class B shares are sold without an initial sales charge but are subject to
higher ongoing expenses and a contingent deferred sales charge payable upon
certain redemptions. The third class of shares of the Funds, the Advisor Class,
is offered through a separate prospectus only to certain investors. See
"Alternative Purchase Plan."
Orders received before the close of regular trading on the New York Stock
Exchange ("NYSE") (currently 4:00 p.m. Eastern Time, unless weather, equipment
failure or other factors contribute to an earlier closing time) on any Business
Day will be executed at the public offering price for the applicable class of
shares determined that day. A "Business Day" is any day Monday through Friday on
which the NYSE is open for business. The minimum initial investment is $500
($100 for IRAs and $25 for custodial accounts under
Section 403(b)(7) of the Code and other tax-qualified employer-sponsored
retirement accounts, if made by such investors under a systematic investment
plan providing for monthly payments of at least that amount), and the minimum
for additional purchases is $100 ($25 for IRAs, Code
Section 403(b)(7) custodial accounts and other tax-qualified employer-sponsored
retirement accounts, as mentioned above). All purchase orders will be executed
at the public offering price next determined after the purchase order is
received, which includes any applicable sales charge for Class A shares. See
"Purchasing Class A Shares" and "Purchasing Class B Shares" below. The Funds and
GT Global reserve the right to reject any purchase order and to suspend the
offering of shares for a period of time.
WHEN PLACING PURCHASE ORDERS, INVESTORS SHOULD SPECIFY WHETHER THE ORDER IS FOR
CLASS A OR CLASS B SHARES OF A FUND. ALL PURCHASE ORDERS THAT FAIL TO SPECIFY A
CLASS WILL AUTOMATICALLY BE INVESTED IN CLASS A SHARES. PURCHASES OF $500,000 OR
MORE MUST BE FOR CLASS A SHARES.
PURCHASES THROUGH BROKER/DEALERS. Shares of the Funds may be purchased through
broker/dealers with which GT Global has entered into dealer agreements. Orders
received by such broker/dealers before the close of regular trading on the NYSE
on a Business Day will be effected that day, provided that such order is
transmitted to the Transfer Agent prior to its close of business on such day.
The broker/dealer will be responsible for forwarding the investor's order to the
Transfer Agent so that it will be received prior to such time. After an initial
investment is made and a shareholder account is established through a
broker/dealer, at the investor's option, subsequent purchases may be made
directly through GT Global. See "Shareholder Account Manual."
Prospectus Page 35
<PAGE>
GT GLOBAL EQUITY FUNDS
Broker/dealers that do not have dealer agreements with GT Global also may offer
to place orders for the purchase of shares. Purchases made through such
broker/dealers will be effected at the public offering price next determined
after the order is received by the Transfer Agent. Such a broker/dealer may
charge the investor a transaction fee as determined by the broker/dealer. That
fee will be in addition to the sales charge payable by the investor with respect
to Class A shares, and may be avoided if shares are purchased through a
broker/dealer that has a dealer agreement with GT Global or directly through GT
Global.
PURCHASES THROUGH THE DISTRIBUTOR. Investors may purchase shares and open an
account directly through GT Global, each Fund's distributor, by completing and
signing an Account Application accompanying this Prospectus. Investors should
mail to the Transfer Agent the completed Account Application indicating the
class of shares together with a check to cover the purchase in accordance with
the instructions provided in the Shareholder Account Manual. Purchases will be
executed at the public offering price next determined after the Transfer Agent
has received the Account Application and check. Subsequent investments do not
need to be accompanied by such an application.
Investors also may purchase shares of the Funds through GT Global by bank wire.
Bank wire purchases will be effected at the next determined public offering
price after the bank wire is received. A wire investment is considered received
when the Transfer Agent is notified that the bank wire has been credited to a
Fund. The investor is responsible for providing prior telephonic or facsimile
notice to the Transfer Agent that a bank wire is being sent. An investor's bank
may charge a service fee for wiring money to the Funds. The Transfer Agent
currently does not charge a service fee for facilitating wire purchases, but
reserves the right to do so in the future. Investors desiring to open an account
by bank wire should call the Transfer Agent at the appropriate toll-free number
provided in the Shareholder Account Manual to obtain an account number and
detailed instructions.
CERTIFICATES. In the interest of economy and convenience, physical certificates
representing a Fund's shares will not be issued unless an investor submits a
written request to the Transfer Agent, or unless the investor's broker requests
that the Transfer Agent provide certificates. Shares of a Fund are recorded on a
register by the Transfer Agent, and shareholders who do not elect to receive
certificates have the same rights of ownership as if certificates had been
issued to them. Redemptions and exchanges by shareholders who hold certificates
may take longer to effect than similar transactions involving non-certificated
shares because the physical delivery and processing of properly executed
certificates is required. ACCORDINGLY, THE FUNDS AND GT GLOBAL RECOMMEND THAT
SHAREHOLDERS DO NOT REQUEST ISSUANCE OF CERTIFICATES.
PURCHASING CLASS A SHARES
Each Fund's public offering price for Class A shares is equal to the net asset
value per share (see "Calculation of Net Asset Value") plus a sales charge
determined in accordance with the following schedule:
<TABLE>
<CAPTION>
SALES CHARGE AS PERCENTAGE OF DEALER
REALLOWANCE AS
AMOUNT OF PURCHASE ------------------------------ PERCENTAGE OF
AT THE PUBLIC OFFERING NET THE OFFERING
OFFERING PRICE PRICE INVESTMENT PRICE
- ---------------------------- ------------- --------------- -------------------
<S> <C> <C> <C>
Less than $50,000........... 4.75% 4.99% 4.25%
$50,000 but less than
$100,000.................. 4.00% 4.17% 3.50%
$100,000 but less than
$250,000.................. 3.00% 3.09% 2.75%
$250,000 but less than
$500,000.................. 2.00% 2.04% 1.75%
$500,000 or more............ 0.00% 0.00% *
</TABLE>
- --------------
* GT Global will pay the following commissions to brokers that initiate and
are responsible for purchases by any single purchaser of Class A shares of
$500,000 or more in the aggregate: 1.00% of the purchase amount up to $3
million, plus 0.50% on the excess over $3 million. For purposes of
determining the appropriate commission to be paid in connection with the
transaction, GT Global will combine purchases made by a broker on behalf of
a single client so that the broker's commission, as outlined above, will be
based on the aggregate amount of such client's share purchases over a
rolling twelve month period from the date of the transaction.
All shares purchased pursuant to a sales charge waiver based on the aggregate
purchase amount equalling at least $500,000 will be subject to a contingent
deferred sales charge for the first year after their purchase, as described
under "Contingent Deferred Sales Charge -- Class A Shares," equal to 1% of the
lower of the original purchase price or the net asset value of such shares at
the time of redemption.
From time to time, GT Global may reallow to broker/ dealers the full amount of
the sales charge on Class A shares or may pay out additional amounts to
broker/dealers who sell Class A shares. In some instances, GT Global may offer
these reallowances or additional payments only to broker/dealers that have sold
or may sell significant amounts of Class A shares. To the extent that GT Global
reallows the full amount of the sales charge to broker/dealers, such
broker/dealers may be deemed to be underwriters under the Securities Act of
1933, as amended. Commissions also may be paid to broker/ dealers and other
financial institutions that initiate purchases of at least $500,000 made
pursuant to
Prospectus Page 36
<PAGE>
GT GLOBAL EQUITY FUNDS
sales charge waivers (i) and (vii), described below under "Sales Charge Waivers
- -- Class A Shares."
The following describes purchases that may be aggregated for purposes of
determining the "Amount of Purchase":
(a) Individual purchases on behalf of a single purchaser, the purchaser's spouse
and their children under the age of 21 years. This includes shares purchased in
connection with an employee benefit plan(s) exclusively for the benefit of such
individual(s), such as an IRA, individual Code Section 403(b) plan or
single-participant self-employed individual retirement plan ("Keogh Plan"). This
also includes purchases made by a company controlled by such individual(s);
(b) Individual purchases by a trustee or other fiduciary purchasing shares for a
single trust estate or a single fiduciary account, including an employee benefit
plan (such as employer-sponsored pension, profit-sharing and stock bonus plans,
including plans under Code Section 401(k), and medical, life and disability
insurance trusts) other than a plan described in "(a)" above; and
(c) Individual purchases by a trustee or other fiduciary purchasing shares
concurrently for two or more employee benefit plans of a single employer or of
employers affiliated with each other (again excluding an employee benefit plan
described in "(a)" above).
SALES CHARGE WAIVERS -- CLASS A SHARES. Class A shares are sold at net asset
value without imposition of sales charges when investments are made by the
following classes of investors:
(i) Trustees or other fiduciaries purchasing shares for employee benefit plans
which are sponsored by organizations which have at least 100 but less than 1,000
employees.
(ii) Current or retired Trustees, Directors and officers of the investment
companies for which the Manager serves as investment manager and/or
administrator; employees or retired employees of the companies comprising
Liechtenstein Global Trust or affiliated companies of Liechtenstein Global
Trust; the children, siblings and parents of the persons in the foregoing
categories; and trusts primarily for the benefit of such persons.
(iii) Registered representatives or full-time employees of broker/dealers that
have entered into dealer agreements with GT Global, and the children, siblings
and parents of such persons, and employees of financial institutions that
directly, or through their affiliates, have entered into dealer agreements with
GT Global (or that otherwise have an arrangement with respect to sales of Fund
shares with a broker/dealer that has entered into a dealer agreement with GT
Global), and the children, siblings and parents of such employees.
(iv) Companies exchanging shares with or selling assets to one or more of the GT
Global Mutual Funds pursuant to a merger, acquisition or exchange offer.
(v) Shareholders of any of the GT Global Mutual Funds as of April 30, 1987 who
since that date continually have owned shares of one or more of the GT Global
Mutual Funds.
(vi) Purchases made through the automatic investment of dividends and other
distributions paid by any of the other GT Global Mutual Funds.
(vii) Registered investment advisers, trust companies and bank trust departments
exercising DISCRETIONARY investment authority with respect to the money to be
invested in the GT Global Mutual Funds provided that the aggregate amount
invested pursuant to this sales charge waiver equals at least $500,000, and
further provided that such money is not eligible to be invested in the Advisor
Class.
(viii) Clients of administrators of tax-qualified employee benefit plans which
have entered into agreements with GT Global.
(ix) Retirement plan participants who borrow from their retirement accounts by
redeeming GT Global Mutual Fund shares and subsequently repay such loans via a
purchase of Fund shares.
(x) Retirement plan participants who receive distributions from a tax-qualified
employer-sponsored retirement plan which is invested in GT Global Mutual Funds,
the proceeds of which are reinvested in Fund shares.
(xi) Accounts not eligible for the Advisor Class as to which a financial
institution or broker/dealer charges an account management fee, provided the
financial institution or broker/dealer has entered into an agreement with GT
Global regarding such accounts.
(xii) Certain former AMA Investment Advisers' shareholders who became
shareholders of the GT Global Health Care Fund in October, 1989, and who have
continuously held shares in the GT Global Mutual Funds since that time.
(xiii) An investor purchasing shares of a fund with redemption proceeds from a
registered management investment company that is not one of the GT Global Mutual
Funds, on which the investor was subject to a front-end sales charge or a
contingent deferred sales charge.
Prospectus Page 37
<PAGE>
GT GLOBAL EQUITY FUNDS
REINSTATEMENT PRIVILEGE. Shareholders who redeem their Class A shares in a Fund
have a one-time privilege of reinstating their investment by investing the
proceeds of the redemption at net asset value without a sales charge in Class A
shares of the Fund and/or one or more of the other GT Global Mutual Funds. The
Transfer Agent must receive from the investor or the investor's broker/dealer
within 180 days after the date of the redemption both a written request for
reinvestment and a check not exceeding the amount of the redemption proceeds.
The reinstatement purchase will be effected at the net asset value per share
next determined after such receipt. For a discussion of the federal income tax
consequences of a reinstatement, see "Dividends, Other Distributions and Federal
Income Taxation -- Taxes."
REDUCED SALES CHARGE PLANS -- CLASS A SHARES. Class A shares may be purchased at
reduced sales charges either through the Right of Accumulation or under a Letter
of Intent. For more details on these plans, investors should contact their
broker/ dealers or the Transfer Agent.
RIGHT OF ACCUMULATION. Pursuant to the Right of Accumulation, investors are
permitted to purchase shares of the Funds at the sales charge applicable to the
total of (a) the dollar amount then being purchased plus (b) the dollar amount
of the investor's concurrent purchases of other GT Global Mutual Funds (other
than GT Global Dollar Fund) plus (c) the price of all shares of GT Global Mutual
Funds (other than shares of GT Global Dollar Fund not acquired by exchange)
already held by the investor. To receive the Right of Accumulation, at the time
of purchase investors must give their broker/dealers, the Transfer Agent or GT
Global sufficient information to permit confirmation of qualification. THE
FOREGOING RIGHT OF ACCUMULATION APPLIES ONLY TO CLASS A SHARES OF THE FUNDS AND
OTHER GT GLOBAL MUTUAL FUNDS (OTHER THAN GT GLOBAL DOLLAR FUND).
LETTER OF INTENT. In executing a Letter of Intent ("LOI") an investor indicates
an aggregate investment amount he or she intends to invest in Class A shares of
the Funds and the Class A shares of other GT Global Mutual Funds (other than GT
Global Dollar Fund) in the following thirteen months. The LOI is included as
part of the Account Application located at the end of this Prospectus. The sales
charge applicable to that aggregate amount then becomes the applicable sales
charge on all purchases made concurrently with the execution of the LOI and in
the thirteen months following that execution. If an investor executes an LOI
within 90 days of a prior purchase of GT Global Mutual Fund Class A shares
(other than GT Global Dollar Fund), the prior purchase may be included under the
LOI and an appropriate adjustment, if any, with respect to the sales charges
paid by the investor in connection with the prior purchase will be made, based
on the then-current net asset value(s) of the pertinent Fund(s).
If at the end of the thirteen month period covered by the LOI, the total amount
of purchases does not equal the amount indicated, the investor will be required
to pay the difference between the sales charges paid at the reduced rate and the
sales charges applicable to the purchases actually made. Shares having a value
equal to 5% of the amount specified in the LOI will be held in escrow during the
thirteen month period (while remaining registered in the investor's name) and
are subject to redemption to assure any necessary payment to GT Global of a
higher applicable sales charge.
For purposes of an LOI, any registered investment adviser, trust company or bank
trust department which exercises investment discretion and which intends within
thirteen months to invest $500,000 or more can be treated as a single purchaser,
provided further that such entity places all purchase and redemption orders.
Such entities should be prepared to establish their qualification for such
treatment. THE FOREGOING LOI APPLIES ONLY TO CLASS A SHARES OF THE FUNDS AND
OTHER GT GLOBAL MUTUAL FUNDS (OTHER THAN GT GLOBAL DOLLAR FUND).
CONTINGENT DEFERRED SALES CHARGE -- CLASS A SHARES. Purchases of Class A shares
of $500,000 or more may be made without an initial sales charge. Purchases of
Class A shares of two or more GT Global Mutual Funds (other than GT Global
Dollar Fund) may be combined for this purpose, and the Right of Accumulation
also applies to such purchases. If a shareholder redeems any Class A shares that
were purchased without a sales charge by reason of a purchase of $500,000 or
more within one year after the date of purchase, a contingent deferred sales
charge of 1% of the lower of the original purchase price or the net asset value
of such shares at the time of redemption will be charged. Class A shares that
are redeemed will not be subject to the contingent deferred sales charge to the
extent that the value of such shares represents: (1) reinvestment of dividends
or other distributions or (2) Class A shares redeemed more than one year after
their purchase. Such shares purchased for at least $500,000 without a sales
charge may be exchanged for Class A shares of another GT Global Mutual Fund
(other than GT Global Dollar Fund) without the imposition of a contingent
deferred
Prospectus Page 38
<PAGE>
GT GLOBAL EQUITY FUNDS
sales charge, although the contingent deferred sales charge described above will
apply to the redemption of the shares acquired through an exchange. The waivers
set forth under "Contingent Deferred Sales Charge Waivers" below apply to
redemptions of Class A shares upon which a contingent deferred sales charge
would otherwise be imposed. For federal income tax purposes, the amount of the
contingent deferred sales charge will reduce the gain or increase the loss, as
the case may be, on the amount realized on redemption. The amount of any
contingent deferred sales charge will be paid to GT Global.
PURCHASING CLASS B SHARES
The public offering price of the Class B shares of each Fund is the next
determined net asset value per share. See "Calculation of Net Asset Value." No
initial sales charge is imposed. A contingent deferred sales charge, however, is
imposed on certain redemptions of Class B shares. Since the Class B shares are
sold without an initial sales charge, the Fund receives the full amount of the
investor's purchase payment.
Class B shares of a Fund that are redeemed will not be subject to a contingent
deferred sales charge to the extent that the value of such shares represents:
(1) reinvestment of dividends or capital gain distributions or (2) shares
redeemed more than six years after their purchase. Redemptions of most other
Class B shares will be subject to a contingent deferred sales charge. See
"Contingent Deferred Sales Charge Waivers." The amount of any applicable
contingent deferred sales charge will be calculated by multiplying the lesser of
the original purchase price or the net asset value of such shares at the time of
redemption by the applicable percentage shown in the table below. Accordingly,
no charge is imposed on increases in net asset value above the original purchase
price:
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS A PERCENTAGE OF THE
LESSER OF NET ASSET VALUE AT
REDEMPTION
OR THE ORIGINAL
REDEMPTION DURING PURCHASE PRICE
- ------------------------------ -----------------------------
<S> <C>
1st Year Since Purchase....... 5%
2nd Year Since Purchase....... 4%
3rd Year Since Purchase....... 3%
4th Year Since Purchase....... 3%
5th Year Since Purchase....... 2%
6th year Since Purchase....... 1%
Thereafter.................... 0%
</TABLE>
In determining whether a contingent deferred sales charge is applicable to a
redemption, the calculation will be made in a manner that results in the lowest
possible rate. It will be assumed that the redemption is made first of amounts
representing shares acquired through the reinvestment of dividends and
distributions; then of amounts representing the cost of shares purchased seven
years or more prior to the redemption; and finally, of amounts representing the
cost of shares held for the longest period of time within the applicable
six-year period.
For example, assume an investor purchased 100 shares at $10 per share for a cost
of $1,000. Subsequently, the shareholder acquired 15 additional shares through
dividend reinvestment. During the second year after the purchase, the investor
decided to redeem $500 of his or her investment. Assuming at the time of the
redemption a net asset value of $11 per share, the value of the investor's
shares would be $1,265 (115 shares at $11 per share). The contingent deferred
sales charge would not be applied to the value of the reinvested dividend
shares. Therefore, the 15 shares currently valued at $165.00 would be sold
without a contingent deferred sales charge. The number of shares needed to fund
the remaining $335.00 of the redemption would equal 30.455. Using the lower of
cost or market price to determine the contingent deferred sales charge the
original purchase price of $10.00 per share would be used. The contingent
deferred sales charge calculation would therefore be 30.455 shares times $10.00
per share at a contingent deferred sales charge rate of 4% (the applicable rate
in the second year after purchase) for a total contingent deferred sales charge
of $12.18.
For federal income tax purposes, the amount of the contingent deferred sales
charge will reduce the gain or increase the loss, as the case may be, on the
amount realized on the redemption. The amount of any contingent deferred sales
charge will be paid to GT Global.
CONTINGENT DEFERRED SALES
CHARGE WAIVERS
The contingent deferred sales charge will be waived for exchanges, as described
below, and for redemptions in connection with each Fund's systematic withdrawal
plan not in excess of 12% of the value of the account annually. In addition, the
contingent deferred sales charge will be waived in the following circumstances:
(1) total or partial redemptions made within one year following the death or
disability of a shareholder; (2) minimum required distributions made in
connection with a GT Global, IRA, Keogh Plan or custodial account under Section
403(b) of the Code or other retirement plan following attainment of age 70 1/2;
(3) total or partial redemptions resulting from a distribution
Prospectus Page 39
<PAGE>
GT GLOBAL EQUITY FUNDS
following retirement in the case of a tax-qualified employer-sponsored
retirement plan; (4) when a redemption results from a tax-free return of an
excess contribution pursuant to Section 408(d)(4) or (5) of the Code or from the
death or disability of the employee; (5) a one-time reinvestment in Class B
shares of the Fund within 180 days of a prior redemption; (6) redemptions
pursuant to the Fund's right to liquidate a shareholder's account involuntarily;
(7) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in GT Global Mutual Funds,
which are permitted to be made without penalty pursuant to the Code (other than
tax-free rollovers or transfers of assets) and the proceeds of which are
reinvested in Fund shares; (8) redemptions made in connection with
participant-directed exchanges between options in an employer-sponsored benefit
plan; (9) redemptions made for the purpose of providing cash to fund a loan to a
participant in a tax-qualified retirement plan; (10) redemptions made in
connection with a distribution from any retirement plan or account that is
permitted in accordance with the provisions of Section 72(t)(2) of the Code, and
the regulations promulgated thereunder; (11) redemptions made in connection with
a distribution from any retirement plan or account that involves the return of
an excess deferral amount pursuant to Section 401(k)(8) or Section 402(g)(2) of
the Code or the return of excess aggregate contributions pursuant to Section
401(m)(6) of the Code; (12) redemptions made in connection with a distribution
(from a qualified profit-sharing or stock bonus plan described in Section 401(k)
of the Code) to a participant or beneficiary under Section 401(k)(2)(B)(IV) of
the Code upon hardship of the covered employee (determined pursuant to Treasury
Regulation Section 1.401(k)-1(d)(2)); and (13) redemptions made by or for the
benefit of certain states, counties or cities, or any instrumentalities,
departments or authorities thereof where such entities are prohibited or limited
by applicable law from paying a sales charge or commission.
PROGRAMS APPLICABLE TO CLASS A SHARES AND CLASS B SHARES
AUTOMATIC INVESTMENT PLAN. Investors may purchase either Class A or Class B
shares of a Fund through the GT Global Automatic Investment Plan. Under this
Plan, an amount specified by the shareholder of $100 or more ($25 or more for
IRAs, Code Section 403(b)(7) custodial accounts and other tax-qualified
employer-sponsored retirement accounts) on a monthly or quarterly basis will be
sent to the Transfer Agent from the investor's bank for investment in the Fund.
Participants in the Automatic Investment Plan should not elect to receive
dividends or other distributions from a Fund in cash. A sales charge will be
applied to each automatic monthly purchase of Class A Fund shares in an amount
determined in accordance with the Right of Accumulation privilege described
above. To participate in the Automatic Investment Plan, investors should
complete the appropriate portion of the Supplemental Application provided at the
end of this Prospectus. Investors should contact their brokers or GT Global for
more information.
DOLLAR COST AVERAGING PROGRAM. Dollar cost averaging is a systematic,
disciplined investment method through which a shareholder invests the same
dollar amount each month. Accordingly, the investor purchases more shares when a
Fund's net asset value is relatively low and fewer shares when a Fund's net
asset value is relatively high. This can result in a lower average
cost-per-share than if the shareholder followed a less systematic approach. The
GT Global Dollar Cost Averaging Program provides a convenient means for
investors to use this method to purchase either Class A or Class B shares of the
GT Global Mutual Funds. Dollar cost averaging does not assure a profit and does
not protect against loss in declining markets. Because such a program involves
continuous investment in securities regardless of fluctuating price levels of
such securities, investors should consider their financial ability to continue
purchases when prices are declining.
A participant in the GT Global Dollar Cost Averaging Program first designates
the size of his or her monthly investment in a Fund ("Monthly Investment") after
participation in the Program begins. The Monthly Investment must be at least
$1,000. The investor then will make an initial investment of at least $10,000 in
the GT Global Dollar Fund. Thereafter, each month an amount equal to the
specified Monthly Investment automatically will be redeemed from the GT Global
Dollar Fund and invested in Fund shares. A sales charge will be applied to each
automatic monthly purchase of Class A Fund shares in an amount determined in
accordance with the Right of Accumulation privilege described above. For more
information about the GT Global Dollar Cost Averaging Program, investors should
consult their brokers or GT Global.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program ("Program")
permits eligible shareholders to establish and maintain an allocation across a
range of GT Global Mutual Funds. The Program will automatically rebalance their
Prospectus Page 40
<PAGE>
GT GLOBAL EQUITY FUNDS
holdings of GT Global Mutual Funds to the established allocation on a periodic
basis. Under the Program, a shareholder may predesignate, on a percentage basis,
how the total value of his or her holdings in a minimum of two, and a maximum of
ten, GT Global Mutual Funds ("Personal Portfolio") is to be rebalanced on a
monthly, quarterly, semiannual, or annual basis.
Rebalancing under the Program will be effected through the exchange of shares of
one or more GT Global Mutual Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other GT Global Mutual Funds in the
shareholder's Personal Portfolio. See "How to Make Exchanges." If shares of the
Funds in a shareholder's Personal Portfolio have appreciated during a
rebalancing period, the Program will result in shares of Fund(s) that have
appreciated most during the period being exchanged for shares of Fund(s) that
have appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR TAX PURPOSES.
See "Dividends, Other Distributions and Federal Income Taxation."
The Program will automatically rebalance the shareholder's Personal Portfolio on
the 28th day of the last month of the period chosen (or immediately preceding
business day if the 28th is not a business day), subject to any limitations
below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Fund would be 2% or less. In
predesignating percentages, shareholders must use whole percentages and totals
must equal 100%. Shareholders participating in the Program may not request
issuance of physical certificates representing a Fund's shares. Exchanges made
under the Program are not subject to the four free exchanges per year
limitation. The Funds and GT Global reserve the right to modify, suspend, or
terminate the Program at any time on 60 days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which Funds or
what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, Letter of Intent,
and Dollar Cost Averaging programs. Certain brokers may charge a fee for
establishing accounts relating to the Program.
A shareholder interested in more information regarding the Program should
contact his or her financial adviser. Participation in the Program does not
assure that a shareholder will profit from purchases under the Program nor does
it prevent or lessen losses in a declining market.
Prospectus Page 41
<PAGE>
GT GLOBAL EQUITY FUNDS
HOW TO MAKE EXCHANGES
- --------------------------------------------------------------------------------
Shares of any Fund may be exchanged for shares of any other GT Global Mutual
Funds (including the other Equity Funds), based on their respective net asset
values without imposition of any sales charges, provided that the registration
remains identical. This exchange privilege is available only in those
jurisdictions where the sale of GT Global Mutual Fund shares to be acquired may
be legally made. CLASS A SHARES MAY BE EXCHANGED ONLY FOR CLASS A SHARES OF
OTHER GT GLOBAL MUTUAL FUNDS. CLASS B SHARES MAY BE EXCHANGED ONLY FOR CLASS B
SHARES OF OTHER GT GLOBAL MUTUAL FUNDS. The exchange of Class B shares will not
be subject to a contingent deferred sales charge. For purposes of computing the
contingent deferred sales charge, the length of time of ownership of Class B
shares will be measured from the date of original purchase and will not be
affected by the exchange. EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR TAX PURPOSES.
See "Dividends, Other Distributions and Federal Income Taxation."
In addition to the Funds, the GT Global Mutual Funds currently include:
-- GT GLOBAL EMERGING MARKETS FUND
-- GT GLOBAL HEALTH CARE FUND
-- GT GLOBAL FINANCIAL SERVICES FUND
-- GT GLOBAL INFRASTRUCTURE FUND
-- GT GLOBAL NATURAL RESOURCES FUND
-- GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
-- GT GLOBAL TELECOMMUNICATIONS FUND
-- GT GLOBAL LATIN AMERICA GROWTH FUND*
-- GT GLOBAL GROWTH & INCOME FUND
-- GT GLOBAL GOVERNMENT INCOME FUND
-- GT GLOBAL STRATEGIC INCOME FUND
-- GT GLOBAL HIGH INCOME FUND
-- GT GLOBAL DOLLAR FUND
- --------------
* Formerly G.T. Latin America Growth Fund
Up to four exchanges each year may be made without charge. A $7.50 service
charge will be imposed on each subsequent exchange. If an investor does not
surrender all of his or her shares in an exchange, the remaining balance in the
investor's account after the exchange must be at least $500. Exchange requests
received in good order by the Transfer Agent before the close of regular trading
on the NYSE on any Business Day will be processed at the net asset value
calculated on that day.
A shareholder interested in making an exchange should write or call his or her
broker/dealer or the Transfer Agent to request the prospectus of the other GT
Global Mutual Fund(s) being considered. Certain brokers may charge a fee for
handling exchanges.
EXCHANGES BY TELEPHONE. A shareholder may give exchange instructions to the
shareholder's broker/ dealer or to the Transfer Agent by telephone at the
appropriate toll-free number provided in the Shareholder Account Manual.
Exchange orders will be accepted by telephone provided that the exchange
involves only uncertificated shares on deposit in the shareholder's account or
for which certificates previously have been deposited.
Shareholders automatically have telephone privileges to authorize exchanges. The
Funds, GT Global and the Transfer Agent will not be liable for any loss or
damage for acting in good faith upon instructions received by telephone and
reasonably believed to be genuine. The Funds employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, including
requiring some form of personal identification prior to acting upon instructions
received by telephone, providing written confirmation of such transactions,
and/or tape recording of telephone instructions.
EXCHANGES BY MAIL. Exchange orders should be sent by mail to the investor's
broker/dealer or to the Transfer Agent at the address set forth in the
Shareholder Account Manual.
OTHER INFORMATION ABOUT EXCHANGES. Purchases, redemptions and exchanges should
be made for investment purposes only. A pattern of frequent exchanges, purchases
and sales is not acceptable and can be limited by a Fund's or GT Global's
refusal to accept further purchase and exchange orders from the investor or
broker/dealer. The terms of the exchange offer described above may be modified
at any time, on 60 days' prior written notice to shareholders.
Prospectus Page 42
<PAGE>
GT GLOBAL EQUITY FUNDS
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
As described below, shares of the Funds may be redeemed at their net asset value
(subject to any applicable contingent deferred sales charge for Class B shares
or, in limited circumstances, Class A shares) and redemption proeeds will be
sent within seven days of the execution of a redemption request. Shareholders
with broker/dealers that sell shares may redeem shares through such broker/
dealers; if the shares are held in the broker/dealer's "street name," the
redemption must be made through the broker/dealer. Other shareholders may redeem
shares through the Transfer Agent. If a redeeming shareholder owns both Class A
and Class B shares of a Fund, the Class A shares will be redeemed first unless
the shareholder specifically requests otherwise.
REDEMPTIONS THROUGH BROKER/DEALERS. Shareholders with accounts at broker/dealers
that sell shares of the Funds may submit redemption requests to such
broker/dealers. Broker/dealers may honor a redemption request either by
repurchasing shares from a redeeming shareholder at the shares' net asset value
next computed after the broker/dealer receives the request or, as described
below, by forwarding such requests to the Transfer Agent (see "How to Redeem
Shares -- Redemptions Through the Transfer Agent"). Redemption proceeds (less
any applicable contingent deferred sales charge for Class B shares) normally
will be paid by check or, if offered by the broker/dealer, credited to the
shareholder's brokerage account at the election of the shareholder.
Broker/dealers may impose a service charge for handling redemption transactions
placed through them and may have other requirements concerning redemptions.
Accordingly, shareholders should contact their broker/ dealers for more details.
REDEMPTIONS THROUGH THE TRANSFER AGENT. Redemption requests may be transmitted
to the Transfer Agent by telephone or by mail, in accordance with the
instructions provided in the Shareholder Account Manual. All redemptions will be
effected at the net asset value next determined after the Transfer Agent has
received the request in good order and any required supporting documentation
(less any applicable contingent deferred sales charge for Class B shares or, in
limited circumstances, Class A shares). Redemption requests received before the
close of regular trading on the NYSE on any Business Day will be effected at the
net asset value calculated on that day. Redemption requests will not require a
signature guarantee if the redemption proceeds are to be sent either: (i) to the
redeeming shareholder at the shareholder's address of record as maintained by
the Transfer Agent, provided the shareholder's address of record has not been
changed within the preceding thirty days; or (ii) directly to a pre-designated
bank, savings and loan or credit union account ("Pre-Designated Account"). ALL
OTHER REDEMPTION REQUESTS MUST BE ACCOMPANIED BY A SIGNATURE GUARANTEE OF THE
REDEEMING SHAREHOLDER'S SIGNATURE. A signature guarantee can be obtained from
any bank, U.S. trust company, a member firm of a U.S. stock exchange or a
foreign branch of any of the foregoing or other eligible guarantor institution.
A notary public is not an acceptable guarantor. A shareholder with questions
concerning the Funds' signature guarantee requirement should contact the
Transfer Agent.
Shareholders may qualify to have redemption proceeds sent to a Pre-Designated
Account by completing the appropriate section of the Account Application at the
end of this Prospectus. Shareholders with Pre-Designated Accounts should request
that redemption proceeds be sent either by bank wire or by check. The minimum
redemption amount for a bank wire is $1,000. Shareholders requesting a bank wire
should allow two business days from the time the redemption request is effected
for the proceeds to be deposited in the shareholder's Pre-Designated Account.
See "How to Redeem Shares -- Other Important Redemption Information."
Shareholders may change their Pre-Designated Accounts only by a letter of
instruction to the Transfer Agent containing all account signatures, each of
which must be guaranteed. The Transfer Agent currently does not charge a bank
wire service fee on each wire redemption sent, but reserves the right to do so
in the future.
REDEMPTIONS BY TELEPHONE. Redemption requests may be made by telephone by
calling the Transfer Agent at the appropriate toll free number provided in the
Shareholder Account Manual. Shareholders who hold certificates for shares may
not redeem by telephone. REDEMPTION REQUESTS MAY NOT BE MADE BY TELEPHONE FOR
THIRTY DAYS
Prospectus Page 43
<PAGE>
GT GLOBAL EQUITY FUNDS
FOLLOWING ANY CHANGE OF THE SHAREHOLDER'S ADDRESS OF RECORD.
Shareholders automatically have telephone privileges to authorize redemptions.
The Funds, GT Global and the Transfer Agent will not be liable for any loss or
damage for acting in good faith upon instructions received by telephone and
reasonably believed to be genuine. The Funds employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, including
requiring some form of personal identification prior to acting upon instructions
received by telephone, providing written confirmation of such transactions,
and/or tape recording of telephone instructions.
REDEMPTIONS BY MAIL. Redemption requests should be mailed directly to the
Transfer Agent at the appropriate address provided in the Shareholder Account
Manual. As discussed above, requests for payment of redemption proceeds to a
party other than the registered account owner(s) and/or requests that redemption
proceeds be mailed to an address other than the shareholder's address of record
require a signature guarantee. In addition, if the shareholder's address of
record has been changed within the preceeding thirty days, a signature guarantee
is required. Redemptions of shares for which certificates have been issued must
be accompanied by properly endorsed share certificates.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $10,000
or more may participate in the GT Global Systematic Withdrawal Plan. A
participating shareholder will receive proceeds from monthly, quarterly or
annual redemptions of Fund shares with respect to either Class A or Class B
shares. No contingent deferred sales charge will be imposed on redemptions made
under the Systematic Withdrawal Plan. The minimum withdrawal amount is $100. The
amount or percentage a participating shareholder specifies to be redeemed may
not, on an annualized basis, exceed 12% of the value of the account, as of the
time the shareholder elects to participate in the Systematic Withdrawal Plan. To
participate in the Systematic Withdrawal Plan, investors should complete the
appropriate portion of the Supplemental Application provided at the end of this
Prospectus. Investors should contact their broker/ dealers or the Transfer Agent
for more information. With respect to Class A shares, participation in the
Systematic Withdrawal Plan concurrent with purchases of Class A shares of the
Fund may be disadvantageous to investors because of the sales charges involved
and possible tax implications, and therefore is discouraged. In addition,
shareholders who participate in the Systematic Withdrawal Plan should not elect
to reinvest dividends or other distributions in additional Fund shares.
OTHER IMPORTANT REDEMPTION INFORMATION. A request for redemption will not be
processed until all of the necessary documentation has been received in good
order. A shareholder in doubt about what documents are required should contact
his or her broker/dealer or the Transfer Agent.
Except in extraordinary circumstances and as permitted under the 1940 Act,
payment for shares redeemed by telephone or by mail will be made promptly after
receipt of a redemption request, if in good order, but not later than seven days
after the date the request is executed. Requests for redemption which are
subject to any special conditions or which specify a future or past effective
date cannot be accepted.
If the Transfer Agent is requested to redeem shares for which a Fund has not yet
received good payment, the Fund may delay payment of redemption proceeds until
it has assured itself that good payment has been collected for the purchase of
the shares. In the case of purchases by check, it can take up to 10 business
days to confirm that the check has cleared and good payment has been received.
Redemption proceeds will not be delayed when shares have been paid for by wire
or when the investor's account holds a sufficient number of shares for which
funds already have been collected.
A Fund may redeem the shares of any shareholder whose account is reduced to less
than $500 in net asset value through redemptions or other action by the
shareholder. Written notice will be given to the shareholder at least 60 days
prior to the date fixed for such redemption, during which time the shareholder
may increase his or her holdings to an aggregate amount of $500 or more (with a
minimum purchase of $100).
Prospectus Page 44
<PAGE>
GT GLOBAL EQUITY FUNDS
SHAREHOLDER ACCOUNT MANUAL
- --------------------------------------------------------------------------------
Shareholders are encouraged to place purchase, exchange and redemption orders
through their broker/dealers. Shareholders also may place such orders directly
through GT Global in accordance with this Manual. See "How to Invest;" "How to
Make Exchanges;" "How to Redeem Shares;" and "Dividends, Other Distributions and
Federal Income Taxation -- Taxes" for more information.
Each Funds' Transfer Agent is GT GLOBAL INVESTOR SERVICES, INC.
INVESTMENTS BY MAIL
Send completed Account Application (if initial purchase) or letter stating Fund
name, class of shares, shareholder's registered name and account number (if
subsequent purchase) with a check to:
GT Global
P.O. Box 7345
San Francisco, California 94120-7345
INVESTMENTS BY BANK WIRE
An investor opening a new account should call 1-800-223-2138 to obtain an
account number. WITHIN SEVEN DAYS OF PURCHASE SUCH AN INVESTOR MUST SEND A
COMPLETED ACCOUNT APPLICATION CONTAINING THE INVESTOR'S CERTIFIED TAXPAYER
IDENTIFICATION NUMBER TO GT GLOBAL AT THE ADDRESS PROVIDED ABOVE UNDER
"INVESTMENTS BY MAIL." Wire instructions must state Fund name, class of shares,
shareholder's registered name and account number. Bank wires should be sent
through the Federal Reserve Bank Wire System to:
WELLS FARGO BANK, N.A.
ABA 121000248
Attn: GT GLOBAL
ACCOUNT NO. 4023-050701
EXCHANGES BY TELEPHONE
Call GT Global at 1-800-223-2138
EXCHANGES BY MAIL
Send complete instructions, including name of Fund exchanging from, amount of
exchange, class of shares, name of the GT Global Mutual Fund exchanging into,
shareholder's registered name and account number, to:
GT Global
P.O. Box 7893
San Francisco, California 94120-7893
REDEMPTIONS BY TELEPHONE
Call GT Global at 1-800-223-2138
REDEMPTIONS BY MAIL
Send complete instructions, including name of Fund, class of shares, amount of
redemption, shareholder's registered name and account number, to:
GT Global
P.O. Box 7893
San Francisco, California 94120-7893
OVERNIGHT MAIL
Overnight mail services do not deliver to post office boxes. To send purchase,
exchange or redemption orders by overnight mail, comply with the above
instructions but send to the following address:
GT Global Investor Services
California Plaza
2121 N. California Boulevard
Suite 450
Walnut Creek, CA 94596
ADDITIONAL QUESTIONS
Shareholders with additional questions regarding purchase, exchange and
redemption procedures should call GT Global at 1-800-223-2138.
Prospectus Page 45
<PAGE>
GT GLOBAL EQUITY FUNDS
CALCULATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------
Each Fund calculates its net asset value as of the close of regular trading on
the NYSE (currently 4:00 p.m. Eastern Time, unless weather, equipment failure or
other factors contribute to an earlier closing time) each Business Day. Each
Fund's net asset value per share is computed by determining the value of its
total assets (which, for the America Small Cap Fund and America Value Fund, is
the value of each such Fund's investment in its corresponding Portfolio),
subtracting all of its liabilities, and dividing the result by the total number
of shares outstanding at such time. Net asset value is determined separately for
each class of shares of each Fund.
Equity securities held by a Fund or Portfolio are valued at the last sale price
on the exchange or in the over-the-counter ("OTC") market in which such
securities are primarily traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. Long-term debt obligations are valued at the mean of representative
quoted bid or asked prices for such securities, or, if such prices are not
available, at prices for securities of comparable maturity, quality and type;
however, when the Manager deems it appropriate, prices obtained from a bond
pricing service will be used. Short-term debt investments are amortized to
maturity based on their cost, adjusted for foreign exchange translation and
market fluctuations, provided that such valuations represent fair value. When
market quotations for futures and options positions held by a Fund or Portfolio
are readily available, those positions are valued based upon such quotations.
Securities and other assets for which market quotations are not readily
available are valued at fair value determined in good faith by or under
direction of the Company's or Portfolio's Board of Trustees. Securities and
other assets quoted in foreign currencies are valued in U.S. dollars based on
the prevailing exchange rates on that day.
Certain of the Fund's or Portfolios' securities, from time to time, may be
traded primarily on foreign exchanges or OTC dealer markets which may trade on
days when the NYSE is closed (such as Saturday). As a result, the net asset
values of a Fund's shares may be affected significantly by such trading on days
when shareholders have no access to that Fund.
The different expenses borne by each class of shares will result in different
net asset values and dividends. The per share net asset value of the Class B
shares of a Fund generally will be lower than that of the Class A shares of that
Fund because of the higher expenses borne by the Class B shares. The per share
net asset value of the Advisor Class shares of a Fund generally will be higher
than that of the Class A and Class B shares of that Fund because of the lower
expenses borne by the Advisor Class shares. It is expected, however, that the
net asset value per share of the classes will tend to converge immediately after
the payment of dividends, which will differ by approximately the amount of the
service and distribution expense accrual differential between the classes.
Prospectus Page 46
<PAGE>
GT GLOBAL EQUITY FUNDS
DIVIDENDS, OTHER DISTRIBUTIONS
AND FEDERAL INCOME TAXATION
- --------------------------------------------------------------------------------
DIVIDENDS AND OTHER DISTRIBUTIONS. Each Fund annually declares as a dividend all
of its (or, in the case of the America Small Cap Fund or the America Value Fund,
its proportionate share of its corresponding Portfolio's) net investment income,
if any, which includes dividends, accrued interest and earned discount
(including both original issue and market discounts) less applicable expenses.
Each Fund also annually distributes substantially all of its (or, in the case of
the America Small Cap Fund or the America Value Fund, its proportionate share of
its corresponding Portfolio's) realized net short-term capital gain (the excess
of short-term capital gains over short-term capital losses), net capital gain
(the excess of net long-term capital gain over net short-term capital loss) and
net gains from foreign currency transactions, if any. Each Fund may make an
additional dividend or other distribution if necessary to avoid a 4% excise tax
on certain undistributed income and gain.
Dividends and other distributions paid by each Fund with respect to all classes
of its shares are calculated in the same manner and at the same time. The per
share income dividends on Class B shares of a Fund will be lower than the per
share income dividends on Class A shares of that Fund as a result of the higher
service and distribution fees applicable to Class B shares; and the per share
income dividends on both such classes of shares of a Fund will be lower than the
per share income dividends on the Advisor Class shares of that Fund as a result
of the absence of any service and distribution fees applicable to Advisor Class
shares. SHAREHOLDERS MAY ELECT:
/ / to have all dividends and other distributions automatically reinvested in
additional Fund shares of the distributing class (or in shares of the
corresponding class of other GT Global Mutual Funds); or
/ / to receive dividends in cash and have other distributions automatically
reinvested in additional Fund shares of the distributing class (or in shares
of the corresponding class of other GT Global Mutual Funds); or
/ / to receive other distributions in cash and have dividends automatically
reinvested in additional Fund shares of the distributing class (or in shares
of the corresponding class of other GT Global Mutual Funds); or
/ / to receive dividends and other distributions in cash.
Automatic reinvestments in additional shares are made at net asset value without
imposition of a sales charge. IF NO ELECTION IS MADE BY A SHAREHOLDER, ALL
DIVIDENDS AND OTHER DISTRIBUTIONS WILL BE AUTOMATICALLY REINVESTED IN ADDITIONAL
FUND SHARES OF THE DISTRIBUTING CLASS. Reinvestments in another GT Global Mutual
Fund may only be directed to an account with the identical shareholder
registration and account number. These elections may be changed by a shareholder
at any time; to be effective with respect to a distribution, the shareholder or
the shareholder's broker must contact the Transfer Agent by mail or telephone at
least 15 Business Days prior to the payment date. THE FEDERAL INCOME TAX STATUS
OF DIVIDENDS AND OTHER DISTRIBUTIONS IS THE SAME WHETHER THEY ARE RECEIVED IN
CASH OR REINVESTED IN ADDITIONAL SHARES.
Any dividend or other distribution paid by a Fund has the effect of reducing the
net asset value per share on the ex-dividend date by the amount thereof.
Therefore, a dividend or other distribution paid shortly after a purchase of
shares would represent, in substance, a return of capital to the shareholder (to
the extent it is paid on the shares so purchased), even though subject to income
tax, as discussed below.
TAXES. Each Fund intends to qualify (in the case of the America Small Cap Fund
and the America Value Fund) or continue to qualify for treatment as a regulated
investment company under the Code. In each taxable year that a Fund so
qualifies, the Fund (but not its shareholders) will be relieved of federal
income tax on that part of its investment company taxable income -- consisting
generally of its (or, in the case of the America Small Cap Fund or America Value
Fund, its proportionate share of its corresponding Portfolio's) net investment
income, net gains from certain foreign currency transactions and net short-term
capital gain -- and net capital gain that is distributed to its shareholders.
Dividends from a Fund's investment company taxable income (whether paid in cash
or reinvested in additional shares) are taxable to its shareholders as ordinary
income to the extent of the Fund's
Prospectus Page 47
<PAGE>
GT GLOBAL EQUITY FUNDS
earnings and profits. Distributions of a Fund's net capital gain, when
designated as such, are taxable to its shareholders as long-term capital gains,
regardless of how long they have held their Fund shares and whether such
distributions are paid in cash or reinvested in additional shares.
Each Fund provides federal tax information to its shareholders annually,
including information about dividends and other distributions paid during the
preceding year and, under certain circumstances, the shareholders' respective
shares of any foreign taxes paid by the Fund, in which event each shareholder
would be required to include in his or her gross income his or her pro rata
share of those taxes but might be entitled to claim a credit or deduction for
them.
Each Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other noncorporate
shareholders who have not furnished to the Fund a correct taxpayer
identification number or a properly completed claim for exemption on Form W-8 or
W-9. Withholding at that rate also is required from dividends and capital gain
distributions payable to such shareholders who otherwise are subject to backup
withholding. Fund accounts opened via a bank wire purchase (see "How to Invest
- -- Purchases Through the Distributor") are considered to have uncertified
taxpayer identification numbers unless a completed Form W-8 or W-9 or Account
Application is received by the Transfer Agent within seven days after the
purchase. A shareholder should contact the Transfer Agent if the shareholder is
uncertain whether a proper taxpayer identification number is on file with a
Fund.
A redemption of Fund shares may result in taxable gain or loss to the redeeming
shareholder, depending upon whether the redemption proceeds are more or less
than the shareholder's adjusted basis for the redeemed shares (which normally
includes any initial sales charge paid on Class A shares). An exchange of Fund
shares for shares of another GT Global Mutual Fund (including another Fund)
generally will have similar tax consequences. However, special tax rules apply
when a shareholder (1) disposes of Class A shares of a Fund through a redemption
or exchange within 90 days after purchase and (2) subsequently acquires Class A
shares of such Fund or any other GT Global Mutual Fund on which an initial sales
charge normally is imposed without paying that sales charge due to the
reinstatement privilege or exchange privilege. In these cases, any gain on the
disposition of the original Class A shares will be increased, or loss decreased,
by the amount of the sales charge paid when those shares were acquired, and that
amount will increase the adjusted basis of the shares subsequently acquired. In
addition, if shares of a Fund are purchased within 30 days before or after
redeeming other shares of the same Fund (regardless of class) at a loss, all or
part of the loss will not be deductible and instead will increase the basis of
the newly purchased shares.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting each Fund and its shareholders. See "Taxes"
in the Statement of Additional Information for a further discussion. There may
be other federal, state, local or foreign tax considerations applicable to a
particular investor. Prospective investors therefore are urged to consult their
tax advisers.
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
The Company's Board of Trustees has overall responsibility for the operation of
each Fund. Pursuant to such responsibility, the Board has approved contracts
with various financial organizations to provide, among other things, day to day
management services required by each Fund.
The Portfolios' Board of Trustees has overall responsibility for the operation
of each Portfolio. See "Directors, Trustees, and Executive Officers" in the
Statement of Additional Information for a complete description of the Trustees
of the Funds and the Portfolios. A majority of the disinterested members (as
defined in the Investment Company Act of 1940, as amended (the "1940 Act")) of
the Board of Trustees of the Company and of the Portfolios have adopted written
procedures reasonably appropriate to deal with potential conflicts of interest
arising concerning the Funds and their corresponding Portfolios up to and
including creating a separate Board of Trustees for the Portfolios.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by Chancellor LGT
Asset Management, Inc. (the "Manager") as the investment
Prospectus Page 48
<PAGE>
GT GLOBAL EQUITY FUNDS
manager of the Pacific Fund, Europe Fund, Japan Fund, International Fund,
Worldwide Fund, America Growth Fund and each Portfolio include, but are not
limited to, determining the composition of the portfolio of such Funds and such
Portfolios and placing orders to buy, sell or hold particular securities. In
addition, the Manager provides the following administrative services to each
Fund and each Portfolio: furnishing corporate officers and clerical staff;
providing office space, services and equipment; and supervising all matters
relating to the Funds' and Portfolios' operation.
The America Small Cap Fund and America Value Fund each pays the Manager
administration fees, computed daily and paid monthly, at the annualized rate of
0.25% of such Fund's average daily net assets. In addition, each such Fund bears
its pro rata portion of the investment management and administration fees paid
by its corresponding Portfolio to the Manager. The Portfolios each pay such
fees, computed daily and paid monthly, based on the average daily net assets of
such Portfolio, directly to the Manager at the annualized rate of .475% on the
first $500 million, .45% on the next $500 million, .425% on the next $500
million and .40% on all amounts thereafter.
The America Growth Fund pays the Manager investment management and
administration fees, computed daily and paid monthly, based on its average daily
net assets, at the annualized rate of .725% on the first $500 million, .70% on
the next $500 million, .675% on the next $500 million, and .65% on amounts
thereafter. Each of the other Funds pays the Manager investment management and
administration fees, computed daily and paid monthly, based on its average daily
net assets, at the annualized rate of .975% on the first $500 million, .95% on
the next $500 million, .925% on the next $500 million, and .90% on amounts
thereafter. These rates are higher than those paid by most mutual funds. Each
Fund and Portfolio pays all expenses not assumed by the Manager, GT Global or
other agents. GT Global and the Manager have undertaken to limit each Fund's,
other than America Small Cap Fund's, America Value Fund's and America Growth
Fund's, expenses (exclusive of brokerage commissions, taxes, interest and
extraordinary expenses) to the maximum annual level of 2.25% and 2.90% of the
average daily net assets of such Fund's Class A and Class B shares,
respectively. Similarly, GT Global and the Manager have undertaken to limit each
of the America Small Cap Fund's, America Value Fund's and America Growth Fund's
expenses (exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the maximum annual level of 2.00% and 2.65% of the average daily
net assets of such Fund's Class A and Class B shares, respectively.
The Manager also serves as each Fund's and each Portfolio's pricing and
accounting agent. The monthly fee for these services to the Manager is a
percentage, not to exceed 0.03% annually, of the Fund's average daily net
assets. The annual fee rate is derived by applying 0.03% to the first $5 billion
of assets of GT Global Mutual Funds and 0.02% to the assets in excess of $5
billion and allocating the result according to each Fund's average daily net
assets.
The Manager provides investment management and/or administration services to the
GT Global Mutual Funds. The Manager and its worldwide asset management
affiliates have provided investment management and/or administration services to
institutional, corporate and individual clients around the world since 1969. The
U.S. offices of the Manager are located at 50 California Street, 27th Floor, San
Francisco, CA 94111 and 1166 Avenue of the Americas, New York, NY 10036.
The Manager and its worldwide affiliates, including LGT Bank in Liechtenstein,
formerly Bank in Liechtenstein, comprise Liechtenstein Global Trust, formerly
BIL GT Group Limited. Liechtenstein Global Trust is a provider of global asset
management and private banking products and services to individual and
institutional investors. Liechtenstein Global Trust is controlled by the Prince
of Liechtenstein Foundation, which serves as a parent organization for the
various business enterprises of the Princely Family of Liechtenstein. The
principal business address of the Prince of Liechtenstein Foundation is
Herrengasse 12, FL-9490, Vaduz, Liechtenstein.
As of October 31, 1996, the Manager and its worldwide asset management
affiliates manage approximately $59 billion. In the United States, as of October
31, 1996, the Manager manages or administers approximately $10 billion of GT
Global Mutual Funds. As of October 31, 1996, assets entrusted to Liechtenstein
Global Trust total approximately $80 billion.
On October 31, 1996, Chancellor Capital Management, Inc. ("Chancellor Capital")
merged with LGT Asset Management, Inc. As of September 30, 1996, Chancellor
Capital and its affiliates, based in New York, were the 15th largest independent
investment manager in the United States with approximately $33 billion in assets
under management. Chancellor Capital specialized in public and private U.S.
equity and bond portfolio management for over 300 U.S. institutional clients.
Prospectus Page 49
<PAGE>
GT GLOBAL EQUITY FUNDS
In addition to the investment resources of its San Francisco and New York
offices, the Manager draws upon the expertise, personnel, data and systems of
other offices of Liechtenstein Global Trust, including investment offices in
Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo, and Toronto. In managing
the GT Global Mutual Funds, the Manager employs a team approach, taking
advantage of its investment resources around the world in seeking to achieve
each Fund's investment objective. Many of the GT Global Mutual Funds' portfolio
managers are natives of the countries in which they invest, speak local
languages and/or live or work in the markets they follow.
The investment professionals primarily responsible for the portfolio management
of each Fund or Portfolio are as follows:
PACIFIC FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Lawrence Yip Portfolio Manager since 1993 Portfolio Manager for the Manager and
Hong Kong LGT Asset Management Ltd. (Asia)
</TABLE>
EUROPE FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Anna Powell Portfolio Manager since 1995 Portfolio Manager for LGT Asset
London Management PLC (London) and the
Manager since 1995. From 1989 to
1995, Ms. Powell was a Portfolio
Manager for Robert Fleming & Co.,
Ltd. (London).
</TABLE>
AMERICA SMALL CAP PORTFOLIO
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE PORTFOLIO LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Soraya M. Betterton Portfolio Manager since 1996 Portfolio Manager for the Manager.
San Francisco
</TABLE>
AMERICA GROWTH FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Derek H. Webb Portfolio Manager since 1996 Portfolio Manager for the Manager
San Francisco since 1994. Analyst for the Manager
from 1992 to 1994. From 1990 to 1992,
Mr. Webb was a student at the
University of Pennsylvania, Wharton
School of Business. During 1989, he
was Vice President, Citicorp
Investment Bank of Los Angeles. Prior
thereto, he was a Bond Trader, Trust
Co. of the West (Los Angeles).
</TABLE>
AMERICA VALUE PORTFOLIO
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE PORTFOLIO LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Soraya M. Betterton Portfolio manager since Portfolio Portfolio Manager for the Manager.
San Francisco inception
</TABLE>
Prospectus Page 50
<PAGE>
GT GLOBAL EQUITY FUNDS
WORLDWIDE FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
F. Christian Wignall Portfolio Manager since 1987 Chief Investment Officer -- Global
San Francisco Equities for the Manager.
Soraya M. Betterton Portfolio Manager since 1989 Portfolio Manager for the Manager.
San Francisco
Serge Selfslagh Portfolio Manager since 1993 Portfolio Manager for LGT Asset
London Management PLC (London) and the
Manager since 1993. Prior thereto,
Mr. Selfslagh was a Portfolio Manager
for Schroder Investment Management
(London) and its U.S. affiliate,
SCMI.
Michael Lindsell Portfolio Manager since 1992 Chief Investment Officer -- Japan for
Tokyo LGT Asset Management Ltd. as well as
Portfolio Manager for the Manager
since 1992. Prior thereto, Mr.
Lindsell was a Director of Warburg
Asset Management (Tokyo).
</TABLE>
JAPAN FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Michael Lindsell Portfolio Manager since 1992 Chief Investment Officer -- Japan for
Tokyo LGT Asset Management Ltd. as well as
Portfolio Manager for the Manager
since 1992. Prior thereto, Mr.
Lindsell was a Director of Warburg
Asset Management (Tokyo).
</TABLE>
INTERNATIONAL FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
F. Christian Wignall Portfolio Manager since 1987 Chief Investment Officer -- Global
San Francisco Equities for the Manager.
Michael Lindsell Portfolio Manager since 1992 Chief Investment Officer -- Japan for
Tokyo LGT Asset Management Ltd. as well as
Portfolio Manager for the Manager
since 1992. Prior thereto, Mr.
Lindsell was a Director of Warburg
Asset Management (Tokyo).
Serge Selfslagh Portfolio Manager since 1993 Portfolio Manager for LGT Asset
London Management PLC (London) and the
Manager since 1993. Prior thereto,
Mr. Selfslagh was a Portfolio Manager
for Schroder Investment Management
(London) and its U.S. affiliate,
SCMI.
</TABLE>
Prospectus Page 51
<PAGE>
GT GLOBAL EQUITY FUNDS
In placing orders for the Funds' and Portfolios' portfolio transactions, the
Manager seeks to obtain the best net results. The Manager has no agreement or
commitment to place orders with any broker/ dealer. Commissions or discounts in
foreign securities exchanges and OTC markets often are fixed and generally are
higher than those in U.S. securities exchanges or markets. Debt securities
generally are traded on a "net" basis with a dealer acting as principal for its
own account without a stated commission, although the price of the security
usually includes a profit to the dealer. U.S. and foreign government securities
and money market instruments generally are traded in the OTC markets. In
underwritten offerings, securities usually are purchased at a fixed price which
includes an amount of compensation to the underwriter. On occasion, securities
may be purchased directly from an issuer, in which case no commissions or
discounts are paid. Broker/dealers may receive commissions on futures, currency
and options transactions. Consistent with its obligation to obtain the best net
results, the Manager may consider a broker/dealer's sale of shares of the GT
Global Mutual Funds as a factor in considering through whom portfolio
transactions will be effected. Brokerage transactions for a Fund or Portfolio
may be executed through any Liechtenstein Global Trust affiliates.
The portfolio turnover rate for the fiscal year ended December 31, 1995, was
113% for the Worldwide Fund and 108% for the Europe Fund. In addition, the
Manager anticipates that the annual turnover rate of each Portfolio will not
exceed 75%. See the sub-caption "Portfolio Trading and Turnover" in the
Statement of Additional Information. Increases in portfolio turnover would
involve correspondingly greater transaction costs in the form of dealer spreads
or brokerage commissions and other costs that a Fund will bear directly, and
could result in the realization of net capital gains which would be taxable when
distributed to shareholders.
DISTRIBUTION OF FUND SHARES. GT Global is the distributor, or principal
underwriter, of each Fund's Class A and Class B shares. Like the Manager, GT
Global is a subsidiary of Liechtenstein Global Trust with offices at 50
California Street, 27th Floor, San Francisco, California 94111. As distributor,
GT Global collects the sales charges imposed on purchases of Class A shares and
and any contingent deferred sales charges that may be imposed on certain
redemptions of Class A and Class B shares. GT Global reallows a portion of the
sales charges on Class A shares to broker/dealers that have sold such shares in
accordance with the schedule set forth above under "How to Invest." In addition,
GT Global pays a commission equal to 4.00% of the amount invested to
broker/dealers who sell Class B shares. A commission with respect to Class B
shares is not paid on exchanges or certain reinvestments in Class B shares.
GT Global, at its own expense, may provide additional promotional incentives to
broker/dealers that sell shares of the Funds and/or shares of the other GT
Global Mutual Funds. In some instances additional compensation or promotional
incentives may be offered to broker/dealers that have sold or may sell
significant amounts of shares during specified periods of time. Such
compensation and incentives may include, but are not limited to, cash,
merchandise, trips and financial assistance to brokers in connection with
preapproved conferences or seminars, sales or training programs for invited
sales personnel, payment for travel expenses (including meals and lodging)
incurred by sales personnel and members of their families or other invited
guests to various locations for such seminars or training programs, seminars for
the public, advertising and sales campaigns regarding one or more of the GT
Global Mutual Funds, and/or other events sponsored by the broker/dealer. In
addition, GT Global makes ongoing payments to brokerage firms, financial
institutions (including banks) and others that facilitate the administration and
servicing of shareholder accounts.
Under a plan of distribution adopted by the Company's Board of Trustees pursuant
to Rule 12b-1 under the 1940 Act, with respect to each Fund's Class A shares
("Class A Plan"), each 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 its 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 its 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 a separate plan of distribution adopted with respect to each Fund's
Class B shares ("Class B Plan"), each 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 its expenditures incurred in servicing
Prospectus Page 52
<PAGE>
GT GLOBAL EQUITY FUNDS
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 its 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
such Plan continues in effect.
GT Global's service and distribution expenses covered by the Plans include the
payment of ongoing commissions; the cost of any additional compensation paid by
GT Global to brokers and dealers; the costs of printing and mailing to
prospective investors prospectuses and other materials relating to the Funds;
the costs of developing, printing, distributing and publishing advertisements
and other sales literature; and allocated costs relating to GT Global's service
and distribution activities, including, among other things, employee salaries,
bonuses and other overhead expenses. In addition, its expenses covered by the
Class B Plan include payment of initial sales commissions to broker/dealers and
interest on any unreimbursed amounts carried forward thereunder.
The Glass-Steagall Act and other applicable laws, among other things, generally
prohibit federally chartered or supervised banks from engaging in the business
of underwriting or distributing securities. Accordingly, GT Global intends to
engage banks (if at all) only to perform administrative and shareholder
servicing functions. If a bank were prohibited from so acting, its shareholder
clients would be permitted to remain shareholders, and alternative means for
continuing the servicing of such shareholders would be sought. It is not
expected that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
CONFIRMATIONS AND REPORTS TO SHAREHOLDERS. Each time a transaction is made that
affects a shareholder's account in a Fund, such as an additional investment,
redemption or the payment of a dividend or other distribution, the shareholder
will receive from the Transfer Agent a confirmation statement reflecting the
transaction. Confirmations for transactions effected pursuant to a Fund's
Automatic Investment Plan, Systematic Withdrawal Plan, and automatic dividend
reinvestment program may be provided quarterly. Shortly after the end of the
Funds' fiscal year on December 31 and fiscal half-year on June 30 of each year,
shareholders will receive an annual and semiannual report, respectively. These
reports list the securities held by each Fund and include each Fund's financial
statements. Under certain circumstances, duplicate mailings of such reports to
the same household may be consolidated. In addition, the federal income tax
status of distributions made by the Funds to shareholders will be reported after
the end of the fiscal year on Form 1099-DIV.
ORGANIZATION OF THE COMPANY. The Company is organized as a Massachusetts
business trust and is registered with the SEC as a diversified open-end
management investment company.
From time to time the Company has and may continue to establish additional
funds, each corresponding to a distinct investment portfolio and a distinct
series of the Company's shares of beneficial interest. Shares of each Fund are
entitled to one vote per share (with proportional voting for fractional shares)
and are freely transferable. Shareholders have no preemptive or conversion
rights.
On any matter submitted to a vote of shareholders, shares of each Fund will be
voted by that Fund's shareholders individually when the matter affects the
specific interest of that Fund only, such as approval of that Fund's investment
management arrangements. In addition, each class of shares of a Fund has
exclusive voting rights with respect to its distribution plan. The shares of all
the Company's Funds will be voted in the aggregate on other matters, such as the
election of Trustees and ratification of the selection by the Board of Trustees
of the Company's independent accountants.
The Company normally will not hold meetings of shareholders, except as required
under the 1940 Act. The Company would be required to hold a shareholders meeting
in the event that at any time less than a majority of the Trustees holding
office
Prospectus Page 53
<PAGE>
GT GLOBAL EQUITY FUNDS
had been elected by shareholders. Trustees shall continue to hold office until
their successors are elected and have qualified. Shares of the Company's Funds
do not have cumulative voting rights, which means that the holders of a majority
of the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed upon a majority vote of the shareholders qualified to
vote in the election. Shareholders holding 10% of the Company's outstanding
voting securities may call a meeting of shareholders for the purpose of voting
upon the question of removal of any Trustee or for any other purpose. The 1940
Act requires the Company to assist shareholders in calling such a meeting.
Pursuant to the Company's Declaration of Trust, the Company may issue an
unlimited number of shares for each of the Funds, including an unlimited number
of Class A, Class B and Advisor Class shares of each Fund. Each share of a Fund
represents an interest in the Fund only, has no par value, represents an equal
proportionate interest in the Fund with other shares of the Fund and is entitled
to such dividends and distributions out of the income earned and gain realized
on the assets belonging to the Fund as may be declared by the Board of Trustees.
Each Class A, Class B and Advisor Class share of each Fund is equal as to
earnings, assets and voting privileges to each other share in such Fund, except
as noted above, and each class bears the expenses, if any, related to the
distribution of its shares. Shares of the Funds, when issued, are fully paid and
nonassessable.
ORGANIZATION OF THE PORTFOLIOS. Each Portfolio is organized as a subtrust of
Growth Portfolio, a New York common law trust. The Declaration of Trust provides
that the America Small Cap Fund, America Value Fund and other entities investing
in its corresponding Portfolio (E.G., other investment companies, insurance
company separate accounts and common and commingled trust funds), if any, each
will be liable for all obligations of that Portfolio. However, the Trustees of
the Company believe that the risk of such Funds' incurring financial loss
because of such liability is limited to circumstances in which both inadequate
insurance existed and each of the Portfolios itself was unable to meet its
obligations, and that neither such Funds nor their shareholders will be exposed
to a material risk of liability by reason of such Funds investing in their
corresponding Portfolios.
Whenever the America Small Cap Fund or America Value Fund is requested to vote
on any proposal of its corresponding Portfolio, such Fund will hold a meeting of
such Fund's shareholders and will cast its vote as instructed by its
shareholders. Because a Portfolio investors' votes are proportionate to their
percentage interests in that Portfolio, one or more other Portfolio investors
could, in certain instances, approve an action against which a majority of the
outstanding voting securities of its corresponding Fund had voted. This could
result in that Fund redeeming its investment in its corresponding Portfolio,
which could result in increased expenses for that Fund. Shares for which no
voting instructions are received will be voted in the same proportion as the
shares for which voting instructions are received. Any information received from
the America Small Cap Portfolio and America Value Portfolio in the Portfolio's
reports to shareholders will be provided to the shareholders of its
corresponding Fund.
SHAREHOLDER INQUIRIES. Shareholder inquiries may be made by calling the Funds
toll-free at (800) 223-2138 or by writing to the Funds at 50 California Street,
27th Floor, San Francisco, California 94111.
PERFORMANCE INFORMATION. Each Fund, from time to time, may include information
on its investment results and/or comparisons of its investment results to
various unmanaged indices or results of other mutual funds or groups of mutual
funds in advertisements, sales literature or reports furnished to present or
prospective shareholders.
In such materials, a Fund may quote its average annual total return
("Standardized Return"). Standardized Return is calculated separately for each
class of shares of each Fund. Standardized Return shows percentage rates
reflecting the average annual change in the value of an assumed investment in
the Fund at the end of a one-year period and at the end of five- and ten-year
periods, reduced by the maximum applicable sales charge imposed on sales of Fund
shares. If a one-, five- and/or ten-year period has not yet elapsed, data will
be provided as of the end of a shorter period corresponding to the life of the
Fund. Standardized Return assumes the reinvestment of all dividends and capital
gain distributions at net asset value on the reinvestment date established by
the Board of Trustees.
In addition, in order to more completely represent a Fund's performance or more
accurately compare such performance to other measures of investment return, a
Fund also may include in advertisements, sales literature and shareholder
reports other total return performance data ("Non-Standardized Return").
Non-Standardized Return reflects percentage rates of return encompassing all
elements of return (i.e., income and capital
Prospectus Page 54
<PAGE>
GT GLOBAL EQUITY FUNDS
appreciation or depreciation); it assumes reinvestment of all dividends and
capital gain
distributions. Non-Standardized Return may be quoted for the same or different
periods as those for which Standardized Return is quoted; it may consist of an
aggregate or average annual percentage rate of return, actual year-by-year rates
or any combination thereof. Non-Standardized Return may or may not take sales
charges into account; performance data calculated without taking the effect of
sales charges into account will be higher than data including the effect of such
charges.
Each Fund's performance data reflect past performance and are not necessarily
indicative of future results. A Fund's investment results will vary from time to
time depending upon market conditions, the composition of its portfolio and its
operating expenses. These factors and possible differences in calculation
methods should be considered when comparing a Fund's investment results with
those published for other investment companies, other investment vehicles and
unmanaged indices. A Fund's results also should be considered relative to the
risks associated with its investment objective and policies. See "Investment
Results" in the Statement of Additional Information.
Each Fund's annual report contains additional information with respect to its
performance. The annual report is available to investors upon request and free
of charge.
TRANSFER AGENT. Shareholder servicing, reporting and general transfer agent
functions for the Funds are performed by GT Global Investor Services, Inc. The
Transfer Agent is an affiliate of the Manager and GT Global, a subsidiary of
Liechtenstein Global Trust, and maintains offices at California Plaza, 2121 N.
California Boulevard, Suite 450, Walnut Creek, California 94596.
CUSTODIAN. State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110 is custodian of each Fund's and each Portfolio's assets.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Company and the Funds.
Kirkpatrick & Lockhart LLP also acts as counsel to the Manager, GT Global and
the Transfer Agent in connection with other matters.
INDEPENDENT ACCOUNTANTS. The Company's and each Fund's or Portfolio's
independent accountants are Coopers & Lybrand L.L.P., One Post Office Square,
Boston, Massachusetts 02109. Coopers & Lybrand L.L.P. conducts an annual audit
of each Fund and Portfolio, assists in the preparation of each Fund's and each
Portfolio's federal and state income tax returns and consults with the Company
and each Fund and Portfolio as to matters of accounting, regulatory filings, and
federal and state income taxation.
MULTIPLE TRANSLATIONS OF THE PROSPECTUS. This Prospectus may be translated into
other languages. In the event of any inconsistency or ambiguity as to the
meaning of any word or phrase contained in a translation, the English text shall
prevail.
Prospectus Page 55
<PAGE>
GT GLOBAL EQUITY FUNDS
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 56
<PAGE>
GT GLOBAL EQUITY FUNDS
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 57
<PAGE>
GT GLOBAL EQUITY FUNDS
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 58
<PAGE>
GT GLOBAL EQUITY FUNDS
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 59
<PAGE>
<TABLE>
<S> <C>
[LOGO]
GT GLOBAL MUTUAL FUNDS
P.O. Box 7345 ACCOUNT APPLICATION
SAN FRANCISCO, CA 94120-7345
800/223-2138
</TABLE>
<TABLE>
<S> <C> <C>
/ / INDIVIDUAL / / JOINT TENANT / / GIFT/TRANSFER FOR MINOR / / TRUST / / CORP.
ACCOUNT REGISTRATION / / NEW ACCOUNT / / ACCOUNT REVISION (Account No.: --------------------------------------)
</TABLE>
NOTE: Trust registrations should specify name of trustee(s), beneficiary(ies)
and date of trust instrument. Registration for Uniform Gifts/Transfers to
Minors accounts should be in the name of one custodian and one minor and
include the state under which the custodianship is created.
<TABLE>
<S> <C> <C> <C>
------------------------------------ --------------------------------------------------------------------------------
Owner Social Security Number / / or Tax I.D. Number / / (Check applicable box)
------------------------------------ If more than one owner, social security number or taxpayer identification number
Co-owner 1 should be provided for first owner listed. If a purchase is made under Uniform Gift/
------------------------------------ Transfer to Minors Act, social security number of the minor must be provided.
Co-owner 2 Resident of / / U.S. / / Other (specify)-----------------------------------------
( )
---------------------------------------------------------------------- ---------------------------
Street Address Home Telephone
( )
---------------------------------------------------------------------- ---------------------------
City, State, Zip Code Business Telephone
</TABLE>
FUND SELECTION $500 minimum initial investment required for each Fund
selected. Checks should be made payable to "GT GLOBAL."
TO PURCHASE THE FUNDS LISTED BELOW PLEASE SELECT EITHER / / Class A Shares or
/ /Class B Shares (Not available for purchases of $500,000 or more or, except
for investors participating in the Portfolio Rebalancing Program, for the
GT Global Dollar Fund).
If a class share box is not checked, your investment will be made in Class A
shares.
<TABLE>
<S> <C> <C> <C> <C>
INITIAL INITIAL
INVESTMENT INVESTMENT
07 / / GT GLOBAL WORLDWIDE GROWTH FUND $ 13 / / GT GLOBAL LATIN AMERICA GROWTH FUND $
---------- ----------
05 / / GT GLOBAL INTERNATIONAL GROWTH FUND $ 24 / / GT GLOBAL AMERICA SMALL CAP GROWTH $
---------- FUND ----------
16 / / GT GLOBAL EMERGING MARKETS FUND $ 06 / / GT GLOBAL AMERICA GROWTH FUND $
---------- ----------
11 / / GT GLOBAL HEALTH CARE FUND $ 23 / / GT GLOBAL AMERICA VALUE FUND $
---------- ----------
15 / / GT GLOBAL TELECOMMUNICATIONS FUND $ 04 / / GT GLOBAL JAPAN GROWTH FUND $
---------- ----------
19 / / GT GLOBAL INFRASTRUCTURE FUND $ 10 / / GT GLOBAL GROWTH & INCOME FUND $
---------- ----------
17 / / GT GLOBAL FINANCIAL SERVICES FUND $ 09 / / GT GLOBAL GOVERNMENT INCOME FUND $
---------- ----------
21 / / GT GLOBAL NATURAL RESOURCES FUND $ 08 / / GT GLOBAL STRATEGIC INCOME FUND $
---------- ----------
22 / / GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND $ 18 / / GT GLOBAL HIGH INCOME FUND $
---------- ----------
02 / / GT GLOBAL NEW PACIFIC GROWTH FUND $ 01 / / GT GLOBAL DOLLAR FUND $
---------- ----------
03 / / GT GLOBAL EUROPE GROWTH FUND $
----------
CHECKWRITING PRIVILEGE
Checkwriting privilege available on Class A shares of GT Global Dollar Fund and GT Global Government Income Fund.
/ / Check here if desired. You will be sent a book of checks.
CAPITAL GAINS AND DIVIDEND DISTRIBUTIONS TOTAL INITIAL INVESTMENT: $
----------
All capital gains and dividend distributions will be reinvested in additional shares of the same class unless appropriate
boxes below are checked:
/ / Pay capital gain distributions only in cash / / Pay dividends only in cash / / Pay capital gain distributions AND
dividends in cash.
SPECIAL CAPITAL GAINS AND DIVIDEND DISTRIBUTIONS OPTION
Pay distributions noted above to another GT Global Mutual Fund: Fund Name ------------------------------------------
</TABLE>
AGREEMENTS & SIGNATURES
By the execution of this Account Application, I/we represent and warrant that
I/we have full right, power and authority and am/are of legal age in my/our
state of residence to make the investment applied for pursuant to this
Application. The person(s), if any, signing on behalf of the investor
represent and warrant that they are duly authorized to sign this Application
and to purchase, redeem or exchange shares of the Fund(s) on behalf of the
investor. I/WE HEREBY AFFIRM THAT I/WE HAVE RECEIVED A CURRENT PROSPECTUS OF
THE GT GLOBAL MUTUAL FUND(S) IN WHICH I/WE AM/ARE INVESTING AND I/WE AGREE TO
ITS TERMS AND CONDITIONS.
I/WE AND MY/OUR ASSIGNS AND SUCCESSORS UNDERSTAND AND AGREE THAT THE ACCOUNT
WILL BE SUBJECT TO THE TELEPHONE EXCHANGE AND TELEPHONE REDEMPTION PRIVILEGES
DESCRIBED IN THE CURRENT PROSPECTUS TO WHICH THIS APPLICATION IS ATTACHED AND
AGREE THAT GT GLOBAL, INC., G.T. GLOBAL GROWTH SERIES, G.T. INVESTMENT FUNDS,
INC., G.T. INVESTMENT PORTFOLIOS, INC. AND THE FUNDS' TRANSFER AGENT, THEIR
OFFICERS AND EMPLOYEES, WILL NOT BE LIABLE FOR ANY LOSS OR DAMAGES ARISING OUT
OF ANY SUCH TELEPHONE, TELEX OR TELEGRAPHIC INSTRUCTIONS REASONABLY BELIEVED
TO BE GENUINE, INCLUDING ANY SUCH LOSS OR DAMAGES DUE TO NEGLIGENCE ON THE
PART OF SUCH ENTITIES. THE INVESTOR(S) CERTIFIES(Y) AND AGREE(S) THAT THE
CERTIFICATIONS, AUTHORIZATIONS, DIRECTIONS AND RESTRICTIONS CONTAINED HEREIN
WILL CONTINUE UNTIL GT GLOBAL, INC., G.T. GLOBAL GROWTH SERIES, G.T.
INVESTMENT FUNDS, INC., G.T. INVESTMENT PORTFOLIOS, INC. OR THE FUNDS'
TRANSFER AGENT RECEIVES WRITTEN NOTICE OF ANY CHANGE OR REVOCATION. ANY CHANGE
IN THESE INSTRUCTIONS MUST BE IN WRITING AND IN SOME CASES, AS DESCRIBED IN
THE PROSPECTUS, REQUIRES THAT ALL SIGNATURES BE GUARANTEED.
PLEASE INDICATE THE NUMBER OF SIGNATURES REQUIRED TO PROCESS CHECKS OR
WRITTEN REDEMPTION REQUESTS: / / ONE / / TWO / / THREE / / FOUR.
(If you do not indicate the number of required signatures, ALL account
owners must sign checks and/or written redemption requests.)
UNDER PENALTIES OF PERJURY, I CERTIFY THAT THE TAXPAYER IDENTIFICATION
NUMBER ("NUMBER") PROVIDED ON THIS FORM IS MY (OR MY EMPLOYER'S, TRUST'S,
MINOR'S OR OTHER PAYEE'S) TRUE, CORRECT AND COMPLETE NUMBER AND MAY BE
ASSIGNED TO ANY NEW ACCOUNT OPENED UNDER THE EXCHANGE PRIVILEGE. I FURTHER
CERTIFY THAT I AM (OR THE PAYEE WHOSE NUMBER IS GIVEN IS) NOT SUBJECT TO
BACKUP WITHHOLDING BECAUSE: (A) I AM (OR THE PAYEE IS) EXEMPT FROM BACKUP
WITHHOLDING; (B) THE INTERNAL REVENUE SERVICE (THE "I.R.S.") HAS NOT NOTIFIED
ME THAT I AM (OR THE PAYEE IS) SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A
FAILURE TO REPORT ALL INTEREST OR DIVIDENDS; OR (C) THE I.R.S. HAS NOTIFIED ME
THAT I AM (THE PAYEE IS) NO LONGER SUBJECT TO BACKUP WITHHOLDING;
OR, / / I AM (THE PAYEE IS) SUBJECT TO BACKUP WITHHOLDING.
ALL ACCOUNT OWNERS MUST SIGN BELOW (Minors are not authorized signers)
Account revisions may require that signatures be guaranteed. Please see the
Prospectus.
THE I.R.S. DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT
OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
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Date
X X
--------------------------------------------------------- ----------------------------------------------------------
X X
--------------------------------------------------------- ----------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
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ACCOUNT PRIVILEGES
TELEPHONE EXCHANGE AND REDEMPTION AUTHORITY TO TRANSMIT REDEMPTION PROCEEDS TO
PRE-DESIGNATED ACCOUNT
I/We, either directly or through the Authorized By completing the following section, redemptions
Agent, if any, named below, hereby authorize the which exceed $1,000 may be wired or mailed to a
Transfer Agent of the GT Global Mutual Funds, to Pre-Designated Account at your bank. (Wiring
honor any telephone, telex or telegraphic instructions may be obtained from your bank.) A
instructions reasonably believed to be authentic bank wire service fee may be charged.
for redemption and/or exchange between a similar
class of shares of any of the Funds distributed --------------------------------------------------
by GT Global, Inc. Name of Bank
SPECIAL PURCHASE AND REDEMPTION PLANS --------------------------------------------------
/ / I have completed and attached the Bank Address
Supplemental Application for:
/ / AUTOMATIC INVESTMENT PLAN --------------------------------------------------
/ / SYSTEMATIC WITHDRAWAL PLAN Bank A.B.A Number Account Number
OTHER
/ / I/We owned shares of one or more Funds --------------------------------------------------
distributed by GT Global, Inc. as of April Names(s) in which Bank Account is Established
30, 1987 and since that date continuously A corporation (or partnership) must also submit a
have owned shares of such Funds. Attached is "Corporate Resolution" (or "Certificate of
a schedule showing the numbers of each of Partnership") indicating the names and titles of
my/our Shareholder Accounts. Officers authorized to act on its behalf.
</TABLE>
RIGHT OF ACCUMULATION -- CLASS A SHARES
/ / I/We qualify for the Right of Accumulation sales charge discount
described in the Prospectus and Statement of Additional Information of
the Fund purchased.
/ / I/We own shares of more than one Fund distributed by GT Global. Listed
below are the numbers of each of my/our Shareholder Accounts.
/ / The registration of some of my/our shares differs from that shown on this
Application. Below are the account number(s) and registration(s) in each
case.
LIST OF OTHER GT GLOBAL MUTUAL FUND ACCOUNTS:
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------------------------------------------- --------------------------------------------------
------------------------------------------- --------------------------------------------------
Account Numbers Account Registrations
</TABLE>
LETTER OF INTENT -- CLASS A SHARES
/ / I agree to the terms of the Letter of Intent set forth below. Although I
am not obligated to do so, it is my intention to invest over a
thirteen-month period in Class A shares of one or more of the GT Global
Mutual Funds in an aggregate amount at least equal to:
/ / $50,000 / / $100,000 / / $250,000 / / $500,000
When a shareholder signs a Letter of Intent in order to qualify for a reduced
sales charge, Class A shares equal to 5% (in no case in excess of 1/2 of 1%
after an aggregate of $500,000 has been purchased under the Letter) of the
dollar amount specified in this Letter will be held in escrow in the
Shareholder's Account out of the initial purchase (or subsequent purchases, if
necessary) by GT Global, Inc. All dividends and other distributions will be
credited to the Shareholder's Account in shares (or paid in cash, if
requested). If the intended investment is not completed within the specified
thirteen-month period, the purchaser will remit to GT Global, Inc. the
difference between the sales charge actually paid and the sales charge which
would have been paid if the total of such purchases had been made at a single
time. If this difference is not paid within twenty days after written request
by GT Global, Inc. or the shareholder's Authorized Agent, the appropriate
number of escrowed shares will be redeemed to pay such difference. If the
proceeds from this redemption are inadequate, the purchaser will be liable to
GT Global, Inc. for the balance still outstanding. The Letter of Intent may be
revised upward at any time during the thirteen-month period, and such a
revision will be treated as a new Letter, except that the thirteen-month
period during which the purchase must be made will remain unchanged. Exchange
requests involving escrowed shares must specifically reference those shares.
Exchanges of escrowed shares may be delayed to allow for the extra processing
required.
Any questions relating to this Letter of Intent should be directed to GT
Global, 50 California Street, 27th Floor, San Francisco, CA 94111.
FOR USE BY AUTHORIZED AGENT (BROKER/DEALER) ONLY
We hereby submit this Account Application for the purchase of Class A shares
including such shares purchased under a Right of Accumulation or Letter of
Intent or for the purchase of Class B shares in accordance with the terms of
our Dealer Agreement with GT Global, Inc. and with the Prospectus and
Statement of Additional Information of each Fund purchased. We agree to notify
GT Global, Inc. of any purchases properly made under a Letter of Intent or
Right of Accumulation.
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Investment Dealer Name
---------------------------------------------------------------------------------------------------------------------------------
Main Office Address Branch Number Representative's Number Representative's Name
( )
- -----------------------------------------------------------------------------------------------------------------------
Branch Address Telephone
X
- -----------------------------------------------------------------------------------------------------------------------
Investment Dealer's Authorized Signature Title
</TABLE>
<PAGE>
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[LOGO]
GT GLOBAL MUTUAL FUNDS SUPPLEMENTAL APPLICATION
P.O. Box 7345 SPECIAL INVESTMENT AND
SAN FRANCISCO, CA 94120-7345 WITHDRAWAL OPTIONS
800/223-2138
</TABLE>
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ACCOUNT REGISTRATION
Please supply the following information exactly as it appears on the Fund's records.
- --------------------------------------------------------- ---------------------------------------------------------
Fund Name Account Number
- ---------------------------------------------------------- ----------------------------------------------------------
Owner's Name Co-Owner 1
- ---------------------------------------------------------- ----------------------------------------------------------
Co-Owner 2 Telephone Number
- ---------------------------------------------------------- ----------------------------------------------------------
Street Address Social Security or Tax I.D. Number
- ----------------------------------------------------------
City, State, Zip Code
Resident of / / U.S. / / Other ------------------
AUTOMATIC INVESTMENT PLAN / / YES / / NO
I/We hereby authorize the Transfer Agent of the GT Global Mutual Funds to debit my/our personal checking account on
the designated dates in order to purchase / / Class A shares or / / Class B shares of the Fund indicated at the top of
this Supplemental Application at the applicable public offering price determined on that day.
/ / Monthly on the 25th day / / Quarterly beginning on the 25th day of the month you first select
(The request for participation in the Plan must be received by the 1st day of the month in which you wish investments
to begin.)
Amount of each debit (minimum $100) $
-------------------------------------------------
NOTE: A Bank Authorization Form (below) and a voided personal check must accompany the Automatic Investment Plan
Application.
</TABLE>
- --------------------------------------------------------------------------------
[LOGO]
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GT GLOBAL MUTUAL FUNDS AUTOMATIC INVESTMENT PLAN
</TABLE>
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<S> <C> <C> <C>
BANK AUTHORIZATION
- ------------------------- ------------------------------ ------------
Bank Name Bank Address Bank Account Number
I/We authorize you, the above named bank, to debit my/our account for amounts drawn by the Transfer Agent of the GT
Global Mutual Funds, acting as my agent. I/We agree that your rights in respect to each withdrawal shall be the same as
if it were a check drawn upon you and signed by me/us. This authority shall remain in effect until I/we revoke it in
writing and you receive it. I/We agree that you shall incur no liability when honoring any such debit.
I/We further agree that you will incur no liability to me if you dishonor any such withdrawal. This will be so even
though such dishonor results in the forfeiture of investment.
- --------------------------------------------------------- ---------------------------------------------------------
Account Holder's Name Joint Account Holder's Name
X X
- ------------------------------------ -------------- ------------------------------------ --------------
Account Holder's Signature Date Joint Account Holder's Signature Date
</TABLE>
(OVER)
<PAGE>
<TABLE>
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SYSTEMATIC WITHDRAWAL PLAN / / YES / / NO
MINIMUM REQUIREMENTS: $10,000 INITIAL ACCOUNT BALANCE AND $100 MINIMUM PERIODIC PAYMENT.
I/We hereby authorize the Transfer Agent of the GT Global Mutual Funds to redeem the necessary number of / / Class A
or / / Class B shares from my/our GT Global Account on the designated dates in order to make the following periodic
payments:
/ / Monthly on the 25th day / / Quarterly beginning on the 25th day of the month you first select
(The request for participation in the Plan must be received by the 18th day of the month in which you wish withdrawals
to begin.)
Maximum annual withdrawal of 12% of initial account balance for shares subject to a contingent deferred sales charge.
Withdrawals in excess of 12% of the initial account balance annually may result in assessment of a contingent deferred
sales charge, as described in the applicable Fund's prospectus.
Amount of each check ($100 minimum): $ -----------------
Please make checks payable to: --------------------------------------------------------------------------------------
(TO BE COMPLETED ONLY IF Recipient
REDEMPTION PROCEEDS TO BE PAID --------------------------------------------------------------------------------------
TO OTHER THAN ACCOUNT HOLDER Street Address
OF RECORD OR MAILED TO ADDRESS --------------------------------------------------------------------------------------
OTHER THAN ADDRESS OF RECORD) City, State, Zip Code
NOTE: If recipient of checks is not the registered shareholder, signature(s) below must be guaranteed. A corporation
(or partnership) must also submit a "Corporate Resolution" (or "Certification of Partnership") indicating the names
and titles of Officers authorized to act on its behalf.
AGREEMENT AND SIGNATURES
The investor(s) certifies(y) and agree(s) that the certifications, authorizations, directions and restrictions
contained herein will continue until the Transfer Agent of the GT Global Mutual Funds receives written notice of any
change or revocation. Any change in these instructions must be in writing with all signatures guaranteed (if
applicable).
- ----------------------------------------------------------
Date
X X
- ----------------------------------------------------- ---------------------------------------------------
Signature Signature
- ----------------------------------------------------------- ---------------------------------------------------------
Signature Guarantee* (if applicable) Signature Guarantee* (if applicable)
X X
- ----------------------------------------------------- ---------------------------------------------------
Signature Signature
- ----------------------------------------------------------- ---------------------------------------------------------
Signature Guarantee* (if applicable) Signature Guarantee* (if applicable)
*Acceptable signature guarantors: (1) a commercial bank; (2) a U.S. trust company; (3) a member firm of a U.S. stock
exchange; (4) a foreign branch of any of the foregoing; or (5) any other eligible guarantor institution. A notary
public is NOT an acceptable guarantor. An investor with questions concerning the GT Global Mutual Funds signature
guarantee requirement should contact the Transfer Agent.
</TABLE>
- --------------------------------------------------------------------------------
INDEMNIFICATION AGREEMENT
To: Bank Named on the Reverse
In consideration of your compliance with the request and authorization of the
depositor(s) named on the reverse, the Transfer Agent of the GT Global Mutual
Funds hereby agrees:
1. To indemnify and hold you harmless from any loss you may incur because of the
payment by you and of any debit by the Transfer Agent to its own order on the
account of such depositor(s) and received by you in the regular course of
business for payment, or arising out of the dishonor by you of any debit,
provided there are sufficient funds in such account to pay the same upon
presentation.
2. To defend at its own expense any action which might be brought by any
depositor or any other persons because of your actions taken pursuant to the
above mentioned request or in any manner arising by reason of your participation
in connection with such request.
<PAGE>
GT GLOBAL EQUITY 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.
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 CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / REGIONALLY DIVERSIFIED FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
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 SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. companies
GT GLOBAL AMERICA GROWTH FUND
Concentrates on small and medium-sized companies in the U.S.
GT GLOBAL AMERICA VALUE FUND
Concentrates on equity securities of large cap U.S. companies believed to be
undervalued
GT GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND 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]
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY G.T. GLOBAL GROWTH SERIES,
GT GLOBAL EQUITY FUNDS, GROWTH PORTFOLIO, CHANCELLOR LGT ASSET MANAGEMENT,
INC. OR GT GLOBAL, INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER.
EQUPR610040MC
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
GT GLOBAL INTERNATIONAL GROWTH FUND
GT GLOBAL NEW PACIFIC GROWTH FUND
GT GLOBAL EUROPE GROWTH FUND
GT GLOBAL AMERICA GROWTH FUND
GT GLOBAL JAPAN GROWTH FUND
50 California Street, 27th Floor
San Francisco, California 94111
(415) 392-6181
Toll Free: (800) 824-1580
Statement of Additional Information
April 29, 1996, As Revised October 31, 1996
- --------------------------------------------------------------------------------
This Statement of Additional Information relates to the Class A and Class B
shares of GT Global Worldwide Growth Fund ("Worldwide Fund"), GT Global
International Growth Fund ("International Fund"), GT Global New Pacific Growth
Fund ("Pacific Fund"), GT Global Europe Growth Fund ("Europe Fund"), GT Global
America Growth Fund ("America Fund") and GT Global Japan Growth Fund ("Japan
Fund"), (individually a "Fund" or collectively, "Funds"). Each Fund is a
diversified series of G.T. Global Growth Series ("Company"), a multiple series
registered open-end management investment company. This Statement of Additional
Information concerning the Funds, which is not a prospectus, supplements and
should be read in conjunction with the Funds' current Class A and Class B
Prospectus dated April 29, 1996, as revised October 31, 1996, a copy of which is
available without charge by writing to the above address or calling the Funds at
the toll-free telephone number printed above.
Chancellor LGT Asset Management, Inc. (the "Manager") serves as each Fund's
investment manager and administrator. The distributor of the shares of each Fund
is GT Global, Inc. ("GT Global"). The Funds' transfer agent is GT Global
Investor Services, Inc. ("GT Services" or "Transfer Agent").
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
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Investment Objectives and Policies....................................................................................... 2
Options, Futures, and Currency Strategies................................................................................ 5
Risk Factors............................................................................................................. 13
Investment Limitations................................................................................................... 16
Execution of Portfolio Transactions...................................................................................... 19
Trustees and Executive Officers.......................................................................................... 21
Management............................................................................................................... 23
Valuation of Shares...................................................................................................... 26
Information Relating to Sales and Redemptions............................................................................ 27
Taxes.................................................................................................................... 29
Additional Information................................................................................................... 32
Investment Results....................................................................................................... 33
Description of Debt Ratings.............................................................................................. 40
Financial Statements..................................................................................................... 42
</TABLE>
[LOGO]
Statement of Additional Information Page 1
<PAGE>
GT GLOBAL GROWTH FUNDS
INVESTMENT OBJECTIVES
AND POLICIES
- --------------------------------------------------------------------------------
SELECTION OF INVESTMENTS
Chancellor LGT Asset Management, Inc. (the "Manager") is the investment manager
of each Fund. In determining the appropriate distribution of investments among
various countries and geographic regions for the Funds, as applicable, the
Manager ordinarily considers the following factors: prospects for relative
economic growth between the different countries in which each Fund may invest;
expected levels of inflation; government policies influencing business
conditions; the outlook for currency relationships; and the range of the
individual investment opportunities available to international investors.
For investment purposes, an issuer typically is considered as domiciled in a
particular country if it is: (a) organized under the laws of, or has its
principal office in, a particular country; or (b) normally derives 50% or more
of its total revenues from business in that country, provided that, in the
Manager's view, the value of such issuer's securities will tend to reflect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Manager to be located in that country
may have substantial foreign operations or subsidiaries and/or export sales
exceeding in size the assets or sales in that country.
In analyzing companies for investment by each Fund, the Manager ordinarily looks
for one or more of the following characteristics: an above-average earnings
growth per share; high return on invested capital; a healthy balance sheet;
sound financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; efficient service; pricing flexibility; strength of management; and
general operating characteristics which will enable the companies to compete
successfully in their respective marketplaces. In certain countries,
governmental restrictions and other limitations on investment may affect the
maximum percentage of equity ownership in any one company by a Fund or the Funds
in the aggregate. In addition, in some instances only special classes of
securities may be purchased by foreigners and the market prices, liquidity and
rights with respect to those securities may vary from shares owned by nationals.
There may be times when, in the opinion of the Manager, prevailing market,
economic or political conditions warrant reducing the proportion invested in
equity securities of issuers domiciled in a Fund's Primary Investment Area (as
described in the Prospectus) below 65% of the Fund's total assets and increasing
the proportion held in cash (U.S. dollars, foreign currencies or multinational
currency units) or invested in debt securities or high quality money market
instruments issued by corporations, or the U.S., or a foreign government. A
portion of each Fund's assets normally will be held in cash (U.S. dollars,
foreign currencies or multinational currency units) or invested in foreign or
domestic high quality money market instruments pending investment of proceeds
from new sales of Fund shares, to provide for ongoing expenses and to satisfy
redemptions.
At this time, the Manager is not aware of the existence of any investment or
exchange control regulations which might substantially impair the operations of
the Funds as described in the Prospectus and this Statement of Additional
Information. Although restrictions may in the future make it undesirable to
invest in certain countries, the Manager does not believe that any current
repatriation restrictions would affect its decisions to invest in the countries
eligible for investment by any Fund. It should be noted, however, that this
situation could change at any time.
INVESTMENTS IN OTHER INVESTMENT COMPANIES
With respect to certain countries (e.g., Taiwan) investments by a Fund presently
may be made only by acquiring shares of other investment companies with local
governmental approval to invest in those countries. At such time as direct
investment in these countries is allowed, the Funds anticipate investing
directly in these markets. The Funds may also invest in the securities of
closed-end investment companies within the limits of the Investment Company Act
of 1940, as amended ("1940 Act"). These limitations currently provide that, in
part, each Fund may purchase shares of a closed-end investment company unless:
(a) such a purchase would cause a Fund to own more than 3% of the total
outstanding voting stock of the investment company or (b) such a purchase would
cause a Fund to have more than 5% of its assets invested in the investment
company or more than 10% of its assets invested in an aggregate of all such
investment companies. Investment in investment companies may involve the payment
of substantial premiums above the value of such companies' portfolio securities.
The Funds do not intend to invest in such vehicles or funds unless the Manager
determines that
STATEMENT OF ADDITIONAL INFORMATION PAGE 2
<PAGE>
GT GLOBAL GROWTH FUNDS
the potential benefits of such investments justify the payment of any applicable
premiums. The yield of such securities will be reduced by operating expenses of
such companies including payments to the investment managers of those investment
companies.
SAMURAI AND YANKEE BONDS
The International Fund, the Japan Fund, the Pacific Fund and the Worldwide Fund
may invest in yen-denominated bonds sold in Japan by non-Japanese issuers
("Samurai bonds"), and the Worldwide Fund and the America Fund may invest in
dollar-denominated bonds sold in the United States by non-U.S. issuers ("Yankee
bonds"). As compared with bonds issued in their countries of domicile, such bond
issues normally carry a higher interest rate but are less actively traded. It is
the policy of each Fund to invest in Samurai or Yankee bond issues only after
taking into account considerations of quality and liquidity, as well as yield.
These bonds are issued by governments which are members of the Organization for
Economic Cooperation and Development or have AAA ratings. None of the Funds has
invested in Samurai or Yankee bonds since 1982.
DEPOSITORY RECEIPTS
Each Fund other than the America Fund may hold securities of foreign issuers in
the form of American Depository Receipts ("ADRs"), American Depository Shares
("ADSs") and European Depository Receipts ("EDRs"), or other securities
convertible into securities of eligible European or Far Eastern issuers. These
securities may not necessarily be denominated in the same currency as the
securities for which they may be exchanged. ADRs and ADSs typically are issued
by an American bank or trust company and evidence ownership of underlying
securities issued by a foreign corporation. EDRs, which are sometimes referred
to as Continental Depository Receipts ("CDRs"), are issued in Europe typically
by foreign banks and trust companies and evidence ownership of either foreign or
domestic securities. Generally, ADRs and ADSs in registered form are designed
for use in United States securities markets and EDRs in bearer form are designed
for use in European securities markets. For purposes of a Fund's investment
policies, the Fund's investments in ADRs, ADSs and EDRs will be deemed to be
investments in the equity securities representing securities of foreign issuers
into which they may be converted.
ADR facilities may be established as either "unsponsored" or "sponsored." While
ADRs issued under these two types of facilities are in some respects similar,
there are distinctions between them relating to the rights and obligations of
ADR holders and the practices of market participants. A depository may establish
an unsponsored facility without participation by (or even necessarily the
acquiescence of) the issuer of the deposited securities, although typically the
depository requests a letter of non-objection from such issuer prior to the
establishment of the facility. Holders of unsponsored ADRs generally bear all
the costs of such facilities. The depository usually charges fees upon the
deposit and withdrawal of the deposited securities, the conversion of dividends
into U.S. dollars, the disposition of non-cash distributions, and the
performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass through voting
rights to ADR holders with respect to the deposited securities. Sponsored ADR
facilities are created in generally the same manner as unsponsored facilities,
except that the issuer of the deposited securities enters into a deposit
agreement with the depository. The deposit agreement sets out the rights and
responsibilities of the issuer, the depository and the ADR holders. With
sponsored facilities, the issuer of the deposited securities generally will bear
some of the costs relating to the facility (such as dividend payment fees of the
depository), although ADR holders continue to bear certain other costs (such as
deposit and withdrawal fees). Under the terms of most sponsored arrangements,
depositories agree to distribute notices of shareholder meetings and voting
instructions, and to provide shareholder communications and other information to
the ADR holders at the request of the issuer of the deposited securities. The
Funds may invest in sponsored and unsponsored ADRs.
WARRANTS OR RIGHTS
Warrants or rights may be acquired by a Fund in connection with other securities
or separately and provide the Fund with the right to purchase at a later date
other securities of the issuer. In addition, each Fund (except the America Fund)
has given an undertaking to the Texas Securities Commission that it will not
purchase warrants in excess of 10% of the Fund's net assets taken at cost or at
market value, whichever is lower. With respect to the America Fund, investments
in warrants may not exceed 5% of the value of the Fund's net assets, and not
more than 2% of such assets may be invested in warrants or rights which are not
listed on the New York or American Stock Exchange. Warrants or rights acquired
by the Fund in units or attached to securities will be deemed to be without
value for purpose of this restriction.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Fund may make secured loans
of portfolio securities amounting to not more than 30% of its total assets.
Securities loans are made to broker/dealers or institutional investors pursuant
to agreements requiring that the loans continuously be secured by collateral at
least equal at all times to the value of the securities lent, plus any accrued
interest, "marked to market" on a daily basis. The collateral received will
consist of cash,
STATEMENT OF ADDITIONAL INFORMATION PAGE 3
<PAGE>
GT GLOBAL GROWTH FUNDS
U.S. short-term government securities, bank letters of credit or such other
collateral as may be permitted under the Fund's investment policies and by
regulatory agencies and approved by the Company's Board of Trustees. The Funds
may pay reasonable administrative and custodial fees in connection with the
loans of their securities. While the securities loans are outstanding, the Funds
will continue to receive the equivalent of the interest or dividends paid by the
issuer on the securities, as well as interest on the investment of the
collateral or a fee from the borrower. If the borrower failed to maintain the
requisite amount of collateral, the loan would terminate automatically and the
Fund could use the collateral to replace the securities while holding the
borrower liable for any excess of the replacement cost over the value of the
collateral. Each Fund has a right to call each loan at any time and obtain the
securities on five business days' notice. The Funds will not have the right to
vote equity securities while they are being lent, but they retain the right to
call for the return of the loaned securities at any time on reasonable notice
and may call in a loan in anticipation of any important vote. The Funds also
will be able to call such loans if the Manager made the investment decision that
the loaned securities should be sold. On termination of a loan, the borrower
would be required to return the securities to the Fund and any gain or loss in
market price during the loan would inure to the Fund. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in recovery of the
securities or possible loss of rights in the collateral should the borrower fail
financially. In the event of the default or bankruptcy by such party, the Funds
would seek promptly to liquidate the collateral. To the extent that the proceeds
from any such sale of such collateral upon a default in the obligation to
repurchase were less than the repurchase price, the Funds would suffer a loss.
The law regarding the rights of the Funds is unsettled with respect to a
borrower becoming subject to bankruptcy or similar proceeding. Under these
circumstances, there may be a restriction on the Funds' ability to sell the
collateral and the Funds could suffer a loss. Loans, however, only will be made
to firms deemed by the Manager to be of good standing and will not be made
unless, in the judgment of the Manager, the consideration to be earned from such
loans would justify the risk.
COMMERCIAL BANK OBLIGATIONS
For the purposes of each Fund's investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks and of foreign banks
are obligations of the issuing bank and may be general obligations of the parent
bank. Such obligations, however, may be limited by the terms of a specific
obligation and by government regulation. As with investment in non-U.S.
securities in general, investments in the obligations of foreign branches of
U.S. banks and of foreign banks may subject the Funds to investment risks that
are different in some respects from those of investments in obligations of
domestic issuers. Although a Fund typically will acquire obligations issued and
supported by the credit of U.S. or foreign banks having total assets at the time
of purchase of $1 billion or more, this $1 billion figure is not an investment
policy or restriction of any Fund. For the purposes of calculation with respect
to the $1 billion figure, the assets of a bank will be deemed to include the
assets of its U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which a Fund purchases a security from
a bank or recognized securities dealer and simultaneously commits to resell that
security to the bank or dealer at an agreed-upon price, date and market rate of
interest unrelated to the coupon rate or maturity of the purchased security.
Although repurchase agreements carry certain risks not associated with direct
investments in securities, including possible decline in the market value of the
underlying securities and delays and costs to the Fund if the other party to the
repurchase agreement becomes bankrupt, the Funds intend to enter into repurchase
agreements only with banks and dealers believed by the Manager to present
minimal credit risks in accordance with guidelines approved by the Company's
Board of Trustees. The Manager reviews and monitors the creditworthiness of such
institutions under the Board's general supervision.
A Fund will invest only in repurchase agreements collateralized at all times in
an amount at least equal to the repurchase price plus accrued interest. To the
extent that the proceeds from any sale of such collateral upon a default in the
obligation to repurchase were less than the repurchase price, the Fund would
suffer a loss. If the financial institution which is party to the repurchase
agreement petitions for bankruptcy or otherwise becomes subject to bankruptcy or
other liquidation proceedings, there may be restrictions on the Fund's ability
to sell the collateral and the Fund could suffer a loss. However, with respect
to financial institutions whose bankruptcy or liquidation proceedings are
subject to the U.S. Bankruptcy Code, each Fund intends to comply with provisions
under the U.S. Bankruptcy Code that would allow it immediately to resell the
collateral. There is no limitation on the amount of a Fund's assets that may be
subject to repurchase agreements at any given time. A Fund will not enter into a
repurchase agreement with a maturity of more than seven days if, as a result,
more than 15% of the value of its net assets would be invested in such
repurchase agreements and other illiquid investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
Each Fund's borrowings will not exceed 33 1/3% of its total assets, i.e., each
Fund's total assets at all times will equal at least 300% of the amount of
outstanding borrowings. No Fund will purchase securities while borrowings are
outstanding. If market fluctuations in the value of a Fund's portfolio holdings
or other factors cause the ratio of the Fund's total assets to
STATEMENT OF ADDITIONAL INFORMATION PAGE 4
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GT GLOBAL GROWTH FUNDS
outstanding borrowings to fall below 300%, within three days (excluding Sundays
and holidays) of such event the Fund may be required to sell portfolio
securities to restore the 300% asset coverage, even though from an investment
standpoint such sales might be disadvantageous. Each Fund also may borrow up to
5% of its total assets for temporary or emergency purposes other than to meet
redemptions. Any borrowing by a Fund may cause greater fluctuation in the value
of its shares than would be the case if the Fund did not borrow.
Each Fund's fundamental investment limitations permit the Fund to borrow money
for leveraging purposes. Each Fund, however, currently is prohibited, pursuant
to a non-fundamental investment policy, from borrowing money in order to
purchase securities. Nevertheless, this policy may be changed in the future by
the Company's Board of Trustees. In the event that a Fund employs leverage in
the future, it would be subject to certain additional risks. Use of leverage
creates an opportunity for greater growth of capital but would exaggerate any
increases or decreases in a Fund's net asset value. When the income and gains on
securities purchased with the proceeds of borrowings exceed the costs of such
borrowings, a Fund's earnings or net asset value will increase faster than
otherwise would be the case; conversely, if such income and gains fail to exceed
such costs, a Fund's earnings or net asset value would decline faster than would
otherwise be the case.
Each Fund may enter into reverse repurchase agreements. A reverse repurchase
agreement is a borrowing transaction in which the Fund transfers possession of a
security to another party, such as a bank or broker/dealer in return for cash,
and agrees to repurchase the security in the future at an agreed upon price,
which includes an interest component. Each Fund also may engage in "roll"
borrowing transactions which involve the Fund's sale of Government National
Mortgage Association certificates or other securities together with a commitment
(for which a Fund may receive a fee) to purchase similar, but not identical,
securities at a future date. A Fund will maintain, in a segregated account with
a custodian, cash, U.S. government securities or other liquid securities in an
amount sufficient to cover its obligations under "roll" transactions and reverse
repurchase agreements with broker/dealers. No segregation is required for
reverse repurchase agreements with banks.
- --------------------------------------------------------------------------------
OPTIONS, FUTURES AND CURRENCY
STRATEGIES
- --------------------------------------------------------------------------------
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
The use of options, futures contracts and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.
(1) Successful use of most of these instruments depends upon the
Manager's ability to predict movements of the overall securities and
currency markets, which requires different skills than predicting changes in
the prices of individual securities. While the Manager is experienced in the
use of these instruments, there can be no assurance that any particular
strategy adopted will succeed.
(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of the
investments being hedged. For example, if the value of an instrument used in
a short hedge increased by less than the decline in value of the hedged
investment, the hedge would not be fully successful. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which the hedging instrument is traded. The effectiveness of
hedges using hedging instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
investments being hedged.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly
or partially offsetting the negative effect of unfavorable price movements
in the investments being hedged. However, hedging strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. For example, if a Fund entered into a
short hedge because the Manager projected a decline in the price of a
security in the Fund's portfolio, and the price of that security increased
instead, the gain from that increase might be wholly or partially offset by
a decline in the price of the hedging instrument. Moreover, if the price of
the hedging instrument declined by more than the increase in the price of
the security, the Fund could suffer a loss. In either such case, the Fund
would have been in a better position had it not hedged at all.
(4) As described below, a Fund might be required to maintain assets as
"cover," maintain segregated accounts or make margin payments when it takes
positions in instruments involving obligations to third parties (I.E.,
instruments
STATEMENT OF ADDITIONAL INFORMATION PAGE 5
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GT GLOBAL GROWTH FUNDS
other than purchased options). If the Fund were unable to close out its
positions in such instruments, it might be required to continue to maintain
such assets or accounts or make such payments until the position expired or
matured. The requirements might impair the Fund's ability to sell a
portfolio security or make an investment at a time when it would otherwise
be favorable to do so, or require that the Fund sell a portfolio security at
a disadvantageous time. The Fund's ability to close out a position in an
instrument prior to expiration or maturity depends on the existence of a
liquid secondary market or, in the absence of such a market, the ability and
willingness of the other party to the transaction ("contra party") to enter
into a transaction closing out the position. Therefore, there is no
assurance that any position can be closed out at a time and price that is
favorable to the Fund.
WRITING CALL OPTIONS
A Fund may write (sell) call options on securities, indices and currencies. Call
options generally will be written on securities and currencies that, in the
opinion of the Manager, are not expected to make any major price moves in the
near future but that, over the long term, are deemed to be attractive
investments for the Fund.
A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
style) or on (European style) a certain date (the expiration date). So long as
the obligation of the writer of a call option continues, he may be assigned an
exercise notice, requiring him to deliver the underlying security or currency
against payment of the exercise price. This obligation terminates upon the
expiration of the call option, or such earlier time at which the writer effects
a closing purchase transaction by purchasing an option identical to that
previously sold.
Portfolio securities or currencies on which call options may be written will be
purchased solely on the basis of investment considerations consistent with each
Fund's investment objectives. When writing a call option, a Fund, in return for
the premium, gives up the opportunity for profit from a price increase in the
underlying security or currency above the exercise price, and retains the risk
of loss should the price of the security or currency decline. Unlike one who
owns securities or currencies not subject to an option, a Fund has no control
over when it may be required to sell the underlying securities or currencies,
since most options may be exercised at any time prior to the option's
expiration. If a call option that a Fund has written expires, the Fund will
realize a gain in the amount of the premium; however, such gain may be offset by
a decline in the market value of the underlying security or currency during the
option period. If the call option is exercised, the Fund will realize a gain or
loss from the sale of the underlying security or currency, which will be
increased or offset by the premium received. The Fund does not consider a
security or currency covered by a call option to be "pledged" as that term is
used in the Fund's policy that limits the pledging or mortgaging of its assets.
Writing call options can serve as a limited short hedge because declines in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and a Fund will be obligated to
sell the security or currency at less than its market value.
The premium that a Fund receives for writing a call option is deemed to
constitute the market value of an option. The premium a Fund will receive from
writing a call option will reflect, among other things, the current market price
of the underlying investment, the relationship of the exercise price to such
market price, the historical price volatility of the underlying investment, and
the length of the option period. In determining whether a particular call option
should be written, the Manager will consider the reasonableness of the
anticipated premium and the likelihood that a liquid secondary market will exist
for those options.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit the Fund to write
another call option on the underlying security or currency with either a
different exercise price or expiration date or both.
The Funds will pay transaction costs in connection with the writing of options
and in entering into closing purchase contracts. Transaction costs relating to
options activity normally are higher than those applicable to purchases and
sales of portfolio securities.
The exercise price of the options may be below, equal to or above the current
market values of the underlying securities, indices or currencies at the time
the options are written. From time to time, a Fund may purchase an underlying
security or currency for delivery in accordance with the exercise of an option,
rather than delivering such security or currency from its portfolio. In such
cases, additional costs will be incurred.
A Fund will realize a profit or loss from a closing purchase transaction if the
cost of the transaction is less or more, respectively, than the premium received
from writing the option. Because increases in the market price of a call option
generally will reflect increases in the market price of the underlying security
or currency, any loss resulting from the
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GT GLOBAL GROWTH FUNDS
repurchase of a call option is likely to be offset in whole or in part by
appreciation of the underlying security or currency owned by the Fund.
WRITING PUT OPTIONS
The Funds may write put options on securities, indices and currencies. A put
option gives the purchaser of the option the right to sell, and the writer
(seller) the obligation to buy, the underlying security or currency at the
exercise price at any time until (American style) or on (European style) the
expiration date. The operation of put options in other respects, including their
related risks and rewards, is substantially identical to that of call options.
A Fund generally would write put options in circumstances where the Manager
wishes to purchase the underlying security or currency for the Fund's portfolio
at a price lower than the current market price of the security or currency. In
such event, the Fund would write a put option at an exercise price that, reduced
by the premium received on the option, reflects the lower price it is willing to
pay. Since the Fund also would receive interest on debt securities or currencies
maintained to cover the exercise price of the option, this technique could be
used to enhance current return during periods of market uncertainty. The risk in
such a transaction would be that the market price of the underlying security or
currency would decline below the exercise price, less the premium received.
Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and a Fund will be obligated
to purchase the security or currency at greater than its market value.
PURCHASING PUT OPTIONS
Each Fund may purchase put options on securities, indices and currencies. As the
holder of a put option, a Fund would have the right to sell the underlying
security or currency at the exercise price at any time until (American style) or
on (European style) the expiration date. A Fund may enter into closing sale
transactions with respect to such option, exercise such option or permit such
option to expire.
A Fund may purchase a put option on an underlying security or currency
("protective put") owned by the Fund in order to protect against an anticipated
decline in the value of the security or currency. Such hedge protection is
provided only during the life of the put option when the Fund, as the holder of
the put option, is able to sell the underlying security or currency at the put
exercise price regardless of any decline in the underlying security's market
price or currency's exchange value. For example, a put option may be purchased
in order to protect unrealized appreciation of a security or currency when the
Manager deems it desirable to continue to hold the security or currency because
of tax considerations. The premium paid for the put option and any transaction
costs would reduce any profit otherwise available for distribution when the
security or currency eventually is sold.
A Fund also may purchase put options at a time when the Fund does not own the
underlying security or currency. By purchasing put options on a security or
currency it does not own, a Fund seeks to benefit from a decline in the market
price of the underlying security or currency. If the put option is not sold when
it has remaining value, and if the market price of the underlying security or
currency remains equal to or greater than the exercise price during the life of
the put option, the Fund will lose its entire investment in the put option. In
order for the purchase of a put option to be profitable, the market price of the
underlying security or currency must decline sufficiently below the exercise
price to cover the premium and transaction costs, unless the put option is sold
in a closing sale transaction.
PURCHASING CALL OPTIONS
Each Fund may purchase call options on securities, indices and currencies. As
the holder of a call option, a Fund would have the right to purchase the
underlying security or currency at the exercise price at any time until
(American style) or on (European style) the expiration date. A Fund may enter
into closing sale transactions with respect to such option, exercise such option
or permit such option to expire.
Call options may be purchased by a Fund for the purpose of acquiring the
underlying security or currency for its portfolio. Utilized in this fashion, the
purchase of call options would enable a Fund to acquire the security or currency
at the exercise price of the call option plus the premium paid. At times, the
net cost of acquiring the security or currency in this manner may be less than
the cost of acquiring the security or currency directly. This technique also may
be useful to the Funds in purchasing a large block of securities that would be
more difficult to acquire by direct market purchases. As long as it holds such a
call option, rather than the underlying security or currency itself, a Fund is
partially protected from any unexpected decline in the market price of the
underlying security or currency and, in such event, could allow the call option
to expire, incurring a loss only to the extent of the premium paid for the
option.
Each Fund also may purchase call options on underlying securities or currencies
it owns in order to protect unrealized gains on call options previously written
by it. A call option could be purchased for this purpose where tax
considerations
STATEMENT OF ADDITIONAL INFORMATION PAGE 7
<PAGE>
GT GLOBAL GROWTH FUNDS
make it inadvisable to realize such gains through a closing purchase
transaction. Call options also may be purchased at times to avoid realizing
losses that would result in a reduction of a Fund's current return. For example,
where a Fund has written a call option on an underlying security or currency
having a current market value below the price at which such security or currency
was purchased by the Fund, an increase in the market price could result in the
exercise of the call option written by the Fund and the realization of a loss on
the underlying security or currency. Accordingly, the Fund could purchase a call
option on the same underlying security or currency, which could be exercised to
fulfill the Fund's delivery obligations under its written call (if it is
exercised). This strategy could allow the Fund to avoid selling the portfolio
security or currency at a time when it has an unrealized loss; however, the Fund
would have to pay a premium to purchase the call option plus transaction costs.
Aggregate premiums paid for put and call options will not exceed 5% of such
Fund's total assets at the time of purchase.
Each Fund may attempt to accomplish objectives similar to those involved in
using Forward Contracts by purchasing put or call options on currencies. A put
option gives a Fund as purchaser the right (but not the obligation) to sell a
specified amount of currency at the exercise price at any time until (American
style) or on (European style) the expiration date of the option. A call option
gives a Fund as purchaser the right (but not the obligation) to purchase a
specified amount of currency at the exercise price at any time until (American
style) or on (European style) the expiration date of the option. A Fund might
purchase a currency put option, for example, to protect itself against a decline
in the dollar value of a currency in which it holds or anticipates holding
securities. If the currency's value should decline against the dollar, the loss
in currency value should be offset, in whole or in part, by an increase in the
value of the put. If the value of the currency instead should rise against the
dollar, any gain to the Fund would be reduced by the premium it had paid for the
put option. A currency call option might be purchased, for example, in
anticipation of, or to protect against, a rise in the value against the dollar
of a currency in which the Fund anticipates purchasing securities.
Options may be either listed on an exchange or traded over-the-counter ("OTC").
Listed options are third-party contracts (I.E., performance of the obligations
of the purchaser and seller is guaranteed by the exchange or clearing
corporation), and have standardized strike prices and expiration dates. OTC
options are two-party contracts with negotiated strike prices and expiration
dates. A Fund will not purchase an OTC option unless the Manager believes that
daily valuations for such options are readily obtainable. OTC options differ
from exchange-traded options in that OTC options are transacted with dealers
directly and not through a clearing corporation (which guarantees performance).
Consequently, there is a risk of non-performance by the dealer. Since no
exchange is involved, OTC options are valued on the basis of an average of the
last bid prices obtained from dealers, unless a quotation from only one dealer
is available, in which case only that dealer's price will be used. In the case
of OTC options, there can be no assurance that a liquid secondary market will
exist for any particular option at any specific time.
The staff of the Securities and Exchange Commission ("SEC") considers purchased
OTC options to be illiquid securities. A Fund may also sell OTC options and, in
connection therewith, segregate assets or cover its obligations with respect to
OTC options written by the Fund. The assets used as cover for OTC options
written by a Fund will be considered illiquid unless the OTC options are sold to
qualified dealers who agree that the Fund may repurchase any OTC option it
writes at a maximum price to be calculated by a formula set forth in the option
agreement. The cover for an OTC option written subject to this procedure would
be considered illiquid only to the extent that the maximum repurchase price
under the formula exceeds the intrinsic value of the option.
A Fund's ability to establish and close out positions in exchange-listed options
depends on the existence of a liquid market. A Fund intends to purchase or write
only those exchange-traded options for which there appears to be a liquid
secondary market. However, there can be no assurance that such a market will
exist at any particular time. Closing transactions can be made for OTC options
only by negotiating directly with the contra party, or by a transaction in the
secondary market if any such market exists. Although a Fund will enter into OTC
options only with contra parties that are expected to be capable of entering
into closing transactions with the Fund, there is no assurance that the Fund
will in fact be able to close out an OTC option position at a favorable price
prior to expiration. In the event of insolvency of the contra party, the Fund
might be unable to close out an OTC option position at any time prior to its
expiration.
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When a Fund writes a call on an
index, it receives a premium and agrees that, prior to the expiration date, the
purchaser of the call, upon exercise of the call, will receive from the Fund an
amount of cash if the closing level of the index upon which the call is based is
greater than the exercise price of the call. The amount of cash is equal to the
difference between the closing price of the index and the exercise price of the
call times a specified multiple (the "multiplier"), which determines the total
STATEMENT OF ADDITIONAL INFORMATION PAGE 8
<PAGE>
GT GLOBAL GROWTH FUNDS
dollar value for each point of such difference. When a Fund buys a call on an
index, it pays a premium and has the same rights as to such call as are
indicated above. When a Fund buys a put on an index, it pays a premium and has
the right, prior to the expiration date, to require the seller of the put, upon
the Fund's exercise of the put, to deliver to the Fund an amount of cash if the
closing level of the index upon which the put is based is less than the exercise
price of the put, which amount of cash is determined by the multiplier, as
described above for calls. When a Fund writes a put on an index, it receives a
premium and the purchaser has the right, prior to the expiration date, to
require the Fund to deliver to it an amount of cash equal to the difference
between the closing level of the index and the exercise price times the
multiplier, if the closing level is less than the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Fund writes a call
on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. A Fund can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, a Fund cannot, as a practical matter, acquire and hold
a portfolio containing exactly the same securities as underlie the index and, as
a result, bears a risk that the value of the securities held will vary from the
value of the index.
Even if a Fund could assemble a securities portfolio that exactly reproduced the
composition of the underlying index, it still would not be fully covered from a
risk standpoint because of the "timing risk" inherent in writing index options.
When an index option is exercised, the amount of cash that the holder is
entitled to receive is determined by the difference between the exercise price
and the closing index level on the date when the option is exercised. As with
other kinds of options, the Fund, as the call writer, will not know that it has
been assigned until the next business day at the earliest. The time lag between
exercise and notice of assignment poses no risk for the writer of a covered call
on a specific underlying security, such as common stock, because there the
writer's obligation is to deliver the underlying security, not to pay its value
as of a fixed time in the past. So long as the writer already owns the
underlying security, it can satisfy its settlement obligations by simply
delivering it, and the risk that its value may have declined since the exercise
date is borne by the exercising holder. In contrast, even if the writer of an
index call holds securities that exactly match the composition of the underlying
index, it will not be able to satisfy its assignment obligations by delivering
those securities against payment of the exercise price. Instead, it will be
required to pay cash in an amount based on the closing index value on the
exercise date; and by the time it learns that it has been assigned, the index
may have declined, with a corresponding decline in the value of its securities
portfolio. This "timing risk" is an inherent limitation on the ability of index
call writers to cover their risk exposure by holding securities positions.
If a Fund has purchased an index option and exercises it before the closing
index value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Fund will be required to pay the difference
between the closing index value and the exercise price of the option (times the
applicable multiplier) to the assigned writer.
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
The Funds may enter into interest rate, currency or stock index futures
contracts ("Futures" or "Futures Contracts") as a hedge against changes in
prevailing levels of interest rates, currency exchange rates or stock price
levels in order to establish more definitely the effective return on securities
or currencies held or intended to be acquired by the Funds. The Funds' hedging
may include sales of Futures as an offset against the effect of expected
increases in interest rates, or decreases in currency exchange rates and stock
prices, and purchases of Futures as an offset against the effect of expected
declines in interest rates, or increases in currency exchange rates or stock
prices.
The Funds only will enter into Futures Contracts that are traded on futures
exchanges and are standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading thereon in the United States are
regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.
Although techniques other than sales and purchases of Futures Contracts could be
used to reduce the Funds' exposure to interest rate and currency exchange rate
fluctuations, the Funds may be able to hedge its exposure more effectively and
at a lower cost through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. A stock
index Futures Contract provides for the delivery, at a designated date, time and
place, of an amount of cash equal to a specified dollar amount times the
difference between the stock index value at the close of trading on the contract
and the price at which the Futures Contract is originally struck; no physical
delivery of stocks comprising the index is made. Brokerage fees are incurred
when a Futures Contract is bought or sold, and margin deposits must be
maintained at all times the Futures Contract is outstanding.
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Although Futures Contracts typically require future delivery of and payment for
financial instruments or currencies, Futures Contracts usually are closed out
before the delivery date. Closing out an open Futures Contract sale or purchase
is effected by entering into an offsetting Futures Contract purchase or sale,
respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, the Fund realizes a gain; if it is
more, the Fund realizes a loss. Conversely, if the offsetting sale price is more
than the original purchase price, the Fund realizes a gain; if it is less, the
Fund realizes a loss. The transaction costs also must be included in these
calculations. There can be no assurance, however, that the Funds will be able to
enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If a Fund is not able to enter into an offsetting
transaction, the Fund will continue to be required to maintain the margin
deposits on the Futures Contract.
As an example of an offsetting transaction, the contractual obligations arising
from the sale of one Futures Contract of September Deutschemarks on an exchange
may be fulfilled at any time before delivery under the Futures Contract is
required (I.E., on a specified date in September, the "delivery month") by the
purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance, the difference between the price at which the
Futures Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Fund.
The Funds' Futures transactions will be entered into for hedging purposes; that
is, Futures Contracts will be sold to protect against a decline in the price of
securities or currencies that the Funds own, or Futures Contracts will be
purchased to protect the Funds against an increase in the price of securities or
currencies it has committed to purchase or expects to purchase.
"Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by a Fund in order to initiate Futures trading and to maintain the
Fund's open positions in Futures Contracts. A margin deposit made when the
Futures Contract is entered into ("initial margin") is intended to ensure the
Fund's performance under the Futures Contract. The margin required for a
particular Futures Contract is set by the exchange on which the Futures Contract
is traded and may be significantly modified from time to time by the exchange
during the term of the Futures Contract.
Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Fund entered into the Futures Contract
will be made on a daily basis as the price of the underlying security, currency
or index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.
RISKS OF USING FUTURES CONTRACTS. The prices of Futures Contracts are
volatile and are influenced by, among other things, actual and anticipated
changes in interest and currency rates, which in turn are affected by fiscal and
monetary policies and national and international political and economic events.
There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in the Fund's portfolio
being hedged. The degree of imperfection of correlation depends upon
circumstances such as: variations in speculative market demand for Futures and
for securities or currencies, including technical influences in Futures trading;
and differences between the financial instruments being hedged and the
instruments underlying the standard Futures Contracts available for trading. A
decision of whether, when and how to hedge involves skill and judgment, and even
a well-conceived hedge may be unsuccessful to some degree because of unexpected
market behavior or interest or currency rate trends.
Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and option on Futures Contract prices during a single trading day. The
daily limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option prices occasionally have moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.
STATEMENT OF ADDITIONAL INFORMATION PAGE 10
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GT GLOBAL GROWTH FUNDS
If a Fund were unable to liquidate a Futures or option on Futures position due
to the absence of a liquid secondary market or the imposition of price limits,
it could incur substantial losses. The Fund would continue to be subject to
market risk with respect to the position. In addition, except in the case of
purchased options, the Fund would continue to be required to make daily
variation margin payments and might be required to maintain the position being
hedged by the Future or option or to maintain cash or securities in a segregated
account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities or currencies,
except that options on Futures Contracts give the purchaser the right, in return
for the premium paid, to assume a position in a Futures Contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the delivery of the Futures position by the writer of
the option to the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's Futures margin account, which represents the
amount by which the market price of the Futures Contract, at exercise, exceeds
(in the case of a call) or is less than (in the case of a put) the exercise
price of the option on the Futures Contract. If an option is exercised on the
last trading day prior to the expiration date of the option, the settlement will
be made entirely in cash equal to the difference between the exercise price of
the option and the closing level of the securities, currencies or index upon
which the Futures Contract is based on the expiration date. Purchasers of
options who fail to exercise their options prior to the exercise date suffer a
loss of the premium paid.
The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.
If a Fund writes an option on a Futures Contract, it will be required to deposit
initial and variation margin pursuant to requirements similar to those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.
The Funds may seek to close out an option position by selling an option covering
the same Futures Contract and having the same exercise price and expiration
date. The ability to establish and close out positions on such options is
subject to the maintenance of a liquid secondary market.
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
To the extent that a Fund enters into Futures Contracts, options on Futures
Contracts, and options on foreign currencies traded on a CFTC-regulated
exchange, in each case other than for BONA FIDE hedging purposes (as defined by
the CFTC), the aggregate initial margin and premiums required to establish those
positions (excluding the amount by which options are "in-the-money") will not
exceed 5% of the liquidation value of the Fund's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Fund has
entered into. In general, a call option on a Futures Contract is "in-the-money"
if the value of the underlying Futures Contract exceeds the strike, I.E.,
exercise, price of the call; a put option on a Futures Contract is
"in-the-money" if the value of the underlying Futures Contract is exceeded by
the strike price of the put. This guideline may be modified by the Company's
Board of Trustees without a shareholder vote. This limitation does not limit the
percentage of a Fund's assets at risk to 5%.
FORWARD CURRENCY CONTRACTS
A Forward Contract is an obligation, generally arranged with a commercial bank
or other currency dealer, to purchase or sell a currency against another
currency at a future date and price as agreed upon by the parties. A Fund may
either accept or make delivery of the currency at the maturity of the Forward
Contract. A Fund may also, if its contra party agrees, prior to maturity, enter
into a closing transaction involving the purchase or sale of an offsetting
contract.
STATEMENT OF ADDITIONAL INFORMATION PAGE 11
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GT GLOBAL GROWTH FUNDS
A Fund engages in forward currency transactions in anticipation of or to protect
itself against fluctuations in exchange rates. A Fund might sell a particular
foreign currency forward, for example, when it holds bonds denominated in a
foreign currency but anticipates, and seeks to be protected against, a decline
in the currency against the U.S. dollar. Similarly, a Fund might sell the U.S.
dollar forward when it holds bonds denominated in U.S. dollars but anticipates,
and seeks to be protected against, a decline in the U.S. dollar relative to
other currencies. Further, a Fund might purchase a currency forward to "lock in"
the price of securities denominated in that currency that it anticipates
purchasing.
Forward Contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. A Forward
Contract generally has no deposit requirement, and no commissions are charged at
any stage for trades. Each Fund will enter into such Forward Contracts with
major U.S. or foreign banks and securities or currency dealers in accordance
with guidelines approved by the Company's Board of Trustees.
Each Fund may enter into Forward Contracts either with respect to specific
transactions or with respect to the overall investments of the Fund. The precise
matching of the Forward Contract amounts and the value of specific securities
generally will not be possible because the future value of such securities in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the Forward Contract is entered into and
the date it matures. Accordingly, it may be necessary for a Fund to purchase
additional foreign currency on the spot (I.E., cash) market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a decision is
made to sell the security and make delivery of the foreign currency. Conversely,
it may be necessary to sell on the spot market some of the foreign currency the
Fund is obligated to deliver. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. Forward Contracts involve the risk that
anticipated currency movements will not be predicted accurately, causing a Fund
to sustain losses on these contracts and transaction costs.
At or before the maturity of a Forward Contract requiring a Fund to sell a
currency, the Fund either may sell a portfolio security and use the sale
proceeds to make delivery of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which the Fund will obtain, on the maturity date, the same amount of
the currency that it is obligated to deliver. Similarly, a Fund may close out a
Forward Contract requiring it to purchase a specified currency by, if its contra
party agrees, entering into a second contract entitling it to sell the same
amount of the same currency on the maturity date of the first contract. The Fund
would realize a gain or loss as a result of entering into such an offsetting
Forward Contract under either circumstance to the extent the exchange rate or
rates between the currencies involved moved between the execution dates of the
first contract and the offsetting contract.
The cost to a Fund of engaging in Forward Contracts varies with factors such as
the currencies involved, the length of the contract period and the market
conditions then prevailing. Because Forward Contracts usually are entered into
on a principal basis, no fees or commissions are involved. The use of Forward
Contracts does not eliminate fluctuations in the prices of the underlying
securities a Fund owns or intends to acquire, but it does establish a rate of
exchange in advance. In additional, while Forward Contracts limit the risk of
loss due to a decline in the value of the hedged currencies, they also limit any
potential gain that might result should the value of the currencies increase.
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
A Fund may use options on foreign currencies, Futures on foreign currencies,
options on Futures on foreign currencies and Forward Contracts to hedge against
movements in the values of the foreign currencies in which the Fund's securities
are denominated. Such currency hedges can protect against price movements in a
security that a Fund owns or intends to acquire that are attributable to changes
in the value of the currency in which it is denominated. Such hedges do not,
however, protect against price movements in the securities that are attributable
to other causes.
A Fund might seek to hedge against changes in the value of a particular currency
when no Futures Contract, Forward Contract or option involving that currency is
available or one of such contracts is more expensive than certain other
contracts. In such cases, the Fund may hedge against price movements in that
currency by entering into a contract on another currency or basket or
currencies, the values of which the Manager believes will have a positive
correlation to the value of the currency being hedged. The risk that movements
in the price of the contract will not correlate perfectly with movements in the
price of the currency being hedged is magnified when this strategy is used.
The value of Futures Contracts, options on Futures Contracts, Forward Contracts
and options on foreign currencies depends on the value of the underlying
currency relative to the U.S. dollar. Because foreign currency transactions
occurring in the interbank market might involve substantially larger amounts
than those involved in the use of Futures Contracts, Forward Contracts or
options, a Fund could be disadvantaged by dealing in the odd lot market
(generally consisting of transactions of less than $1 million) for the
underlying foreign currencies at prices that are less favorable than for round
lots.
STATEMENT OF ADDITIONAL INFORMATION PAGE 12
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GT GLOBAL GROWTH FUNDS
There is no systematic reporting of last sale information for foreign currencies
or any regulatory requirements that quotations available through dealers or
other market sources be firm or revised on a timely basis. Quotation information
generally is representative of very large transactions in the interbank market
and thus might not reflect odd-lot transactions where rates might be less
favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Futures contracts or options until they
reopen.
Settlement of Futures Contracts, Forward Contracts and options involving foreign
currencies might be required to take place within the country issuing the
underlying currency. Thus, a Fund might be required to accept or make delivery
of the underlying foreign currency in accordance with any U.S. or foreign
regulations regarding the maintenance of foreign banking arrangements by U.S.
residents and might be required to pay any fees, taxes and charges associated
with such delivery assessed in the issuing country.
COVER
Transactions using Forward Contracts, Futures Contracts and options (other than
options that a Fund has purchased) expose the Fund to an obligation to another
party. A Fund will not enter into any such transactions unless it owns either
(1) an offsetting ("covered") position in securities, currencies, or other
options, Forward Contracts or Futures Contracts, or (2) cash, receivables and
short-term debt securities with a value sufficient at all times to cover its
potential obligations not covered as provided in (1) above. Each Fund will
comply with SEC guidelines regarding cover for these instruments and, if the
guidelines so require, set aside cash, U.S. government securities or other
liquid securities.
Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of a Fund's assets is used for cover or otherwise set aside, it could affect
portfolio management or the Fund's ability to meet redemption requests or other
current obligations.
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RISK FACTORS
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POLITICAL, SOCIAL AND ECONOMIC RISKS. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, a Fund could lose its entire investment in
any such country.
RELIGIOUS, POLITICAL AND ETHNIC INSTABILITY. Certain countries in which a
Fund may invest may have groups that advocate radical religious or revolutionary
philosophies or support ethnic independence. Any disturbance on the part of such
individuals could carry the potential for widespread destruction or confiscation
of property owned by individuals and entities foreign to such country and could
cause the loss of the Fund's investment in those countries. Instability may also
result from, among other things: (i) authoritarian governments or military
involvement in political and economic decision-making, including changes in
government through extra-constitutional means; (ii) popular unrest associated
with demands for improved political, economic and social conditions; and (iii)
hostile relations with neighboring or other countries. Such political, social
and economic instability could disrupt the principal financial markets in which
a Fund invests and adversely affect the value of the Fund's assets.
ILLIQUID SECURITIES. A Fund may invest up to 15% of its net assets in
illiquid securities. Securities may be considered illiquid if a Fund cannot
reasonably expect within seven days to sell the securities for approximately the
amount at which the Fund values such securities. See "Investment Limitations."
The sale of illiquid securities if they can be sold at all, generally will
require more time and result in higher brokerage charges or dealer discounts and
other selling expenses than the sale of liquid securities such as securities
eligible for trading on U.S. securities exchanges or in the OTC markets.
Moreover, restricted securities, which may be illiquid for purposes of this
limitation, often sell, if at all, at a price lower than similar securities that
are not subject to restrictions on resale.
STATEMENT OF ADDITIONAL INFORMATION PAGE 13
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GT GLOBAL GROWTH FUNDS
Illiquid securities include those that are subject to restrictions contained in
the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, a Fund may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the Fund may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the Fund might obtain a less favorable price
than prevailed when it decided to sell.
Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended ("1933 Act"), including
private placements, repurchase agreements, commercial paper, foreign securities
and corporate bonds and notes. These instruments are often restricted securities
because the securities are sold in transactions not requiring registration.
Institutional investors generally will not seek to sell these instruments to the
general public, but instead will often depend either on an efficient
institutional market in which such unregistered securities can be readily resold
or on an issuer's ability to honor a demand for repayment. Therefore, the fact
that there are contractual or legal restrictions on resale to the general public
or certain institutions is not dispositive of the liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible restricted securities held by
a Fund, however, could affect adversely the marketability of such portfolio
securities and the Fund might be unable to dispose of such securities promptly
or at favorable prices.
With respect to liquidity determinations generally, the Company's Board of
Trustees has the ultimate responsibility for determining whether specific
securities, including restricted securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the 1933 Act, are liquid or
illiquid. The Board of Trustees has delegated the function of making day-to-day
determinations of liquidity to the Manager in accordance with procedures
approved by the Company's Board of Trustees. The Manager takes into account a
number of factors in reaching liquidity decisions, including, but not limited
to: (i) the frequency of trading in the security; (ii) the number of dealers who
make quotes for the security; (iii) the number of dealers who have undertaken to
make a market in the security; (iv) the number of other potential purchasers;
and (v) the nature of the security and how trading is effected (e.g., the time
needed to sell the security, how offers are solicited, and the mechanics of
transfer.) The Manager monitors the liquidity of securities in each Fund's
portfolio and periodically reports such determinations to the Company's Board of
Trustees. Moreover, certain securities, such as those subject to repatriation
restrictions of more than seven days, will generally be treated as illiquid.
FOREIGN INVESTMENT RESTRICTIONS. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as a Fund. These restrictions or
controls may at times limit or preclude investment in certain securities and may
increase the cost and expenses of the Fund. For example, certain countries
require prior governmental approval before investments by foreign persons may be
made, or may limit the amount of investment by foreign persons in a particular
company, or limit the investment by foreign persons to only a specific class of
securities of a company that may have less advantageous terms than securities of
the company available for purchase by nationals. Moreover, the national policies
of certain countries may restrict investment opportunities in issuers or
industries deemed sensitive to national interests. In addition, some countries
require governmental approval for the repatriation of investment income, capital
or the proceeds of securities sales by foreign investors. In addition, if there
is a deterioration in a country's balance of payments or for other reasons, a
country may impose restrictions on foreign capital remittances abroad. A Fund
could be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.
NON-UNIFORM CORPORATE DISCLOSURE STANDARDS AND GOVERNMENTAL
REGULATION. Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. In particular, the assets, liabilities, and
profits appearing on the financial statements of such a company may not reflect
its financial position or results of operations in the way they would be
reflected had such financial statements been prepared in accordance with U.S.
generally accepted accounting principles. Most of the securities held by a Fund
(other than the America Fund) will not be registered with the SEC or regulators
of any foreign country, nor will the issuers thereof be subject to the SEC's
reporting requirements. Thus, there will be less available information
concerning most foreign issuers of securities held by a Fund than is available
concerning U.S. issuers. In instances where the financial statements of an
issuer are not deemed to reflect accurately the financial situation of the
issuer, the Manager will take appropriate steps to evaluate the proposed
investment, which may include on-site inspection of the issuer, interviews with
STATEMENT OF ADDITIONAL INFORMATION PAGE 14
<PAGE>
GT GLOBAL GROWTH FUNDS
its management and consultations with accountants, bankers and other
specialists. There is substantially less publicly available information about
foreign companies than there are reports and ratings published about U.S.
companies and the U.S. government. In addition, where public information is
available, it may be less reliable than such information regarding U.S. issuers.
Issuers of securities in foreign jurisdictions are generally not subject to the
same degree of regulation as are U.S. issuers with respect to such matters as
restrictions on market manipulation, insider trading rules, shareholder proxy
requirements and timely disclosure of information.
CURRENCY FLUCTUATIONS. Because each Fund, other than the America Fund, under
normal circumstances will invest a substantial portion of its total assets in
the securities of foreign issuers which are denominated in foreign currencies,
the strength or weakness of the U.S. dollar against such foreign currencies will
account for a significant part of the Fund's investment performance. A decline
in the value of any particular currency against the U.S. dollar will cause a
decline in the U.S. dollar value of a Fund's holdings of securities and cash
denominated in such currency and, therefore, will cause an overall decline in
the Fund's net asset value and any net investment income and capital gains
derived from such securities to be distributed in U.S. dollars to shareholders
of the Fund. Moreover, if the value of the foreign currencies in which a Fund
receives its income declines relative to the U.S. dollar between the receipt of
the income and the making of Fund distributions, the Fund may be required to
liquidate securities in order to make distributions if the Fund has insufficient
cash in U.S. dollars to meet distribution requirements.
The rate of exchange between the U.S. dollar and other currencies is determined
by several factors, including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the relative movement of
interest rates and pace of business activity in the other countries and the
United States, and other economic and financial conditions affecting the world
economy.
Although each Fund values its assets daily in terms of U.S. dollars, the Funds
do not intend to convert their holdings of foreign currencies into U.S. dollars
on a daily basis. Each Fund will do so, from time to time, and investors should
be aware of the costs of currency conversion. Although foreign exchange dealers
do not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to a Fund at one
rate, while offering a lesser rate of exchange should a Fund desire to sell that
currency to the dealer.
ADVERSE MARKET CHARACTERISTICS. Securities of many foreign issuers may be
less liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the United
States, and foreign securities exchange transactions usually are subject to
fixed commissions, which generally are higher than negotiated commissions on
U.S. transactions. In addition, foreign securities exchange transactions may be
subject to difficulties associated with the settlement of such transactions.
Delays in settlement could result in temporary periods when assets of a Fund are
uninvested and no return is earned thereon. The inability of a Fund to make
intended security purchases due to settlement problems could cause the Fund to
miss attractive investment opportunities. Inability to dispose of a portfolio
security due to settlement problems either could result in losses to a Fund due
to subsequent declines in value of the portfolio security or, if a Fund has
entered into a contract to sell the security, could result in possible liability
to the purchaser. The Manager will consider such difficulties when determining
the allocation of each Fund's assets, although the Manager does not believe that
such difficulties will have a material adverse effect on the Funds' portfolio
trading activities.
The Funds may use foreign custodians, which may involve risks in addition to
those related to the use of U.S. custodians. Such risks include uncertainties
relating to: (i) determining and monitoring the financial strength, reputation
and standing of the foreign custodian; (ii) maintaining appropriate safeguards
to protect the Funds' investments and (iii) obtaining and enforcing judgments
against such custodians.
WITHHOLDING TAXES. A Fund's net investment income from foreign issuers may
be subject to non-U.S. withholding taxes by the foreign issuer's country,
thereby reducing the Fund's net investment income or delaying the receipt of
income where those taxes may be recaptured. See "Taxes."
SPECIAL CONSIDERATIONS AFFECTING EUROPE. The countries that are members of
the European Economic Community ("Common Market") (Belgium, Denmark, France,
Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain and
the United Kingdom) eliminated certain import tariffs and quotas, and other
trade barriers with respect to one another over the past several years. The
Manager believes that this deregulation should improve the prospects for
economic growth in many European countries. Among other things, the deregulation
could enable companies domiciled in one country to avail themselves of lower
labor costs existing in other countries. In addition, this deregulation could
benefit companies domiciled in one country by opening additional markets for
their goods and services in other countries. Since, however, it is not clear
what the exact form or effect of these Common Market reforms will be on business
STATEMENT OF ADDITIONAL INFORMATION PAGE 15
<PAGE>
GT GLOBAL GROWTH FUNDS
in Western Europe or the emerging European markets, it is impossible to predict
the long-term impact of the implementation of these programs on the securities
owned by the Fund.
SPECIAL CONSIDERATIONS AFFECTING JAPAN AND HONG KONG. Investment in
securities of issuers domiciled in Japan and Hong Kong entails special
considerations. Overseas trade is important to Japan's economy. Japan has few
natural resources and must export to pay for its imports of these basic
requirements. Because of the concentration of Japanese exports in highly visible
products, Japan has had difficult relations with its trading partners,
particularly the U.S., where the trade imbalance is the greatest. It is possible
that trade sanctions or other protectionist measures could impact Japan
adversely in both the short and the long term. The Japanese securities markets
are less regulated than those in the United States. Evidence has emerged from
time to time of distortion of market prices to serve political or other
purposes. Shareholders' rights are not always equally enforced.
Hong Kong is a British colony which will transfer sovereignty to the Peoples
Republic of China in 1997. China has espoused policies antagonistic to free
enterprise capitalism and democracy. There can be no guarantee that property
rights will continue to be safeguarded in Hong Kong after 1997, although
recently, China has moved toward free enterprise, and has established stock
exchanges of its own.
SPECIAL CONSIDERATIONS AFFECTING EMERGING MARKETS. Investing in the
securities of issuers domiciled in emerging markets, including the markets of
Latin America and certain Asian markets such as Taiwan, Malaysia and Indonesia,
may entail special risks relating to the potential political and economic
instability and the risks of expropriation, nationalization, confiscation or the
imposition of restrictions on foreign investment, convertibility of currencies
into U.S. dollars and on repatriation of capital invested. In the event of such
expropriation, nationalization or other confiscation by any country, a Fund
could lose its entire investment in any such country.
Emerging securities markets are substantially smaller, less developed, less
liquid and more volatile than the major securities markets. The limited size of
emerging securities markets and limited trading volume in issuers compared to
the volume of trading in U.S. securities could cause prices to be erratic for
reasons apart from factors that affect the quality of the securities. For
example, limited market size may cause prices to be unduly influenced by traders
who control large positions. Adverse publicity and investors' perceptions,
whether or not based on fundamental analysis, may decrease the value and
liquidity of portfolio securities in these markets. In addition, securities
traded in certain emerging markets may be subject to risks due to the
inexperience of financial intermediaries, a lack of modern technology, the lack
of a sufficient capital base to expand business operations, and the possibility
of permanent or temporary termination of trading.
Settlement mechanisms in emerging securities markets may be less efficient and
less reliable than in more developed markets. In such emerging securities
markets there may be share registration and delivery delays or failures.
Most Latin American countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may continue to have negative effects on the economies and securities
markets of certain Latin American countries.
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INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
Each Fund has adopted the following fundamental investment limitations as
fundamental policies which (unless otherwise noted) may not be changed without
approval by the affirmative vote of the lesser of (i) 67% of that Fund's shares
represented at a meeting at which more than 50% of the outstanding shares are
represented, or (ii) more than 50% of the Fund's outstanding shares. No Fund
may:
(1) Invest in companies for the purpose of exercising control or
management;
(2) Purchase or sell real estate; provided that a Fund may invest in
securities secured by real estate or interests therein or issued by
companies that invest in real estate or interests therein;
(3) Purchase or sell interests in oil, gas or other mineral exploration
or development programs, except that the Fund may invest in the securities
of companies that engage in these activities;
STATEMENT OF ADDITIONAL INFORMATION PAGE 16
<PAGE>
GT GLOBAL GROWTH FUNDS
(4) Purchase or sell commodities or commodity contracts, except that the
Fund may purchase and sell financial and currency futures contracts and
options thereon, and may purchase and sell currency forward contracts,
options on foreign currencies and may otherwise engage in other transactions
in foreign currencies;
(5) Mortgage, pledge or in any other manner transfer as security for any
indebtedness, any of its assets except to secure permitted borrowings.
Collateral arrangements with respect to initial or variation margin for
futures contracts will not be deemed to be a pledge of a Fund's assets;
(6) Borrow money in excess of 33 1/3% of the Fund's total assets
(including the amount borrowed), less all liabilities and indebtedness
(other than borrowing). Transactions involving options, futures contracts,
options on futures contracts and forward currency contracts, and collateral
arrangements relating thereto will not be deemed to be borrowings;
(7) Purchase securities on margin or effect short sales, except that a
Fund may obtain such short-term credits as may be necessary for the
clearance of purchases or sales of securities and except in connection with
the use of options, futures contracts, options thereon or forward currency
contracts. The Funds may make deposits of margin in connection with futures
and forward contracts and options thereon;
(8) Participate on a joint or a joint and several basis in any trading
account in securities. (The "bunching" of orders for the sale or purchase of
marketable portfolio securities with other accounts under the management of
the Manager to save brokerage costs or average prices among them is not
deemed to result in a securities trading account);
(9) Make loans, except that the Fund may purchase debt securities and
enter into repurchase agreements and make loans of portfolio securities;
(10) Purchase or retain the securities of an issuer if, to the Fund's
knowledge, one or more of the Trustees or officers of the Company or the
Manager individually own beneficially more than 1/2 of 1% of the securities
of such issuer and together own beneficially more than 5% of such
securities;
(11) Underwrite securities of other issuers, except to the extent that,
in connection with the disposition of portfolio securities, the Fund may be
deemed an underwriter under federal or state securities laws; and
(12) Invest more than 25% of the value of the Fund's total assets in
securities of issuers conducting their principal business activities in any
one industry, except that this limitation shall not apply to securities
issued or guaranteed as to principal and interest by the U.S. government or
any of its agencies or instrumentalities.
For purposes of the concentration policy contained in limitation (12) above,
each Fund intends to comply with the SEC staff position that securities issued
or guaranteed as to principal and interest by any single foreign government or
any supranational organization are considered to be securities of issuers in the
same industry.
The following investment restrictions of each Fund are not fundamental policies
and may be changed by vote of the Company's Board of Trustees without
shareholder approval. Each Fund may not:
(1) Invest more than 15% of its net assets in illiquid securities, a
term which means securities that cannot be disposed of within seven days in
the normal course of business at approximately the amount at which the Fund
has valued the securities and includes, among other things, repurchase
agreements maturing in more than seven days;
(2) Invest more than 5% of its assets in securities of companies which,
together with any predecessors, have been in operation for less than three
years;
(3) Borrow money except for temporary or emergency purposes (not for
leveraging) not in excess of 33 1/3% of the value of the Fund's total
assets; or
(4) Enter into a futures contract, an option on a futures contract, or
an option on foreign currency traded on a CFTC-regulated exchange, in each
case other than for BONA FIDE hedging purposes (as defined by the CFTC), if
the aggregate initial margin and premiums required to establish all of these
positions (excluding the amount by which options are "in-the-money") exceeds
5% of the liquidation value of the Fund's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Fund
has entered into.
----------------------------
A Fund will not knowingly exercise rights or otherwise acquire securities when
to do so would jeopardize the Fund's status under the 1940 Act as a diversified
investment company. If a percentage restriction on investment or utilization of
assets in a fundamental policy or restriction is adhered to at the time an
investment is made, a later change in percentage
STATEMENT OF ADDITIONAL INFORMATION PAGE 17
<PAGE>
GT GLOBAL GROWTH FUNDS
ownership of a security or kind of securities resulting from changing market
values or a similar type of event will not be considered a violation of a Fund's
investment policies or restrictions. A Fund may exchange securities, exercise
conversion or subscription rights, warrants, or other rights to purchase common
stock or other equity securities and may hold, except to the extent limited by
the 1940 Act, any such securities so acquired without regard to the Fund's
investment policies and restrictions. The original cost of the securities so
acquired will be included in any subsequent determination of a Fund's compliance
with the investment percentage limitations referred to above and in the
Prospectus.
Investors should refer to the Prospectus for further information with respect to
each Fund's investment objective, which may not be changed without the approval
of shareholders, and other investment policies, techniques and limitations which
may be changed without shareholder approval.
STATEMENT OF ADDITIONAL INFORMATION PAGE 18
<PAGE>
GT GLOBAL GROWTH FUNDS
EXECUTION OF PORTFOLIO
TRANSACTIONS
- --------------------------------------------------------------------------------
Subject to policies established by the Company's Board of Trustees, the Manager
is responsible for the execution of the Funds' portfolio transactions and the
selection of brokers/dealers who execute such transactions on behalf of the
Funds. In executing portfolio transactions, the Manager seeks the best net
results for each Fund, taking into account such factors as the price (including
the applicable brokerage commission or dealer spread), size of the order,
difficulty of execution and operational facilities of the firm involved.
Although the Manager generally seeks reasonably competitive commission rates and
spreads, payment of the lowest commission or spread is not necessarily
consistent with the best net results. While the Funds may engage in soft dollar
arrangements for research services, as described below, the Funds have no
obligation to deal with any broker/dealer or group of broker/dealers in the
execution of portfolio transactions.
Consistent with the interests of the Funds, the Manager may select brokers to
execute the Funds' portfolio transactions on the basis of the research services
they provide to the Manager for its use in managing the Funds and its other
advisory accounts. Such services may include furnishing analysis, reports and
information concerning issuers, industries, securities, geographic regions,
economic factors and trends, portfolio strategy, and performance of accounts;
and effecting securities transactions and performing functions incidental
thereto (such as clearance and settlement). Research and brokerage services
received from such broker is in addition to, and not in lieu of, the services
required to be performed by the Manager under the Management Contract (defined
below). A commission paid to such broker may be higher than that which another
qualified broker would have charged for effecting the same transaction, provided
that the Manager determines in good faith that such commission is reasonable in
terms either of that particular transaction or the overall responsibility of the
Manager to the Funds and its other clients and that the total commissions paid
by each Fund will be reasonable in relation to the benefits received by the
Funds over the long term. Research services may also be received from dealers
who execute Fund transactions in over-the-counter markets.
The Manager may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by the Fund toward payment of the Fund's expenses, such as
transfer agent and custodian fees.
Investment decisions for each Fund and for other investment accounts managed by
the Manager are made independently of each other in light of differing
conditions. However, the same investment decision occasionally may be made for
two or more of such accounts, including one or more Funds. In such cases,
simultaneous transactions may occur. Purchases or sales are then allocated as to
price or amount in a manner deemed fair and equitable to all accounts involved.
While in some cases this practice could have a detrimental effect upon the price
or value of the security as far as a Fund is concerned, in other cases the
Manager believes that coordination and the ability to participate in volume
transactions will be beneficial to the Funds.
Under a policy adopted by the Company's Board of Trustees, and subject to the
policy of obtaining the best net results, the Manager may consider a
broker/dealer's sale of the shares of the Funds and the other funds for which
the Manager serves as investment manager and/or administrator in selecting
broker/dealers for the execution of portfolio transactions. This policy does not
imply a commitment to execute portfolio transactions through all broker/dealers
that sell shares of the Funds and such other funds.
Each Fund contemplates purchasing most foreign equity securities in OTC markets
or stock exchanges located in the countries in which the respective principal
offices of the issuers of the various securities are located, if that is the
best available market. The fixed commissions paid in connection with most such
foreign stock transactions generally are higher than negotiated commissions on
United States transactions. There generally is less government supervision and
regulation of foreign stock exchanges and brokers than in the United States.
Foreign security settlements may in some instances be subject to delays and
related administrative uncertainties.
Foreign equity securities may be held by a Fund in the form of ADRs, ADSs, EDRs,
CDRs or securities convertible into foreign equity securities. ADRs, ADSs, EDRs
and CDRs may be listed on stock exchanges, or traded in the OTC markets in the
United States or Europe, as the case may be. ADRs, like other securities traded
in the United States, will be subject to negotiated commission rates. The
foreign and domestic debt securities and money market instruments in which the
Funds may invest are generally traded in the OTC markets.
STATEMENT OF ADDITIONAL INFORMATION PAGE 19
<PAGE>
GT GLOBAL GROWTH FUNDS
Each Fund contemplates that, consistent with the policy of obtaining the best
net results, brokerage transactions may be conducted through certain companies
that are members of Liechtenstein Global Trust. The Company's Board of Trustees
has adopted procedures in conformity with Rule 17e-1 under the 1940 Act to
ensure that all brokerage commissions paid to such affiliates are reasonable and
fair in the context of the market in which they are operating. Any such
transactions will be effected and related compensation paid only in accordance
with applicable SEC regulations. For the fiscal year ended December 31, 1994,
the Europe Fund paid to LGT Bank in Liechtenstein (Deutschland) GmbH and LGT
Bank in Liechtenstein AG, each an "affiliated" broker as defined in the 1940
Act, aggregate brokerage commissions of $58,346 and $26,599, respectively, for
transactions involving purchases and sales of portfolio securities which
represented 2.67% and 1.22%, respectively, of the total brokerage commissions
paid by the Europe Fund, and 1.20% and 0.71%, respectively, of the aggregate
dollar amount of transactions involving payment of commissions by the Europe
Fund.
For the fiscal year ended December 31, 1995, the Europe Fund paid to LGT Bank in
Liechtenstein AG and LGT Bank in Liechtenstein (Zurich), each an "affiliated"
broker, aggregate brokerage commissions of $9,529 and $16,250, respectively, for
transactions involving purchases and sales of portfolio securities which
represented 0.25% and 0.42%, respectively, of the total brokerage commissions
paid by the Europe Fund, and 0% and 0%, respectively, of the aggregate dollar
amount of transactions involving payment of commissions by the Europe Fund.
For the fiscal year ended December 31, 1995, the International Fund paid to LGT
Bank in Liechtenstein AG aggregate brokerage commissions of $1,475 for
transactions involving purchases and sales of portfolio securities which
represented 0.08% of the total brokerage commissions paid by the International
Fund, and 0% of the aggregate dollar amount of transactions involving payment of
commissions by the International Fund.
Aggregate brokerage commissions paid by the Funds for their three most recent
fiscal years were:
<TABLE>
<CAPTION>
FUND 1995 1994 1993
- -------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
America
Fund..................................................................... $ 878,569 1,082,311 185,402
Europe
Fund.................................................................... $ 3,877,784 2,185,831 1,935,775
International
Fund.................................................................... $ 1,889,228 1,090,763 2,163,843
Japan
Fund.................................................................... $ 440,117 838,666 133,436
Pacific
Fund.................................................................... $ 3,310,887 2,746,761 3,832,898
Worldwide
Fund.................................................................... $ 1,007,167 954,962 711,034
</TABLE>
PORTFOLIO TRADING AND TURNOVER
Although the Funds generally do not intend to trade for short-term profits, the
securities in a Fund's portfolio will be sold whenever the Manager believes it
is appropriate to do so, without regard to the length of time a particular
security may have been held. Portfolio turnover rate is calculated by dividing
the lesser of sales or purchases of portfolio securities by each Fund's average
month-end portfolio sales, excluding short-term investments. For purposes of
this calculation, portfolio securities exclude purchases and sales of debt
securities having a maturity at the date of purchase of one year or less. The
portfolio turnover rate will not be a limiting factor when management deems
portfolio changes appropriate. The portfolio turnover rates for the fiscal years
ended December 31, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
America Fund.............................................................................. 71% 102%
Europe Fund............................................................................... 108 91
International Fund........................................................................ 75 96
Japan Fund................................................................................ 67 49
Pacific Fund.............................................................................. 63 87
Worldwide Fund............................................................................ 113 86
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION PAGE 20
<PAGE>
GT GLOBAL GROWTH FUNDS
TRUSTEES AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The Company's Trustees and Executive Officers are listed below.
<TABLE>
<CAPTION>
Name, Position(s) with the Principal Occupations and Business
Company and Address Experience for Past 5 Years
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
David A. Minella,* 43 Chairman, the Manager since October 1996; Director, Liechtenstein Global Trust (holding
Trustee, Chairman of the Board and company of the various international LGT companies) since 1990; President, Asset
President Management Division, Liechtenstein Global Trust since 1995; Director and President, LGT
50 California Street Asset Management Holdings, Inc. ("LGT Asset Management Holdings") since 1988; Director and
San Francisco, CA 94111 President, the Manager since 1989; Director, GT Global since 1987 and President, GT Global
from 1987 to 1995; Director, GT Services since 1990; President, GT Services from 1990 to
1995; Director, G.T. Global Insurance Agency, Inc. ("G.T. Insurance") since 1992; and
President, G.T. Insurance from 1992 to 1995. Mr. Minella also is a director or trustee of
each of the other investment companies registered under the 1940 Act that is managed or
administered by the Manager.
C. Derek Anderson, 54 Chief Executive Officer, Anderson Capital Management, Inc.; Chairman and Chief Executive
Trustee Officer, Plantagenet Holdings, Ltd. from 1991 to present; Director, Munsingwear, Inc.; and
220 Sansome Street Director, American Heritage Group Inc. and various other companies. Mr. Anderson also is a
Suite 400 director or trustee of each of the other investment companies registered under the 1940
San Francisco, CA 94104 Act that is managed or administered by the Manager.
Frank S. Bayley, 55 Partner with Baker & McKenzie (a law firm); Director and Chairman, C.D. Stimson Company (a
Trustee private investment company); and Trustee, Seattle Art Museum. Mr. Bayley also is a
Two Embarcadero Center director or trustee of each of the other investment companies registered under the 1940
Suite 2400 Act that is managed or administered by the Manager.
San Francisco, CA 94111
Arthur C. Patterson, 52 Managing Partner, Accel Partners (a venture capital firm). He also serves as a director of
Trustee various computing and software companies. Mr. Patterson also is a director or trustee of
One Embarcadero Center each of the other investment companies registered under the 1940 Act that is managed or
Suite 3820 administered by the Manager.
San Francisco, CA 94111
Ruth H. Quigley, 59 Private investor; and President, Quigley Friedlander & Co., Inc. (a financial advisory
Trustee services firm) from 1984 to 1986. Ms. Quigley also is a director or trustee of each of the
1055 California Street other investment companies registered under the 1940 Act that is managed or administered
San Francisco, CA 94108 by the Manager.
F. Christian Wignall, 39 Director, LGT Asset Management Holdings since 1989; Senior Vice President, Chief
Vice President and Chief Investment Investment Officer -- Global Equities and Director, the Manager since 1987; and Chairman,
Officer -- Investment Policy Committee of the affiliated international LGT companies since 1990.
Global Equities
50 California Street
San Francisco, CA 94111
</TABLE>
- --------------
* Mr. Minella is an "interested person" of the Company as defined by the 1940
Act due to his affiliation with the LGT companies.
STATEMENT OF ADDITIONAL INFORMATION PAGE 21
<PAGE>
GT GLOBAL GROWTH FUNDS
<TABLE>
<CAPTION>
Name, Position(s) with the Principal Occupations and Business
Company and Address Experience for Past 5 Years
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
James R. Tufts, 37 President, GT Services since 1995; Senior Vice President -- Finance and
Vice President and Chief Administration, GT Global, GT Services and G.T. Insurance, from 1994 to
Financial Officer 1995; Senior Vice President -- Finance and Administration, LGT Asset
50 California Street Management Holdings and the Manager since 1994; Vice President --
San Francisco, CA 94111 Finance, LGT Asset Management Holdings, the Manager, GT Global and GT
Services from 1990 to 1994; Vice President -- Finance, G.T. Insurance
from 1992 to 1994; and a Director of the Manager, GT Global and GT
Services since 1991.
Kenneth W. Chancey, 50 Vice President -- Mutual Fund Accounting, the Manager since 1992; and
Vice President and Principal Vice President, Putnam Fiduciary Trust Company from 1989 to 1992.
Accounting Officer
50 California Street
San Francisco, CA 94111
Helge K. Lee, 48 Senior Vice President, General Counsel and Secretary, LGT Asset
Vice President and Secretary Management Holdings, the Manager, GT Global, GT Services and G.T.
50 California Street Insurance since February 1996. Senior Vice President, Secretary and
San Francisco, CA94111 General Counsel, LGT Asset Management Holdings, the Manager, GT Global,
GT Services and G.T. Insurance from May 1994 to February 1996; Senior
Vice President, General Counsel and Secretary, Strong/Corneliuson
Management, Inc. and Secretary, each of the Strong Funds from October
1991 through May 1994; and shareholder in the law firm of Godfrey &
Kahn, S.C., Milwaukee, Wisconsin for more than five years prior to
October 1991.
</TABLE>
The Board of Trustees has a Nominating and Audit Committee, comprised of Ms.
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Company and its
Funds and recommending firms to serve as independent auditors of the Company.
Each of the Trustees and officers of the Company is also a Director and officer
of G.T. Investment Portfolios, Inc., G.T. Investment Funds, Inc. and G.T. Global
Developing Markets Fund, Inc. and a Trustee and officer of G.T. Greater Europe
Fund, G.T. Global Variable Investment Trust, G.T. Global Variable Investment
Series, Global High Income Portfolio and Global Investment Portfolio, which also
are registered investment companies managed by the Manager. Each Trustee and
Officer serves in total as a Director and or Trustee and Officer, respectively,
of 10 registered investment companies with 40 series managed or administered by
the Manager. The Company pays each Trustee who is not a director, officer or
employee of the Manager or any affiliated company $5,000 per annum plus $300 per
Fund for each meeting of the Board attended by the Trustee, and reimburses
travel and other expenses incurred in connection with attendance at such
meetings. Other Trustees and officers receive no compensation or expense
reimbursements from the Company. For the fiscal year ended December 31, 1995,
the Company paid Mr. Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley, who
are not directors, officers or employees of the Manager or any affiliated
company, total compensation of $24,342, $23,244, $21,933 and $23,012,
respectively, for their services as Trustees. For the year ended December 31,
1995, Mr. Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley received total
compensation of $99,677, $95,369, $92,140 and $94,458, respectively, from the 40
investment companies managed or administered by the Manager for which he or she
serves as a Director or Trustee. Fees and expenses disbursed to the Trustees
contained no accrued or payable pension or retirement benefits. As of the date
of this Statement of Additional Information, the officers and Trustees and their
families as a group owned in the aggregate beneficially or of record less than
1% of the outstanding shares of any Fund.
STATEMENT OF ADDITIONAL INFORMATION PAGE 22
<PAGE>
GT GLOBAL GROWTH FUNDS
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
Chancellor LGT Asset Management, Inc. (the "Manager") serves as each Fund's
investment manager and administrator under an Investment Management and
Administration Contract ("Management Contract") between the Company and the
Manager. As investment manager and administrator, the Manager makes all
investment decisions for each Fund and administers each Fund's affairs. Among
other things, the Manager furnishes the services and pays the compensation and
travel expenses of persons who perform the executive, administrative, clerical
and bookkeeping functions of the Company and the Funds, and provides suitable
office space, and necessary small office equipment and utilities. The America
Fund pays the Manager investment management and administration fees, computed
daily and paid monthly, based on its average daily net assets, at the annualized
rate of .725% on the first $500 million, .70% on the next $500 million, .675% on
the next $500 million, and .65% on amounts thereafter. Each of the other Funds
pay the Manager investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .975% on the first $500 million, .95% on the next $500 million, .925% on the
next $500 million, and .90% on amounts thereafter. Prior to July 1, 1993, each
Fund other than the America Fund paid investment management and administration
fees to the Manager at the annualized rate of 1.00% of each Fund's average daily
net assets. The America Fund previously paid investment management and
administration fees to the Manager at the annualized rate of 0.75% of the Fund's
average daily net assets.
The Management Contract may be renewed for additional one-year terms with
respect to each Fund, provided that any such renewal has been specifically
approved at least annually by: (i) the Company's Board of Trustees, or by the
vote of a majority of the Fund's outstanding voting securities (as defined in
the 1940 Act), and (ii) a majority of Trustees who are not parties to the
Management Contract or "interested persons" of any such party (as defined in the
1940 Act), cast in person at a meeting called for the specific purpose of voting
on such approval. With respect to any Fund either the Company or the Manager may
terminate the Management Contract without penalty upon sixty (60) days' written
notice to the other party. The Management Contract terminates automatically in
the event of its assignment (as defined in the 1940 Act).
Under the Management Contract, the Manager has agreed to reimburse each Fund if
that Fund's annual ordinary expenses exceed the most stringent limits prescribed
by any state in which the Fund's shares are offered for sale. Currently, the
most restrictive applicable limitation provides that a Fund's expenses may not
exceed an annual rate of 2 1/2% of the first $30 million of average net assets,
2% of the next $70 million of average net assets and 1 1/2% of assets in excess
of that amount. Expenses which are not subject to this limitation are interest,
taxes, brokerage commissions, the amortization of organizational expenses,
payments of distribution fees, in part, and extraordinary expenses. In addition,
the Manager and GT Global voluntarily have undertaken to limit the expenses of
each Fund, other than those of the America Fund (exclusive of brokerage
commissions, taxes, interest and extraordinary expenses) to the maximum annual
level of 2.25% and 2.90% of the average daily net assets of each Fund's Class A
and Class B shares, respectively. Similarly, the Manager and GT Global have
undertaken to limit the America Fund's expenses (exclusive of brokerage
commissions, taxes, interest and extraordinary expenses) to the maximum annual
level of 2.00% and 2.65% of the average daily net assets of the Fund's Class A
and Class B shares, respectively.
The amounts of investment management and administration fees paid by each Fund
to the Manager during the Funds' three most recent fiscal years were as follows:
<TABLE>
<CAPTION>
FUND 1995 1994 1993
- ----------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
America Fund..................................................... $ 4,425,913 1,283,893 1,058,534
Europe Fund...................................................... $ 6,161,265 8,319,087 7,839,132
International Fund............................................... $ 4,027,923 5,368,669 4,488,221
Japan Fund....................................................... $ 1,167,576 1,345,064 1,058,002
Pacific Fund..................................................... $ 5,176,333 5,563,245 3,820,147
Worldwide Fund................................................... $ 2,050,983 3,355,681 1,665,771
</TABLE>
DISTRIBUTION SERVICES
Each Fund's Class A and Class B shares are offered continuously through the
Funds' principal underwriter and distributor, GT Global, on a "best efforts"
basis pursuant to separate Distribution Contracts between the Company and GT
Global.
STATEMENT OF ADDITIONAL INFORMATION PAGE 23
<PAGE>
GT GLOBAL GROWTH FUNDS
As described in the Prospectus, the Company has adopted separate Distribution
Plans with respect to Class A and Class B shares of the Funds in accordance with
the provisions of Rule 12b-1 under the 1940 Act ("Class A Plan" and "Class B
Plan") (collectively, "Plans"). The rate of payment by each Fund under the
Plans, as described in the Prospectus, may not be increased without the approval
of the majority of the outstanding voting securities of the affected class of
that Fund. All expenses for which GT Global is reimbursed under the Class A Plan
will have been incurred within one year of such reimbursement.
The following table discloses payments made by the Funds under the Class A Plan
and the Class B Plan for the Funds' fiscal year ended December 31, 1995.
<TABLE>
<CAPTION>
FUND CLASS A CLASS B
- ------------------------------------------------------------------------------------ ------------- -------------
<S> <C> <C>
America Fund........................................................................ $ 1,259,234 $ 2,547,904
Europe Fund......................................................................... 1,952,376 771,586
International Fund.................................................................. 1,206,618 681,752
Japan Fund.......................................................................... 317,310 288,296
Pacific Fund........................................................................ 1,422,420 1,247,894
Worldwide Fund...................................................................... 550,183 522,040
</TABLE>
In approving the continuation of the Plans, the Trustees determined that the
continuation of the Class A and Class B Plans was in the best interests of the
shareholders. Agreements related to the Plans also must be approved by vote of
the Trustees, including a majority of trustees who are not "interested persons"
of the Company (as defined in the 1940 Act) and who have no direct or indirect
financial interests in the operation of the Plans, or in any agreement related
thereto described above. Each Fund's plan of distribution pursuant to Rule 12b-1
in effect prior to the issuance of two classes of shares, which was
substantially similar to the current Class A Plan, was approved by the
shareholders of the International, Pacific and Japan Funds on May 27, 1987, by
shareholders of the Worldwide and America Funds on September 14, 1987 and by
shareholders of the Europe Fund on September 21, 1987. The Class B Plan was
approved by the Manager as initial sole shareholder of the Class B shares of
each Fund on March 31, 1993.
Each Plan requires that, at least quarterly, the Trustees review the amounts
expended thereunder and the purposes for which such expenditures were made. Each
Plan requires that as long as it is in effect, the selection and nomination of
Trustees who are not "interested persons" of the Company will be committed to
the discretion of the Trustees who are not "interested persons" of the Company,
as defined in the 1940 Act.
STATEMENT OF ADDITIONAL INFORMATION PAGE 24
<PAGE>
GT GLOBAL GROWTH FUNDS
As discussed in the Prospectus, GT Global collects sales charges on sales of
Class A shares of the Funds, retains certain amounts of such charges and
reallows other amounts of such charges to broker/dealers who sell Class A shares
of the Funds. The sales structure for the period January 1, 1993 through March
31, 1993 was a sales structure substantially similar to the current Class A
structure. The following table reviews the extent of such activity during the
Funds' last three fiscal years:
<TABLE>
<CAPTION>
SALES CHARGES AMOUNTS AMOUNTS
COLLECTED RETAINED REALLOWED
-------------- -------------- --------------
<S> <C> <C> <C>
America
Fund......................................................1995 $ 2,101,049 $ 336,010 $ 1,765,039
1994 1,213,567 80,807 1,132,760
1993 591,000 85,000 506,000
Europe
Fund......................................................1995 $ 258,281 $ 51,964 $ 206,317
1994 2,448,091 137,252 2,310,839
1993 1,809,000 202,000 1,607,000
International
Fund......................................................1995 $ 322,537 $ 50,454 $ 272,083
1994 1,230,657 106,490 1,124,167
1993 1,311,000 34,000 1,277,000
Japan
Fund......................................................1995 $ 480,623 $ 78,489 $ 402,134
1994 945,666 23,730 921,936
1993 554,000 75,000 478,000
Pacific
Fund......................................................1995 $ 734,983 $ 141,263 $ 593,720
1994 3,088,807 260,474 2,828,333
1993 1,737,000 121,000 1,616,000
Worldwide
Fund......................................................1995 $ 180,015 $ 28,527 $ 151,488
1994 1,067,748 89,742 978,006
1993 927,000 59,000 868,000
</TABLE>
GT Global receives no compensation or reimbursements relating to its
distribution efforts with respect to Class A shares other than as described
under this heading. GT Global receives contingent deferred sales charges payable
with respect to redemptions of Class B shares. Purchases of Class A shares
exceeding $500,000 also may be subject to a contingent deferred sales charge
upon redemption. For the nine month period ended December 31, 1993, and for the
fiscal years ended December 31, 1994, and December 31, 1995, GT Global collected
contingent deferred sales charges in the following amounts:
<TABLE>
<CAPTION>
APRIL 1-
1995 1994 DEC. 31, 1993
----------- ----------- -------------
<S> <C> <C> <C>
America Fund......................................................... $ 925,863 $ 130,809 $ 681
Europe Fund.......................................................... $ 510,319 $ 237,076 $ 16,219
International Fund................................................... $ 329,959 $ 32,916 $ 13,266
Japan Fund........................................................... $ 213,714 $ 88,454 $ 5,342
Pacific Fund......................................................... $ 758,951 $ 280,905 $ 21,728
Worldwide Fund....................................................... $ 260,049 $ 13,472 $ 6,854
</TABLE>
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
GT Global Investor Services, Inc. ("Transfer Agent") has been retained by the
Funds to perform shareholder servicing, reporting and general transfer agent
functions for the Funds. For these services, the Transfer Agent receives an
annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. The Transfer Agent also is reimbursed
by the Funds for its out-of-pocket expenses for such items as postage, forms,
telephone charges, stationery and office supplies.
For the period ended December 31, 1995, the America Fund, Europe Fund,
International Fund, Japan Fund, Pacific Fund, and Worldwide Fund paid the
Manager fees of $79,918, $62,660, $40,655, $14,483, $53,724 and $22,092,
respectively, for accounting services.
EXPENSES OF THE FUNDS
Each Fund pays all expenses not assumed by the Manager, GT Global and other
agents. These expenses include, in addition to the advisory, distribution,
transfer agency, pricing and accounting agency and brokerage fees discussed
above, legal and audit expenses, custodian fees, trustees' fees, organizational
fees, fidelity bond and other insurance premiums,
STATEMENT OF ADDITIONAL INFORMATION PAGE 25
<PAGE>
GT GLOBAL GROWTH FUNDS
taxes, extraordinary expenses and expenses of reports and prospectuses sent to
existing investors. The allocation of general Company expenses and expenses
shared by the Funds with one another, are made on a basis deemed fair and
equitable, and may be based on the relative net assets of the Funds or the
nature of the services performed and relative applicability to each Fund.
Expenditures, including costs incurred in connection with the purchase or sale
of portfolio securities, which are capitalized in accordance with generally
accepted accounting principles applicable to investment companies, are accounted
for as capital items and not as expenses. The ratio of each Fund's, other than
America Fund's, expenses to its relative net assets can be expected to be higher
than the expense ratios of funds investing solely in domestic securities, since
the cost of maintaining the custody of foreign securities and the rate of
investment management fees paid by each Fund generally are higher than the
comparable expenses of such other funds.
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VALUATION OF SHARES
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As described in the Prospectus, each Fund's net asset value per share for each
class of shares is determined at the close of regular trading on the New York
Stock Exchange, Inc. ("NYSE") (currently, 4:00 P.M. Eastern time, unless
weather, equipment failure or other factors contribute to an earlier closing
time). Currently, the NYSE is closed on weekends and on certain days relating to
the following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, July 4th, Labor Day, Thanksgiving Day and Christmas Day.
The Funds' portfolio securities and other assets are valued as follows:
Equity securities, including ADRs, ADSs and EDRs, which are traded on stock
exchanges, are valued at the last sale price on the exchange on which such
securities are traded, as of the close of business on the day the securities are
being valued or, lacking any sales, at the last available bid price. In cases
where securities are traded on more than one exchange, the securities are valued
on the exchange determined by the Manager to be the primary market. Securities
traded in the OTC market are valued at the last available bid price prior to the
time of valuation.
Long-term debt obligations are valued at the mean of representative quoted bid
or asked prices for such securities or, if such prices are not available, at
prices for securities of comparable maturity, quality and type; however, when
the Manager deems it appropriate, prices obtained for the day of valuation from
a bond pricing service will be used. Short-term debt investments are amortized
to maturity based on their cost, adjusted for foreign exchange translation,
provided that such valuations represent fair value.
Options on indices, securities and currencies purchased by the Funds are valued
at their last bid price in the case of listed options or at the average of the
last bid prices obtained from dealers, unless a quotation from only one dealer
is available, in which case only that dealer's price will be used, in the case
of OTC options. When market quotations for futures and options on futures held
by a Fund are readily available, those positions will be valued based upon such
quotations.
Securities and other assets for which market quotations are not readily
available (including restricted securities that are subject to limitations as to
their sale) are valued at fair value as determined in good faith by or under the
direction of the Company's Board of Trustees. The valuation procedures applied
in any specific instance are likely to vary from case to case. However,
consideration generally is given to the financial position of the issuer and
other fundamental analytical data relating to the investment and to the nature
of the restrictions on disposition of the securities (including any registration
expenses that might be borne by a Fund in connection with such disposition). In
addition, other factors, such as the cost of the investment, the market value of
any unrestricted securities of the same class (both at the time of purchase and
at the time of valuation), the size of the holding, the prices of any recent
transactions or offers with respect to such securities and any available
analysts' reports regarding the issuer, generally are considered.
The fair value of any other assets is added to the value of all securities
positions to arrive at the value of a Fund's total assets. A Fund's liabilities,
including accruals for expenses, are deducted from its total assets. Once the
total value of a Fund's net assets is so determined, that value is then divided
by the total number of shares outstanding (excluding treasury shares), and the
result, rounded to the nearer cent, is the net asset value per share.
Any assets or liabilities initially expressed in terms of foreign currencies are
translated into U.S. dollars at the official exchange rate or, alternatively, at
the mean of the current bid and asked prices of such currencies against the U.S.
dollar last quoted by a major bank that is a regular participant in the foreign
exchange market or on the basis of a pricing service that takes into account the
quotes provided by a number of such major banks. If none of these alternatives
are available or
STATEMENT OF ADDITIONAL INFORMATION PAGE 26
<PAGE>
GT GLOBAL GROWTH FUNDS
none are deemed to provide a suitable methodology for converting a foreign
currency into U.S. dollars, the Board of Trustees, in good faith, will establish
a conversion rate for such currency.
European, Far Eastern or Latin American securities trading may not take place on
all days on which the NYSE is open. Further, trading takes place in Japanese
markets on certain Saturdays and in various foreign markets on days on which the
NYSE is not open. In addition, trading in securities on European and Far Eastern
securities exchanges and OTC markets generally is completed well before the
close of the business day in New York. Consequently, the calculation of the
Funds' net asset values may not take place contemporaneously with the
determination of the prices of securities held by the Funds. Events affecting
the values of portfolio securities that occur between the time their prices are
determined and the close of regular trading on the NYSE will not be reflected in
the Funds' net asset values unless the Manager, under the supervision of the
Company's Board of Trustees, determines that the particular event would
materially affect net asset value. As a result, a Fund's net asset value may be
significantly affected by such trading on days when a shareholder has no access
to the Fund.
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INFORMATION RELATING TO SALES
AND REDEMPTIONS
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PAYMENT AND TERMS OF OFFERING
Payment for Class A or Class B shares purchased should accompany the purchase
order, or funds should be wired to the Transfer Agent as described in the
Prospectus. Payment, other than by wire transfer, must be made by check or money
order drawn on a U.S. bank. Checks or money orders must be payable in U.S.
dollars.
As a condition of this offering, if an order to purchase either class of shares
is cancelled due to nonpayment (for example, because a check is returned for
"not sufficient funds"), the person who made the order will be responsible for
any loss incurred by a Fund by reason of such cancellation, and if such
purchaser is a shareholder, that Fund shall have the authority as agent of the
shareholder to redeem shares in his or her account at their then-current net
asset value per share to reimburse that Fund for the loss incurred. Investors
whose purchase orders have been cancelled due to nonpayment may be prohibited
from placing future orders.
The Funds reserve the right at any time to waive or increase the minimum
requirements applicable to initial or subsequent investments with respect to any
person or class of persons. An order to purchase shares is not binding on a Fund
until it has been confirmed in writing by the Transfer Agent (or other
arrangements made with the Fund, in the case of orders utilizing wire transfer
of funds, as described above) and payment has been received. To protect existing
shareholders, the Funds reserve the right to reject any offer for a purchase of
shares by any individual.
SALES OUTSIDE THE UNITED STATES
Sales of Fund shares made through brokers outside the United States will be at
net asset value plus a sales commission, if any, established by that broker or
by local law. Such commission, if any, may be more or less than the sales
charges listed in the sales charge table included in the Prospectus.
LETTER OF INTENT -- CLASS A SHARES
The Letter of Intent ("LOI") is not a binding obligation to purchase the
indicated amount. During such time as Class A shares are held in escrow under an
LOI to ensure payment of applicable sales charges if the indicated amount is not
met, all dividends and capital gain distributions on escrowed shares will be
reinvested in additional Class A shares or paid in cash, as specified by the
shareholder. If the intended investment is not completed within the specified
13-month period, the purchaser must remit to GT Global the difference between
the sales charge actually paid and the sales charge which would have been
applicable if the total Class A purchases had been made at a single time. If
this amount is not paid to GT Global within 20 days after written request, the
appropriate number of escrowed shares will be redeemed and the proceeds paid to
GT Global.
A registered investment adviser, trust company or trust department seeking to
execute an LOI as a single purchaser with respect to accounts over which it
exercises investment discretion is required to provide the Transfer Agent with
information establishing that such entity has discretionary authority with
respect to the money invested (e.g. by providing a copy of the pertinent
investment advisory agreement). Class A shares purchased in this manner must be
restrictively registered with the Transfer Agent so that only the investment
adviser, trust company or trust department, and not the beneficial owner, will
be able to place purchase, redemption and exchange orders.
STATEMENT OF ADDITIONAL INFORMATION PAGE 27
<PAGE>
GT GLOBAL GROWTH FUNDS
AUTOMATIC INVESTMENT PLAN -- CLASS A SHARES AND CLASS B SHARES
To establish participation in the Funds' Automatic Investment Plan ("AIP"),
investors or their broker/dealers should specify whether investment will be in
Class A shares or Class B shares and send the following documents to the
Transfer Agent: (1) an AIP Application; (2) a Bank Authorization Form; and (3) a
voided personal check from the pertinent bank account. The necessary forms are
provided at the back of the Funds' Prospectus. Providing that an investor's bank
accepts the Bank Authorization Form, investment amounts will be drawn on the
designated dates (monthly on the 25th day or beginning quarterly on the 25th day
of the month the investor first selects) in order to purchase full and
fractional shares of a Fund at the public offering price determined on that day.
In the event that the 25th day falls on a Saturday, Sunday or holiday, shares
will be purchased on the next business day. If an investor's check is returned
because of insufficient funds, a stop payment order or the account is closed,
the AIP may be discontinued, and any share purchase made upon deposit of such
check may be cancelled. Furthermore, the shareholder will be liable for any loss
incurred by a Fund by reason of such cancellation. Investors should allow one
month for the establishment of an AIP. An AIP may be terminated by the Transfer
Agent or the Funds upon 30 days' written notice or by the participant, at any
time, without penalty, upon written notice to the pertinent Fund or the Transfer
Agent.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
Class A or Class B shares of a Fund may be purchased as the underlying
investment for an IRA meeting the requirements of Section 408(a) of the Internal
Revenue Code of 1986, as amended ("Code"). IRA applications are available from
brokers, or GT Global.
EXCHANGES BETWEEN FUNDS
Shares of a Fund may be exchanged for shares of other GT Global Mutual Funds,
based on their respective net asset values without imposition of any sales
charges provided that the registration remains identical. Class A shares may be
exchanged only for Class A shares of other GT Global Mutual Funds. Class B
shares may be exchanged only for Class B shares of other GT Global Mutual Funds.
The exchange privilege is not an option or right to purchase shares but is
permitted under the current policies of the respective GT Global Mutual Funds.
The privilege may be discontinued or changed at any time by any of the Funds
upon 60 days' prior written notice to the shareholders of such Fund and is
available only in states where the exchange may be made legally. Before
purchasing shares through the exercise of the exchange privilege, a shareholder
should obtain and read a copy of the Prospectus of the Fund to be purchased and
should consider the investment objective(s) of that Fund.
TELEPHONE REDEMPTIONS
A corporation or partnership wishing to utilize telephone redemption services
must submit a "Corporate Resolution" or "Certificate of Partnership" indicating
the names, titles and the required number of signatures of persons authorized to
act on its behalf. The certificate must be signed by a duly authorized
officer(s) and, in the case of a corporation, the corporate seal must be
affixed. All shareholders may request that redemption proceeds be transmitted by
bank wire directly to the shareholder's predesignated account at a domestic bank
or savings institution if the proceeds are at least $1,000. Costs in connection
with the administration of this service, including wire charges, will be borne
by the Funds. Proceeds of less than $ 1,000 will be mailed to the shareholder's
registered address of record. The Funds and the Transfer Agent reserve the right
to refuse any telephone instructions and may discontinue the aforementioned
redemption options upon 30 days' written notice.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders owning Class A or Class B shares with a value of $10,000 or more of
any of the Funds, may establish a Systematic Withdrawal Plan ("SWP"). Under a
SWP, a shareholder will receive monthly or quarterly payments, in amounts of not
less than $100 per payment, through the automatic redemption of the necessary
number of shares on the designated dates (monthly or beginning quarterly on the
25th day of the month the investor first selects). In the event that the 25th
day falls on a Saturday, Sunday or holiday, the redemption will take place on
the prior business day. Certificates, if any, for the shares being redeemed must
be held by the Transfer Agent. Checks will be made payable to the designated
recipient and mailed within seven days. If the recipient is other than the
registered shareholder, the signature of each shareholder must be guaranteed on
the SWP application (see "How to Redeem Shares" in the Prospectus). A
corporation (or partnership) must also submit a "Corporation Resolution" or
"Certification of Partnership" indicating the names, titles, and signatures of
the individuals authorized to act on its behalf, and the SWP application must be
signed by a duly authorized officer(s) and the corporate seal affixed.
With respect to a SWP the maximum annual SWP withdrawal is 12% of the initial
account value. Withdrawals in excess of 12% of the initial account value
annually may result in assessment of a contingent deferred sales charge. See
"How to Invest" in the Prospectus.
STATEMENT OF ADDITIONAL INFORMATION PAGE 28
<PAGE>
GT GLOBAL GROWTH FUNDS
Shareholders should be aware that systematic withdrawals may deplete or use up
entirely the initial investment and result in realized long-term or short-term
capital gains or losses. The SWP may be terminated at any time by the Transfer
Agent or a Fund upon 30 days' written notice or by a shareholder upon written
notice to a Fund or its Transfer Agent. Applications and further details
regarding establishment of a SWP are provided at the back of the Funds'
Prospectus.
SUSPENSION OF REDEMPTION PRIVILEGES
The Funds may suspend redemption privileges or postpone the date of payment for
more than seven days after a redemption order is received during any period: (1)
when the NYSE is closed other than customary weekend and holiday closings, or
when trading on the NYSE is restricted as directed by the SEC; (2) when an
emergency exists, as defined by the SEC, which will prohibit the Funds from
disposing of portfolio securities owned by them or in fairly determining the
value of their assets; or (3) as the SEC may otherwise permit.
REDEMPTIONS IN KIND
It is possible that conditions may arise in the future which would, in the
opinion of the Company's Board of Trustees, make it undesirable for a Fund to
pay for all redemptions in cash. In such cases, the Board may authorize payment
to be made in portfolio securities or other property of a Fund, so called
"redemptions in kind." Payment of redemptions in kind will be made in readily
marketable securities. Such securities would be valued at the same value
assigned to them in computing the net asset value per share. Shareholders
receiving such securities would incur brokerage costs in selling any such
securities so received and would be subject to any increase or decrease in the
value of the securities until they were sold.
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TAXES
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GENERAL
Each Fund is treated as a separate corporation for federal income tax purposes.
In order to continue to qualify for treatment as a regulated investment company
("RIC") under the Code, each Fund must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income (consisting
generally of net investment income, net short-term capital gain and net gains
from certain foreign currency transactions) ("Distribution Requirement") and
must meet several additional requirements. With respect to each Fund, these
requirements include the following: (1) the Fund must derive at least 90% of its
gross income each taxable year from dividends, interest, payments with respect
to securities loans and gains from the sale or other disposition of securities
or foreign currencies, or other income (including gains from options, Futures or
Forward Contracts) derived with respect to its business of investing in
securities or those currencies ("Income Requirement"); (2) the Fund must derive
less than 30% of its gross income each taxable year from the sale or other
disposition of securities, or any of the following, that were held for less than
three months -- options or Futures (other than those on foreign currencies), or
foreign currencies (or options, Futures or Forward Contracts thereon) that are
not directly related to the Fund's principal business of investing in securities
(or options and Futures with respect to securities) ("Short-Short Limitation");
(3) at the close of each quarter of the Fund's taxable year, at least 50% of the
value of its total assets must be represented by cash and cash items, U.S.
government securities, securities of other RICs and other securities, with these
other securities limited, with respect to any one issuer, to an amount that does
not exceed 5% of the value of the Fund's total assets and that does not
represent more than 10% of the issuer's outstanding voting securities; and (4)
at the close of each quarter of the Fund's taxable year, not more than 25% of
the value of its total assets may be invested in securities (other than U.S.
government securities or the securities of other RICs) of any one issuer.
Dividends and other distributions declared by a Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
A portion of the dividends from a Fund's investment company taxable income
(whether paid in cash or reinvested in additional shares) may be eligible for
the dividends-received deduction allowed to corporations. The eligible portion
may not exceed the aggregate dividends received by a Fund from U.S.
corporations. However, dividends received by a corporate shareholder and
deducted by it pursuant to the dividends-received deduction are subject
indirectly to the alternative minimum tax.
STATEMENT OF ADDITIONAL INFORMATION PAGE 29
<PAGE>
GT GLOBAL GROWTH FUNDS
If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the
extent it fails to distribute by the end of any calendar year substantially all
of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
FOREIGN TAXES
Dividends and interest received by a Fund may be subject to income, withholding
or other taxes imposed by foreign countries that would reduce the yield on its
securities. Tax conventions between certain countries and the United States may
reduce or eliminate these foreign taxes, however, and many foreign countries do
not impose taxes on capital gains in respect of investments by foreign
investors. If more than 50% of the value of a Fund's total assets at the close
of its taxable year consists of securities of foreign corporations, the Fund
will be eligible to, and may, file an election with the Internal Revenue Service
that will enable its shareholders, in effect, to receive the benefit of the
foreign tax credit with respect to any foreign income taxes paid by it. Pursuant
to the election, a Fund will treat those taxes as dividends paid to its
shareholders and each shareholder will be required to (1) include in gross
income, and treat as paid by him, his proportionate share of those taxes, (2)
treat his share of those taxes and of any dividend paid by the Fund that
represents income from foreign sources as his own income from those sources, and
(3) either deduct the taxes deemed paid by him in computing his taxable income
or, alternatively, use the foregoing information in calculating the foreign tax
credit against his federal income tax. Each Fund will report to its shareholders
shortly after each taxable year their respective shares of the Fund's income
from sources within, and taxes paid to, foreign countries if it makes this
election.
PASSIVE FOREIGN INVESTMENT COMPANIES
Each Fund (other than the America Fund) may invest in the stock of "passive
foreign investment companies" ("PFICs"). A PFIC is a foreign corporation that,
in general, meets either of the following tests: (1) at least 75% of its gross
income is passive or (2) an average of at least 50% of its assets produce, or
are held for the production of, passive income. Under certain circumstances, a
Fund will be subject to federal income tax on a portion of any "excess
distribution" received on, or of any gain from disposition of, stock of a PFIC
(collectively "PFIC income"), plus interest thereon, even if the Fund
distributes the PFIC income as a taxable dividend to its shareholders. The
balance of the PFIC income will be included in the Fund's investment company
taxable income and, accordingly, will not be taxable to the Fund to the extent
that income is distributed to its shareholders.
If a Fund invests in a PFIC and elects to treat the PFIC as a "qualified
electing fund" ("QEF"), then in lieu of the foregoing tax and interest
obligation, the Fund will be required to include in income each year its pro
rata share of the QEF's annual ordinary earnings and net capital gain (the
excess of net long-term capital gain over net short-term capital loss) -- which
most likely would have to be distributed to satisfy the Distribution Requirement
and to avoid imposition of the Excise Tax -- even if those earnings and gain
were not received by the Fund. In most instances, it will be very difficult, if
not impossible, to make this election because of certain requirements thereof.
Pursuant to proposed regulations, open-end RICs, such as the Funds, would be
entitled to elect to "mark-to-market" their stock in certain PFICs.
"Marking-to-market," in this context, means recognizing as gain for each taxable
year the excess, as of the end of that year, of the fair market value of each
such PFIC's stock over the adjusted basis in that stock (including
mark-to-market gain for each prior year for which an election was in effect).
NON-U.S. SHAREHOLDERS
Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") generally
will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply if a dividend paid by a Fund to a foreign shareholder
is "effectively connected with the conduct of a U.S. trade or business," in
which case the reporting and withholding requirements applicable to domestic
shareholders will apply. A distribution of net capital gain by a Fund to a
foreign shareholder generally will be subject to U.S. federal income tax (at the
rates applicable to domestic persons) only if the distribution is "effectively
connected" or the foreign shareholder is treated as a resident alien individual
for federal income tax purposes.
OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS
The use of hedging transactions, such as selling (writing) and purchasing
options and Futures Contracts and entering into Forward Contracts, involves
complex rules that will determine, for federal income tax purposes, the
character and timing of recognition of the gains and losses a Fund realizes in
connection therewith. Gains from the disposition of foreign currencies (except
certain gains that may be excluded by future regulations), and gains from
options, Futures and Forward
STATEMENT OF ADDITIONAL INFORMATION PAGE 30
<PAGE>
GT GLOBAL GROWTH FUNDS
Contracts derived by a Fund with respect to its business of investing in
securities or foreign currencies, will qualify as permissible income under the
Income Requirement. However, income from the disposition by a Fund of options
and Futures (other than those on foreign currencies) will be subject to the
Short-Short Limitation if they are held for less than three months. Income from
the disposition by a Fund of foreign currencies, and options, Futures and
Forward Contracts on foreign currencies, that are not directly related to the
Fund's principal business of investing in securities (or options and Futures
with respect thereto) also will be subject to the Short-Short Limitation if they
are held for less than three months.
If a Fund satisfies certain requirements, any increase in value of a position
that is part of a "designated hedge" will be offset by any decrease in value
(whether realized or not) of the offsetting hedging position during the period
of the hedge for purposes of determining whether the Fund satisfies the
Short-Short Limitation. Thus, only the net gain (if any) from the designated
hedge will be included in gross income for purposes of that limitation. Each
Fund intends that, when it engages in hedging transactions, it will qualify for
this treatment, but at the present time it is not clear whether this treatment
will be available for all those transactions. To the extent this treatment is
not available, a Fund may be forced to defer the closing out of certain options,
Futures, Forward Contracts or foreign currency positions beyond the time when it
otherwise would be advantageous to do so, in order for the Fund to continue to
qualify as a RIC.
Futures and Forward Contracts that are subject to section 1256 of the Code
(other than those that are part of a "mixed straddle") ("Section 1256
Contracts") and that are held by a Fund at the end of its taxable year generally
will be deemed to have been sold at market value for federal income tax
purposes. Sixty percent of any net gain or loss recognized on these deemed
sales, and 60% of any net realized gain or loss from any actual sales of Section
1256 Contracts, will be treated as long-term capital gain or loss, and the
balance will be treated as short-term capital gain or loss. Section 988 of the
Code also may apply to gains and losses from transactions in foreign currencies,
foreign-currency-denominated debt securities and options, Futures and Forward
Contracts on foreign currencies ("Section 988" gains or losses). Each Section
988 gain or loss generally is computed separately and treated as ordinary income
or loss. In the case of overlap between Sections 1256 and 988, special
provisions determine the character and timing of any income, gain or loss. Each
Fund attempts to monitor Section 988 transactions to minimize any adverse tax
impact.
The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Funds and their shareholders. Investors are urged
to consult their own tax advisers for more detailed information and for
information regarding any foreign, state and local taxes applicable to
distributions received from a Fund.
STATEMENT OF ADDITIONAL INFORMATION PAGE 31
<PAGE>
GT GLOBAL GROWTH FUNDS
ADDITIONAL INFORMATION
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LIECHTENSTEIN GLOBAL TRUST
Liechtenstein Global Trust, formerly BIL GT Group, is composed of the Manager
and its worldwide affiliates. Other worldwide affiliates of Liechtenstein Global
Trust include LGT Bank in Liechtenstein, formerly Bank in Liechtenstein, an
international financial services institution founded in 1920. LGT Bank in
Liechtenstein has principal offices in Vaduz, Liechtenstein. Its subsidiaries
currently include LGT Bank in Liechtenstein (Deutschland) GmbH, formerly Bank in
Liechtenstein (Frankfurt) GmbH, and LGT Asset Management AG, formerly Bilfinanz
und Verwaltung AG, located in Zurich, Switzerland.
Worldwide asset management affiliates also currently include LGT Asset
Management PLC, formerly G.T. Management PLC in London; LGT Asset Management
Ltd., formerly G.T. Management (Asia) Ltd. in Hong Kong; LGT Asset Management
Ltd., formerly G.T. Management (Japan) in Tokyo; LGT Asset Management Pte. Ltd.,
formerly G.T. Management (Singapore) PTE Ltd. in Singapore; LGT Asset Management
Ltd., formerly G.T. Management (Australia) Ltd., in Sydney; and LGT Asset
Management GmbH, formerly BIL Asset Management GmbH, in Frankfurt.
CUSTODIAN
State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, Massachusetts 02110, acts as custodian of the Funds' assets. State
Street is authorized to establish and has established separate accounts in
foreign currencies and to cause securities of the Company to be held in separate
accounts outside the United States in the custody of non-U.S. banks.
INDEPENDENT ACCOUNTANTS
The Company's and the Funds' independent accountants are Coopers & Lybrand
L.L.P., One Post Office Square, Boston, Massachusetts 02109. Coopers & Lybrand
L.L.P. conducts annual audits of the Funds, assists in the preparation of the
Funds' federal and state income tax returns and consults with the Company and
the Funds as to matters of accounting, regulatory filings and federal and state
income taxation.
The audited financial statements of the Company included in this Statement of
Additional Information have been examined by Coopers & Lybrand L.L.P. as stated
in their opinion appearing herein and are included in reliance upon such opinion
given upon the authority of said firm as experts in accounting and auditing.
USE OF NAME
The Manager has granted the Company the right to use the "GT" and "GT Global"
names and has reserved the right to withdraw its consent to the use of such
names by the Company and/or any of the Funds at any time, or to grant the use of
such names to any other company.
SHAREHOLDER LIABILITY
Under certain circumstances, shareholders of a Fund may be held personally
liable for the obligations of the Fund. The Company's Declaration of Trust
provides that shareholders shall not be subject to any personal liability for
the acts or obligations of a Fund or the Company and that every written
agreement, obligation or other undertaking made or issued by a Fund or the
Company shall contain a provision to the effect that shareholders are not
personally liable thereunder. The Declaration of Trust provides for
indemnification out of the Company's assets under certain circumstances, and
further provides that the Company shall, upon request, assume the defense of any
act or obligation of a Fund or the Company and that the Fund in which the
shareholder holds shares will indemnify the shareholder for all legal and other
expenses incurred therewith. Thus, the risk of any shareholder's incurring
financial loss beyond his or her investment, because of this theoretical
shareholder liability, is limited to circumstances in which the Fund or the
Company itself would be unable to meet its obligations.
STATEMENT OF ADDITIONAL INFORMATION PAGE 32
<PAGE>
GT GLOBAL GROWTH FUNDS
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
A Fund's "Standardized Return", as referred to in the Prospectus (see "Other
Information -- Performance Information" in the Prospectus), is calculated
separately for Class A and Class B shares of each Fund as follows: Standardized
Return ("T") is computed by using the value at the end of the period ("EV") of a
hypothetical initial investment of $1,000 ("P") over a period of years ("n")
according to the following formula as required by the Securities and Exchange
Commission: P(1+T)(n) = EV. The following assumptions will be reflected in
computations made in accordance with this formula: (1) for Class A shares,
deduction of the maximum sales charge of 4.75% from the $1,000 initial
investment; (2) for Class B shares, deduction of the applicable contingent
deferred sales charge imposed on a redemption of Class B shares held for the
period; (3) reinvestment of dividends and other distributions at net asset value
on the reinvestment date determined by the Board; and (4) a complete redemption
at the end of any period illustrated.
The Standardized Returns of the Funds' Class A shares, stated as average
annualized total returns, for the periods indicated were as follows:
AMERICA FUND
-- For the year ended December 31, 1995: 17.37%
-- For the five years ended December 31, 1995: 18.25%
-- For the period June 9, 1987 (commencement of operations)
through December 31, 1995: 14.34%
EUROPE FUND
-- For the year ended December 31, 1995: 4.64%
-- For the five years ended December 31, 1995: 3.21%
-- For the ten years ended December 31, 1995: 8.90%
-- For the period July 19, 1985 (commencement of operations)
through December 31, 1995: 11.76%
INTERNATIONAL FUND
-- For the year ended December 31, 1995: -1.06%
-- For the five years ended December 31, 1995: 5.48%
-- For the ten years ended December 31, 1995: 11.69%
-- For the period July 19, 1985 (commencement of operations)
through December 31, 1995: 13.52%
JAPAN FUND
-- For the year ended December 31, 1995: -2.91%
-- For the five years ended December 31, 1995: 1.05%
-- For the ten years ended December 31, 1995: 13.69%
-- For the period July 19, 1985 (commencement of operations)
through December 31, 1995: 15.40%
PACIFIC FUND
--For the year ended December 31, 1995: 2.34%
-- For the five years ended December 31, 1995: 6.55%
-- For the ten years ended December 31, 1995: 14.89%
-- For the period January 19, 1977 (commencement of operations)
through December 31, 1995: 13.14%
STATEMENT OF ADDITIONAL INFORMATION PAGE 33
<PAGE>
GT GLOBAL GROWTH FUNDS
WORLDWIDE FUND
-- For the year ended December 31, 1995: 5.95%
-- For the five years ended December 31, 1995: 9.40%
-- For the period June 9, 1987 (commencement of operations)
through December 31, 1995: 8.03%
The Standardized Returns of the Funds' Class A shares, stated as aggregate total
return, for the periods from the commencement of each Fund's operations through
December 31, 1995, were as follows:
AMERICA FUND
--From inception on June 9, 1987: 215.23%
EUROPE FUND
--From inception on July 19, 1985: 219.99%
INTERNATIONAL FUND
--From inception on July 19, 1985: 276.61%
JAPAN FUND
--From inception on July 19, 1985: 347.40%
PACIFIC FUND
--From inception on January 19, 1977: 939.00%
WORLDWIDE FUND
--From inception on June 9, 1987: 93.88%
The Standardized Returns of the Funds' Class B shares, which were first offered
on April 1, 1993, stated as average annualized total returns, for the periods
indicated, were as follows:
AMERICA FUND
-- For the year ended December 31, 1995: 17.42%
-- For the period April 1, 1993
through December 31, 1995: 18.77%
EUROPE FUND
-- For the year ended December 31, 1995: 4.20%
-- For the period April 1, 1993 through December 31, 1995: 6.91%
INTERNATIONAL FUND
-- For the year ended December 31, 1995: -1.76%
-- For the period April 1, 1993 through December 31, 1995: 5.46%
JAPAN FUND
-- For the year ended December 31, 1995: -3.29%
-- For the period April 1, 1993 through December 31, 1995: 7.74%
PACIFIC FUND
-- For the year ended December 31, 1995: 1.54%
-- For the period April 1, 1993 through December 31, 1995: 7.25%
WORLDWIDE FUND
-- For the year ended December 31, 1995: 5.52%
-- For the period April 1, 1993
through December 31, 1995: 5.92%
STATEMENT OF ADDITIONAL INFORMATION PAGE 34
<PAGE>
GT GLOBAL GROWTH FUNDS
The Standardized Returns for the Funds' Class B shares, which were first offered
on April 1, 1993, stated as aggregate total return, for the period April 1, 1993
through December 31, 1995, were as follows:
AMERICA FUND
-- For the period April 1, 1993 through December 31, 1995: 60.51%
EUROPE FUND
-- For the period April 1, 1993 through December 31, 1995: 20.19%
INTERNATIONAL FUND
-- For the period April 1, 1993 through December 31, 1995: 15.76%
JAPAN FUND
-- For the period April 1, 1993 through December 31, 1995: 22.77%
PACIFIC FUND
-- For the period April 1, 1993 through December 31, 1995: 21.23%
WORLDWIDE FUND
-- For the period April 1, 1993 through December 31, 1995: 17.14%
Performance of the Funds is historical and does not necessarily indicate future
results. The Funds operated in prior periods under different investment policies
and limitations including different Primary Investment Areas. For example in
January, 1994, Japan was eliminated from the Primary Investment Area of the
Pacific Fund. In addition, in July 1995, the percentage of total assets normally
invested in a Fund's Primary Investment Area was changed from 80% to 65%. Such
policies, limitations and Primary Investment Areas may change in the future.
As discussed in the Prospectus, each Fund may quote Non-Standardized Total
Returns that do not reflect the effect of sales charges. Non-Standardized
Returns may be quoted for the same or different time periods for which
Standardized Returns are quoted. The Non-Standardized Returns for the Funds'
Class A shares, quoted as average annual returns and as aggregate total return,
for the periods from the commencement of each Fund's operations through December
31, 1995, were as follows:
<TABLE>
<CAPTION>
AVERAGE
ANNUAL AGGREGATE
RETURN RETURN
---------- ------------
<S> <C> <C>
America Fund -- from inception on June 9, 1987: 14.99 % 230.95 %
Europe Fund -- from inception on July 19, 1985: 12.29 % 235.95 %
International Fund -- from inception on July 19, 1985: 14.05 % 295.39 %
Japan Fund -- from inception on July 19, 1985: 15.94 % 369.71 %
Pacific Fund -- from inception on January 19, 1977: 13.43 % 990.81 %
Worldwide Fund -- from inception on June 9, 1987: 8.65 % 103.54 %
</TABLE>
The Non-Standardized Returns for the Funds' Class B shares, which were first
offered on April 1, 1993, quoted as average annual returns and aggregate total
return, for the period April 1, 1993 through December 31, 1995, were as follows:
<TABLE>
<CAPTION>
AVERAGE
ANNUAL AGGREGATE
RETURN RETURN
---------- ------------
<S> <C> <C>
America Fund......................................................................... 19.57% 63.51%
Europe Fund.......................................................................... 7.88% 23.19%
International Fund................................................................... 6.45% 18.76%
Japan Fund........................................................................... 8.69% 25.77%
Pacific Fund......................................................................... 8.21% 24.23%
Worldwide Fund....................................................................... 6.90% 20.14%
</TABLE>
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of a
Fund, so that current or past yield or total return should not be considered
representative of what an investment in a Fund may earn in any future period.
These factors and possible differences in the methods used in calculating
investment results should be considered when comparing a Fund's investment
results with those published for other investment companies and other investment
vehicles. A Fund's results also should be considered relative to the risks
associated with such Fund's investment objective and policies.
STATEMENT OF ADDITIONAL INFORMATION PAGE 35
<PAGE>
GT GLOBAL GROWTH FUNDS
IMPORTANT POINTS TO NOTE ABOUT DATA RELATING TO WORLD EQUITY AND BOND MARKETS
Each Fund and GT Global may from time to time in advertisements, sales
literature and reports furnished to present or prospective shareholders compare
a Fund with, but not limited to, the following:
(1) The Salomon Brothers Non-U.S. Dollars Indices, which are measures of
the total return performance of high quality non-U.S. dollar denominated
securities in major sectors of the worldwide bond markets.
(2) The Lehman Brothers Government/Corporate Bond Index, which is a
comprehensive measure of all public obligations of the U.S. Treasury
(excluding flower bonds and foreign targeted issues), all publicly issued
debt of agencies of the U.S. Government (excluding mortgage backed
securities), and all public, fixed rate, non-convertible investment grade
domestic corporate debt rated at least Baa by Moody's Investors Service,
Inc. or BBB by Standard and Poor's, or, in the case of nonrated bonds, BBB
by Fitch Investors Service (excluding Collateralized Mortgage Obligations).
(3) The Consumer Price Index, which is a measure of the average change
in prices over time in a fixed market basket of goods and services (e.g.,
food, clothing, shelter, fuels, transportation fares, charges for doctors'
and dentists' services, prescription medicines, and other goods and services
that people buy for day-to-day living). There is inflation risk which does
not affect a security's value but its purchasing power i.e. the risk of
changing price levels in the economy that affects security prices or the
price of goods and services.
(4) Data and mutual fund rankings published or prepared by Lipper
Analytical Data Services, Inc. ("Lipper"), CDA/Wiesenberger Investment
Companies Service ("CDA/Wiesenberger"), Morningstar, Inc. and/or other
companies that rank and/or compare mutual funds by overall performance,
investment objectives, assets, expense levels, periods of existence and/or
other factors. In this regard each Fund may be compared to the Fund's "peer
group" as defined by Lipper, CDA/Wiesenberger, Morningstar and/or other
firms, as applicable, or to specific funds or groups of funds within or
without such peer group. Lipper generally ranks funds on the basis of total
return, assuming reinvestment of distributions, but does not take sales
charges or redemption fees into consideration, and is prepared without
regard to tax consequences. In addition to the mutual fund rankings, the
Fund's performance may be compared to mutual fund performance indices
prepared by Lipper. Morningstar is a mutual fund rating service that also
rates mutual funds on the basis of risk-adjusted performance. Morningstar
ratings are calculated from a fund's three, five and ten year average annual
returns with appropriate fee adjustments and a risk factor that reflects
fund performance relative to the three-month U.S. Treasury bill monthly
returns. Ten percent of the funds in an investment category receive five
stars and 22.5% receive four stars. The ratings are subject to change each
month.
(5) Bear Stearns Foreign Bond Index, which provides simple average
returns for individual countries and GNP-weighted index, beginning in 1975.
The returns are broken down by local market and currency.
(6) Ibbottson Associates International Bond Index, which provides a
detailed breakdown of local market and currency returns since 1960.
(7) Standard & Poor's 500 Composite Stock Price Index which is a widely
recognized index composed of the capitalization-weighted average of the
price of 500 of the largest publicly traded stocks in the U.S.
(8) Salomon Brothers Broad Investment Grade Index which is a widely used
index composed of U.S. domestic government, corporate and mortgage-backed
fixed income securities.
(9) Dow Jones Industrial Average.
(10) CNBC/Financial News Composite Index.
(11) Morgan Stanley Capital International World Indices, including, among
others, the Morgan Stanley Capital International Europe, Australia, Far East
Index ("EAFE Index"). The EAFE index is an unmanaged index of more than
1,000 companies of Europe, Australia and the Far East.
(12) Salomon Brothers World Government Bond Index and Salomon Brothers
World Government Bond Index-Non-U.S. are each a widely used index composed
of world government bonds.
(13) The World Bank Publication of Trends in Developing Countries (TIDE).
TIDE provides brief reports on most of the World Bank's borrowing members.
The World Development Report is published annually and looks at global and
regional economic trends and their implications for the developing
economies.
(14) Salomon Brothers Global Telecommunications Index is composed of
telecommunications companies in the developing and emerging countries.
STATEMENT OF ADDITIONAL INFORMATION PAGE 36
<PAGE>
GT GLOBAL GROWTH FUNDS
(15) Datastream and Worldscope each is an on-line database retrieval
service for information including, but not limited to, international
financial and economic data.
(16) International Financial Statistics, which is produced by the
International Monetary Fund.
(17) Various publications and annual reports produced by the World Bank
and its affiliates.
(18) Various publications from the International Bank for Reconstruction
and Development.
(19) Various publications including, but not limited to ratings agencies
such as Moody's Investors Service, Inc., Fitch Investors Service, Inc.,
Standard & Poor's.
(20) Wilshire Associates which is an on-line database for international
financial and economic data including performance measure for a wide range
of securities.
(21) Bank Rate National Monitor Index, which is an average of the quoted
rates for 100 leading banks and thrifts in ten U.S. cities.
(22) International Finance Corporation (IFC) Emerging Markets Data Base
which provides detailed statistics on stock and bond markets in developing
countries.
(23) Various publications from the Organization for Economic Cooperation
and Development (OECD).
(24) Average of Savings Accounts, which is a measure of all kinds of
savings deposits, including longer-term certificates. Savings accounts offer
a guaranteed rate of return on principal, but no opportunity for capital
growth. During a portion of the period, the maximum rates paid on some
savings deposits were fixed by law.
Indices, economic and financial data prepared by the research departments of
various financial organizations, such as Salomon Brothers, Inc., Lehman
Brothers, Merrill Lynch, Pierce, Fenner & Smith, Inc., J. P. Morgan, Morgan
Stanley, Smith Barney, S.G. Warburg, Jardine Flemming, The Bank for
International Settlements, Asian Development Bank, Bloomberg, L.P., and
Ibbottson Associates may be used, as well as information reported by the Federal
Reserve and the respective Central Banks of various nations. In addition, GT
Global may use performance rankings, ratings and commentary reported
periodically in national financial publications, including but not limited to,
Money Magazine, Smart Money, Global Finance, EuroMoney, Financial World, Forbes,
Fortune, Business Week, Latin Finance, the Wall Street Journal, Emerging Markets
Weekly, Kiplinger's Guide To Personal Finance, Barron's, The Financial Times,
USA Today, The New York Times, Far Eastern Economic Review, The Economist and
Investors Business Digest. Each Fund may compare its performance to that of
other compilations or indices of comparable quality to those listed above and
other indices which may be developed and made available in the future.
Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable, but which may be
subject to revision and which has not been independently verified by the Company
or GT Global. The authors and publishers of such material are not to be
considered as "experts" under the Securities Act of 1933 as amended, on account
of the inclusion of such information herein.
GT Global believes that this information may be useful to investors considering
whether and to what extent to diversify their investments through the purchase
of mutual funds investing in securities on a global basis. However, this data is
not a representation of the past performance of any of these Funds, nor is it a
prediction of such performance. The performance of the Funds will differ from
the historical performance of relevant indices. The performance of indices does
not take expenses into account, while each Fund incurs expenses in its
operations, which will reduce performance. Each Fund is actively managed, I.E.,
the Manager, as each Fund's investment manager, actively purchases and sells
securities in seeking each Fund's investment objective. Moreover, each Fund may
invest a portion of its assets in corporate bonds, while certain indices relate
only to government bonds. Each of these factors will cause the performance of
each Fund to differ from relevant indices.
From time to time, each Fund and GT Global may refer to the number of
shareholders in the Funds or the aggregate number of shareholders in all GT
Global Mutual Funds or the dollar amount of each Fund's assets under management
in advertising materials.
GT Global believes each Fund is an appropriate investment for long-term
investment goals including, but not limited to funding retirement, paying for
education or purchasing a house. GT Global may provide information designed to
help individuals understand their investment goals and explore various financial
strategies. For example, GT Global may describe general principles of investing,
such as asset allocation, diversification and risk tolerance. Each Fund does not
represent a complete investment program and the investors should consider each
Fund as appropriate for a portion of
STATEMENT OF ADDITIONAL INFORMATION PAGE 37
<PAGE>
GT GLOBAL GROWTH FUNDS
their overall investment portfolio with regard to their long-term investment
goals. There is no assurance that any such information will lead to achieving
these goals or guarantee future results.
From time to time, GT Global may refer to or advertise the names of such
companies, or their products although there can be no assurance that any GT
Global Mutual Fund may own the securities of these companies.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical returns
of the capital markets in the United States, including common stocks, small
capitalization stocks, long-term corporate bonds, intermediate-term government
bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation
(based on the CPI), and combinations of various capital markets. The performance
of these capital markets are based on the returns of different indices.
GT Global Funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any of
these capital markets. The risks associated with the security types in any
capital market may or may not correspond directly to those of the funds.
Ibbotson calculates total returns in the same method as the funds. The funds may
also compare performance to that of other compilations or indices that may be
developed and made available in the future.
Each Fund may quote various measures of volatility and benchmark correlation
such as beta, standard deviation and R(2) in advertising. In addition, each Fund
may compare these measures to those of other funds. Measures of volatility seek
to compare each Fund's historical share price fluctuations or total returns
compared to those of a benchmark. All measures of volatility and correlation are
calculated using averages of historical data.
Each Fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging programs. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals, thereby
purchasing fewer shares when prices are high and more shares when prices are
low. While such a strategy does not assure a profit or guard against loss in a
declining market, the investor's average cost per share can be lower than if
fixed numbers of shares are purchased at the same intervals. In evaluating such
a plan, investors should consider their ability to continue purchasing shares
through periods of low price levels.
Each Fund may be available for purchase through retirement plans or other
programs offering deferral of income taxes, which may produce superior after tax
returns over time. For example, a $10,000 investment earning a taxable return of
10% annually would have an after-tax value of $17,976 after ten years, assuming
tax was deducted from the return each year at a 39.6% rate. An equivalent
tax-deferred investment would have an after-tax value of $19,626 after ten
years, assuming tax was deducted at a 39.6% rate from the deferred earnings at
the end of the ten-year period.
Each Fund may describe in its sales material and advertisements how an investor
may invest in GT Global Mutual Funds through various retirement accounts and
plans that offer deferral of income taxes on investment earnings and may also
enable an investor to make pre-tax contributions. Because of their advantages,
these retirement accounts and plans may produce returns superior to comparable
non-retirement investments. In sales material and advertisements, the Funds may
also discuss these accounts and plans which include:
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS): Any individual who receives earned income
from employment (including self-employment) can contribute up to $2,000 (or if
less, 100% of compensation) each year to an IRA. If your spouse is not employed,
a total of $2,250 may be contributed each year to IRAs set up for you and your
spouse (subject to the maximum of $2,000 to either IRA). Some individuals may be
able to take an income tax deduction for the contribution. Regular contributions
may not be made for the year you become 70 1/2 or thereafter. Please consult
your tax advisor for more information.
ROLLOVER IRAS: Individuals who receive distributions from qualified retirement
plans (other than required distributions) and who wish to keep their savings
growing tax-deferred can rollover (or make a direct transfer of) their
distribution to a Rollover IRA. These accounts can also receive rollovers or
transfers from an existing IRA. If an "eligible roll-over distribution" from a
qualified employer-sponsored retirement plan is not directly rolled over to an
IRA (or certain qualified plans), withholding at the rate of 20% will be
required for federal income tax purposes. A distribution from a qualified plan
that is not an "eligible rollover distribution," including a distribution that
is one of a series of substantially equal periodic payments, generally is
subject to regular wage withholding or withholding at the rate of 10% (depending
on the type and amount of the distribution), unless you elect not to have any
withholding apply. Please consult your tax advisor for more information.
SEP-IRAS AND SALARY-REDUCTION SEP-IRAS: Simplified employee pension plans
("SEPs" or "SEP-IRAs") and salary-reduction SEPs provide self-employed
individuals (and any eligible employees) with benefits similar to Keogh-type
plans or Code Section 401(k) plans, but with fewer administrative requirements
and therefore potential lower annual administration expenses.
STATEMENT OF ADDITIONAL INFORMATION PAGE 38
<PAGE>
GT GLOBAL GROWTH FUNDS
403(B)(7) CUSTODIAL ACCOUNTS: Employees of public schools and most other
not-for-profit organizations can make pre-tax salary reduction contributions to
these accounts.
PROFIT-SHARING (INCLUDING CODE SECTION 401(K)) AND MONEY PURCHASE PENSION
PLANS: Corporations can sponsor these qualified defined contribution plans for
their employees. A Code Section 401(k) plan, a type of profit-sharing plan,
additionally permits the eligible, participating employees to make pre-tax
salary reduction contributions to the plan (up to certain limitations).
GT Global may from time to time in its sales materials and advertising discuss
the risks inherent in investing. The major types of investment risks are market
risk, industry risk, credit risk, interest risk and inflation risk. Risk
represents the possibility that you may lose some or all of your investment over
a period of time. A basic tenet of investing is the greater the potential
reward, the greater the risk.
From time to time, the Funds and GT Global will quote certain data regarding
industries, individual countries, regions, world stock exchanges, and economic
and demographic statistics from sources GT Global deems reliable, including but
not limited to, the economic and financial data of such financial organizations
as:
1) Stock market capitalization: Morgan Stanley Capital International World
Indices, International Finance Corporation and Datastream.
2) Stock market trading volume: Morgan Stanley Capital International World
Indices, International Finance Corporation.
3) The number of listed companies: International Finance Corporation, GT Guide
to World Equity Markets, Salomon Brothers, Inc., and S.G. Warburg.
4) Wage rates: U.S. Department of Labor Statistics and Morgan Stanley Capital
International World Indices.
5) International industry performance: Morgan Stanley Capital International
World Indices, Wilshire Associates and Salomon Brothers, Inc.
6) Stock market performance: Morgan Stanley Capital International World
Indices, International Finance Corporation and Datastream.
7) The Consumer Price Index and inflation rate: The World Bank, Datastream and
International Finance Corporation.
8) Gross Domestic Product (GDP): Datastream and The World Bank.
9) GDP growth rate: International Finance Corporation, The World Bank and
Datastream.
10) Population: The World Bank, Datastream and United Nations.
11) Average annual growth rate (%) of population: The World Bank, Datastream and
United Nations.
12) Age distribution within populations: Organization for Economic Cooperation
and Development and United Nations.
13) Total exports and imports by year: International Finance Corporation, The
World Bank and Datastream.
14) Top three companies by country, industry or market: International Finance
Corporation, LGT Guide to World Equity Markets, Salomon Brothers Inc., and
S.G. Warburg.
15) Foreign direct investments to developing countries: The World Bank and
Datastream.
16) Supply, consumption, demand and growth in demand of certain products,
services and industries, including, but not limited to electricity, water,
transportation, construction materials, natural resources, technology, other
basic infrastructure, financial services, health care services and supplies,
consumer products and services and telecommunications equipment and services
(sources of such information may include, but would not be limited to, The
World Bank, OECD, IMF, Bloomberg and Datastream).
17) Standard deviation and performance returns for U.S. and non-U.S. equity and
bond markets: Morgan Stanley Capital International.
18) Countries restructuring their debt, including those under the Brady Plan:
the Manager.
19) Political and economic structure of countries: Economist Intelligence Unit.
20) Government and corporate bonds -- credit ratings, yield to maturity and
performance returns: Salomon Brothers, Inc.
21) Dividend yields for U.S. and non-U.S. companies: Bloomberg.
From time to time, GT Global may include in its advertisement and sales
material, information about privatization, which is an economic process
involving the sale of state-owned companies to the private sector.
In advertising and sales materials, GT Global may make reference to or discuss
its products, services and accomplishments. Among these accomplishments are that
in 1983 GT Global provided assistance to the government of Hong Kong in linking
its currency to the U.S. dollar, and that in 1987 Japan's Ministry of Finance
licensed LGT Asset Management Ltd. as one of the first foreign discretionary
investment managers for Japanese investors. Such accomplishments, however,
STATEMENT OF ADDITIONAL INFORMATION PAGE 39
<PAGE>
GT GLOBAL GROWTH FUNDS
should not be viewed as an endorsement of the Manager or GT Global by the
government of Hong Kong, Japan's Ministry of Finance or any other government or
government agency. Nor do any such accomplishments of the Manager or GT Global
provide any assurance that the GT Global Mutual Funds' investment objectives
will be achieved.
THE GT ADVANTAGE
The Manager has developed a unique team approach to its global money management
which we call the GT Advantage. The Manager's money management style combines
the best of the "top-down" and "bottom-up" investment manager strategies. The
top-down approach is implemented by the Manager's Investment Policy Committee,
which sets broad guidelines for asset allocation and currency management, based
on the Manager's own macroeconomic forecasts and research from our worldwide
offices. The bottom-up approach utilizes regional teams of individual portfolio
managers to implement the committee's guidelines by selecting local securities
that offer strong growth and income potential.
- --------------------------------------------------------------------------------
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
COMMERCIAL PAPER RATINGS
Standard & Poor's Ratings Group ("S&P"). "A-1" and "A-2" are the two highest
commercial paper rating categories:
A-1. This highest category indicates that the degree of safety regarding
timely payment is strong. Issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+) designation.
A-2. Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
Moody's Investors Service, Inc. ("Moody's"). "Prime-1" and "Prime-2" are the two
highest commercial paper rating categories.
Prime-1. Issuers (or supporting institutions) assigned this highest
rating have a superior ability for repayment of senior short-term debt
obligations. Prime-1 repayment ability will often be evidenced by many of
the following characteristics: leading market positions in well established
industries; high rates of return on funds employed; conservative
capitalization structure with moderate reliance on debt and ample asset
protection; broad margins in earnings coverage of fixed financial charges
and high internal cash generation; well established access to a range of
financial markets and assured sources of alternate liquidity.
Prime-2. Issuers (or supporting institutions) assigned this rating have
a strong ability for repayment of short-term debt obligations. This will
normally be evidenced by mny of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while still
appropriate, may be more affect by external conditions. Ample alternate
liquidity is maintained.
DESCRIPTION OF BOND RATINGS
MOODY'S rates the long-term debt securities issued by various entities from
"Aaa" to "C." Investment grade ratings are as follows:
Aaa -- Best quality. These securities carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa -- High quality by all standards. Together with the Aaa group they
comprise what generally are known as high yield bonds. They are rated lower
than the best bond because margins of protection may not be as large as in
Aaa securities, fluctuation of protective elements may be of greater
amplitude, or there may be other elements present which make the long-term
risks appear somewhat greater than for securities rated Aaa.
A -- Upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa -- Medium grade obligations (i.e., they are neither highly protected
nor poorly secured). Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or
may be
STATEMENT OF ADDITIONAL INFORMATION PAGE 40
<PAGE>
GT GLOBAL GROWTH FUNDS
characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well.
S&P rates the long-term securities debt of various entities in categories
ranging from "AAA" to "D" according to quality. Investment grade ratings are as
follows:
AAA -- Highest rating. Capacity to pay interest and repay principal is
extremely strong.
AA -- High grade. Very strong capacity to pay interest and repay
principal. Generally, these bonds differ from AAA issues only in a small
degree.
A -- Have a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of change
in circumstances and economic conditions, than debt in higher rated
categories.
BBB -- Regarded as having adequate capacity to pay interest and repay
principal. These bonds normally exhibit adequate protection parameters, but
adverse economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay principal than for
debt in higher rated categories.
Further, both Moody's and S&P provide sovereign assessments and implied debt
ratings to sovereign governments. These assessments and ratings are broad
qualitative statements about that government's capacity to meet its senior debt
obligations. These assessments and ratings are then translated to the letter
grade debt ratings described above.
STATEMENT OF ADDITIONAL INFORMATION PAGE 41
<PAGE>
GT GLOBAL GROWTH FUNDS
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of each Fund at December 31, 1995, and for the
fiscal year then ended, appear on the following pages.
STATEMENT OF ADDITIONAL INFORMATION PAGE 42
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
G.T. Global Growth Series:
We have audited the accompanying statement of assets and liabilities of GT
Global Worldwide Growth Fund, one of the funds organized as a series of G.T.
Global Growth Series, including the schedule of portfolio investments, as of
December 31, 1995, the related statement of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended and the financial highlights for each of the four years in the period
then ended. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits. The financial highlights for the year ended December 31, 1991 were
audited by other auditors whose report dated January 31, 1992 expressed an
unqualified opinion on such financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Worldwide Growth Fund as of December 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the four years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 12, 1996
Statement of Additional Information Page 43
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
PORTFOLIO OF INVESTMENTS
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (27.8%)
Lehman Brothers Holdings, Inc. ............................ US 235,100 $ 4,995,875 2.5
INVESTMENT MANAGEMENT
American International Group, Inc. ........................ US 48,000 4,440,000 2.2
INSURANCE - MULTI-LINE
Axa Group ................................................. FR 60,772 4,101,597 2.0
INSURANCE - MULTI-LINE
Citicorp .................................................. US 57,700 3,880,325 1.9
BANKS-MONEY CENTER
HSBC Holdings PLC ......................................... HK 217,200 3,286,653 1.6
BANKS-MONEY CENTER
United Overseas Bank Ltd. - Foreign ....................... SING 260,000 2,500,707 1.2
BANKS-MONEY CENTER
Bangkok Bank Co., Ltd. - Foreign .......................... THAI 185,000 2,248,213 1.1
BANKS-MONEY CENTER
Swiss Reinsurance Co. - Registered-/- ..................... SWTZ 1,863 2,169,324 1.1
INSURANCE - MULTI-LINE
Nichiei Co., Ltd. ........................................ JPN 28,000 2,089,147 1.0
INVESTMENT MANAGEMENT
Sparbanken Sverige AB "A" ................................. SWDN 160,000 2,037,218 1.0
INVESTMENT MANAGEMENT
ITT Hartford Group, Inc.-/- .............................. US 35,700 1,726,988 0.8
INSURANCE - MULTI-LINE
Invesco PLC ............................................... UK 431,600 1,698,659 0.8
INVESTMENT MANAGEMENT
Skandia Forsakrings AB Free ............................... SWDN 61,869 1,673,395 0.8
INSURANCE - MULTI-LINE
Internationale Nederlanden Groep N.V. ..................... NETH 23,911 1,600,437 0.8
OTHER FINANCIAL
Land and House Co., Ltd. - Foreign ........................ THAI 90,000 1,479,746 0.7
REAL ESTATE
AEGON N.V. ................................................ NETH 32,968 1,461,494 0.7
INSURANCE-LIFE
UNI Storebrand AS "A"-/- .................................. NOR 260,142 1,439,339 0.7
INSURANCE - MULTI-LINE
Banco Intercontinental Espanol ............................ SPN 14,168 1,378,824 0.7
BANKS-MONEY CENTER
Assicurazioni Generali S.p.A. ............................. ITLY 52,700 1,277,069 0.6
INSURANCE - MULTI-LINE
Orix Corp. ................................................ JPN 30,600 1,260,174 0.6
OTHER FINANCIAL
M & G Group PLC ........................................... UK 64,200 1,254,895 0.6
INVESTMENT MANAGEMENT
Barclays PLC ............................................. UK 107,000 1,227,651 0.6
BANKS-MONEY CENTER
Thai Farmers Bank, Ltd. - Foreign ......................... THAI 121,000 1,220,572 0.6
BANKS-REGIONAL
Mercury Asset Management Group PLC ........................ UK 89,000 1,201,452 0.6
INVESTMENT MANAGEMENT
Sun Hung Kai Properties Ltd. .............................. HK 132,000 1,079,798 0.5
REAL ESTATE
</TABLE>
Statement of Additional Information Page 44
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (Continued)
Phatra Thanakit Co., Ltd. - Foreign ....................... THAI 111,900 $ 959,905 0.5
INVESTMENT MANAGEMENT
Corporacion Mapfre ........................................ SPN 15,940 892,640 0.4
INSURANCE - MULTI-LINE
Mapfre Vida Seguros ....................................... SPN 13,227 785,438 0.4
INSURANCE-LIFE
National Westminster Bank PLC ............................. UK 76,875 774,002 0.4
BANKS-MONEY CENTER
Cardif S.A. ............................................... FR 6,517 743,734 0.4
INSURANCE - MULTI-LINE
------------
56,885,271
------------
Services (20.8%)
Aoyama Trading Co., Ltd. ................................. JPN 125,000 3,997,093 2.0
RETAILERS-APPAREL
DDI Corp. ................................................. JPN 515 3,992,248 2.0
WIRELESS COMMUNICATIONS
Seven-Eleven Japan Ltd. ................................... JPN 55,000 3,879,845 1.9
RETAILERS-OTHER
Viacom, Inc.-/- ........................................... US 75,100 3,557,863 1.7
BROADCASTING & PUBLISHING
ABC Rail Products Corp.-/- ................................ US 145,800 3,225,825 1.6
TRANSPORTATION - ROAD & RAIL
Elsevier N.V. ............................................. NETH 184,221 2,461,494 1.2
BROADCASTING & PUBLISHING
Fast Retailing Co., Ltd. .................................. JPN 47,200 2,346,279 1.2
RETAILERS-APPAREL
Autobacs Seven Co., Ltd. .................................. JPN 27,000 2,244,767 1.1
RETAILERS-OTHER
Tesco PLC ................................................. UK 433,000 1,996,600 1.0
RETAILERS-FOOD
Koninklijke Ahold N.V. .................................... NETH 48,507 1,983,772 1.0
RETAILERS-FOOD
Reuters Holdings PLC ..................................... UK 193,200 1,768,225 0.9
BROADCASTING & PUBLISHING
EMAP PLC ................................................. UK 202,200 1,679,506 0.8
BROADCASTING & PUBLISHING
Compass Group PLC ......................................... UK 213,007 1,617,147 0.8
RESTAURANTS
Carrefour Supermarche ..................................... FR 2,437 1,480,791 0.7
RETAILERS-FOOD
La Quinta Inns, Inc. ..................................... US 50,562 1,384,135 0.7
LEISURE & TOURISM
Dixons Group PLC .......................................... UK 174,100 1,206,888 0.6
RETAILERS-APPAREL
British Airport Authority PLC ............................ UK 152,800 1,150,567 0.6
TRANSPORTATION - AIRLINES
Granada Group PLC ......................................... UK 106,000 1,061,481 0.5
LEISURE & TOURISM
Telecom Italia Mobile S.p.A. .............................. ITLY 547,645 963,993 0.5
TELEPHONE NETWORKS
Marco Polo Developments Ltd. .............................. SING 59,000 90,545 --
LEISURE & TOURISM
------------
42,089,064
------------
</TABLE>
Statement of Additional Information Page 45
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Health Care (8.9%)
Merck & Co., Inc. ......................................... US 83,600 $ 5,496,700 2.7
PHARMACEUTICALS
Sola International, Inc.-/- ............................... US 180,000 4,545,000 2.2
MEDICAL TECHNOLOGY & SUPPLIES
Takeda Chemical Industries ................................ JPN 250,000 4,118,217 2.0
PHARMACEUTICALS
Ciba-Geigy "B" ............................................ SWTZ 2,474 2,168,104 1.1
PHARMACEUTICALS
Medeva PLC ................................................ UK 417,400 1,749,697 0.9
PHARMACEUTICALS
------------
18,077,718
------------
Capital Goods (6.5%)
L.M. Ericsson Telephone Co. ............................... SWDN 103,523 2,027,875 1.0
TELECOM EQUIPMENT
Olivetti Group-/- ......................................... ITLY 2,424,774 1,964,296 1.0
OFFICE EQUIPMENT
Boeing Co. ................................................ US 22,800 1,786,950 0.9
AEROSPACE/DEFENSE
Nokia AB "A" .............................................. FIN 42,366 1,637,597 0.8
TELECOM EQUIPMENT
Bic ....................................................... FR 14,739 1,501,180 0.7
OFFICE EQUIPMENT
Siemens AG ................................................ GER 2,717 1,487,443 0.7
TELECOM EQUIPMENT
Lockheed Martin Corp. ..................................... US 17,200 1,358,800 0.7
AEROSPACE/DEFENSE
Bouygues ................................................. FR 9,815 990,232 0.5
CONSTRUCTION
Electrocomponents PLC ..................................... UK 69,000 385,119 0.2
ELECTRICAL PLANT/EQUIPMENT
------------
13,139,492
------------
Energy (6.4%)
Pacific Gas and Electric Co. .............................. US 130,700 3,708,613 1.8
ELECTRICAL & GAS UTILITIES
Sonat Offshore Drilling Co. ............................... US 67,200 3,007,200 1.5
OIL
North West Water PLC ...................................... UK 172,000 1,644,962 0.8
ENERGY SOURCES
Electrabel S.A. ........................................... BEL 6,303 1,508,777 0.7
ELECTRICAL & GAS UTILITIES
Korea Electric Power Corp.-/- ............................. KOR 26,000 1,114,946 0.5
ELECTRICAL & GAS UTILITIES
Yukong Ltd.: .............................................. KOR -- -- 0.5
OIL
Common ................................................. -- 23,044 796,157 --
New-/- .................................................. -- 5,502 184,388 --
C.A. La Electricidad de Caracas .......................... VENZ 1,163,231 796,193 0.4
ELECTRICAL & GAS UTILITIES
Compania Sevillana de Electricidad ........................ SPN 45,308 352,001 0.2
ELECTRICAL & GAS UTILITIES
------------
13,113,237
------------
</TABLE>
Statement of Additional Information Page 46
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industries (5.7%)
Eastman Kodak Co. ......................................... US 52,800 $ 3,537,600 1.7
MISC. MATERIALS & COMMODITIES
Hercules, Inc. ............................................ US 51,100 2,880,763 1.4
CHEMICALS
Pilkington PLC: ........................................... UK -- -- 1.0
BUILDING MATERIALS & COMPONENTS
Common ................................................. -- 525,000 1,646,483 --
New ..................................................... -- 131,250 411,621 --
RWE AG .................................................... GER 3,770 1,367,180 0.7
MISC. MATERIALS & COMMODITIES
Siam Cement Co., Ltd. - Foreign ........................... THAI 19,000 1,053,376 0.5
CEMENT
Construcciones y Auxiliar de Ferrocarriles S.A. .......... SPN 21,500 762,474 0.4
BUILDING MATERIALS & COMPONENTS
------------
11,659,497
------------
Consumer Non-Durables (4.4%)
Amway Japan Ltd. .......................................... JPN 64,400 2,720,775 1.3
HOUSEHOLD PRODUCTS
B.A.T. Industries PLC ..................................... UK 279,600 2,463,484 1.2
TOBACCO
Polygram .................................................. NETH 33,640 1,789,540 0.9
RECREATION
Reliance Industries Ltd. - 144A GDR{.} -/- {\/} ........... IND 113,500 1,518,630 0.7
TEXTILES & APPAREL
Adidas AG-/- .............................................. GER 13,486 713,849 0.3
TEXTILES & APPAREL
------------
9,206,278
------------
Multi Industry/Miscellaneous (3.8%)
Polaroid Corp. ............................................ US 50,000 2,368,750 1.2
MISCELLANEOUS
ITT Corp. - New-/- ........................................ US 35,700 1,892,100 0.9
CONGLOMERATE
Straits Steamship Land Ltd. .............................. SING 297,000 1,004,003 0.5
CONGLOMERATE
ITT Industries, Inc. ...................................... US 35,700 856,800 0.4
CONGLOMERATE
Citic Pacific Ltd. ........................................ HK 160,000 547,336 0.3
CONGLOMERATE
Hutchison Whampoa ......................................... HK 89,000 542,150 0.3
CONGLOMERATE
United Industrial Corp. ................................... SING 401,000 394,194 0.2
CONGLOMERATE
------------
7,605,333
------------
Technology (3.6%)
Matsushita-Kotobuki Electronics Ltd. ...................... JPN 110,000 2,792,636 1.4
COMPUTERS & PERIPHERALS
S.M.H. AG - Bearer ........................................ SWTZ 3,558 2,130,169 1.0
SEMICONDUCTORS
Koei Co., Ltd. ............................................ JPN 60,000 2,081,395 1.0
SOFTWARE
Logica PLC ................................................ UK 71,000 501,553 0.2
COMPUTERS & PERIPHERALS
------------
7,505,753
------------
</TABLE>
Statement of Additional Information Page 47
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Consumer Durables (2.2%)
Samsung Electronics Co.: .................................. KOR -- -- 1.3
CONSUMER ELECTRONICS
Common ................................................. -- 7,428 $ 1,350,197 --
Preferred-/- ............................................ -- 4,434 514,451 --
Preferred New-/- ........................................ -- 2,856 325,474 --
New-/- .................................................. -- 1,470 259,188 --
New 2-/- ................................................ -- 200 35,264 --
PSA Peugeot Citroen S.A. .................................. FR 8,797 1,162,258 0.6
AUTOMOBILES
Kiekert AG-/- ............................................ GER 11,130 661,326 0.3
AUTO PARTS
------------
4,308,158
------------ -----
TOTAL EQUITY INVESTMENTS (cost $154,918,116) ................ 183,589,801 90.1
------------ -----
<CAPTION>
Market % of Net
Repurchase Agreement Value Assets {d}
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 29, 1995, with State Street Bank & Trust
Company, due January 2, 1996, for an effective yield of
5.55%, collateralized by $12,475,000 U.S. Treasury Notes,
10.375% due 11/15/12 (market value of collateral is
$17,377,117, including accrued interest).
(cost $17,033,875) ...................................... 17,033,875 8.4
------------ -----
TOTAL INVESTMENTS (cost $171,951,991) * ..................... 200,623,676 98.5
Other Assets and Liabilities ................................ 3,146,393 1.5
------------ -----
NET ASSETS .................................................. $203,770,069 100.0
------------ -----
------------ -----
</TABLE>
- ----------------
{d} Percentages indicated are based on net assets of $203,770,069.
-/- Non-income producing security.
{\/} U.S. currency denominated.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
* For Federal income tax purposes, cost is $172,534,069 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 32,776,324
Unrealized depreciation: (4,686,717)
-------------
Net unrealized appreciation: $ 28,089,607
-------------
-------------
Statement of Additional Information Page 48
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
The Fund's Portfolio of Investments at December 31, 1995, was concentrated in
the following countries:
<TABLE>
<CAPTION>
Percentage of Net Assets {d}
-----------------------------------
Short-Term
Country (Country Code/Currency Code) Equity & Other Total
- -------------------------------------- ------ ------------- ----------
<S> <C> <C> <C>
Belgium (BEL/BEF) ................... 0.7 0.7
Finland (FIN/FIM) .................... 0.8 0.8
France (FR/FRF) ...................... 4.9 4.9
Germany (GER/DEM) .................... 2.0 2.0
Hong Kong (HK/HKD) ................... 2.7 2.7
India (IND/INR) ...................... 0.7 0.7
Italy (ITLY/ITL) ..................... 2.1 2.1
Japan (JPN/JPY) ...................... 15.5 15.5
Korea (KOR/KRW) ...................... 2.3 2.3
Netherlands (NETH/NLG) ............... 4.6 4.6
Norway (NOR/NOK) ..................... 0.7 0.7
Singapore (SING/SGD) ................. 1.9 1.9
Spain (SPN/ESP) ...................... 2.1 2.1
Sweden (SWDN/SEK) .................... 2.8 2.8
Switzerland (SWTZ/CHF) ............... 3.2 3.2
Thailand (THAI/THB) .................. 3.4 3.4
United Kingdom (UK/GBP) .............. 12.5 12.5
United States (US/USD) ............... 26.8 9.9 36.7
Venezuela (VENZ/VEB) ................. 0.4 0.4
------ --- -----
Total ............................... 90.1 9.9 100.0
------ --- -----
------ --- -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $203,770,069.
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Unrealized
Market Value Contract Delivery Appreciation
Contracts to Buy: (U.S. Dollars) Price Date (Depreciation)
- ---------------------------------------------------------------------------- -------------- --------- -------- --------------
<S> <C> <C> <C> <C>
Japanese Yen................................................................ 1,395,287 100.25490 02/14/96 $ (31,078)
-------------- --------------
Total Contracts to Buy (Payable amount $1,426,365)........................ 1,395,287 (31,078)
-------------- --------------
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF NET ASSETS IS 0.68%
<CAPTION>
Contracts to Sell:
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
French Francs............................................................... 4,093,886 4.91125 02/06/96 (21,603)
French Francs............................................................... 2,497,636 4.88280 02/16/96 930
Japanese Yen................................................................ 2,925,159 101.50000 02/09/96 30,506
Japanese Yen................................................................ 5,459,181 99.00000 02/14/96 192,334
Japanese Yen................................................................ 3,580,911 98.95800 02/14/96 127,733
Japanese Yen................................................................ 4,692,963 99.80000 02/29/96 116,656
Netherland Guilders......................................................... 2,442,213 1.58068 02/15/96 25,080
Netherland Guilders......................................................... 438,346 1.58000 02/15/96 4,692
Netherland Guilders......................................................... 1,377,659 1.60472 02/15/96 (6,703)
Swedish Krona............................................................... 2,302,972 6.60950 02/22/96 19,443
Swiss Francs................................................................ 4,725,579 1.15258 03/19/96 (40,438)
-------------- --------------
Total Contracts to Sell (Receivable amount $34,985,135)................... 34,536,505 448,630
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF NET ASSETS IS 16.95%
Total Open Forward Foreign Currency Contracts, Net........................ $ 417,552
--------------
--------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
Statement of Additional Information Page 49
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $171,951,991)
(Note 1)............................................... $200,623,676
U.S. currency.............................. $ 251
Foreign currencies (cost $467,274)......... 427,623 427,874
--------
Receivable for securities sold.......................... 3,045,240
Receivable for Fund shares sold......................... 503,196
Receivable for open forward foreign currency contracts,
net (Note 1)........................................... 417,552
Dividends and dividend withholding tax reclaims
receivable............................................. 381,800
Cash held as collateral for securities loaned (Note
1)..................................................... 10,328,426
------------
Total assets.......................................... 215,727,764
------------
Liabilities:
Payable for Fund shares repurchased..................... 607,335
Payable for securities purchased........................ 463,109
Payable for investment management and administration
fees (Note 2).......................................... 170,673
Payable for printing and postage expenses............... 138,348
Payable for service and distribution expenses (Note
2)..................................................... 91,522
Payable for transfer agent fees (Note 2)................ 79,778
Payable for professional fees........................... 37,135
Payable for registration and filing fees................ 16,006
Payable for custodian fees (Note 1)..................... 11,827
Payable for insurance expenses.......................... 4,998
Payable for fund accounting fees (Note 2)............... 4,358
Payable for Trustees' fees and expenses (Note 2)........ 3,680
Distribution payable.................................... 500
Collateral for securities loaned (Note 1)............... 10,328,426
------------
Total liabilities..................................... 11,957,695
------------
Net assets................................................ $203,770,069
------------
------------
Class A:
Net asset value and redemption price per share
($145,982,279 DIVIDED BY 8,679,483 shares outstanding)... $ 16.82
------------
------------
Maximum offering price per share
(100/95.25 of $16.82) *.................................. $ 17.66
------------
------------
Class B:+
Net asset value and offering price per share
($56,095,248 DIVIDED BY 3,400,308 shares outstanding).... $ 16.50
------------
------------
Advisor Class: (Notes 1 & 4)
Net asset value, offering price per share, and redemption
price per share
($1,692,542 DIVIDED BY 100,384 shares outstanding)....... $ 16.86
------------
------------
Net assets consist of:
Paid in capital (Note 4)................................ $170,433,182
Accumulated net realized gain on investments and foreign
currency transactions.................................. 4,280,496
Net unrealized appreciation on translation of assets and
liabilities in foreign currencies...................... 384,706
Net unrealized appreciation of investments.............. 28,671,685
------------
Total -- representing net assets applicable to capital
shares outstanding....................................... $203,770,069
------------
------------
<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.
Statement of Additional Information Page 50
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
STATEMENT OF OPERATIONS
Year ended December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of
$348,591)................................................. $ 3,312,606
Interest income............................................ 500,830
-----------
Total investment income.................................. 3,813,436
-----------
Expenses:
Investment management and administration fees (Note 2)..... 2,050,983
Service and distribution expenses: (Note 2)
Class A.................................. $ 550,183
Class B.................................. 522,040 1,072,223
-----------
Transfer agent fees (Note 2)............................... 563,984
Printing and postage expenses.............................. 308,473
Custodian fees (Note 1).................................... 165,402
Registration and filing fees............................... 67,270
Audit fees................................................. 65,300
Fund accounting fees (Note 2).............................. 52,845
Legal fees................................................. 25,021
Trustees' fees and expenses (Note 2)....................... 21,445
-----------
Total expenses before reductions......................... 4,392,946
-----------
Expense reductions (Notes 1 & 5)....................... (121,393)
-----------
Total net expenses....................................... 4,271,553
-----------
Net investment loss.......................................... (458,117)
-----------
Net realized and unrealized gain (loss) on
investments and foreign currencies: (Note 1)
Net realized gain on investments........... 13,048,225
Net realized loss on foreign currency
transactions.............................. (3,052,724)
-----------
Net realized gain during the year........................ 9,995,501
Net change in unrealized appreciation on
translation of assets and liabilities in
foreign
currencies................................ (595,367)
Net change in unrealized appreciation of
investments............................... 11,340,575
-----------
Net unrealized appreciation during the year.............. 10,745,208
-----------
Net realized and unrealized gain on investments and foreign
currencies.................................................. 20,740,709
-----------
Net increase in net assets resulting from operations......... $20,282,592
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 51
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- -----------------
<S> <C> <C>
Increase (Decrease) in net assets
Operations:
Net investment (loss)...................... $ (458,117) $ (364,638)
Net realized gain on investments and
foreign currency transactions............. 9,995,501 11,169,856
Net change in unrealized depreciation on
translation of assets and liabilities in
foreign currencies........................ (595,367) (439,209)
Net change in unrealized appreciation
(depreciation) of investments............. 11,340,575 (27,662,950)
----------------- -----------------
Net increase (decrease) in net assets
resulting from operations............... 20,282,592 (17,296,941)
----------------- -----------------
Class A:
Distributions to shareholders: (Note 1)
From net realized gain on investments...... (3,836,040) (8,774,504)
Class B:
Distributions to shareholders: (Note 1)
From net realized gain on investments...... (1,484,807) (2,518,790)
Advisor Class:
Distributions to shareholders: (Note 1)
From net realized gain on investments...... (44,576) --
----------------- -----------------
Total distributions...................... (5,365,423) (11,293,294)
----------------- -----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested................................ 134,626,823 146,805,682
Decrease from capital shares repurchased... (180,807,770) (97,769,940)
----------------- -----------------
Net increase (decrease) from capital
share transactions...................... (46,180,947) 49,035,742
----------------- -----------------
Total increase (decrease) in net assets...... (31,263,778) 20,445,507
Net assets:
Beginning of year.......................... 235,033,847 214,588,340
----------------- -----------------
End of year................................ $ 203,770,069 $235,033,847
----------------- -----------------
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 52
<PAGE>
GT GLOBAL WORLDWIDE 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>
CLASS A+
---------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1995 * 1994 1993 * 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 15.53 $ 17.47 $ 14.47 $ 14.07 $ 11.83
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income (loss).......... (0.00) (0.00) 0.04 0.07 0.10
Net realized and unrealized gain
(loss) on investments................ 1.74 (1.16) 3.92 0.39 2.29
----------- ----------- ----------- ----------- -----------
Net increase (decrease) from
investment operations.............. 1.74 (1.16) 3.96 0.46 2.39
----------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From net investment income............ 0.00 0.00 0.00 0.00 (0.15)
From net realized gain on
investments.......................... (0.45) (0.78) (0.96) (0.06) 0.00
----------- ----------- ----------- ----------- -----------
Total distributions................. (0.45) (0.78) (0.96) (0.06) (0.15)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period.......... $ 16.82 $ 15.53 $ 17.47 $ 14.47 $ 14.07
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total investment return (c)............. 11.23% (6.65)% 27.6% 3.3% 20.3%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 145,982 $ 182,467 $ 193,997 $ 141,310 $ 126,868
Ratio of net investment income (loss) to
average net assets..................... (0.06)% (0.01)% 0.9% 0.5% 0.8%
Ratio of expenses to average net assets:
With expense reductions (Notes 1 & 5)... 1.87% 1.81% 1.9% 2.1% 2.0%
Without expense reductions.............. 1.93% 1.84% --%** --%** --%**
Portfolio turnover rate++++............. 113% 86% 92% 95% 122%
</TABLE>
- ----------------
+ 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 is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Calculated based upon weighted average shares outstanding during the
period.
** Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions,
if any.
(a) Not annualized.
(b) Annualized.
(c) Total investment return does not include sales charges.
Statement of Additional Information Page 53
<PAGE>
GT GLOBAL WORLDWIDE 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>
CLASS B++ ADVISOR
------------------------------------- CLASS+++
--------------
YEAR ENDED DECEMBER APRIL 1, 1993 JUNE 1, 1995
31, TO TO
---------------------- DECEMBER 31, DECEMBER 31,
1995 * 1994 1993 * 1995 *
---------- ---------- ------------- --------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 15.34 $ 17.39 $ 15.67 $ 15.26
---------- ---------- ------------- -------
Income from investment operations:
Net investment income (loss).......... (0.12) (0.11) (0.04) 0.03
Net realized and unrealized gain
(loss) on investments................ 1.73 (1.16) 2.72 2.02
---------- ---------- ------------- -------
Net increase (decrease) from
investment operations.............. 1.61 (1.27) 2.68 2.05
---------- ---------- ------------- -------
Distributions to shareholders:
From net investment income............ 0.00 0.00 0.00 --
From net realized gain on
investments.......................... (0.45) (0.78) (0.96) (0.45)
---------- ---------- ------------- -------
Total distributions................. (0.45) (0.78) (0.96) (0.45)
---------- ---------- ------------- -------
Net asset value, end of period.......... $ 16.50 $ 15.34 $ 17.39 $ 16.86
---------- ---------- ------------- -------
---------- ---------- ------------- -------
Total investment return (c)............. 10.52% (7.32)% 17.3 %(a) 13.46 %(a)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 56,095 $ 52,567 $ 20,592 $ 1,693
Ratio of net investment income (loss) to
average net assets..................... (0.71)% (0.66)% (0.4)%(b) 0.29 %(b)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 & 5)... 2.52% 2.46% 2.5 %(b) 1.52 %(b)
Without expense reductions.............. 2.58% 2.49% -- %** 1.58 %(b)
Portfolio turnover rate++++............. 113% 86% 92 % 113 %
</TABLE>
- ----------------
+ 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 is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Calculated based upon weighted average shares outstanding during the
period.
** Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions,
if any.
(a) Not annualized.
(b) Annualized.
(c) Total investment return does not include sales charges.
Statement of Additional Information Page 54
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
NOTES TO
FINANCIAL STATEMENTS
December 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Worldwide Growth Fund ("Fund"), is a separate series of G.T. Global
Growth Series ("Company"). The Company is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended
("1940 Act"), 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 Fund offers 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. The Fund
commenced sale of Advisor Class shares on June 1, 1995. Investment income,
realized and unrealized capital gains and losses, and the common expenses of the
Fund 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 Fund. 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 Fund in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles, and,
therefore, the financial statements may include certain estimates made by
management.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes 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 in which
such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by LGT Asset Management, Inc.
("LGT", formerly known as G.T. Capital Management, Inc.) 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,
the Fund's investment manager, 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
foreign exchange translation and 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
Fund's Board of Trustees.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rate, except that when an occurrence subsequent to the time
a value was so established is likely to have materially changed such value, then
the fair value of those securities will be determined by consideration of other
factors by or under the direction of the Company's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities
Statement of Additional Information Page 55
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
transactions, and the differences between the amounts of dividends, interest,
and foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains or losses arise from changes in the value of assets and
liabilities other than investments in securities at year end, resulting from
changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. 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 under each agreement at
its maturity. LGT is responsible for determining that the value of these
underlying securities remain at least equal to the resale price.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of a contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund'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 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 can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid, 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 may use options to manage its exposure
to the stock market and to fluctuations in currency values or interest rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund'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 has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund 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 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 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 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 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 may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) 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 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 agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in the value
of the contract. Such receipts or payments are known as "variation margin" and
are recorded by the Fund as
Statement of Additional Information Page 56
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
unrealized gains or losses. When the contract is closed, the Fund 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 is that the change in value of the underlying securities may
not correlate to the change in value of the contracts. The Fund may use futures
contracts to manage its exposure to the stock market and to fluctuations in
currency values or interest rates.
(G) 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 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 may trade
securities on other than normal settlement terms. This may increase the risk of
the other party to the transaction fails to deliver and cause the Fund to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At December 31, 1995, stocks with an aggregate value of approximately $9,756,093
were on loan to brokers. The loans were secured by cash collateral of
$10,328,426, received by the Fund. For international securities, cash collateral
is received by the Fund against loaned securities in an amount at least equal to
105% of the market value of the loaned securities at the inception of each loan.
This collateral must be maintained at not less than 103% of the market value of
the loaned securities during the period of the loan. For domestic securities,
cash collateral is received by the Fund against loaned securities in an 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 each loan. For
the year ended December 31, 1995, the Fund received securities lending fees of
$48,192, which were used to reduce custodian fees.
(I) TAXES
It is the policy of the Fund 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 Fund 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, or excise tax on income
and capital gains.
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the 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 and timing differences.
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investment in emerging market
countries may involve greater risks than investments in more developed markets
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
(L) RESTRICTED SECURITIES
The Fund 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.
(M) INDEXED SECURITIES
The Fund 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 Fund's investment manager and administrator. The Fund pays investment
management and administration fees at the following annualized rates: 0.975% on
the first $500 million of average daily net assets of the Fund; 0.95% on the
next $500 million; 0.925% on the next $500 million and 0.90% 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 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
Statement of Additional Information Page 57
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
state in which the Fund's shares are offered for sale, based on the average net
asset value of the Fund.
GT Global, Inc. ("GT Global", formerly known as G.T. Global Financial Services,
Inc.), an affiliate of LGT, serves as the Fund's distributor. The Fund offers
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 year ended December 31, 1995, GT Global retained $28,527
of such sales charges. 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 CDSCs of
$4,493 for the year ended December 31, 1995. 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 CDSC, in accordance with the Fund's current
prospectus. For the year ended December 31, 1995, GT Global collected CDSCs in
the amount of $255,556. 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 Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the 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 its 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
its 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 Fund's Class B Plan, the 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 its 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 its 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 have voluntarily undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary items) to
the maximum annual level of 2.25%, 2.90%, and 1.90% 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 Fund. 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. The Transfer Agent also is reimbursed by the Fund for its
out-of-pocket expenses for such items as postage, forms, telephone charges,
stationery and office supplies.
Effective July 1, 1995, LGT has assumed the role of pricing and accounting agent
for the Fund. The monthly fee for these services to LGT is a percentage, not to
exceed 0.03% annually, of the Fund's average daily net assets. The annual fee
rate is derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by LGT ("GT Funds") and 0.02% to the assets in
excess of $5 billion and dividing the result by the aggregated assets of the GT
Funds. For the period ended December 31, 1995, the Fund paid fund accounting
fees of $22,092 to LGT.
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.
Statement of Additional Information Page 58
<PAGE>
GT GLOBAL WORLDWIDE GROWTH FUND
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1995, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $191,266,449 and $252,366,205, respectively. There were
no purchases or sales of U.S. government obligations by the Fund during the
year.
4. CAPITAL SHARES
At December 31, 1995, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
-------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold................................................................. 6,947,488 $ 112,415,112 5,542,867 $ 94,463,212
Shares issued in connection with reinvestment of distributions.............. 198,449 3,306,220 455,250 7,079,197
----------- ------------- ---------- -------------
7,145,937 115,721,332 5,998,117 101,542,409
Shares repurchased.......................................................... (10,218,028) (163,317,151) (5,352,193) (90,753,350)
----------- ------------- ---------- -------------
Net increase (decrease)..................................................... (3,072,091) $ (47,595,819) 645,924 $ 10,789,059
----------- ------------- ---------- -------------
----------- ------------- ---------- -------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
-------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
CLASS B
Shares sold................................................................. 1,002,715 $ 15,948,611 2,513,641 $ 43,054,428
Shares issued in connection with reinvestment of distributions.............. 79,120 1,293,841 143,692 2,208,845
----------- ------------- ---------- -------------
1,081,835 17,242,452 2,657,333 45,263,273
Shares repurchased.......................................................... (1,107,459) (17,390,637) (415,621) (7,016,590)
----------- ------------- ---------- -------------
Net increase (decrease)..................................................... (25,624) $ (148,185) 2,241,712 $ 38,246,683
----------- ------------- ---------- -------------
----------- ------------- ---------- -------------
</TABLE>
<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF SALE OF
SHARES) TO DECEMBER 31,
1995
------------------------
SHARES AMOUNT
---------- ------------
<S> <C> <C>
ADVISOR CLASS
Shares sold.................................................................. 103,579 $ 1,618,463
Shares issued in connection with reinvestment of distributions............... 2,669 44,576
---------- ------------
106,248 1,663,039
Shares repurchased........................................................... (5,864) (99,982)
---------- ------------
Net increase................................................................. 100,384 $ 1,563,057
---------- ------------
---------- ------------
</TABLE>
5. EXPENSE REDUCTIONS
LGT has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses. For the year ended December 31, 1995, the Fund's expenses were
reduced by $73,201 under these arrangements.
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$5,365,423 as capital gain dividends for the fiscal year ended December 31,
1995.
Statement of Additional Information Page 59
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
G.T. Global Growth Series:
We have audited the accompanying statement of assets and liabilities of GT
Global International Growth Fund, one of the funds organized as a series of G.T.
Global Growth Series, including the schedule of portfolio investments, as of
December 31, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the four years in the
period then ended. These financial statements and the financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits. The financial highlights for the year ended December 31, 1991 were
audited by other auditors whose report dated January 31, 1992 expressed an
unqualified opinion on such financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global International Growth Fund as of December 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the four years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 12, 1996
Statement of Additional Information Page 60
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
PORTFOLIO OF INVESTMENTS
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (25.2%)
DDI Corp. ................................................. JPN 1,449 $ 11,232,558 3.0
WIRELESS COMMUNICATIONS
Aoyama Trading Co., Ltd. ................................. JPN 320,000 10,232,558 2.7
RETAILERS-APPAREL
Seven-Eleven Japan Ltd. ................................... JPN 145,000 10,228,682 2.7
RETAILERS-OTHER
Ito-Yokado Co., Ltd. ...................................... JPN 130,000 8,011,628 2.1
RETAILERS-OTHER
Elsevier N.V. ............................................. NETH 469,083 6,267,717 1.7
BROADCASTING & PUBLISHING
Hagemeyer N.V. ............................................ NETH 105,302 5,509,683 1.5
WHOLESALE & INTERNATIONAL TRADE
Koninklijke Ahold N.V. .................................... NETH 120,725 4,937,242 1.3
RETAILERS-FOOD
Reuters Holdings PLC ..................................... UK 417,000 3,816,511 1.0
BROADCASTING & PUBLISHING
Securitas AB "B" ......................................... SWDN 77,680 3,687,064 1.0
BUSINESS & PUBLIC SERVICES
Tesco PLC ................................................. UK 791,200 3,648,291 1.0
RETAILERS-FOOD
EMAP PLC ................................................. UK 433,330 3,599,310 0.9
BROADCASTING & PUBLISHING
Autobacs Seven Co., Ltd. .................................. JPN 41,600 3,458,605 0.9
RETAILERS-OTHER
Fast Retailing Co., Ltd. .................................. JPN 65,400 3,250,988 0.9
RETAILERS-APPAREL
Great Universal Stores PLC ................................ UK 304,000 3,230,678 0.9
RETAILERS-OTHER
Compass Group PLC ......................................... UK 413,650 3,140,426 0.8
RESTAURANTS
British Airport Authority PLC ............................ UK 358,700 2,700,970 0.7
TRANSPORTATION - AIRLINES
Dixons Group PLC .......................................... UK 340,000 2,356,932 0.6
RETAILERS-APPAREL
Telecom Italia Mobile S.p.A. .............................. ITLY 1,335,355 2,350,562 0.6
TELEPHONE NETWORKS
ASSA Abloy AB "B"-/- ...................................... SWDN 182,850 1,708,235 0.5
BUSINESS & PUBLIC SERVICES
Granada Group PLC ......................................... UK 86,250 863,705 0.2
LEISURE & TOURISM
PT Indonesia Satellite (Indosat) - ADR{\/} ................ INDO 10,900 397,850 0.1
TELEPHONE NETWORKS
Marco Polo Developments Ltd. .............................. SING 252,600 387,653 0.1
LEISURE & TOURISM
Carrefour Supermarche ..................................... FR 300 182,289 --
RETAILERS-FOOD
News Corp., Ltd. .......................................... AUSL 18 96 --
BROADCASTING & PUBLISHING
------------
95,200,233
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 61
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (23.3%)
Banco Intercontinental Espanol ............................ SPN 61,393 $ 5,974,741 1.6
BANKS-MONEY CENTER
Axa Group ................................................. FR 84,336 5,691,969 1.5
INSURANCE - MULTI-LINE
Swiss Reinsurance Co. - Registered-/- ..................... SWTZ 4,480 5,216,625 1.4
INSURANCE - MULTI-LINE
HSBC Holdings PLC ......................................... HK 344,000 5,205,380 1.4
BANKS-MONEY CENTER
Bangkok Bank Co., Ltd. - Foreign .......................... THAI 415,000 5,043,288 1.3
BANKS-MONEY CENTER
Nichiei Co., Ltd. ........................................ JPN 66,000 4,924,419 1.3
INVESTMENT MANAGEMENT
National Australia Bank Ltd. .............................. AUSL 506,305 4,551,817 1.2
BANKS-MONEY CENTER
United Overseas Bank Ltd. - Foreign ....................... SING 453,300 4,359,887 1.2
BANKS-MONEY CENTER
Skandia Forsakrings AB Free ............................... SWDN 151,830 4,106,605 1.1
INSURANCE - MULTI-LINE
Internationale Nederlanden Groep N.V. ..................... NETH 58,027 3,883,925 1.0
OTHER FINANCIAL
Cardif S.A. ............................................... FR 33,196 3,788,397 1.0
INSURANCE - MULTI-LINE
AEGON N.V. ................................................ NETH 84,870 3,762,344 1.0
INSURANCE-LIFE
UNI Storebrand AS "A"-/- .................................. NOR 645,193 3,569,786 0.9
INSURANCE - MULTI-LINE
Invesco PLC ............................................... UK 868,400 3,417,783 0.9
INVESTMENT MANAGEMENT
Assicurazioni Generali S.p.A. ............................. ITLY 126,700 3,070,297 0.8
INSURANCE - MULTI-LINE
Land and House Co., Ltd. - Foreign ........................ THAI 185,000 3,041,700 0.8
REAL ESTATE
M & G Group PLC ........................................... UK 154,000 3,010,185 0.8
INVESTMENT MANAGEMENT
Thai Farmers Bank, Ltd. - Foreign ......................... THAI 261,000 2,632,804 0.7
BANKS-REGIONAL
Barclays PLC ............................................. UK 229,000 2,627,403 0.7
BANKS-MONEY CENTER
Mapfre Vida Seguros ....................................... SPN 43,289 2,570,563 0.7
INSURANCE-LIFE
Mercury Asset Management Group PLC ........................ UK 172,532 2,329,088 0.6
INVESTMENT MANAGEMENT
Corporacion Mapfre ........................................ SPN 40,330 2,258,480 0.6
INSURANCE - MULTI-LINE
National Westminster Bank PLC ............................. UK 185,500 1,867,672 0.5
BANKS-MONEY CENTER
Phatra Thanakit Co., Ltd. - Foreign ....................... THAI 133,800 1,147,768 0.3
INVESTMENT MANAGEMENT
Sanyo Shinpan Finance Co. ................................. JPN 1,600 131,783 --
CONSUMER FINANCE
------------
88,184,709
------------
Technology (9.4%)
Matsushita-Kotobuki Electronics Ltd. ...................... JPN 420,000 10,662,791 2.8
COMPUTERS & PERIPHERALS
Hosiden Electronics ....................................... JPN 740,000 6,381,783 1.7
COMPUTERS & PERIPHERALS
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 62
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Technology (Continued)
Kyushu-Matsushita Electric Co., Ltd. ...................... JPN 317,000 $ 5,467,636 1.4
COMPUTERS & PERIPHERALS
S.M.H. AG - Bearer ........................................ SWTZ 8,908 5,333,206 1.4
SEMICONDUCTORS
Keyence Corp. ............................................. JPN 31,000 3,574,612 0.9
INSTRUMENTATION & TEST
Koei Co., Ltd. ............................................ JPN 102,500 3,555,717 0.9
SOFTWARE
Logica PLC ................................................ UK 148,800 1,051,141 0.3
COMPUTERS & PERIPHERALS
------------
36,026,886
------------
Materials/Basic Industry (6.4%)
Broken Hill Proprietary Co., Ltd. ......................... AUSL 382,987 5,406,607 1.4
MISC. MATERIALS & COMMODITIES
Pilkington PLC: ........................................... UK -- -- 1.2
BUILDING MATERIALS & COMPONENTS
Common ................................................. -- 1,185,900 3,719,171 --
New ..................................................... -- 296,475 929,793 --
PT Semen Gresik - Foreign ................................. INDO 1,422,000 3,984,588 1.1
CEMENT
RWE AG .................................................... GER 9,006 3,266,002 0.9
MISC. MATERIALS & COMMODITIES
Amcor Ltd. ............................................... AUSL 346,282 2,444,222 0.6
PAPER/PACKAGING
Wickes PLC ................................................ UK 887,700 1,708,971 0.5
BUILDING MATERIALS & COMPONENTS
Siam Cement Co., Ltd. - Foreign ........................... THAI 30,000 1,663,225 0.4
CEMENT
Construcciones y Auxiliar de Ferrocarriles S.A. .......... SPN 32,848 1,164,919 0.3
BUILDING MATERIALS & COMPONENTS
------------
24,287,498
------------
Consumer Non-Durables (5.9%)
B.A.T. Industries PLC ..................................... UK 638,200 5,623,017 1.5
TOBACCO
Amway Japan Ltd. .......................................... JPN 121,700 5,141,589 1.4
HOUSEHOLD PRODUCTS
Polygram .................................................. NETH 81,259 4,322,719 1.1
RECREATION
Reliance Industries Ltd. - 144A GDR{.} -/- {\/} ........... IND 244,400 3,270,072 0.9
TEXTILES & APPAREL
South African Breweries Ltd. .............................. SAFR 50,099 1,835,153 0.5
BEVERAGES - ALCOHOLIC
Adidas AG-/- .............................................. GER 33,252 1,760,114 0.5
TEXTILES & APPAREL
------------
21,952,664
------------
Capital Goods (5.8%)
L.M. Ericsson Telephone Co. ............................... SWDN 226,708 4,440,901 1.2
TELECOM EQUIPMENT
Bic ....................................................... FR 41,740 4,251,257 1.1
OFFICE EQUIPMENT
Olivetti Group-/- ......................................... ITLY 4,696,250 3,804,407 1.0
OFFICE EQUIPMENT
Canon, Inc. ............................................... JPN 180,000 3,261,628 0.9
OFFICE EQUIPMENT
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 63
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Capital Goods (Continued)
Bouygues ................................................. FR 25,932 $ 2,616,271 0.7
CONSTRUCTION
Nokia AB "A" .............................................. FIN 64,164 2,480,167 0.7
TELECOM EQUIPMENT
Electrocomponents PLC ..................................... UK 136,600 762,424 0.2
ELECTRICAL PLANT/EQUIPMENT
------------
21,617,055
------------
Health Care (5.5%)
Takeda Chemical Industries ................................ JPN 500,000 8,236,434 2.2
PHARMACEUTICALS
Ciba-Geigy AG - Registered ................................ SWTZ 6,277 5,528,117 1.5
PHARMACEUTICALS
Medeva PLC ................................................ UK 834,800 3,499,395 0.9
PHARMACEUTICALS
Sankyo Co., Ltd. .......................................... JPN 153,000 3,439,535 0.9
PHARMACEUTICALS
------------
20,703,481
------------
Energy (4.4%)
Sasol Ltd. ................................................ SAFR 500,000 4,095,212 1.1
ENERGY SOURCES
North West Water PLC ...................................... UK 389,900 3,728,899 1.0
ENERGY SOURCES
Electrabel S.A. ........................................... BEL 15,059 3,604,739 1.0
ELECTRICAL & GAS UTILITIES
Korea Electric Power Corp.-/- ............................. KOR 55,050 2,360,685 0.6
ELECTRICAL & GAS UTILITIES
Oil Search Ltd. ........................................... AUSL 2,302,000 1,984,040 0.5
OIL
Compania Sevillana de Electricidad ........................ SPN 118,790 922,888 0.2
ELECTRICAL & GAS UTILITIES
Polifin Ltd.-/- .......................................... SAFR 105,000 168,542 --
ENERGY SOURCES
------------
16,865,005
------------
Consumer Durables (2.7%)
Samsung Electronics Co.: .................................. KOR -- -- 1.5
CONSUMER ELECTRONICS
Preferred-/- ............................................ -- 22,803 2,645,701 --
Common ................................................. -- 8,816 1,602,496 --
Preferred New-/- ........................................ -- 6,491 739,725 --
New - GDR Non-Voting-/- {\/} ............................ -- 9,220 539,370 --
New-/- .................................................. -- 1,744 307,499 --
New - 144A GDR{.} -/- {\/} .............................. -- 1,826 175,296 --
New - GDR Voting-/- {\/} ................................ -- 1,098 105,408 --
New 2-/- ................................................ -- 494 87,101 --
GDR 1/2 Voting-/- {\/} .................................. -- 630 60,480 --
PSA Peugeot Citroen S.A. .................................. FR 21,205 2,801,601 0.7
AUTOMOBILES
Kiekert AG-/- ............................................ GER 29,070 1,727,292 0.5
AUTO PARTS
------------
10,791,969
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 64
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Multi Industry/Miscellaneous (2.5%)
Barlow Ltd. ............................................... SAFR 300,000 $ 4,280,423 1.1
CONGLOMERATE
Citic Pacific Ltd. ........................................ HK 535,000 1,830,154 0.5
CONGLOMERATE
Hutchison Whampoa ......................................... HK 295,000 1,797,012 0.5
CONGLOMERATE
United Industrial Corp. ................................... SING 1,726,000 1,696,704 0.4
CONGLOMERATE
------------
9,604,293
------------ -----
TOTAL EQUITY INVESTMENTS (cost $306,331,543) ................ 345,233,793 91.1
------------ -----
<CAPTION>
Principal Market % of Net
Fixed Income Investments Currency Amount Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Corporate Bonds (0.1%)
Thailand (0.1%)
Siam Syntech Construction Co., Convertible Bond, 4.5% due
2/25/02 (cost $310,000) ................................ USD 310,000 145,700 0.1
------------ -----
<CAPTION>
No. of Market % of Net
Warrants (0.0%) Country Warrants Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
CMIC Finance & Securities Co., Ltd. Warrants, expire
12/31/99 (cost $43,003)-/- ............................... THAI 107,250 -- --
------------ -----
SECURITIES BROKER
<CAPTION>
Market % of Net
Repurchase Agreement Value Assets {d}
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 29, 1995, with State Street Bank & Trust
Company, due January 2, 1996, for an effective yield of
5.55%, collateralized by $12,790,000 U.S. Treasury Notes,
due 8/31/97 (market value of collateral is $13,201,082,
including accrued interest). (cost $12,939,982) ......... 12,939,982 3.4
------------ -----
TOTAL INVESTMENTS (cost $319,624,528) * ..................... 358,319,475 94.6
Other Assets and Liabilities ................................ 20,531,764 5.4
------------ -----
NET ASSETS .................................................. $378,851,239 100.0
------------ -----
------------ -----
</TABLE>
- ----------------
{d} Percentages indicated are based on net assets of $378,851,239.
-/- Non-income producing security.
{\/} U.S. currency denominated.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
* For Federal income tax purposes, cost is $321,085,734 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 54,428,631
Unrealized depreciation: (17,194,890)
-------------
Net unrealized appreciation: $ 37,233,741
-------------
-------------
Abbreviations:
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 65
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
The Fund's Portfolio of Investments at December 31, 1995, was concentrated in
the following countries:
<TABLE>
<CAPTION>
Percentage of Net Assets {d}
-------------------------------------------
Fixed Income,
Rights & Short-Term
Country(Country Code/Currency Code) Equity Warrants & Other Total
- -------------------------------------- ------ ------------- ---------- -----
<S> <C> <C> <C> <C>
Australia (AUSL/AUD) ................. 3.7 3.7
Belgium (BEL/BEF) ................... 1.0 1.0
Finland (FIN/FIM) .................... 0.7 0.7
France (FR/FRF) ...................... 5.0 5.0
Germany (GER/DEM) .................... 1.9 1.9
Hong Kong (HK/HKD) ................... 2.4 2.4
India (IND/INR) ...................... 0.9 0.9
Indonesia (INDO/IDR) ................. 1.2 1.2
Italy (ITLY/ITL) ..................... 2.4 2.4
Japan (JPN/JPY) ...................... 26.7 26.7
Korea (KOR/KRW) ...................... 2.1 2.1
Netherlands (NETH/NLG) ............... 7.6 7.6
Norway (NOR/NOK) ..................... 0.9 0.9
Singapore (SING/SGD) ................. 1.7 1.7
South Africa (SAFR/ZAR) .............. 2.7 2.7
Spain (SPN/ESP) ...................... 3.4 3.4
Sweden (SWDN/SEK) .................... 3.8 3.8
Switzerland (SWTZ/CHF) ............... 4.3 4.3
Thailand (THAI/THB) .................. 3.5 0.1 3.6
United Kingdom (UK/GBP) .............. 15.2 15.2
United States (US/USD) ............... 8.8 8.8
------ --- --- -----
Total ............................... 91.1 0.1 8.8 100.0
------ --- --- -----
------ --- --- -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $378,851,239.
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Market Value
(U.S. Contract Delivery Appreciation
Contracts to Buy: Dollars) Price Date (Depreciation)
- ---------------------------------------------------------------------------- ------------- ----------- --------- -------------
<S> <C> <C> <C> <C>
Japanese Yen................................................................ 9,884,094 102.48790 02/14/96 $ (220,150)
------------- -------------
Total Contracts to Buy (Payable amount $10,104,244)....................... 9,884,094 (220,150)
------------- -------------
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF NET ASSETS IS 2.61%
Contracts to Sell:
- ----------------------------------------------------------------------------
French Francs............................................................... 2,046,943 4.86000 02/06/96 10,670
French Francs............................................................... 8,187,772 4.91125 02/06/96 (43,206)
French Francs............................................................... 2,456,691 4.88280 02/16/96 915
Japanese Yen................................................................ 23,888,800 101.50000 02/09/96 249,131
Japanese Yen................................................................ 15,600,849 101.40000 02/09/96 178,244
Japanese Yen................................................................ 23,285,676 99.00000 02/14/96 820,384
Netherland Guilders......................................................... 7,389,261 1.58068 02/15/96 75,880
Netherland Guilders......................................................... 4,446,081 1.58000 02/15/96 47,590
Netherland Guilders......................................................... 3,882,493 1.60472 02/15/96 (18,890)
Swedish Krona............................................................... 6,038,739 6.60950 02/22/96 50,980
Swiss Francs................................................................ 11,892,708 1.15258 03/19/96 (101,770)
------------- -------------
Total Contracts to Sell (Receivable amount $110,385,941).................. 109,116,013 1,269,928
------------- -------------
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF NET ASSETS IS 28.80%
Total Open Forward Foreign Currency Contracts, Net........................ $ 1,049,778
-------------
-------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 66
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $319,624,528)
(Note 1)................................................. $358,319,475
U.S. currency.............................. $ 814
Foreign currencies (cost $3,646,192)....... 3,671,650 3,672,464
----------
Receivable for Fund shares sold........................... 18,130,532
Receivable for securities sold............................ 3,441,582
Receivable for open forward foreign currency contracts,
net (Note 1)............................................. 1,049,778
Dividends and dividend withholding tax reclaims
receivable............................................... 904,586
Interest receivable....................................... 11,857
Cash held as collateral for securities loaned (Note 1).... 18,709,722
------------
Total assets............................................ 404,239,996
------------
Liabilities:
Payable for securities purchased.......................... 3,482,185
Payable for Fund shares repurchased....................... 2,426,740
Payable for investment management and administration fees
(Note 2)................................................. 304,119
Payable for service and distribution expenses (Note 2).... 147,186
Payable for printing and postage expenses................. 125,252
Payable for transfer agent fees........................... 75,866
Payable for professional fees............................. 32,169
Payable for custodian fees (Note 1)....................... 21,373
Payable for registration and filing fees.................. 14,184
Payable for fund accounting fees (Note 2)................. 7,781
Payable for Trustees' fees and expenses (Note 2).......... 5,164
Other accrued expenses.................................... 37,016
Collateral for securities loaned (Note 1)................. 18,709,722
------------
Total liabilities....................................... 25,388,757
------------
Net assets.................................................. $378,851,239
------------
------------
Class A:
Net asset value and redemption price per share
($308,816,401 DIVIDED BY 33,994,719 shares outstanding).... $ 9.08
------------
------------
Maximum offering price per share
(100/95.25 of $9.08) *..................................... $ 9.53
------------
------------
Class B:+
Net asset value and offering price per share
($69,654,073 DIVIDED BY 7,814,991 shares outstanding)...... $ 8.91
------------
------------
Advisor Class: (Note 1 & 4)
Net asset value, offering price per share, and redemption
price per share
($380,765 DIVIDED BY 41,815 shares outstanding)............ $ 9.11
------------
------------
Net assets consist of:
Paid in capital (Note 4).................................. $343,057,435
Accumulated net realized loss on investments and foreign
currency transactions.................................... (3,964,587)
Net unrealized appreciation on translation of assets and
liabilities in foreign currencies........................ 1,063,444
Net unrealized appreciation of investments................ 38,694,947
------------
Total -- representing net assets applicable to capital
shares outstanding......................................... $378,851,239
------------
------------
<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.
Statement of Additional Information Page 67
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
STATEMENT OF OPERATIONS
Year ended December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of
$1,361,001)............................................... $6,759,232
Interest income............................................ 1,273,947
----------
Total investment income.................................. 8,033,179
----------
Expenses:
Investment management and administration fees.............. 4,027,923
Service and distribution expenses: (Note 2)
Class A.................................. $ 1,206,618
Class B.................................. 681,752 1,888,370
-----------
Transfer agent fees........................................ 965,711
Custodian fees (Note 1).................................... 395,778
Printing and postage expenses.............................. 273,691
Fund accounting fees (Note 2).............................. 102,559
Audit fees................................................. 58,500
Registration and filing fees............................... 39,374
Legal fees................................................. 32,346
Trustees' fees and expenses (Note 2)....................... 6,625
Insurance expenses......................................... 6,419
----------
Total expenses before reductions......................... 7,797,296
----------
Expense reductions (Note 1 & 5)........................ (319,478)
----------
Total net expenses....................................... 7,477,818
----------
Net investment income........................................ 555,361
----------
Net realized and unrealized gain on
investments and foreign currencies: (Note 1)
Net realized gain on investments........... 5,147,147
Net realized loss on foreign currency
transactions.............................. (4,165,066)
-----------
Net realized gain during the year........................ 982,081
Net change in unrealized appreciation on
translation of assets and liabilities in
foreign currencies........................ 247,497
Net change in unrealized appreciation of
investments............................... 7,882,538
-----------
Net unrealized appreciation during the year.............. 8,130,035
----------
Net realized and unrealized gain on investments and foreign
currencies.................................................. 9,112,116
----------
Net increase in net assets resulting from operations......... $9,667,477
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 68
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- -----------------
<S> <C> <C>
Decrease in net assets
Operations:
Net investment income (loss)............... $ 555,361 $ (618,214)
Net realized gain on investments and
foreign currency transactions............. 982,081 66,237,292
Net change in unrealized appreciation
(depreciation) on translation of assets
and liabilities in foreign currencies..... 247,497 (4,100,341)
Net change in unrealized appreciation
(depreciation) of investments............. 7,882,538 (100,302,042)
----------------- -----------------
Net increase (decrease) in net assets
resulting from operations............... 9,667,477 (38,783,305)
----------------- -----------------
Class A:
Distributions to shareholders:
From net investment income................. -- (1,684,749)
From net realized gain on investments...... (7,612,428) (40,336,515)
In excess of net realized gain on
investments............................... (6,510,219) --
Class B:
Distributions to shareholders:
From net investment income................. -- (280,442)
From net realized gain on investments...... (1,774,209) (6,714,382)
In excess of net realized gain on
investments............................... (1,517,320) --
Advisor Class:
Distributions to shareholders:
From net realized gain on investments...... (9,818) --
In excess of net realized gain on
investments............................... (8,396) --
----------------- -----------------
Total distributions...................... (17,432,390) (49,016,088)
----------------- -----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested................................ 1,294,676,738 1,036,090,550
Decrease from capital shares repurchased... (1,410,555,957) (999,937,817)
----------------- -----------------
Net increase (decrease) from capital
share transactions...................... (115,879,219) 36,152,733
----------------- -----------------
Total decrease in net assets................. (123,644,132) (51,646,660)
Net assets:
Beginning of year.......................... 502,495,371 554,142,031
----------------- -----------------
End of year................................ $ 378,851,239 $ 502,495,371
----------------- -----------------
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 69
<PAGE>
GT GLOBAL INTERNATIONAL 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>
CLASS A+
---------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1995 1994 1993 (A) 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 9.17 $ 11.02 $ 8.21 $ 8.74 $ 7.82
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income (loss).......... 0.03 (0.04) 0.03 0.11 0.14
Net realized and unrealized gain
(loss) on investments................ 0.32 (0.82) 2.78 (0.62) 0.89
----------- ----------- ----------- ----------- -----------
Net increase (decrease) from
investment operations.............. 0.35 (0.86) 2.81 (0.51) 1.03
----------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From net investment income............ 0.00 (0.04) 0.00 (0.02) (0.11)
From net realized gain on
investments.......................... (0.24) (0.95) 0.00 0.00 0.00
In excess of net realized gain on
investments.......................... (0.20) 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- -----------
Total distributions................. (0.44) (0.99) 0.00 (0.02) (0.11)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period.......... $ 9.08 $ 9.17 $ 11.02 $ 8.21 $ 8.74
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total investment return (d)............. 3.88% (7.78)% 34.2% (5.8)% 13.2%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 308,816 $ 430,701 $ 523,397 $ 421,693 $ 463,851
Ratio of net investment income (loss) to
average net assets..................... 0.24% (0.04)% 0.3% 1.2% 1.5%
Ratio of expenses to average net assets:
With expense reductions............... 1.70% 1.70% 1.80% 1.90% 1.90%
Without expense reductions............ 1.78% 1.75% --%* --%* --%*
Portfolio turnover rate++++............. 75% 96% 90% 89% 83%
</TABLE>
- ----------------
+ 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 is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(a) Calculated based upon weighted average shares outstanding during the
period.
(b) Not annualized.
(c) Annualized.
(d) Total investment return does not include sales charges.
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 70
<PAGE>
GT GLOBAL INTERNATIONAL 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>
ADVISOR
CLASS B++ CLASS+++
---------------------------------------- --------------
APRIL 1, 1993 JUNE 1, 1995
YEAR ENDED DECEMBER 31, TO TO
------------------------- DECEMBER 31, DECEMBER 31,
1995 1994 1993 (A) 1995
---------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 9.07 $ 10.98 $ 8.74 $ 8.49
---------- ------------- ------------- -------
Income from investment operations:
Net investment income (loss).......... (0.04) (0.10) (0.01) 0.03
Net realized and unrealized gain
(loss) on investments................ 0.32 (0.82) 2.25 1.03
---------- ------------- ------------- -------
Net increase (decrease) from
investment operations.............. 0.28 (0.92) 2.24 1.06
---------- ------------- ------------- -------
Distributions to shareholders:
From net investment income............ 0.00 (0.04) 0.00 --
From net realized gain on
investments.......................... (0.24) (0.95) 0.00 (0.24)
In excess of net realized gain on
investments.......................... (0.20) 0.00 0.00 (0.20)
---------- ------------- ------------- -------
Total distributions................. (0.44) (0.99) 0.00 (0.44)
---------- ------------- ------------- -------
Net asset value, end of period.......... $ 8.91 $ 9.07 $ 10.98 $ 9.11
---------- ------------- ------------- -------
---------- ------------- ------------- -------
Total investment return (d)............. 3.15% (8.36)% 25.6 %(b) 12.56 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 69,654 $ 71,794 $ 30,745 $ 381
Ratio of net investment income (loss) to
average net assets..................... (0.41)% (0.69)% (0.4)%(c) 0.59 %(c)
Ratio of expenses to average net assets:
With expense reductions............... 2.35% 2.35 % 2.40 %(c) 1.35 %(c)
Without expense reductions............ 2.43% 2.40 % -- %* 1.43 %(c)
Portfolio turnover rate++++............. 75% 96 % 90 % 75 %
</TABLE>
- ----------------
+ 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 is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(a) Calculated based upon weighted average shares outstanding during the
period.
(b) Not annualized.
(c) Annualized.
(d) Total investment return does not include sales charges.
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 71
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
NOTES TO
FINANCIAL STATEMENTS
December 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global International Growth Fund ("Fund"), is a separate series of G.T.
Global Growth Series ("Company"). The Company is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), 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 Fund offers 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. The Fund
commenced sale of Advisor Class shares on June 1, 1995. Investment income,
realized and unrealized capital gains and losses, and the common expenses of the
Fund 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 Fund. 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 Fund in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles, and,
therefore, the financial statements may include certain estimates from
management.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of Fund shares and completes 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 in which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by LGT Asset Management, Inc.
("LGT", formerly G.T. Capital Management, Inc.) to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
asked 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 foreign exchange translation
and market fluctuation, if any.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities
Statement of Additional Information Page 72
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
other than investments in securities at year end, resulting from changes in
exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. 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 under each agreement at
its maturity. LGT is responsible for determining that the value of these
underlying securities remain at least equal to the resale price.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of a contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund'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 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 can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid, 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 may use options to manage its exposure
to the stock market and to fluctuations in currency values or interest rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund'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 has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund 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 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 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 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 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 may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) 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 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 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 as unrealized gains or losses. When the contract is closed,
the Fund 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
Statement of Additional Information Page 73
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
was closed. The potential risk to the Fund is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
(G) 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 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 to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At December 31, 1995, stocks with an aggregate value of approximately
$17,499,956 were on loan to brokers. The loans were secured by cash collateral
of $18,709,722, received by the Fund. Cash collateral is received by the Fund
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For the year ended December 31, 1995,
the Fund received securities lending fees of $175,653 which were used to reduce
custodian fees.
(I) TAXES
It is the policy of the Fund 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 Fund 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, or excise tax on income
and capital gains.
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the 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 and timing differences.
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets,
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
(L) RESTRICTED SECURITIES
The Fund 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.
(M) INDEXED SECURITIES
The Fund 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 Fund's investment manager and
administrator. The Fund pays investment management and administration fees at
the following annualized rates: 0.975% on the first $500 million of average
daily net assets of the Fund; 0.95% on the next $500 million; 0.925% on the next
$500 million and 0.90% 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 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", formerly known as G.T. Global Financial Services,
Inc.), an affiliate of LGT, serves as the Fund's distributor. The Fund offers
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
Statement of Additional Information Page 74
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
imposed on sales of Class A shares, and reallows a portion of such charges to
dealers through which the sales are made. For the year ended December 31, 1995,
GT Global retained $50,454 of such sales charges. 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 CDSCs in the amount of $32,049 for the year ended December 31, 1995.
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. During the period ended December 31, 1995, GT Global collected CDSCs
in the amount of $297,910. 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 Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the 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 its 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
its 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 Fund's Class B Plan, the 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 its 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 its 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 have voluntarily undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary items) to
the maximum annual level of 2.25%, and 2.90%, and 1.90% 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 Fund. 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 Fund for its
out-of-pocket expenses for such items as postage, forms, telephone charges,
stationery and office supplies.
Effective July 1, 1995, LGT has assumed the role of pricing and accounting agent
for the Fund. The monthly fee for these services to LGT is a percentage, not to
exceed 0.03% annually, of the Fund's average daily net assets. The annual fee
rate is derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by LGT ("GT Funds") and 0.02% to the assets in
excess of $5 billion and dividing the result by the aggregate assets of the GT
Funds. For the period ended December 31, 1995, the Fund paid fund accounting
fees of $40,655 to LGT.
The Company pays each of its Trustees who is not an employee, officer or
director of LGT Asset Management, 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.
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1995, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $289,373,330 and $425,782,128, respectively. There were
no purchases or sales of U.S. government obligations by the Fund during the
period.
Statement of Additional Information Page 75
<PAGE>
GT GLOBAL INTERNATIONAL GROWTH FUND
4. CAPITAL SHARES
At December 31, 1995, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
------------ --------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold............................................................ 140,096,147 $ 1,244,115,581 86,542,390 $ 926,900,205
Shares issued in connection with reinvestment of distributions......... 1,274,450 11,483,253 3,799,540 34,613,815
------------ --------------- ----------- -------------
141,370,597 1,255,598,834 90,341,930 961,514,020
Shares repurchased..................................................... (154,325,977) (1,370,898,171) (90,893,714) (979,657,620)
------------ --------------- ----------- -------------
Net decrease........................................................... (12,955,380) $ (115,299,337) (551,784) $ (18,143,600)
------------ --------------- ----------- -------------
------------ --------------- ----------- -------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
------------ --------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS B
Shares sold............................................................ 4,065,880 $ 35,727,913 6,350,365 $ 68,347,089
Shares issued in connection with reinvestment of distributions......... 329,999 2,917,198 691,392 6,229,441
------------ --------------- ----------- -------------
4,395,879 38,645,111 7,041,757 74,576,530
Shares repurchased..................................................... (4,499,678) (39,592,887) (1,924,260) (20,280,197)
------------ --------------- ----------- -------------
Net increase (decrease)................................................ (103,799) $ (947,776) 5,117,497 $ 54,296,333
------------ --------------- ----------- -------------
------------ --------------- ----------- -------------
</TABLE>
<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF
SALE OF SHARES)
TO DECEMBER 31, 1995
--------------------------
SHARES AMOUNT
----------- -------------
<S> <C> <C>
ADVISOR CLASS
Shares sold............................................................ 47,423 $ 417,842
Shares issued in connection with reinvestment of distributions......... 1,656 14,951
----------- -------------
49,079 432,793
Shares repurchased..................................................... (7,264) (64,899)
----------- -------------
Net increase........................................................... 41,815 $ 367,894
----------- -------------
----------- -------------
</TABLE>
5. EXPENSE REDUCTIONS
LGT has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses. For the year ended December 31, 1995, the Fund's expenses were
reduced by $143,825 under these arrangements.
6. COVERED CALL OPTIONS WRITTEN
The Fund's written options contracts activity for the year ended December 31,
1995 was as follows:
<TABLE>
<CAPTION>
UNDERLYING NOMINAL
AMOUNT IN USD PREMIUMS
------------------ ----------
<S> <C> <C>
Options outstanding at December 31, 1994......................................................... 140,000,000 $3,934,000
Options written during the year ended December 31, 1995.......................................... -- --
Options cancelled in closing purchase transactions (loss of $2,317,000 realized)................. (140,000,000) (3,934,000)
Options expired prior to exercise................................................................ -- --
Options exercised................................................................................ -- --
------------------ ----------
Options outstanding at December 31, 1995......................................................... 0 $ 0
------------------ ----------
------------------ ----------
</TABLE>
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$17,432,389 as capital gain dividends for the fiscal year ended December 31,
1995.
Statement of Additional Information Page 76
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
G.T. Global Growth Series:
We have audited the accompanying statement of assets and liabilities of GT
Global New Pacific Growth Fund, a series of shares of beneficial interest of
G.T. Global Growth Series, including the schedule of portfolio investments, as
of December 31, 1995, the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the four years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the year ended December 31, 1991 were
audited by other auditors whose report dated January 31, 1992 expressed an
unqualified opinion on such financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of GT
Global New Pacific Growth Fund as of December 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the four years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 12, 1996
Statement of Additional Information Page 77
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
PORTFOLIO OF INVESTMENTS
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- -------------------------------------------------------------- -------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (43.4%)
HSBC Holdings PLC .......................................... HK 3,447,600 $ 52,168,803 10.1
BANKS-MONEY CENTER
New World Development Co., Ltd. ........................... HK 6,567,000 28,622,336 5.6
REAL ESTATE
Siam Commercial Bank PLC - Foreign ........................ THAI 1,958,000 25,816,362 5.0
BANKS-MONEY CENTER
National Australia Bank Ltd. ............................... AUSL 1,574,883 14,158,618 2.7
BANKS-MONEY CENTER
Public Bank Bhd. - Foreign ................................ MAL 7,336,000 14,041,021 2.7
BANKS-MONEY CENTER
Krung Thai Bank Ltd. - Foreign ............................. THAI 3,166,540 13,078,640 2.5
BANKS-MONEY CENTER
Cheung Kong (Holdings) Ltd. ................................ HK 1,883,000 11,470,422 2.2
REAL ESTATE
Hysan Development Co., Ltd. ................................ HK 4,019,000 10,629,662 2.1
REAL ESTATE
Bank of East Asia, Ltd. .................................... HK 2,781,000 9,980,956 1.9
BANKS-MONEY CENTER
United Overseas Bank Ltd. - Foreign ........................ SING 1,020,000 9,810,467 1.9
BANKS-MONEY CENTER
Bank of Ayudhya Ltd. - Foreign ............................. THAI 1,512,600 8,470,079 1.6
BANKS-REGIONAL
Rashid Hussain Bhd. ........................................ MAL 2,250,000 6,734,405 1.3
SECURITIES BROKER
DCB Holdings Bhd. .......................................... MAL 1,720,000 5,012,602 1.0
BANKS-REGIONAL
Henderson Investment Ltd. .................................. HK 4,870,000 3,999,547 0.8
REAL ESTATE
Overseas-Chinese Banking Corp., Ltd. - Foreign ............. SING 300,000 3,755,304 0.7
BANKS-REGIONAL
City Developments Ltd. .................................... SING 348,200 2,536,393 0.5
REAL ESTATE
Hong Kong Land Holdings Ltd.{\/} ........................... HK 592,000 1,095,200 0.2
REAL ESTATE INVESTMENT TRUST
Wharf (Holdings) Ltd. ...................................... HK 250,000 832,579 0.2
REAL ESTATE
PT Bank Internasional Indonesia - Foreign .................. INDO 239,500 794,314 0.2
BANKS-MONEY CENTER
Amoy Properties Ltd. ....................................... HK 613,500 610,961 0.1
REAL ESTATE
Malayan Banking Bhd. ....................................... MAL 47,500 400,323 0.1
BANKS-MONEY CENTER
Hong Leong Bank Bhd. ....................................... MAL 1,000 2,757 --
BANKS-MONEY CENTER
------------
224,021,751
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 78
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- -------------------------------------------------------------- -------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
Multi Industry/Miscellaneous (14.3%)
Hutchison Whampoa .......................................... HK 5,244,000 $ 31,944,180 6.2
CONGLOMERATE
Swire Pacific Ltd. "A" ..................................... HK 3,087,000 23,954,992 4.6
MULTI-INDUSTRY
Citic Pacific Ltd. ......................................... HK 3,029,000 10,361,750 2.0
CONGLOMERATE
Pacific Dunlop Ltd. ........................................ AUSL 1,630,000 3,814,919 0.7
MULTI-INDUSTRY
Arab Malaysian Corp., Bhd. ................................. MAL 726,000 2,630,435 0.5
CONGLOMERATE
Jardine Matheson Holding Ltd.{\/} .......................... HK 224,400 1,537,140 0.3
CONGLOMERATE
Java Fund-/- {\/} .......................................... INDO 30,000 252,000 --
COUNTRY FUNDS
JG Summit Holdings, Inc. "B" ............................... PHIL 748,000 205,479 --
CONGLOMERATE
Indonesian Capital Fund-/- {\/} ............................ INDO 5,000 53,750 --
COUNTRY FUNDS
Korea Fund, Inc.{\/} ....................................... KOR 907 19,954 --
COUNTRY FUNDS
------------
74,774,599
------------
Services (10.1%)
China Hong Kong Photo Products Holdings, Ltd. .............. HK 20,700,000 11,712,688 2.3
WHOLESALE & INTERNATIONAL TRADE
News Corp., Ltd. ........................................... AUSL 1,546,823 8,251,868 1.6
BROADCASTING & PUBLISHING
Philippine Long Distance Telephone Co. - ADR{\/} ........... PHIL 125,000 6,765,625 1.3
TELEPHONE - LONG DISTANCE
Cathay Pacific Airways ..................................... HK 3,900,000 5,951,888 1.2
TRANSPORTATION - AIRLINES
Advanced Info. Service - Foreign ........................... THAI 222,900 3,948,110 0.8
WIRELESS COMMUNICATIONS
Telecom Corporation of New Zealand Ltd. .................... NZ 884,000 3,812,835 0.7
TELEPHONE NETWORKS
Hong Kong & Shanghai Hotels ................................ HK 2,000,000 2,897,051 0.6
LEISURE & TOURISM
Technology Resources Industries Bhd.-/- .................... MAL 667,000 1,970,109 0.4
TRANSPORTATION - AIRLINES
Malaysian Airlines System Bhd. ............................. MAL 558,000 1,812,973 0.4
TRANSPORTATION - AIRLINES
Singapore Airlines Ltd. - Foreign ......................... SING 105,000 980,198 0.2
TRANSPORTATION - AIRLINES
Matichon Newspaper Group - Foreign ......................... THAI 154,800 916,013 0.2
BROADCASTING & PUBLISHING
Dusit Thani PLC - Foreign-/- ............................... THAI 608,666 894,386 0.2
LEISURE & TOURISM
International Cosmetics Co., Ltd. - Foreign ................ THAI 60,059 548,593 0.1
WHOLESALE & INTERNATIONAL TRADE
TelecomAsia Corp. - Foreign-/- ............................. THAI 106,000 324,146 0.1
TELEPHONE NETWORKS
Shun Tak Holdings Ltd. ..................................... HK 160,000 112,778 --
TRANSPORTATION - SHIPPING
------------
50,899,261
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 79
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- -------------------------------------------------------------- -------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
Materials/Basic Industry (7.8%)
Broken Hill Proprietary Co., Ltd. .......................... AUSL 1,049,568 $ 14,816,697 2.9
MISC. MATERIALS & COMMODITIES
Siam City Cement Co., Ltd. - Foreign ....................... THAI 467,600 7,316,696 1.4
CEMENT
Amcor Ltd. ................................................. AUSL 1,004,685 7,091,543 1.4
PAPER/PACKAGING
Western Mining Corporation Holdings Ltd. ................... AUSL 452,381 2,904,058 0.6
METALS - NON-FERROUS
Malaysian Pacific Industries Bhd. .......................... MAL 675,000 2,086,779 0.4
PAPER/PACKAGING
Siam Cement Co., Ltd. - Foreign ........................... THAI 33,500 1,857,268 0.4
CEMENT
Yizheng Chemical Fibre Co., Ltd. ........................... CHNA 6,158,000 1,385,789 0.3
CHEMICALS
PT Barito Pacific Timber - Foreign ........................ INDO 1,155,000 847,034 0.2
FOREST PRODUCTS
Pohang Iron & Steel Co., Ltd. .............................. KOR 8,500 616,675 0.1
METALS - STEEL
Siam Pulp & Paper Co., Ltd. - Foreign ..................... THAI 194,284 559,396 0.1
PAPER/PACKAGING
PT Indah Kiat Pulp & Paper Corp. - Foreign ................. INDO 328,488 240,901 --
PAPER/PACKAGING
------------
39,722,836
------------
Energy (2.9%)
Hong Kong Electric Holdings Ltd. .......................... HK 1,650,500 5,411,300 1.0
ELECTRICAL & GAS UTILITIES
Electricity Generating Public Co., Ltd. - Foreign-/- ....... THAI 1,219,350 4,164,579 0.8
ELECTRICAL & GAS UTILITIES
Oil Search Ltd. ............................................ AUSL 4,487,000 3,867,241 0.7
OIL
Petronas Gas Bhd. .......................................... MAL 257,000 875,492 0.2
OIL
Hong Kong and China Gas Co., Ltd. .......................... HK 450,000 724,586 0.1
ELECTRICAL & GAS UTILITIES
Yukong Ltd. - New-/- ....................................... KOR 17,929 600,854 0.1
OIL
Tenaga Nasional Bhd. ....................................... MAL 49,000 192,974 --
ELECTRICAL & GAS UTILITIES
------------
15,837,026
------------
Capital Goods (2.5%)
C & P Homes, Inc.-/- ....................................... PHIL 8,995,800 6,606,988 1.3
CONSTRUCTION
Hopewell Holdings .......................................... HK 5,778,000 3,325,414 0.6
CONSTRUCTION
E.R.G. Ltd. ................................................ AUSL 1,742,015 2,083,843 0.4
ELECTRICAL PLANT/EQUIPMENT
Bandar Raya Developments Bhd. .............................. MAL 394,000 561,704 0.1
CONSTRUCTION
United Engineers Ltd., Convertible Unsecured Loan Stock, 4%
expires 5/22/99 .......................................... MAL 522,500 292,198 0.1
CONSTRUCTION
New World Infrastructure Ltd.-/- ........................... HK 3,163 6,054 --
INDUSTRIAL COMPONENTS
------------
12,876,201
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 80
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- -------------------------------------------------------------- -------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
Consumer Durables (2.0%)
Samsung Electronics Co.: ................................... KOR -- -- 1.9
CONSUMER ELECTRONICS
common .................................................. -- 26,517 $ 4,820,030 --
New-/- ................................................... -- 25,509 4,497,700 --
New 2-/- ................................................. -- 1,735 305,912 --
PT Astra International - Foreign ........................... INDO 261,600 544,046 0.1
AUTO PARTS
------------
10,167,688
------------
Consumer Non-Durables (0.2%)
PT Unilever Indonesia - Foreign ............................ INDO 70,414 847,804 0.2
HOUSEHOLD PRODUCTS
------------ -----
TOTAL EQUITY INVESTMENTS (cost $372,593,224) ................. 429,147,166 83.2
------------ -----
<CAPTION>
No. of Market % of Net
Warrants (0.2%) Country Warrants Value Assets {d}
- -------------------------------------------------------------- -------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
Development & Commercial Bank Warrants, expire 12/28/99-/-
.......................................................... MAL 933,750 926,690 0.2
BANKS-MONEY CENTER
Henderson Investment Warrants, expire 3/31/96-/- ........... HK 500,000 7,695 --
INVESTMENT MANAGEMENT
Hang Lung Development Co. Warrants, expire 10/31/97-/- ..... HK 36,500 5,476 --
REAL ESTATE
------------ -----
TOTAL WARRANTS (cost $147,877) .............................. 939,861 0.2
------------ -----
<CAPTION>
No. of Market % of Net
Rights (0.0%) Country Rights Value Assets {d}
- -------------------------------------------------------------- -------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
Hong Leong Bank Rights, expire 1996 (cost $0)-/- ........... MAL 150 -- --
------------ -----
BANKS-MONEY CENTER
<CAPTION>
Market % of Net
Repurchase Agreement Value Assets {d}
- -------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 29, 1995, with State Street Bank & Trust
Company, due January 2, 1996, for an effective yield of
5.55% collateralized by $44,195,000 U.S. Treasury Bond,
10.4% due 11/15/12 (market value of collateral is
$61,561,658 including accrued interest) (cost $60,355,902)
.......................................................... 60,355,902 11.7
------------ -----
TOTAL INVESTMENTS (cost $433,097,003) * ...................... 490,442,929 95.1
Other Assets and Liabilities ................................. 25,101,457 4.9
------------ -----
NET ASSETS ................................................... $515,544,386 100.0
------------ -----
------------ -----
</TABLE>
- ----------------
{d} Percentages indicated are based on net assets of $515,544,386.
-/- Non-income producing security.
{\/} U.S. currency denominated.
* For Federal income tax purposes, cost is $433,856,100 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 71,611,486
Unrealized depreciation: (15,024,657)
-------------
Net unrealized appreciation: $ 56,586,829
-------------
-------------
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 81
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
The Fund's Portfolio of Investments at December 31, 1995, was concentrated in
the following countries:
<TABLE>
<CAPTION>
Percentage of Net Assets {d}
-------------------------------------------
Fixed Income,
Rights & Short-Term
Country(Country Code/Currency Code) Equity Warrants & Other Total
- -------------------------------------- ------ ------------- ---------- -----
<S> <C> <C> <C> <C>
Australia (AUSL/AUD) ................. 11.0 11.0
China (CHNA/RMB) ..................... 0.3 0.3
Hong Kong (HK/HKD) ................... 42.1 42.1
Indonesia (INDO/IDR) ................. 0.7 0.7
Korea (KOR/KRW) ...................... 2.1 2.1
Malaysia (MAL/MYR) ................... 7.2 0.2 7.4
New Zealand (NZ/NZD) ................. 0.7 0.7
Philippines (PHIL/PHP) ............... 2.6 2.6
Singapore (SING/SGD) ................. 3.3 3.3
Thailand (THAI/THB) .................. 13.2 13.2
United States (US/USD) ............... 16.6 16.6
------ --- --- -----
Total ............................... 83.2 0.2 16.6 100.0
------ --- --- -----
------ --- --- -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $515,544,386.
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 82
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $372,741,101)
(Note 1)................................................. $430,087,027
Repurchase agreement, at value and cost (Note 1).......... 60,355,902
U.S. currency.............................. $ 430
Foreign currencies (cost $4,974,575)....... 4,977,527 4,977,957
----------
Receivable for Fund shares sold........................... 21,263,013
Receivable for securities sold............................ 5,507,248
Dividends and dividend withholding tax reclaims
receivable............................................... 1,289,348
Interest receivable....................................... 224
Cash held as collateral for securities loaned (Note 1).... 34,303,197
------------
Total assets............................................ 557,783,916
------------
Liabilities:
Payable for Fund shares repurchased....................... 6,491,595
Payable for securities purchased.......................... 426,159
Payable for investment management and administration fees
(Note 2)................................................. 422,638
Payable for service and distribution expenses (Note 2).... 221,282
Payable for transfer agent fees (Note 2).................. 170,333
Payable for printing and postage expenses................. 90,329
Payable for custodian fees (Note 1)....................... 34,631
Payable for professional fees............................. 26,606
Payable for registration and filing fees.................. 23,071
Payable for fund accounting fees (Note 2)................. 10,822
Payable for Trustees' fees and expenses (Note 2).......... 10,076
Other accrued expenses.................................... 8,791
Collateral for securities loaned (Note 1)................. 34,303,197
------------
Total liabilities....................................... 42,239,530
------------
Net assets.................................................. $515,544,386
------------
------------
Class A:
Net asset value and redemption price per share
($383,721,688 DIVIDED BY 30,776,366 shares outstanding).... $ 12.47
------------
------------
Maximum offering price per share
(100/95.25 of $12.47) *.................................... $ 13.09
------------
------------
Class B:+
Net asset value and offering price per share
($130,887,431 DIVIDED BY 10,648,765 shares outstanding).... $ 12.29
------------
------------
Advisor Class:
Net asset value, offering price per share, and redemption
price per share
($935,267 DIVIDED BY 75,147 shares outstanding)............ $ 12.45
------------
------------
Net assets consist of:
Paid in capital (Note 4).................................. $459,455,958
Accumulated net realized loss on investments and foreign
currency transactions.................................... (1,261,198)
Net unrealized appreciation on translation of assets and
liabilities in foreign currencies........................ 3,700
Net unrealized appreciation of investments................ 57,345,926
------------
Total -- representing net assets applicable to capital
shares outstanding......................................... $515,544,386
------------
------------
<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.
Statement of Additional Information Page 83
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
STATEMENT OF OPERATIONS
Year ended December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of
$781,653)................................................. $11,446,729
Interest income............................................ 3,456,228
-----------
Total investment income.................................. 14,902,957
-----------
Expenses:
Investment management and administration fees (Note 2)..... 5,176,333
Service and distribution expenses: (Note 2)
Class A.................................. $ 1,422,420
Class B.................................. 1,247,894 2,670,314
-----------
Transfer agent fees (Note 2)............................... 1,867,170
Custodian fees (Note 1).................................... 783,756
Printing and postage expenses.............................. 342,220
Fund accounting fees (Note 2).............................. 131,708
Registration and filing fees............................... 119,063
Audit fees................................................. 30,060
Legal fees................................................. 24,267
Trustees' fees and expenses (Note 2)....................... 5,779
-----------
Total expenses before reductions......................... 11,150,670
-----------
Expense reductions (Notes 1 & 5)....................... (285,318)
-----------
Total net expenses....................................... 10,865,352
-----------
Net investment income........................................ 4,037,605
-----------
Net realized and unrealized gain on
investments and foreign currencies: (Note 1)
Net realized gain on investments........... 18,316,773
Net realized loss on foreign currency
transactions.............................. (599,862)
-----------
Net realized gain during the year........................ 17,716,911
Net change in unrealized appreciation on
translation of assets and liabilities in
foreign
currencies................................ 6,315
Net change in unrealized appreciation of
investments............................... 36,706,715
-----------
Net unrealized appreciation during the year.............. 36,713,030
-----------
Net realized and unrealized gain on investments and foreign
currencies.................................................. 54,429,941
-----------
Net increase in net assets resulting from operations......... $58,467,546
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 84
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- -----------------
<S> <C> <C>
Decrease in net assets
Operations:
Net investment income (loss)............... $ 4,037,605 $ (28,620)
Net realized gain on investments and
foreign currency transactions............. 17,716,911 12,214,388
Net change in unrealized appreciation on
translation of assets and liabilities in
foreign currencies........................ 6,315 25,326
Net change in unrealized appreciation
(depreciation) of investments............. 36,706,715 (129,412,169)
----------------- -----------------
Net increase (decrease) in net assets
resulting from operations............... 58,467,546 (117,201,075)
----------------- -----------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income................. (2,982,780) (202,019)
From net realized gain on investments...... (13,196,301) (18,250,328)
In excess of net realized gain on
investments............................... -- (2,341,796)
Class B:
Distributions to shareholders: (Note 1)
From net investment income................. (228,209) (5,228,855)
From net realized gain on investments...... (4,263,749) --
In excess of net realized gain on
investments............................... -- (670,942)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income................. (11,427) --
From net realized gain on investments...... (35,360) --
----------------- -----------------
Total distributions...................... (20,717,826) (26,693,940)
----------------- -----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested................................ 3,442,682,160 1,372,467,962
Decrease from capital shares repurchased... (3,489,738,455) (1,274,742,064)
----------------- -----------------
Net increase (decrease) from capital
share transactions...................... (47,056,295) 97,725,898
----------------- -----------------
Total decrease in net assets................. (9,306,575) (46,169,117)
Net assets:
Beginning of year.......................... 524,850,961 571,020,078
----------------- -----------------
End of year................................ $ 515,544,386 $ 524,850,961
----------------- -----------------
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 85
<PAGE>
GT GLOBAL NEW PACIFIC 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>
CLASS A+
---------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1995(D) 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 12.10 $ 15.86 $ 10.31 $ 11.30 $ 10.57
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income (loss).......... 0.11 0.02 (0.03) 0.07 0.11
Net realized and unrealized gain
(loss) on investments................ 0.79 (3.15) 6.23 (0.97) 1.25
----------- ----------- ----------- ----------- -----------
Net increase (decrease) from
investment operations.............. 0.90 (3.13) 6.20 (0.90) 1.36
----------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From net investment income............ (0.10) (0.01) 0.00 (0.06) (0.08)
From net realized gain on
investments.......................... (0.43) (0.55) (0.65) (0.03) (0.55)
In excess of net investment income.... 0.00 0.00 0.00 0.00 0.00
In excess of net realized gain on
investments.......................... 0.00 (0.07) 0.00 0.00 0.00
----------- ----------- ----------- ----------- -----------
Total distributions................. (0.53) (0.63) (0.65) (0.09) (0.63)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period.......... $ 12.47 $ 12.10 $ 15.86 $ 10.31 $ 11.30
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total investment return (c)............. 7.45% (19.73)% 60.6% (8.0)% 13.1%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 383,722 $ 404,680 $ 498,898 $ 281,418 $ 333,800
Ratio of net investment income (loss) to
average net assets..................... 0.91% 0.11% (0.3)% 0.6% 1.0%
Ratio of expenses to average net assets:
With expense reductions (Notes 1 & 5)... 1.89% 1.81% 1.9% 2.0% 2.0%
Without expense reductions.............. 1.94% 0.0% 0.0% 0.0% 0.0%
Portfolio turnover rate++++............. 63% 87% 117% 72% 85%
</TABLE>
- ----------------
+ All capitals 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 is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(a) Not annualized.
(b) Annualized.
(c) Total investment return does not include sales charges.
(d) Calculated based upon weighted average shares outstanding during the
period.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 86
<PAGE>
GT GLOBAL NEW PACIFIC 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>
CLASS B++ ADVISOR
--------------------------------------- CLASS+++
--------------
YEAR ENDED APRIL 1, 1993 JUNE 1, 1995
DECEMBER 31, TO TO
------------------------ DECEMBER 31, DECEMBER 31,
1995(D) 1994 1993 1995(D)
----------- ----------- ------------- --------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 11.96 $ 15.79 $ 11.27 $ 12.89
----------- ----------- ------------- -------
Income from investment operations:
Net investment income (loss).......... 0.03 (0.06) (0.10) 0.09
Net realized and unrealized gain
(loss) on investments................ 0.75 (3.15) 5.27 0.05
----------- ----------- ------------- -------
Net increase (decrease) from
investment operations.............. 0.78 (3.21) 5.17 0.14
----------- ----------- ------------- -------
Distributions to shareholders:
From net investment income............ (0.02) 0.00 0.00 (0.15)
From net realized gain on
investments.......................... (0.43) (0.55) (0.65) (0.43)
In excess of net investment income.... 0.00 0.00 0.00 --
In excess of net realized gain on
investments.......................... 0.00 (0.07) 0.00 --
----------- ----------- ------------- -------
Total distributions................. (0.45) (0.62) (0.65) (0.58)
----------- ----------- ------------- -------
Net asset value, end of period.......... $ 12.29 $ 11.96 $ 15.79 $ 12.45
----------- ----------- ------------- -------
----------- ----------- ------------- -------
Total investment return (c)............. 6.54% (20.3)% 46.3 %(a) 1.07 %(a)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 130,887 $ 120,171 $ 72,122 $ 935
Ratio of net investment income (loss) to
average net assets..................... 0.26% (0.54)% (0.9)%(b) 1.26 %(b)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 & 5)... 2.54% 2.46% 2.5 %(b) 1.54 %(b)
Without expense reductions.............. 2.59% 0.0% 0.0 % 1.59 %(b)
Portfolio turnover rate++++............. 63% 87% 117 % 63 %
</TABLE>
- ----------------
+ All capitals 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 is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(a) Not annualized.
(b) Annualized.
(c) Total investment return does not include sales charges.
(d) Calculated based upon weighted average shares outstanding during the
period.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 87
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
NOTES TO
FINANCIAL STATEMENTS
December 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global New Pacific Growth Fund ("Fund") is a separate series of G.T. Global
Growth Series ("Company"). The Company is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended
("1940 Act"), 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 Fund offers 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. The Fund
commenced sale of Advisor Class shares on June 1, 1995. Investment income,
realized and unrealized capital gains and losses, and the common expenses of the
Fund 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 Fund. 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 Fund in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles, and,
therefore, the financial statements may include certain estimates made by
management.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes 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, 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 Asset Management, Inc. ("LGT", formerly known as G.T. Capital Management,
Inc.) to be the primary market.
Fixed income securities 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 securities 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 foreign exchange translation
and 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.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized
Statement of Additional Information Page 88
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
between the trade and settlement dates on securities transactions, and the
differences between the amounts of dividends, interest, and foreign withholding
taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. 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 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.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of a contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund'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 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 can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid, 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 may use options to manage its exposure
to the stock and bond markets and to fluctuations in currency values or interest
rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund'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 has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund 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 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 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 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 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 may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) 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 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
Statement of Additional Information Page 89
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
contract is traded. Pursuant to the contract, the Fund 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 as unrealized gains or losses. When the contract is closed,
the Fund 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 is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock and bond
markets and to fluctuations in currency values or interest rates.
(G) 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 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 to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At December 31, 1995, stocks with an aggregate value of approximately
$30,384,771 were on loan to brokers. The loans were secured by cash collateral
of $34,303,197, received by the Fund. Cash collateral is received by the Fund
against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For the year ended December 31, 1995,
the Fund received securities lending fees of $148,078 which were used to reduce
custodian fees.
(I) TAXES
It is the policy of the Fund 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 Fund 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, or excise tax on income
and capital gains.
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the 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 and timing differences.
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets,
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
(L) RESTRICTED SECURITIES
The Fund 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.
(M) INDEXED SECURITIES
The Fund 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 Fund's investment manager and administrator. The Fund pays investment
management and administration fees at the following annualized rates: 0.975% on
the first $500 million of average daily net assets on the Fund; 0.95% on the
next $500 million; 0.925% on the next $500 million and 0.90% 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 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.
Statement of Additional Information Page 90
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
GT Global, Inc. ("GT Global", formerly known as G.T. Global Financial Services,
Inc.), an affiliate of LGT, serves as the Fund's distributor. The Fund offers
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 year ended December 31, 1995, GT Global retained
$141,263 of such sales charges. 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 CDSCs in
the amount of $51,337 for the year ended December 31, 1995. 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 year ended December 31, 1995, GT Global collected CDSCs in
the amount of $707,614. 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 Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the 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 its 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
its 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 Fund's Class B Plan, the 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 its 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 its 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 have voluntarily undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary items) to
the maximum annual level of 2.25%, 2.90%, and 1.90% 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 Fund. 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 Fund for its
out-of-pocket expenses for such items as postage, forms, telephone charges,
stationery and office supplies.
Effective July 1, 1995, LGT has assumed the role of pricing and accounting agent
for the Fund. The monthly fee for these services to LGT is a percentage, not to
exceed 0.03% annually, of the Fund's average daily net assets. The annual fee
rate is derived by applying 0.03% of the first $5 billion of assets of all
registered mutual funds advised by LGT ("GT Funds") and 0.02% to the assets in
excess of $5 billion and dividing the result by the aggregated assets of the GT
Funds. For the period ended December 31, 1995, the Fund paid fund accounting
fees of $53,724 to LGT.
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.
Statement of Additional Information Page 91
<PAGE>
GT GLOBAL NEW PACIFIC GROWTH FUND
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1995, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $293,335,057 and $409,997,442, respectively. There were
no purchases or sales of U.S. government obligations during the year.
4. CAPITAL SHARES
At December 31, 1995, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------------------- ----------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
------------ --------------- ----------- ---------------
<S> <C> <C> <C> <C>
Shares sold........................................................... 213,508,812 $ 2,634,346,068 75,474,666 $ 1,050,741,703
Shares issued in connection with reinvestment of distributions........ 1,069,849 13,241,922 1,507,455 18,168,232
------------ --------------- ----------- ---------------
214,578,661 2,647,587,990 76,982,121 1,068,909,935
Shares repurchased.................................................... (217,241,112) (2,697,556,175) (75,002,452) (1,047,474,403)
------------ --------------- ----------- ---------------
Net increase (decrease)............................................... (2,662,451) $ (49,968,185) 1,979,669 $ 21,435,532
------------ --------------- ----------- ---------------
------------ --------------- ----------- ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------------------- ----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
------------ --------------- ----------- ---------------
<S> <C> <C> <C> <C>
Shares sold........................................................... 64,930,186 $ 788,928,928 21,680,848 $ 298,469,013
Shares issued in connection with reinvestment of distributions........ 307,922 3,759,320 427,074 5,089,014
------------ --------------- ----------- ---------------
65,238,108 792,688,248 22,107,922 303,558,027
Shares repurchased.................................................... (64,636,995) (790,755,338) (16,628,905) (227,267,661)
------------ --------------- ----------- ---------------
Net increase.......................................................... 601,113 $ 1,932,910 5,479,017 $ 76,290,366
------------ --------------- ----------- ---------------
------------ --------------- ----------- ---------------
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF SALE OF
SHARES) TO DECEMBER 31, 1995
-----------------------------
ADVISOR CLASS SHARES AMOUNT
------------ ---------------
<S> <C> <C> <C> <C>
Shares sold........................................................... 184,375 $ 2,360,516
Shares issued in connection with reinvestment of distributions........ 3,674 45,406
------------ ---------------
188,049 2,405,922
Shares repurchased.................................................... (112,902) (1,426,942)
------------ ---------------
Net increase.......................................................... 75,147 $ 978,980
------------ ---------------
------------ ---------------
</TABLE>
5. EXPENSE REDUCTIONS
LGT has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses. For the year ended December 31, 1995, the Fund's expenses were
reduced by $137,240 under these arrangements.
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
For its fiscal year ended December 31, 1995, the total amount of income received
by the Fund from sources within foreign countries and possessions of the United
States was approximately $0.322 per share (representing an approximate total of
$12,518,000). The total amount of dividend and capital gain taxes paid by the
Fund to such countries was approximately $0.0391 per share (representing an
approximate total of $1,594,151).
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$17,495,410 as capital gain dividends for the fiscal year ended December 31,
1995.
Statement of Additional Information Page 92
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
G.T. Global Growth Series:
We have audited the accompanying statement of assets and liabilities of GT
Global Europe Growth Fund, one of the funds organized as a series of G.T. Global
Growth Series, including the schedule of portfolio investments, as of December
31, 1995, the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended and the financial highlights for each of the four years in the period then
ended. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits. The financial highlights for the years ended December 31, 1991 were
audited by other auditors whose report dated January 31, 1992 expressed an
unqualified opinion on such financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Europe Growth Fund as of December 31, 1995, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended and the financial highlights for each of the four years
in the period then ended, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 12, 1996
Statement of Additional Information Page 93
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
PORTFOLIO OF INVESTMENTS
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (34.9%)
Canal Plus ................................................ FR 105,100 $ 19,732,447 3.5
BROADCASTING & PUBLISHING
Reuters Holdings PLC ..................................... UK 1,813,500 16,597,706 3.0
BROADCASTING & PUBLISHING
Elsevier N.V. ............................................. NETH 1,235,000 16,501,623 3.0
BROADCASTING & PUBLISHING
Wolters Kluwer CVA ........................................ NETH 168,745 15,993,688 2.9
BROADCASTING & PUBLISHING
Carrefour Supermarche ..................................... FR 25,780 15,664,665 2.8
RETAILERS-FOOD
Compass Group PLC ......................................... UK 1,773,544 13,464,726 2.4
RESTAURANTS
EMAP PLC ................................................. UK 1,593,000 13,231,719 2.4
BROADCASTING & PUBLISHING
Verenigde Nederlandse Uitgevbedri Verigd Bezit (VNU) ...... NETH 85,000 11,691,746 2.1
BROADCASTING & PUBLISHING
Telecom Italia Mobile S.p.A. .............................. ITLY 6,574,000 11,571,899 2.1
TELEPHONE NETWORKS
Pearson PLC ............................................... UK 1,000,000 9,680,174 1.7
BROADCASTING & PUBLISHING
Tesco PLC ................................................. UK 1,981,200 9,135,482 1.6
RETAILERS-FOOD
British Airport Authority PLC ............................ UK 1,155,400 8,700,029 1.6
TRANSPORTATION - AIRLINES
Prosegur, Compania de Seguridad S.A. - Registered ......... SPN 309,393 7,680,601 1.4
BUSINESS & PUBLIC SERVICES
Hornbach Holding AG Preferred ............................. GER 79,461 6,816,168 1.2
RETAILERS-OTHER
Granada Group PLC ......................................... UK 451,600 4,522,310 0.8
LEISURE & TOURISM
Dixons Group PLC .......................................... UK 533,900 3,701,077 0.7
RETAILERS-APPAREL
But S.A. .................................................. FR 66,345 3,595,751 0.6
RETAILERS-OTHER
Storli AS Series A ........................................ NOR 189,000 2,838,376 0.5
TRANSPORTATION - SHIPPING
Cortefiel S.A. ........................................... SPN 75,774 1,987,310 0.4
RETAILERS-APPAREL
Silja Oy AB "A"-/- ........................................ FIN 290,000 887,421 0.2
TRANSPORTATION - SHIPPING
------------
193,994,918
------------
Finance (15.3%)
Baloise Holdings Ltd. - Registered ........................ SWTZ 6,903 14,375,011 2.6
INSURANCE - MULTI-LINE
Cetelem Group ............................................. FR 64,400 12,104,223 2.2
CONSUMER FINANCE
M & G Group PLC ........................................... UK 600,000 11,727,993 2.1
INVESTMENT MANAGEMENT
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 94
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (Continued)
Mercury Asset Management Group PLC ........................ UK 842,656 $ 11,375,398 2.0
INVESTMENT MANAGEMENT
Singer & Friedlander Group PLC ........................... UK 6,250,000 10,528,256 1.9
BANKS-REGIONAL
Barclays PLC ............................................. UK 800,000 9,178,699 1.6
BANKS-MONEY CENTER
Invesco PLC ............................................... UK 2,000,000 7,871,449 1.4
INVESTMENT MANAGEMENT
National Westminster Bank PLC ............................. UK 566,750 5,706,216 1.0
BANKS-MONEY CENTER
Banco Ambrosiano Veneto S.p.A. ............................ ITLY 1,192,000 1,535,687 0.3
BANKS-MONEY CENTER
UNI Storebrand AS "A"-/- .................................. NOR 194,100 1,073,935 0.2
INSURANCE - MULTI-LINE
------------
85,476,867
------------
Consumer Non-Durables (11.2%)
Industrie Natuzzi S.p.A. - ADR{\/} ........................ ITLY 368,500 16,720,688 3.0
HOUSEHOLD PRODUCTS
B.A.T. Industries PLC ..................................... UK 1,654,000 14,572,970 2.6
TOBACCO
Adidas AG-/- .............................................. GER 170,000 8,998,535 1.6
TEXTILES & APPAREL
Polygram .................................................. NETH 152,200 8,096,553 1.5
RECREATION
Gucci Group - NY Registered Shares{\/} .................... ITLY 146,100 5,679,638 1.0
TEXTILES & APPAREL
Nutricia Vereenigde Bedrijven N.V. ........................ NETH 62,600 5,073,352 0.9
FOOD
De Rigo S.p.A. - ADR{\/} .................................. ITLY 152,900 3,478,475 0.6
TEXTILES & APPAREL
------------
62,620,211
------------
Capital Goods (8.6%)
Olivetti Group-/- ......................................... ITLY 17,750,000 14,379,180 2.6
OFFICE EQUIPMENT
L.M. Ericsson Telephone Co. ............................... SWDN 699,600 13,704,212 2.5
TELECOM EQUIPMENT
SGS-Thomson Microelectronics N.V. - ADR-/- {\/} ........... FR 302,380 12,170,795 2.2
ELECTRICAL PLANT/EQUIPMENT
Nokia AB "A" .............................................. FIN 182,400 7,050,411 1.3
TELECOM EQUIPMENT
------------
47,304,598
------------
Health Care (8.0%)
Ciba-Geigy AG - Registered ................................ SWTZ 19,284 16,983,306 3.0
PHARMACEUTICALS
Gehe AG: .................................................. GER -- -- 3.0
PHARMACEUTICALS
Common ................................................. -- 26,000 13,236,627 --
New-/- .................................................. -- 6,500 3,263,826 --
Medeva PLC ................................................ UK 2,725,000 11,422,916 2.0
PHARMACEUTICALS
------------
44,906,675
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 95
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Country Shares Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Technology (5.9%)
SAP AG .................................................... GER 60,180 $ 9,338,204 1.7
COMPUTERS & PERIPHERALS
Austria Mikro Systeme International AG .................... ASTRI 56,088 9,101,219 1.6
SEMICONDUCTORS
Group Axime-/- ............................................ FR 83,170 6,412,740 1.2
COMPUTERS & PERIPHERALS
Nera AS ................................................... NOR 167,000 5,438,364 1.0
TELECOM TECHNOLOGY
Benefon Oy-/- ............................................. FIN 96,200 2,390,447 0.4
TELECOM TECHNOLOGY
------------
32,680,974
------------
Consumer Durables (5.5%)
Autoliv AB ................................................ SWDN 244,750 14,309,199 2.6
AUTO PARTS
Hoganas AB "B" ........................................... SWDN 419,900 12,274,633 2.2
AUTO PARTS
Moulinex-/- .............................................. FR 171,800 2,354,147 0.4
APPLIANCES & HOUSEHOLD
Bertrand Faure S.A. ....................................... FR 72,713 1,858,907 0.3
AUTO PARTS
------------
30,796,886
------------
Materials/Basic Industry (4.9%)
Pilkington PLC: ........................................... UK -- -- 2.4
BUILDING MATERIALS & COMPONENTS
Common ................................................. -- 3,305,700 10,367,201 --
New ..................................................... -- 826,425 2,591,800 --
Groupe Poliet ............................................. FR 106,200 8,640,221 1.5
BUILDING MATERIALS & COMPONENTS
Svedala Industri "AB" - Free .............................. SWDN 112,800 2,906,472 0.5
BUILDING MATERIALS & COMPONENTS
Construcciones y Auxiliar de Ferrocarriles S.A. .......... SPN 73,300 2,599,505 0.5
BUILDING MATERIALS & COMPONENTS
------------
27,105,199
------------
Multi Industry/Miscellaneous (1.4%)
Assystem-/- ............................................... FR 109,810 7,997,411 1.4
MULTI-INDUSTRY
------------
TOTAL EQUITY INVESTMENTS (cost $467,934,875) ................ 532,883,739 95.7
------------ -----
<CAPTION>
Number
of Market % of Net
Options (1.6%) Currency Contracts Value Assets {d}
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Italian Government Bond Call Option, strike 95.48, expires
8/16/96 (cost $6,292,936) ............................... ITL 2,820,000 8,967,066 1.6
------------ -----
TOTAL INVESTMENTS (cost $474,227,811) * ..................... 541,850,805 97.3
Other Assets and Liabilities ................................ 15,266,328 2.7
------------ -----
NET ASSETS .................................................. $557,117,133 100.0
------------ -----
------------ -----
</TABLE>
- ----------------
{d} Percentages indicated are based on net assets of $557,117,133.
{\/} U.S. currency denominated.
-/- Non-income producing security.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 96
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
<TABLE>
<C> <S>
* For Federal income tax purposes, cost is $476,575,883 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 91,445,368
Unrealized depreciation: (26,170,446)
-------------
Net unrealized appreciation: $ 65,274,922
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1995, was concentrated in
the following countries:
<TABLE>
<CAPTION>
Percentage of Net Assets {d}
-----------------------------------
Short-Term
Country(Country Code/Currency Code) Equity & Other Total
- -------------------------------------- ------ ------------- ----------
<S> <C> <C> <C>
Austria (ASTRI/ATS) .................. 1.6 1.6
Finland (FIN/FIM) .................... 1.9 1.9
France (FR/FRF) ...................... 16.1 16.1
Germany (GER/DEM) .................... 7.5 7.5
Italy (ITLY/ITL) ..................... 9.6 1.6 11.2
Netherlands (NETH/NLG) ............... 10.4 10.4
Norway (NOR/NOK) ..................... 1.7 1.7
Spain (SPN/ESP) ...................... 2.3 2.3
Sweden (SWDN/SEK) .................... 7.8 7.8
Switzerland (SWTZ/CHF) ............... 5.6 5.6
United Kingdom (UK/GBP) .............. 31.2 31.2
Other ................................ 2.7 2.7
------ --- -----
Total ............................... 95.7 4.3 100.0
------ --- -----
------ --- -----
<FN>
- ----------------
{d} Percentages indicated are based on net assets of $557,117,133.
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Market Value Unrealized
(U.S. Contract Delivery Appreciation
Contracts to Sell: Dollars) Price Date (Depreciation)
- ------------------------------------------------------------------------------- ------------- --------- --------- -------------
<S> <C> <C> <C> <C>
French Francs.................................................................. 1,821,779 4.91125 02/06/96 $ (9,613)
French Francs.................................................................. 27,749,739 4.88280 02/16/96 10,338
German Deutsche Marks.......................................................... 8,948,223 1.42738 02/29/96 12,250
German Deutsche Marks.......................................................... 9,584,884 1.42738 02/29/96 13,120
Netherland Guilders............................................................ 18,185,097 1.58000 02/15/96 194,650
------------- -------------
Total Contracts to Sell (Payable amount $66,068,977)......................... 66,289,722 220,745
------------- -------------
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF NET ASSETS IS 11.90%
Total Open Forward Foreign Currency Contracts................................ $ 220,745
-------------
-------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 97
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost
$474,227,811) (Note 1)........................... $ 541,850,805
Receivable for Fund shares sold................... 17,989,829
Receivable for securities sold.................... 8,702,672
Dividends and dividend withholding tax reclaims
receivable....................................... 2,180,254
Receivable for open forward foreign currency
contracts (Note 1)............................... 220,745
Cash held as collateral for securities loaned
(Note 1)......................................... 14,090,397
-------------
Total assets.................................... 585,034,702
-------------
Liabilities:
Due to custodian.................................. 5,483,690
Payable for Fund shares repurchased............... 4,899,387
Payable for securities purchased.................. 2,339,273
Payable for investment management and
administration fees (Note 2)..................... 450,920
Payable for service and distribution expenses
(Note 2)......................................... 206,038
Payable for printing and postage expenses......... 178,273
Payable for transfer agent fees (Note 2).......... 176,652
Payable for professional fees..................... 32,619
Payable for custodian fees (Note 1)............... 26,203
Payable for registration and filing fees.......... 13,005
Payable for fund accounting fees (Note 2)......... 11,818
Payable for Trustees' fees and expenses (Note
2)............................................... 3,764
Other accrued expenses............................ 5,530
Collateral for securities loaned (Note 1)......... 14,090,397
-------------
Total liabilities............................... 27,917,569
-------------
Net assets.......................................... $ 557,117,133
-------------
-------------
Class A:
Net asset value and redemption price per share
($483,374,580 DIVIDED BY 44,432,429 shares
outstanding)....................................... $ 10.88
-------------
-------------
Maximum offering price per share
(100/95.25 of $10.88) *............................ $ 11.42
-------------
-------------
Class B:+
Net asset value and offering price per share
($73,024,567 DIVIDED BY 6,752,818 shares
outstanding)....................................... $ 10.81
-------------
-------------
Advisor Class:
Net asset value, offering price per share, and
redemption price per share
($717,986 DIVIDED BY 66,156 shares outstanding).... $ 10.85
-------------
-------------
Net assets consist of:
Paid in capital (Note 4).......................... $ 671,459,517
Undistributed net investment income............... 285,680
Accumulated net realized loss on investments and
foreign currency transactions.................... (182,501,560)
Net unrealized appreciation on translation of
assets and liabilities in foreign currencies..... 250,502
Net unrealized appreciation of investments........ 67,622,994
-------------
Total -- representing net assets applicable to
capital shares outstanding......................... $ 557,117,133
-------------
-------------
<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.
Statement of Additional Information Page 98
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
STATEMENT OF OPERATIONS
Year ended December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of
$2,103,218)................................................ $13,275,187
Interest income............................................. 748,304
-----------
Total investment income................................... 14,023,491
-----------
Expenses:
Investment management and administration fees (Note 2)...... 6,161,265
Transfer agent fees (Note 2)................................ 2,415,470
Service and distribution expenses: (Note 2)
Class A.................................. $ 1,952,376
Class B.................................. 771,586 2,723,962
------------
Custodian fees (Note 1)..................................... 523,522
Fund accounting fees (Note 2)............................... 159,169
Printing and postage expenses............................... 334,627
Audit fees.................................................. 51,625
Legal fees.................................................. 28,348
Registration and filing fees................................ 70,375
Trustees' fees and expenses (Note 2)........................ 26,289
Insurance expenses.......................................... 1,298
Other expenses.............................................. 10,001
-----------
Total expenses before reductions.......................... 12,505,951
-----------
Expense reductions (Notes 1 & 5)........................ (391,842)
-----------
Total net expenses........................................ 12,114,109
-----------
Net investment income......................................... 1,909,382
-----------
Net realized and unrealized gain on
investments and foreign currencies: (Note 1)
Net realized gain on investments........... 66,927,280
Net realized loss on foreign currency
transactions.............................. (40,617,970)
------------
Net realized gain during the year......................... 26,309,310
Net change in unrealized appreciation on
translation of assets and liabilities in
foreign currencies........................ (158,136)
Net change in unrealized appreciation of
investments............................... 32,353,329
------------
Net unrealized appreciation during the year............... 32,195,193
-----------
Net realized and unrealized gain on investments and foreign
currencies................................................... 58,504,503
-----------
Net increase in net assets resulting from operations.......... $60,413,885
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 99
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- -----------------
<S> <C> <C>
Decrease in net assets
Operations:
Net investment income...................... $ 1,909,382 $ 4,829,645
Net realized gain on investments and
foreign currency transactions............. 26,309,310 45,153,682
Net change in unrealized depreciation on
translation of assets and liabilities in
foreign currencies........................ (158,136) (6,292,249)
Net change in unrealized appreciation
(depreciation) of investments............. 32,353,329 (91,044,462)
----------------- -----------------
Net increase (decrease) in net assets
resulting from operations............... 60,413,885 (47,353,384)
----------------- -----------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income................. (4,239,316) (3,125,751)
From net realized gain on investments...... (1,762,043) --
In excess of net investment income......... -- (8,333,619)
Class B:
Distributions to shareholders: (Note 1)
From net investment income................. (173,659) --
From net realized gain on investments...... (269,455) --
In excess of net investment income......... -- (1,040,571)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income................. (9,151) --
From net realized gain on investments...... (2,596) --
----------------- -----------------
Total distributions...................... (6,456,220) (12,499,941)
----------------- -----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested................................ 1,608,239,408 1,287,884,918
Decrease from capital shares repurchased... (1,832,994,490) (1,388,865,472)
----------------- -----------------
Net decrease from capital share
transactions............................ (224,755,082) (100,980,554)
----------------- -----------------
Total decrease in net assets................. (170,797,417) (160,833,879)
Net assets:
Beginning of year.......................... 727,914,550 888,748,429
----------------- -----------------
End of year................................ $ 557,117,133 $ 727,914,550
----------------- -----------------
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 100
<PAGE>
GT GLOBAL EUROPE 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>
CLASS A+
----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1995 (A) 1994 (A) 1993 (A) 1992 (A) 1991
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 10.03 $ 10.84 $ 8.51 $ 9.59 $ 9.33
----------- ----------- ----------- ----------- ------------
Income from investment operations:
Net investment income................. 0.04 0.06 0.05 0.11** 0.21
Net realized and unrealized gain
(loss) on investments................ 0.95 (0.69) 2.36 (1.19) 0.19
----------- ----------- ----------- ----------- ------------
Net increase (decrease) from
investment operations.............. 0.99 (0.63) 2.41 (1.08) 0.40
----------- ----------- ----------- ----------- ------------
Distributions to shareholders:
From net investment income............ (0.10) (0.05) (0.06) 0.00 (0.14)
From net realized gain on
investments.......................... (0.04) 0.00 0.00 0.00 0.00
In excess of net investment income.... 0.00 0.00 (0.02) 0.00 0.00
In excess of net realized gain on
investments.......................... 0.00 (0.13) 0.00 0.00 0.00
----------- ----------- ----------- ----------- ------------
Total distributions................. (0.14) (0.18) (0.08) 0.00 (0.14)
----------- ----------- ----------- ----------- ------------
Net asset value, end of period.......... $ 10.88 $ 10.03 $ 10.84 $ 8.51 $ 9.59
----------- ----------- ----------- ----------- ------------
----------- ----------- ----------- ----------- ------------
Total investment return(d).............. 9.86% (5.8)% 28.3% (11.3)% 4.3%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 483,375 $ 646,313 $ 854,701 $ 781,607 $ 1,211,709
Ratio of net investment income (loss) to
average net assets..................... 0.38% 0.61% 0.6% 1.2%** 1.7%
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 1.83% 1.73% 1.9% 2.0%** 1.8%
Without expense reductions............ 1.89% 1.81% --%* --%* --%*
Portfolio turnover rate++++............. 108% 91% 67% 65% 55%
</TABLE>
- ----------------
+ 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 is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions,
if any.
* * Includes reimbursement by LGT Asset Management, Inc. of Fund Class A
operating expenses of less than one cent per share. Without such
reimbursement, the ratio of expenses to average net assets would have
been 2.1% and the ratio of net investment income to average net assets
would have been 1.2% (See Note 2).
(a) Calculated based upon weighted average shares outstanding during the
period.
(b) Annualized.
(c) Not Annualized.
(d) Total Investment return does not include sales charges.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 101
<PAGE>
GT GLOBAL EUROPE 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>
CLASS B++ ADVISOR
------------------------------------- CLASS+++
--------------
YEAR ENDED DECEMBER APRIL 1, 1993 JUNE 1, 1995
31, TO TO
---------------------- DECEMBER 31, DECEMBER 31,
1995 (A) 1994 (A) 1993 (A) 1995 (A)
---------- ---------- ------------- --------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 9.97 $ 10.79 $ 9.02 $ 10.24
---------- ---------- ------------- -------
Income from investment operations:
Net investment income................. (0.03) 0.00 0.00 0.08
Net realized and unrealized gain
(loss) on investments................ 0.94 (0.69) 1.85 0.71
---------- ---------- ------------- -------
Net increase (decrease) from
investment operations.............. 0.91 (0.69) 1.85 0.79
---------- ---------- ------------- -------
Distributions to shareholders:
From net investment income............ (0.03) 0.00 (0.06) (0.14)
From net realized gain on
investments.......................... (0.04) 0.00 0.00 (0.04)
In excess of net investment income.... 0.00 0.00 (0.02) 0.00
In excess of net realized gain on
investments.......................... 0.00 (0.13) 0.00 0.00
---------- ---------- ------------- -------
Total distributions................. (0.07) (0.13) (0.08) (0.18)
---------- ---------- ------------- -------
Net asset value, end of period.......... $ 10.81 $ 9.97 $ 10.79 $ 10.85
---------- ---------- ------------- -------
---------- ---------- ------------- -------
Total investment return(d).............. 9.20% (6.38)% 20.5 %(c) 7.75 %(c)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 73,025 $ 81,602 $ 34,048 $ 718
Ratio of net investment income (loss) to
average net assets..................... (0.27)% (0.04)% (0.1)%(b) 0.73 %(b)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)................................... 2.48% 2.38% 2.6 %(b) 1.48 %(b)
Without expense reductions............ 2.54% 2.46% -- %* 1.54 %(b)
Portfolio turnover rate++++............. 108% 91% 67 % 108 %
</TABLE>
- ----------------
+ 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 is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions,
if any.
* * Includes reimbursement by LGT Asset Management, Inc. of Fund Class A
operating expenses of less than one cent per share. Without such
reimbursement, the ratio of expenses to average net assets would have
been 2.1% and the ratio of net investment income to average net assets
would have been 1.2% (See Note 2).
(a) Calculated based upon weighted average shares outstanding during the
period.
(b) Annualized.
(c) Not Annualized.
(d) Total Investment return does not include sales charges.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 102
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
NOTES TO
FINANCIAL STATEMENTS
December 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Europe Growth Fund ("Fund") is a separate series of G.T. Global Growth
Series ("Company"). The Company is organized as a Massachusetts business trust
and is registered under the Investment Company Act of 1940, as amended ("1940
Act"), 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 Fund offers 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. The Fund
commenced sale of Advisor Class shares on June 1, 1995. Investment income,
realized and unrealized capital gains and losses, and the common expenses of the
Fund 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 Fund. 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 Fund in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles, and,
therefore, the financial statements may include certain estimates from
management.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes 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 in which
such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by LGT Asset Management, Inc.
("LGT", formerly known as G.T. Capital Management, Inc.) 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 foreign exchange translation
and 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.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized
Statement of Additional Information Page 103
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
between the trade and settlement dates on securities transactions, and the
differences between the amounts of dividends, interest, and foreign withholding
taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains or losses arise
from changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund'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 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.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of the contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund'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 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 can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid, 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 may use options to manage its exposure
to the stock market and to fluctuations in currency values or interest rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund'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 has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund 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 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 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 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 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 may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) 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 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
Statement of Additional Information Page 104
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
contract is traded. Pursuant to the contract, the Fund 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 as unrealized gains or losses. When the contract is closed,
the Fund 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 is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund may use futures contracts to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
(G) 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 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 to
subsequently invest at less than advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At December 31, 1995, securities with an aggregate value of $13,284,677 were on
loan to brokers. The loans were secured by cash collateral of $14,090,397,
received by the Fund. For international securities, cash collateral is received
by the Fund against loaned securities in an amount at least equal to 105% of the
market value of the loaned securities at the inception of each loan. This
collateral must be maintained at not less than 103% of the market value of the
loaned securities during the period of the loan. For domestic securities, cash
collateral is received by the Fund against loaned securities in an 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. For
the year ended December 31, 1995, the Fund earned securities lending fees of
$212,235 which were used to reduce custodian fees.
(I) TAXES
It is the policy of the Fund 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 Fund 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. The Fund currently has a capital loss carryforward of
$180,151,215 of which $22,772,831 expires in 1999, $152,895,949 expires in 2000,
and $4,482,435 expires in 2001.
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the 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 and timing differences.
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. These risks of investing in foreign markets may
include foreign currency exchange rate fluctuations, perceived credit risk,
adverse political and economic developments and possible adverse foreign
government intervention.
(L) RESTRICTED SECURITIES
The Fund 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.
(M) INDEXED SECURITIES
The Fund 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 Fund's investment manager and
administrator. The Fund pays investment management and administration fees to
LGT at the following annualized rates of 0.975% on the first $500 million of
average daily net assets of the Fund; 0.95% on the next $500 million; 0.925% on
the next $500 million and 0.90% 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
Statement of Additional Information Page 105
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
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", formerly known as G.T. Global Financial Services,
Inc.), an affiliate of LGT, serves as the Fund's distributor. The Fund offers
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 year ended December 31, 1995, GT Global retained $51,964
of such sales charges. 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 CDSCs in the
amount of $23,179 for the year ended December 31, 1995. 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 year ended December 31, 1995, GT Global collected CDSCs in
the amount of $487,140. 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 Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the 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 Fund's Class B Plan, the 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 have voluntarily undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary items) to
the maximum annual rate of 2.25%, 2.90%, and 1.90% 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 Fund. 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 Fund for its
out-of-pocket expenses for such items as postage, forms, telephone charges,
stationery and office supplies.
Effective July 1, 1995, LGT has assumed the role of pricing and accounting agent
for the Fund. The monthly fee for these services to LGT is a percentage, not to
exceed 0.03% annually, of the Fund's average daily net assets. The annual fee
rate is derived by applying 0.03% to the first $5 billion of assets of all
registered mutual funds advised by LGT ("GT Funds") and 0.02% to the assets in
excess of $5 billion and dividing the result by the aggregate assets of the GT
Funds. For the period ended December 31, 1995, the Fund paid fund accounting
fees of $62,660 to LGT.
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.
Statement of Additional Information Page 106
<PAGE>
GT GLOBAL EUROPE GROWTH FUND
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1995, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $658,547,113 and $920,403,071, respectively. There were
no purchases or sales of U.S. government obligations by the Fund during the
year.
4. CAPITAL SHARES
At December 31, 1995, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------------------- -----------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold......................................................... 148,571,806 $ 1,551,431,041 109,168,643 $ 1,160,153,253
Shares issued in connection with reinvestment of distributions...... 415,180 4,458,262 874,425 8,526,677
------------ --------------- ------------ ---------------
148,986,986 1,555,889,303 110,043,068 1,168,679,930
Shares repurchased.................................................. (169,021,976) (1,766,588,469) (124,431,789) (1,325,037,548)
------------ --------------- ------------ ---------------
Net decrease........................................................ (20,034,990) $ (210,699,166) (14,388,721) $ (156,357,618)
------------ --------------- ------------ ---------------
------------ --------------- ------------ ---------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------------------- -----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold......................................................... 4,792,541 $ 50,660,689 10,710,316 $ 118,315,558
Shares issued in connection with reinvestment of distributions...... 35,327 377,127 91,703 889,430
------------ --------------- ------------ ---------------
4,827,868 51,037,816 10,802,019 119,204,988
Shares repurchased.................................................. (6,262,885) (65,780,212) (5,769,922) (63,827,924)
------------ --------------- ------------ ---------------
Net increase (decrease)............................................. (1,435,017) $ (14,742,396) 5,032,097 $ 55,377,064
------------ --------------- ------------ ---------------
------------ --------------- ------------ ---------------
</TABLE>
<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF
SALE OF SHARES)
TO DECEMBER 31, 1995
-----------------------------
ADVISOR CLASS SHARES AMOUNT
------------ ---------------
<S> <C> <C>
Shares sold......................................................... 122,102 $ 1,300,674
Shares issued in connection with reinvestment of distributions...... 1,098 11,615
------------ ---------------
123,200 1,312,289
Shares repurchased.................................................. (57,044) (625,809)
------------ ---------------
Net increase........................................................ 66,156 $ 686,480
------------ ---------------
------------ ---------------
</TABLE>
5. EXPENSE REDUCTIONS
LGT has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses. For the year ended December 31, 1995, the Fund's expenses were
reduced by $179,607 under these arrangements.
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
For its fiscal year ended December 31, 1995, the total amount of income received
by the Fund from sources within foreign countries and possessions of the United
States was approximately $0.305 per share (representing an approximate total of
$15,459,700). The total amount of taxes paid by the Fund to such countries was
approximately $0.0415 per share (representing an approximate total of
$2,103,218).
Statement of Additional Information Page 107
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
G.T. Global Growth Series:
We have audited the accompanying statement of assets and liabilities of GT
Global America Growth Fund, one of the funds organized as a series of G.T.
Global Growth Series, including the schedule of portfolio investments, as of
December 31, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the four years in the
period then ended. These financial statements and the financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits. The financial highlights for the year ended December 31, 1991 were
audited by other auditors whose report dated January 31, 1992 expressed an
unqualified opinion on such financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global America Growth Fund as of December 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the four years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 12, 1996
Statement of Additional Information Page 108
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
PORTFOLIO OF INVESTMENTS
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Shares Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Technology (31.6%)
Integrated Device Technology, Inc.-/- .............................. 1,794,000 $ 23,097,750 3.1
SEMICONDUCTORS
LAM Research Corp.-/- .............................................. 480,400 21,978,300 3.0
SEMICONDUCTORS
Applied Materials, Inc.-/- ......................................... 556,100 21,896,438 2.9
SEMICONDUCTORS
National Semiconductor Corp.-/- ................................... 976,700 21,731,575 2.9
SEMICONDUCTORS
Komag, Inc.-/- ..................................................... 439,300 20,262,713 2.7
COMPUTERS & PERIPHERALS
Micron Technology, Inc. ............................................ 500,200 19,820,425 2.7
SEMICONDUCTORS
Read-Rite Corp.-/- ................................................. 827,500 19,239,375 2.6
COMPUTERS & PERIPHERALS
BMC Software, Inc.-/- .............................................. 353,600 15,116,400 2.0
SOFTWARE
Cirrus Logic, Inc.-/- .............................................. 727,600 14,370,100 1.9
SEMICONDUCTORS
Seagate Technology-/- ............................................. 284,400 13,509,000 1.8
COMPUTERS & PERIPHERALS
Excalibur Technologies Corp.-/- .................................... 316,900 11,566,850 1.6
SOFTWARE
Compuware Corp. .................................................... 524,600 9,705,100 1.3
SOFTWARE
Dallas Semiconductor Corp.-/- ...................................... 443,100 9,194,325 1.2
SEMICONDUCTORS
Conner Peripherals, Inc.-/- ........................................ 342,500 7,192,500 1.0
COMPUTERS & PERIPHERALS
Quantum Corp.-/- .................................................. 244,400 3,940,950 0.5
COMPUTERS & PERIPHERALS
MEMC Electronic Materials, Inc.-/- ................................. 90,100 2,939,513 0.4
SEMICONDUCTORS
------------
235,561,314
------------
Services (15.3%)
Michaels Stores, Inc.{::} -/- ...................................... 1,685,400 23,174,250 3.1
RETAILERS-OTHER
AnnTaylor Stores, Inc.{::} -/- .................................... 1,689,100 17,313,275 2.3
RETAILERS-APPAREL
Sports Authority, Inc.-/- .......................................... 794,800 16,194,050 2.2
LEISURE & TOURISM
United Video Satellite Group, Inc. "A"-/- .......................... 513,200 13,856,400 1.9
CABLE TELEVISION
Kelly Services, Inc. 'A' ........................................... 445,100 12,351,525 1.7
CONSUMER SERVICES
Younkers, Inc.{::} -/- ............................................. 482,200 12,235,825 1.6
RETAILERS-APPAREL
Proffitt's, Inc.-/- ................................................ 267,500 7,021,875 0.9
RETAILERS-OTHER
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 109
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Shares Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Services (Continued)
Rio Hotel and Casino, Inc.-/- ..................................... 430,100 $ 5,107,438 0.7
LEISURE & TOURISM
Friedman's, Inc. "A"-/- ............................................ 248,300 4,779,775 0.6
RETAILERS-OTHER
Buckles, Inc.-/- ................................................... 114,700 2,035,925 0.3
RETAILERS-APPAREL
------------
114,070,338
------------
Finance (13.3%)
RFS Hotel Investors, Inc. ......................................... 1,070,000 16,451,250 2.2
REAL ESTATE INVESTMENT TRUST
KeyCorp ........................................................... 414,000 15,007,500 2.0
BANKS-REGIONAL
H&R Block, Inc. .................................................... 365,800 14,814,900 2.0
CONSUMER FINANCE
Equity Inns, Inc.{::} .............................................. 1,176,900 13,534,350 1.8
REAL ESTATE INVESTMENT TRUST
Signet Banking Corp. .............................................. 497,700 11,820,375 1.6
BANKS-REGIONAL
Leader Financial Corp. ............................................. 314,800 11,765,650 1.6
SAVINGS&LOANS
ADVANTA Corp. "B" .................................................. 229,700 8,355,338 1.1
CONSUMER FINANCE
Mid-America Apartment Communities, Inc. ............................ 180,900 4,477,275 0.6
REAL ESTATE
Trans Financial, Inc. .............................................. 178,433 3,189,490 0.4
BANKS-REGIONAL
------------
99,416,128
------------
Health Care (6.2%)
Coventry Corp.-/- .................................................. 1,103,700 22,763,809 3.1
HEALTH CARE SERVICES
Health Systems International, Inc. "A"-/- .......................... 490,500 15,757,313 2.1
HEALTH CARE SERVICES
Abaxis, Inc.{::} -/- ............................................... 752,800 5,269,600 0.7
MEDICAL TECHNOLOGY & SUPPLIES
GranCare, Inc.-/- .................................................. 168,300 2,440,350 0.3
HEALTH CARE SERVICES
------------
46,231,072
------------
Consumer Non-Durables (3.7%)
V F Corp. .......................................................... 240,400 12,681,100 1.7
TEXTILES & APPAREL
Haggar Corp.{::} .................................................. 587,400 10,573,200 1.4
TEXTILES & APPAREL
Varsity Spirit Corp.{::} ........................................... 342,150 4,790,100 0.6
TEXTILES & APPAREL
------------
28,044,400
------------
Consumer Durables (3.3%)
Eaton Corp. ........................................................ 303,000 16,248,375 2.2
AUTO PARTS
Syratech Corp.-/- .................................................. 244,100 4,912,513 0.7
APPLIANCES & HOUSEHOLD
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 110
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Shares Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Consumer Durables (Continued)
Lifetime Hoan Corp.-/- ............................................. 352,008 $ 3,256,071 0.4
APPLIANCES & HOUSEHOLD
------------
24,416,959
------------
Materials/Basic Industry (1.4%)
Georgia Gulf Corp. ................................................. 341,800 10,510,350 1.4
CHEMICALS
------------ -----
TOTAL EQUITY INVESTMENTS (cost $546,043,444) ......................... 558,250,561 74.8
------------ -----
<CAPTION>
Market % of Net
Repurchase Agreements Value Assets {d}
- ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
Dated December 29, 1995, with Merrill Lynch, due January 2, 1996,
for an effective yield of 5.6%, collateralized by $165,610,000 U.S.
Treasury Notes, 5.625% due 10/31/97 (market value of collateral is
$168,387,892, including accrued interest). (cost $165,077,000) ... 165,077,000 22.1
Dated December 29, 1995, with State Street Bank and Trust Company,
due January 2, 1996, for an effective yield of 5.55%,
collateralized by $24,955,000 U.S. Treasury Bonds, 10.375% due
11/15/12 (market value of collateral is $34,746,973, including
accrued interest).
(cost $34,076,753) ............................................... 34,076,753 4.6
------------ -----
TOTAL REPURCHASE AGREEMENTS (cost $199,153,753) ...................... 199,153,753 26.7
------------ -----
TOTAL INVESTMENTS (cost $745,197,197) * .............................. 757,404,314 101.5
Other Assets and Liabilities ......................................... (11,283,985) (1.5)
------------ -----
NET ASSETS ........................................................... $746,120,329 100.0
------------ -----
------------ -----
</TABLE>
- ----------------
{d} Percentages indicated are based on net assets of $746,120,329.
-/- Non-income producing security.
{::} See Note 5 of Notes to Financial Statements.
* For Federal income tax purposes, cost is $749,127,499 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 58,714,839
Unrealized depreciation: (50,438,024)
-------------
Net unrealized appreciation: $ 8,276,815
-------------
-------------
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 111
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost
$546,043,444) (Note 1)........................... $558,250,561
Repurchase agreements, at value and cost (Note
1)............................................... 199,153,753
U.S. currency..................................... 123
Receivable for Fund shares sold................... 21,773,350
Receivable for securities sold.................... 1,766,832
Dividends receivable.............................. 522,624
------------
Total assets.................................... 781,467,243
------------
Liabilities:
Payable for securities purchased.................. 26,307,035
Payable for Fund shares repurchased............... 7,812,078
Payable for investment management and
administration fees (Note 2)..................... 468,346
Payable for service and distribution expenses
(Note 2)......................................... 425,681
Payable for transfer agent fees (Note 2).......... 147,865
Payable for printing and postage expenses......... 112,702
Payable for professional fees..................... 20,555
Payable for fund accounting fees (Note 2)......... 16,300
Payable for registration and filing fees.......... 14,336
Payable for custodian fees........................ 8,037
Payable for Trustees' fees and expenses (Note
2)............................................... 5,243
Other accrued expenses............................ 8,736
------------
Total liabilities............................... 35,346,914
------------
Net assets.......................................... $746,120,329
------------
------------
Class A:
Net asset value and redemption price per share
($396,290,863 DIVIDED BY 20,781,443 shares
outstanding)....................................... $ 19.07
------------
------------
Maximum offering price per share
(100/95.25 of $19.07) *............................ $ 20.02
------------
------------
Class B:+
Net asset value and offering price per share
($348,435,445 DIVIDED BY 18,559,541 shares
outstanding)....................................... $ 18.77
------------
------------
Advisor Class:
Net asset value, offering price per share, and
redemption price per share
($1,394,021 DIVIDED BY 73,175 shares
outstanding)....................................... $ 19.05
------------
------------
Net assets consist of:
Paid in capital (Note 4).......................... $725,868,107
Undistributed net investment income............... 258,896
Accumulated net realized gain on investments...... 7,786,209
Net unrealized appreciation of investments........ 12,207,117
------------
Total -- representing net assets applicable to
capital shares outstanding......................... $746,120,329
------------
------------
<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.
Statement of Additional Information Page 112
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
STATEMENT OF OPERATIONS
Year ended December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income............................................ $12,335,951
Dividend income............................................ 4,255,693
-----------
Total investment income.................................. 16,591,644
-----------
Expenses:
Investment management and administration fees (Note 2)..... 4,425,913
Service and distribution expenses: (Note 2)
Class A.................................. $ 1,259,234
Class B.................................. 2,547,904 3,807,138
-----------
Transfer agent fees (Note 2)............................... 1,666,500
Printing and postage expenses.............................. 288,000
Fund accounting fees (Note 2).............................. 158,181
Registration and filing fees............................... 130,450
Audit fees................................................. 45,500
Legal fees................................................. 32,600
Custodian fees............................................. 31,762
Trustees' fees and expenses (Note 2)....................... 24,075
-----------
Total expenses............................................. 10,610,119
-----------
Net investment income........................................ 5,981,525
-----------
Net realized and unrealized gain (loss) on
investments: (Note 1)
Net realized gain on investments........................... 93,317,375
Net change in unrealized appreciation of investments....... (4,611,894)
-----------
Net realized and unrealized gain on investments.............. 88,705,481
-----------
Net increase in net assets resulting from operations......... $94,687,006
-----------
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 113
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- -----------------
<S> <C> <C>
Increase in net assets
Operations:
Net investment income...................... $ 5,981,525 $ 216,804
Net realized gain on investments........... 93,317,375 24,664,201
Net change in unrealized appreciation
(depreciation) of investments............. (4,611,894) 1,064,481
----------------- -----------------
Net increase in net assets resulting from
operations.............................. 94,687,006 25,945,486
----------------- -----------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income................. (3,774,599) (177,363)
From net realized gain on investments...... (46,598,539) (18,246,884)
Class B:
Distributions to shareholders: (Note 1)
From net investment income................. (1,969,042) --
From net realized gain on investments...... (41,818,697) (7,094,970)
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) (25,519,217)
----------------- -----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested................................ 1,840,086,218 842,423,864
Decrease from capital shares repurchased... (1,371,300,487) (684,302,549)
----------------- -----------------
Net increase from capital share
transactions............................ 468,785,731 158,121,315
----------------- -----------------
Total increase in net assets................. 469,122,886 158,547,584
Net assets:
Beginning of year.......................... 276,997,443 118,449,859
----------------- -----------------
End of year................................ $ 746,120,329 $ 276,997,443
----------------- -----------------
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 114
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
<TABLE>
<CAPTION>
CLASS A+
--------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1995 1994 (C) 1993 1992 1991
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 17.69 $ 17.17 $ 17.12 $ 14.13 $ 11.89
----------- ----------- ----------- ----------- ----------
Income from investment operations:
Net investment income (loss).......... 0.24 0.04 (0.21) (0.11) 0.01
Net realized and unrealized gain
(loss) on investments................ 3.93 2.55 1.56 4.54 2.28
----------- ----------- ----------- ----------- ----------
Net increase (decrease) from
investment operations.............. 4.17 2.59 1.35 4.43 2.29
----------- ----------- ----------- ----------- ----------
Distributions to shareholders:
From net investment income............ (0.21) (0.02) 0.00 0.00 (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.......... $ 19.07 $ 17.69 $ 17.17 $ 17.12 $ 14.13
----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------
Total investment return (d)............. 23.23% 15.69% 8.3% 31.7% 19.3%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 396,291 $ 196,937 $ 116,468 $ 166,712 $ 88,041
Ratio of net investment income (loss) to
average net assets..................... 1.24% 0.17% (0.7)% (1.1)% 0.0%
Ratio of expenses to average net
assets................................. 1.46% 1.58% 1.6% 1.8% 1.7%
Portfolio turnover rate++++............. 71% 102% 92% 114% 156%
</TABLE>
- ----------------
+ 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 is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(a) Not annualized.
(b) 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.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 115
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
FINANCIAL HIGHLIGHTS (CONT'D)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements.
<TABLE>
<CAPTION>
CLASS B++ ADVISOR
--------------------------------------- CLASS+++
--------------
YEAR ENDED DECEMBER 31, APRIL 1, 1993 JUNE 1, 1995
TO TO
----------------------- DECEMBER 31, DECEMBER 31,
1995 1994 (C) 1993 1995
----------- ---------- -------------- --------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 17.50 $ 17.09 $ 15.90 $ 20.61
----------- ---------- ------- -------
Income from investment operations:
Net investment income (loss).......... 0.10 (0.09) (0.29) 0.21
Net realized and unrealized gain
(loss) on investments................ 3.87 2.55 2.78 1.09
----------- ---------- ------- -------
Net increase (decrease) from
investment operations.............. 3.97 2.46 2.49 1.30
----------- ---------- ------- -------
Distributions to shareholders:
From net investment income............ (0.12) 0.00 0.00 (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.......... $ 18.77 $ 17.50 $ 17.09 $ 19.05
----------- ---------- ------- -------
----------- ---------- ------- -------
Total investment return (d)............. 22.42% 15.06% 16.1 %(a) 6.01 %(a)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 348,435 $ 80,060 $ 1,982 $ 1,394
Ratio of net investment income (loss) to
average net assets..................... 0.59% (0.48)% (1.3)%(b) 1.59 %(b)
Ratio of expenses to average net
assets................................. 2.11% 2.23% 2.2 %(b) 1.11 %(b)
Portfolio turnover rate++++............. 71% 102% 92 % 71 %
</TABLE>
- ----------------
+ 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 is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(a) Not annualized.
(b) 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.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 116
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
NOTES TO
FINANCIAL STATEMENTS
December 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global America Growth Fund ("Fund"), is a separate series of G.T. Global
Growth Series ("Company"). The Company is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended
("1940 Act"), 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 Fund offers 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. The Fund
commenced sale of Advisor Class shares on June 1, 1995. Investment income,
realized and unrealized capital gains and losses, and the common expenses of the
Fund 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 Fund. 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 Fund in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles, and,
therefore, the financial statements may include certain estimates made by
management.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes 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 Asset Management, Inc.
("LGT", formerly know as G.T. Capital Management, Inc.) 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 the Fund, it is the Fund'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 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 the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund'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 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 can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid, high
Statement of Additional Information Page 117
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
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 may use options to manage its exposure to the stock market and to
fluctuations in interest rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund'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 has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund 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 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 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 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 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 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 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 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 as unrealized gains or losses. When the contract is closed,
the Fund 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 is that the change in value of the
underlying securities may not correlate to the change in value of the contracts.
The Fund 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 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 to
subsequently invest at less advantageous prices.
(F) TAXES
It is the policy of the Fund 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 Fund 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.
(G) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the 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 and timing differences.
(H) RESTRICTED SECURITIES
The Fund 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.
(I) INDEXED SECURITIES
The Fund 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 Fund's investment manager and
administrator. The Fund pays investment management and administration fees to
LGT at the following annualized rates of 0.725% on the first $500 million of
average daily net assets on the Fund; 0.70% on the
Statement of Additional Information Page 118
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
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 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", formerly known as G.T. Global Financial Services,
Inc.), an affiliate of LGT, serves as the Fund's distributor. The Fund offers
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 year ended December 31, 1995, GT Global retained
$336,010 of such sales charges. 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 CDSCs in
the amount of $3,160 for the year ended December 31, 1995. 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 year ended December 31, 1995, GT Global collected CDSCs in
the amount of $922,703. 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 Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the 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 Fund's Class B Plan, the 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 the 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 Fund. 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 Fund for its
out-of-pocket expenses for such items as postage, forms, telephone charges,
stationery and office supplies.
Effective July 1, 1995, LGT has assumed the role of pricing and accounting agent
for the Fund. The monthly fee for these services to LGT is a percentage, not to
exceed 0.03% annually, of the Fund's average daily net assets. The annual fee
rate is derived by applying 0.03% of the first $5 billion of assets of all
registered mutual funds advised by LGT ("GT Funds") and 0.02% to the assets in
excess of $5 billion and dividing the result by the aggregated assets of the GT
Funds. For the year ended December 31, 1995, the Fund paid fund accounting fees
of $79,918 to LGT.
The Company pays each of its Trustees who is not an employee, officer or
director of LGT, GT Global or
Statement of Additional Information Page 119
<PAGE>
GT GLOBAL AMERICA GROWTH FUND
GT Services $5,000 per year plus $300 for each meeting of the board or any
committee thereof attended by the Trustee.
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1995, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $580,930,689 and $288,889,658, respectively. There were
no purchases or sales of U.S. government obligations by the Fund during the
year.
4. CAPITAL SHARES
At December 31, 1995, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold............................................................. 64,255,259 $ 1,354,329,879 37,768,865 $ 699,605,033
Shares issued in connection with reinvestment of distributions.......... 2,163,720 42,170,721 902,149 15,125,347
----------- --------------- ----------- -------------
66,418,979 1,396,500,600 38,671,014 714,730,380
Shares repurchased...................................................... (56,768,364) (1,210,272,338) (34,322,058) (638,933,258)
----------- --------------- ----------- -------------
Net increase............................................................ 9,650,615 $ 186,228,262 4,348,956 $ 75,797,122
----------- --------------- ----------- -------------
----------- --------------- ----------- -------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS B
Shares sold............................................................. 19,673,669 $ 406,685,987 6,565,639 $ 121,728,093
Shares issued in connection with reinvestment of distributions.......... 1,832,696 35,169,188 359,927 5,965,391
----------- --------------- ----------- -------------
21,506,365 441,855,175 6,925,566 127,693,484
Shares repurchased...................................................... (7,522,345) (160,828,667) (2,466,010) (45,369,291)
----------- --------------- ----------- -------------
Net increase............................................................ 13,984,020 $ 281,026,508 4,459,556 $ 82,324,193
----------- --------------- ----------- -------------
----------- --------------- ----------- -------------
</TABLE>
<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF SALE OF
SHARES) TO DECEMBER 31, 1995
----------------------------
ADVISOR CLASS SHARES AMOUNT
----------- ---------------
<S> <C> <C>
Shares sold............................................................. 72,809 $ 1,541,469
Shares issued in connection with reinvestment of distributions.......... 9,711 188,974
----------- ---------------
82,520 1,730,443
Shares repurchased...................................................... (9,345) (199,482)
----------- ---------------
Net increase............................................................ 73,175 $ 1,530,961
----------- ---------------
----------- ---------------
</TABLE>
5. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES
Investments of 5% or more of an issuer's outstanding voting securities by the
Fund are defined in the Investment Company Act of 1940, as amended, as an
"affiliated company". Investments in affiliated companies at December 31, 1995,
amounted to $86,890,600. Transactions with affiliated companies during 1995 are
as follows:
<TABLE>
<CAPTION>
PURCHASES NET REALIZED DIVIDEND
AFFILIATES COST SALES COST LOSS INCOME
- ------------------------------------------------------------------------------- ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
Abaxis, Inc.................................................................... $ 411,025 $ -- $ -- $ --
AnnTaylor Stores, Inc.......................................................... 14,643,698 5,185,744 2,743,461 --
Equity Inns, Inc............................................................... 8,086,420 -- -- 841,982
Haggar Corp.................................................................... 4,471,290 -- -- 93,840
Michaels Stores, Inc........................................................... 10,981,339 -- -- --
Varsity Spirit Corp............................................................ -- -- -- 41,058
Younkers, Inc.................................................................. 10,725,577 -- -- --
</TABLE>
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$24,032,736 as capital gain dividends for the fiscal year ended December 31,
1995.
Statement of Additional Information Page 120
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
G.T. Global Growth Series:
We have audited the accompanying statement of assets and liabilities of GT
Global Japan Growth Fund, a series of shares of beneficial interest of G.T.
Global Growth Series, including the schedule of portfolio investments, as of
December 31, 1995, the related statement of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the four years in the
period then ended. These financial statements and the financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the year ended December 31, 1991 were
audited by other auditors whose report dated January 31, 1992 expressed an
unqualified opinion on such financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global Japan Growth Fund, as of December 31, 1995, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the four
years in the period then ended, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 12, 1996
Statement of Additional Information Page 121
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
PORTFOLIO OF INVESTMENTS
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Shares Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Services (34.1%)
Aoyama Trading Co., Ltd. ........................................... 200,000 $ 6,395,349 4.2
RETAILERS-APPAREL
DDI Corp. ......................................................... 800 6,201,550 4.1
WIRELESS COMMUNICATIONS
Ito-Yokado Co., Ltd. ............................................... 100,000 6,162,791 4.0
RETAILERS-OTHER
Seven-Eleven Japan Ltd. ............................................ 80,000 5,643,411 3.7
RETAILERS-OTHER
Autobacs Seven Co., Ltd. ........................................... 55,000 4,572,674 3.0
RETAILERS-OTHER
Fast Retailing Co., Ltd. ........................................... 83,000 4,125,872 2.7
RETAILERS-APPAREL
Southland Corp.{l} -/- {\/} ....................................... 1,175,000 3,892,188 2.5
RETAILERS-OTHER
Yoshinoya D&C Co., Ltd. ........................................... 220 3,837,209 2.5
RESTAURANTS
Kentucky Fried Chicken Japan ....................................... 157,000 2,586,240 1.7
RESTAURANTS
Bunkyodo Co., Ltd. ................................................ 104,000 2,368,217 1.5
RETAILERS-OTHER
Ten Allied Co. ..................................................... 110,000 1,641,473 1.1
RESTAURANTS
Xebio Co., Ltd. .................................................... 37,000 1,308,624 0.9
RETAILERS-APPAREL
Nitori Co. ......................................................... 46,000 1,292,636 0.8
RETAILERS-OTHER
Nissha Printing Co. ................................................ 50,000 741,279 0.5
BROADCASTING & PUBLISHING
Fujitsu Business Systems ........................................... 28,000 737,984 0.5
WHOLESALE & INTERNATIONAL TRADE
Blue Grass Co., Ltd. ............................................... 21,000 559,595 0.4
RETAILERS-APPAREL
------------
52,067,092
------------
Technology (12.1%)
Matsushita-Kotobuki Electronics Ltd. ............................... 220,000 5,585,271 3.6
COMPUTERS & PERIPHERALS
Koei Co., Ltd. ..................................................... 124,900 4,332,771 2.8
SOFTWARE
Kyushu-Matsushita Electric Co., Ltd. .............................. 219,000 3,777,326 2.5
COMPUTERS & PERIPHERALS
Hosiden Electronics ............................................... 313,000 2,699,322 1.8
COMPUTERS & PERIPHERALS
Nippon Densan ...................................................... 32,000 1,159,690 0.8
COMPUTERS & PERIPHERALS
Geomatec Co., Ltd. ................................................. 26,700 965,029 0.6
COMPUTERS & PERIPHERALS
------------
18,519,409
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 122
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Shares Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Capital Goods (7.8%)
Murata Manufacturing Co., Ltd. ..................................... 120,000 $ 4,418,605 2.9
ELECTRICAL PLANT/EQUIPMENT
Higashi Nihon House ................................................ 152,000 2,503,876 1.6
CONSTRUCTION
Enomoto Co., Ltd. .................................................. 93,000 1,991,570 1.3
INDUSTRIAL COMPONENTS
Shima Seiki Manufacturing Ltd. ..................................... 31,000 1,787,306 1.2
MACHINE TOOLS
Komori Corp. ....................................................... 49,000 1,234,496 0.8
MACHINERY & ENGINEERING
Japan Foundation Engineering ...................................... 900 18,837 --
CONSTRUCTION
NEC System Integration & Construction .............................. 600 14,709 --
CONSTRUCTION
------------
11,969,399
------------
Health Care (6.7%)
Takeda Chemical Industries ......................................... 450,000 7,412,791 4.8
PHARMACEUTICALS
Olympus Optical Co., Ltd. .......................................... 300,000 2,906,977 1.9
MEDICAL TECHNOLOGY & SUPPLIES
------------
10,319,768
------------
Finance (4.4%)
Nichiei Co., Ltd. .................................................. 68,000 5,073,643 3.3
INVESTMENT MANAGEMENT
Diamond Lease Co., Ltd. ........................................... 120,000 1,627,907 1.1
OTHER FINANCIAL
------------
6,701,550
------------
Consumer Non-Durables (3.0%)
Amway Japan Ltd. ................................................... 72,000 3,041,860 2.0
HOUSEHOLD PRODUCTS
Tsutsumi Jewelry Co., Ltd. ......................................... 30,600 1,532,965 1.0
PERSONAL CARE/COSMETICS
------------
4,574,825
------------
Materials/Basic Industry (2.4%)
Toyo Exterior ...................................................... 150,000 3,691,860 2.4
------------
BUILDING MATERIALS & COMPONENTS
Consumer Durables (1.0%)
NGK Spark Plug Co., Ltd. ........................................... 125,000 1,574,612 1.0
AUTO PARTS
------------ -----
TOTAL EQUITY INVESTMENTS (cost $110,025,119) ......................... 109,418,515 71.5
------------ -----
<CAPTION>
Principal Market % of Net
Fixed Income Investments Amount + Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Government & Government Agency Obligations (11.5%)
Austria (3.9%)
Republic of Austria, 4.5% due 9/28/05 ........................... 550,000,000 5,917,030 3.9
Finland (2.2%)
Republic of Finland, 6% due 1/29/02 .............................. 300,000,000 3,445,494 2.2
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 123
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
<TABLE>
<CAPTION>
Principal Market % of Net
Fixed Income Investments Amount + Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Government & Government Agency Obligations (Continued)
Japan (5.4%)
Japanese Government, 3.7% due 9/21/15 ............................ 847,000,000 $ 8,235,434 5.4
------------
Total Government & Government Agency Obligations (cost
$17,791,469) ........................................................ 17,597,958
------------
Supranational Bond (1.5%)
International Bank of Reconstruction & Development, 4.75% due
12/20/04 (cost $2,500,085) ....................................... 205,000,000 2,257,582 1.5
------------
Corporate Bond (0.8%)
Japan (0.8%)
Higashi Nihon House Co., Convertible Bond, 0.375% due 4/30/00
(cost $1,089,201) .............................................. 1,150,000++ 1,197,397 0.8
------------ -----
TOTAL FIXED INCOME INVESTMENTS (cost $21,380,755) .................... 21,052,937 13.8
------------ -----
<CAPTION>
Number of Market % of Net
Options Contracts Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Simex Nikkei Put Option, strike JPY17,500, expires 3/8/96
(cost $573,992)-/- ................................................ 190 36,822 --
------------ -----
<CAPTION>
Market % of Net
Repurchase Agreement Value Assets {d}
- ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
Dated December 29, 1995, with State Street Bank & Trust Company, due
January 2, 1996, for an effective yield of 5.55%, collateralized by
$8,345,000 U.S. Treasury Bonds, 10.375% due 11/15/12 (market value
of collateral is $11,624,212, including accrued interest).
(cost $11,393,267) ............................................... 11,393,267 7.5
------------ -----
TOTAL INVESTMENTS (cost $143,373,133)* ............................... 141,901,541 92.8
Other Assets and Liabilities ......................................... 11,035,381 7.2
------------ -----
NET ASSETS ........................................................... $152,936,922 100.0
------------ -----
------------ -----
</TABLE>
- ----------------
{d} Percentages indicated are based on net assets of $152,936,922.
{l} This is a U.S. security of which approximately 62.5% of its
outstanding stock is owned by Ito-Yokado Co., Ltd.
{\/} U.S. currency denominated.
-/- Non-income producing security.
+ All principal amounts are denominated in Japanese Yen unless
otherwise noted.
++ Principal amount is denominated in Swiss Francs.
* For Federal income tax purposes, cost is $144,572,711 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 9,794,892
Unrealized depreciation: (12,466,062)
-------------
Net unrealized depreciation: $ (2,671,170)
-------------
-------------
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 124
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Market Value
(U.S. Contract Delivery Unrealized
Contracts to Sell: Dollars) Price Date Appreciation
- ------------------------------------------------------------------------------ ------------- ----------- --------- ------------
<S> <C> <C> <C> <C>
Japanese Yen.................................................................. 65,354,736 99.00000 02/14/96 $2,302,532
Japanese Yen.................................................................. 14,951,320 100.04700 03/12/96 307,728
------------- ------------
Total Contracts to Sell (Receivable amount $82,916,316)..................... 80,306,056 2,610,260
------------- ------------
-------------
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF NET ASSETS IS 52.51%
Total Open Forward Foreign Currency Contracts, Net.......................... $2,610,260
------------
------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WRITTEN FUTURES CONTRACTS OUTSTANDING
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Expiration No. of Market
Description Date Contracts Currency Value
- ---------------------------------------------------------------------------------- ---------- --------- -------- -----------
<S> <C> <C> <C> <C>
Simex Nikkei 225 Index Future (Face $15,643,207).................................. 03/08/96 170 JPY $16,357,558
-----------
-----------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 125
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $143,373,133)
(Note 1)................................................. $141,901,541
U.S. currency.............................. $ 859 --
Foreign currencies (cost $3,533,198)....... 3,518,195 3,519,054
----------
Receivable for Fund shares sold........................... 6,124,238
Receivable for open forward foreign currency contracts,
net (Note 1)............................................. 2,610,260
Initial margin for futures (Note 1)....................... 1,592,154
Interest receivable....................................... 389,602
Receivable for securities sold............................ 246,471
Dividends receivable...................................... 59,853
Receivable for variation margin (Note 1).................. 52,703
Cash held as collateral for securities loaned (Note 1).... 23,154,700
------------
Total assets............................................ 179,650,576
------------
Liabilities:
Payable for Fund shares repurchased....................... 2,543,999
Payable for securities purchased.......................... 653,139
Payable for investment management and administration fees
(Note 2)................................................. 120,095
Payable for printing and postage expenses................. 71,892
Payable for service and distribution expenses (Note 2).... 65,169
Payable for transfer agent fees (Note 2).................. 48,290
Payable for professional fees............................. 16,109
Payable for registration and filing fees.................. 8,324
Payable for custodian fees (Note 1)....................... 8,289
Payable for fund accounting fees (Note 2)................. 3,072
Payable for Trustees' fees and expenses (Note 2).......... 2,335
Other accrued expenses.................................... 18,241
Collateral for securities loaned (Note 1)................. 23,154,700
------------
Total liabilities....................................... 26,713,654
------------
Net assets.................................................. $152,936,922
------------
------------
Class A:
Net asset value and redemption price per share
($111,104,963 DIVIDED BY 10,102,324 shares outstanding).... $ 11.00
------------
------------
Maximum offering price per share
(100/95.25 of $11.00) *.................................... $ 11.55
------------
------------
Class B:+
Net asset value and offering price per share
($41,273,965 DIVIDED BY 3,828,028 shares outstanding)...... $ 10.78
------------
------------
Advisor Class:
Net asset value, offering price per share, and redemption
price per share
($557,994 DIVIDED BY 50,612 shares outstanding)............ $ 11.02
------------
------------
Net assets consist of:
Paid in capital (Note 4).................................. $154,726,647
Accumulated net realized loss on investments and foreign
currency transactions.................................... (2,186,526)
Net unrealized appreciation on translation of assets and
liabilities in foreign currencies........................ 2,582,744
Net unrealized depreciation of investments................ (2,185,943)
------------
Total -- representing net assets applicable to capital
shares outstanding......................................... $152,936,922
------------
------------
<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.
Statement of Additional Information Page 126
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
STATEMENT OF OPERATIONS
Year ended December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income............................................. $ 1,384,777
Dividend income (net of foreign withholding tax of
$89,093)................................................... 518,977
------------
Total investment income................................... 1,903,754
------------
Expenses:
Investment management and administration fees (Note 2)...... 1,167,576
Service and distribution expenses: (Note 2)
Class A.................................. $ 317,310
Class B.................................. 288,296 605,606
------------
Transfer agent fees (Note 2)................................ 478,638
Printing and postage expenses............................... 189,345
Custodian fees (Note 1)..................................... 121,916
Registration and filing fees................................ 58,000
Audit fees.................................................. 42,500
Fund accounting fees (Note 2)............................... 30,103
Legal fees.................................................. 29,668
Trustees' fees and expenses (Note 2)........................ 12,600
Insurance expenses.......................................... 10,284
------------
Total expenses before reductions.......................... 2,746,236
------------
Expense reductions (Notes 1 & 5)........................ (180,230)
------------
Total net expenses........................................ 2,566,006
------------
Net investment loss........................................... (662,252)
------------
Net realized and unrealized gain (loss) on
investments and foreign currencies: (Note 1)
Net realized gain on investments........... 9,581,492
Net realized gain on foreign currency
transactions.............................. 5,383,418
------------
Net realized gain during the year......................... 14,964,910
Net change in unrealized appreciation on
translation of assets and liabilities in
foreign currencies........................ 923,132
Net change in unrealized depreciation of
investments............................... (11,851,499)
------------
Net unrealized depreciation during the year............... (10,928,367)
------------
Net realized and unrealized gain on investments and foreign
currencies................................................... 4,036,543
------------
Net increase in net assets resulting from operations.......... $ 3,374,291
------------
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 127
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- -----------------
<S> <C> <C>
Increase in net assets
Operations:
Net investment loss........................ $ (662,252) $ (577,388)
Net realized gain on investments and
foreign currency transactions............. 14,964,910 8,729,650
Net change in unrealized appreciation
(depreciation) on translation of assets
and liabilities in foreign currencies..... 923,132 (528,496)
Net change in unrealized depreciation of
investments............................... (11,851,499) (3,251,782)
----------------- -----------------
Net increase in net assets resulting from
operations.............................. 3,374,291 4,371,984
----------------- -----------------
Class A:
Distributions to shareholders: (Note 1)
From net realized gain on investments...... (11,936,435) (1,687,150)
Class B:
Distributions to shareholders: (Note 1)
From net realized gain on investments...... (4,652,476) (462,102)
Advisor Class:
Distributions to shareholders: (Note 1)
From net realized gain on investments...... (58,144) --
----------------- -----------------
Total distributions...................... (16,647,055) (2,149,252)
----------------- -----------------
Capital share transactions: (Note 4)
Increase from capital shares sold and
reinvested................................ 565,596,580 422,096,027
Decrease from capital shares repurchased... (524,808,353) (391,082,829)
----------------- -----------------
Net increase from capital share
transactions............................ 40,788,227 31,013,198
----------------- -----------------
Total increase in net assets................. 27,515,463 33,235,930
Net assets:
Beginning of year.......................... 125,421,459 92,185,529
----------------- -----------------
End of year................................ $ 152,936,922 $ 125,421,459
----------------- -----------------
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 128
<PAGE>
GT GLOBAL JAPAN 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>
CLASS A+
-----------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1995 (A) 1994 1993 1992 (A) 1991
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 12.15 $ 11.61 $ 8.70 $ 11.16 $ 11.48
----------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment loss................... (0.04) (0.04) (0.14) (0.00) * (0.09)
Net realized and unrealized gain
(loss) on investments................ 0.26 0.79 3.05 (2.40) (0.23)
----------- ---------- ---------- ---------- ----------
Net increase (decrease) from
investment operations.............. 0.22 0.75 2.91 (2.40) (0.32)
----------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net realized gain on
investments.......................... (1.37) (0.21) 0.00 (0.06) 0.00
----------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 11.00 $ 12.15 $ 11.61 $ 8.70 $ 11.16
----------- ---------- ---------- ---------- ----------
----------- ---------- ---------- ---------- ----------
Total investment return (d)............. 1.94% 6.56% 33.5% (21.5)% (2.8)%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 111,105 $ 98,066 $ 88,487 $ 93,865 $ 61,519
Ratio of net investment loss to average
net assets............................. (0.40)% (0.32)% (0.3)% (0.0)%* (1.5)%
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)..................................... 1.99% 1.91% 2.1% 2.2%* 2.2%
Without expense reductions............ 2.14% 2.03% --%** --%** --%**
Portfolio turnover rate++++............. 67% 49% 104% 115% 251%
</TABLE>
- ----------------
+ 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 is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Includes reimbursement by LGT Asset Management, Inc. of operating
expenses of $0.01. Without such reimbursement, the ratio of expenses
to average net assets would have been 2.3% and the ratio of net
investment loss to average net assets would have been (0.1)% (See Note
2).
* * Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
(a) These selected per share data were calculated based upon weighted
average shares outstanding during the period.
(b) Not annualized.
(c) Annualized.
(d) Total investment return does not include sales charges.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 129
<PAGE>
GT GLOBAL JAPAN 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>
CLASS B++ ADVISOR
-------------------------------------- CLASS+++
--------------
YEAR ENDED DECEMBER APRIL 1, 1993 JUNE 1, 1995
31, TO TO
---------------------- DECEMBER 31, DECEMBER 31,
1995 (A) 1994 1993 1995 (A)
---------- ---------- -------------- --------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 12.02 $ 11.57 $ 9.85 $ 10.50
---------- ---------- ------- -------
Income from investment operations:
Net investment loss................... (0.12) (0.13) (0.18) (0.00)
Net realized and unrealized gain
(loss) on investments................ 0.25 0.79 1.90 1.89
---------- ---------- ------- -------
Net increase (decrease) from
investment operations.............. 0.13 0.66 1.72 1.89
---------- ---------- ------- -------
Distributions to shareholders:
From net realized gain on
investments.......................... (1.37) (0.21) 0.00 (1.37)
---------- ---------- ------- -------
Net asset value, end of period.......... $ 10.78 $ 12.02 $ 11.57 $ 11.02
---------- ---------- ------- -------
---------- ---------- ------- -------
Total investment return (d)............. 1.20% 5.81% 17.5 %(b) 18.14 %(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 41,274 $ 27,355 $ 3,699 $ 558
Ratio of net investment loss to average
net assets............................. (1.05)% (0.97)% (0.9)%(c) (0.05)%(c)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 &
5)..................................... 2.64% 2.56% 2.7 %(c) 1.64 %(c)
Without expense reductions............ 2.79% 2.68% -- %** 1.79 %(c)
Portfolio turnover rate++++............. 67% 49% 104 % 67 %
</TABLE>
- ----------------
+ 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 is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
* Includes reimbursement by LGT Asset Management, Inc. of operating
expenses of $0.01. Without such reimbursement, the ratio of expenses
to average net assets would have been 2.3% and the ratio of net
investment loss to average net assets would have been (0.1)% (See Note
2).
* * Calculation of "Ratio of expenses to average net assets" was made
without considering the effect of expense reductions, if any.
(a) These selected per share data were calculated based upon weighted
average shares outstanding during the period.
(b) Not annualized.
(c) Annualized.
(d) Total investment return does not include sales charges.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 130
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
NOTES TO
FINANCIAL STATEMENTS
December 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global Japan Growth Fund ("Fund"), is a separate series of G.T. Global Growth
Series ("Company"). The Company is organized as a Massachusetts business trust
and is registered under the Investment Company Act of 1940, as amended ("1940
Act"), 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 Fund offers 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. The Fund
commenced sale of Advisor Class shares on June 1, 1995. Investment income,
realized and unrealized capital gains and losses, and the common expenses of the
Fund 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 Fund. 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 Fund in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles, and,
therefore, the financial statements may include certain estimates made by
management.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes 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 in which
such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by LGT Asset Management, Inc.
("LGT", formerly known as G.T. Capital Management, Inc.) 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 foreign exchange translation
and 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.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Company's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Statement of Additional Information Page 131
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at year
end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund'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 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.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened and the value at the
time it was closed. The Fund could be exposed to risk if a counterparty is
unable to meet the terms of a contract or if the value of the currency changes
unfavorably. The Fund may enter into Forward Contracts in connection with
planned purchases or sales of securities, or to hedge against adverse
fluctuations in exchange rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund'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 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 can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid, 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 may use options to manage its exposure
to the stock and bond markets and to fluctuations in currency values or interest
rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund'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 has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund 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 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 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 may forego the
opportunity of profit if the market value of the underlying securitiy or index
increases and the option is exercised. The risk in writing a put option is that
the Fund 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 may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a
Statement of Additional Information Page 132
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
future date. Upon entering into such a contract the Fund 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 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 as
unrealized gains or losses. When the contract is closed, the Fund 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 is that the change in value of the underlying securities may
not correlate to the change in value of the contracts. The Fund may use futures
contracts to manage its exposure to the stock and bond markets and to
fluctuations in currency values or interest rates. At December 31, 1995, the
Fund had segregated securities valued at $16,481,637 to cover margin
requirements on open futures contracts.
(G) 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 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 to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At December 31, 1995, stocks with an aggregate value of $21,264,947 were on loan
to brokers. The loans were secured by cash collateral of $23,154,700, received
by the Fund. For international securities, cash collateral is received by the
Fund against loaned securities in an amount at least equal to 105% of the market
value of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 103% of the market value of the loaned
securities during the period of the loan. For domestic securities, cash
collateral is received by the Fund against loaned securities in an 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 each loan. For
the year ended December 31, 1995, the Fund received securities lending fees of
$93,026 which were used to reduce custodian fees.
(I) TAXES
It is the policy of the Fund 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 Fund 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, and unrealized appreciation of securities held, or for excise tax on
income and capital gains.
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the 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 and timing differences.
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. These risks of investing in foreign markets may
include foreign currency exchange rate fluctuations, perceived credit risk,
adverse political and economic developments and possible adverse foreign
government intervention.
(L) RESTRICTED SECURITIES
The Fund 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.
(M) INDEXED SECURITIES
The Fund 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 Fund's investment manager and
administrator. The Fund pays investment management and administration fees to
LGT at the following annualized rates: 0.975% on the first $500 million of
average daily net assets of the Fund; 0.95% on the
Statement of Additional Information Page 133
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
next $500 million; 0.925% of the next $500 million and 0.90% 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 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 net asset value of the Fund.
GT Global, Inc. ("GT Global", formerly known as G.T. Global Financial Services,
Inc.), an affiliate of LGT, serves as the Fund's distributor. The Fund offers
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 year ended December 31, 1995, GT Global retained $78,489
of such sales charges. 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 CDSCs in the
amount of $39,752 for the year ended December 31, 1995. 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. During the year ended December 31, 1995, GT Global collected CDSCs
in the amount of $173,962. 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 Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the 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 its 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 Fund's Class B Plan, the 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 its 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 have voluntarily undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary items)
to the maximum annual level of 2.25%, 2.90%, and 1.90% 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 Fund. 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,
stationary and office supplies.
Effective July 1, 1995, LGT has assumed the role of pricing and accounting agent
for the Fund. The monthly fee for these services to LGT is a percentage, not to
exceed 0.03% annually, of the Fund's average daily net assets. The annual fee
rate is derived by applying 0.03% of the first $5 billion of assets of all
registered mutual funds advised by LGT ("GT Funds")
Statement of Additional Information Page 134
<PAGE>
GT GLOBAL JAPAN GROWTH FUND
and 0.02% to the assets in excess of $5 billion and dividing the result by the
aggregated assets of the GT Funds. For the period ended December 31, 1995, the
Fund paid fund accounting fees of $14,483 to LGT.
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.
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1995, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $85,047,455 and $74,594,151, respectively. There were no
purchases or sales of U.S. government obligations by the Fund during the year.
4. CAPITAL SHARES
At December 31, 1995, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold............................................................... 42,162,424 $ 483,616,630 26,403,403 $ 337,405,704
Shares issued in connection with reinvestment of distributions............ 899,831 9,789,980 119,477 1,396,969
----------- ------------- ----------- -------------
43,062,255 493,406,610 26,522,880 338,802,673
Shares repurchased........................................................ (41,032,648) (470,692,845) (26,071,333) (332,875,892)
----------- ------------- ----------- -------------
Net increase.............................................................. 2,029,607 $ 22,713,765 451,547 $ 5,926,781
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS B
Shares sold............................................................... 5,971,262 $ 67,899,245 6,416,496 $ 82,933,091
Shares issued in connection with reinvestment of distributions............ 340,110 3,629,261 31,084 360,263
----------- ------------- ----------- -------------
6,311,372 71,528,506 6,447,580 83,293,354
Shares repurchased........................................................ (4,758,650) (53,997,274) (4,491,860) (58,206,937)
----------- ------------- ----------- -------------
Net increase.............................................................. 1,552,722 $ 17,531,232 1,955,720 $ 25,086,417
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>
<TABLE>
<CAPTION>
JUNE 1, 1995
(COMMENCEMENT OF
SALE OF SHARES)
TO DECEMBER 31, 1995
--------------------------
ADVISOR CLASS SHARES AMOUNT
----------- -------------
<S> <C> <C>
Shares sold............................................................... 55,192 $ 604,443
Shares issued in connection with reinvestment of distributions............ 5,231 57,021
----------- -------------
60,423 661,464
Shares repurchased........................................................ (9,811) (118,234)
----------- -------------
Net increase.............................................................. 50,612 $ 543,230
----------- -------------
----------- -------------
</TABLE>
5. EXPENSE REDUCTIONS
LGT has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses. For the year ended December 31, 1995, the Fund's expenses were
reduced by $87,204 under these arrangements.
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$9,469,767 as capital gain dividends for the fiscal year ended December 31,
1995.
Statement of Additional Information Page 135
<PAGE>
GT GLOBAL GROWTH FUNDS
NOTES
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION PAGE 136
<PAGE>
GT GLOBAL GROWTH FUNDS
NOTES
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION PAGE 137
<PAGE>
GT GLOBAL GROWTH FUNDS
NOTES
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION PAGE 138
<PAGE>
GT GLOBAL GROWTH 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 INVESTMENT COUNSELOR OR CALL GT GLOBAL
DIRECTLY AT 1-800-824-1580.
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 CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / 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 equity securities of large cap U.S. companies believed to be
undervalued
GT GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND 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]
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
STATEMENT OF ADDITIONAL INFORMATION AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY G.T.
GLOBAL GROWTH SERIES, CHANCELLOR LGT ASSET MANAGEMENT, INC., OR GT GLOBAL,
INC. THIS STATEMENT OF ADDITIONAL INFORMATION DOES NOT CONSTITUTE AN OFFER
TO SELL OR SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER IN SUCH JURISDICTION.
EQUSA604MC
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
50 California Street, 27th Floor
San Francisco, California 94111
(415) 392-6181
Toll Free: (800) 824-1580
Statement of Additional Information
April 29, 1996, As Revised October 31, 1996
- --------------------------------------------------------------------------------
This Statement of Additional Information relates to the Class A and Class B
shares of GT Global America Small Cap Growth Fund ("Small Cap Fund") and GT
Global America Value Fund ("Value Fund") (individually, "Fund," or collectively,
"Funds"). Each Fund is a diversified series of G.T. Global Growth Series
("Company"), a multiple series registered open-end management investment
company. The Small Cap Fund and Value Fund invest all of their investable assets
in the Small Cap Growth Portfolio and Value Portfolio (individually,
"Portfolio," collectively, "Portfolios"), respectively. This Statement of
Additional Information concerning the Funds, which is not a prospectus,
supplements and should be read in conjunction with the Funds' current Class A
and Class B Prospectus dated April 29, 1996, as revised October 31, 1996, a copy
of which is available without charge by writing to the above address or calling
the Funds at the toll-free telephone number printed above.
Chancellor LGT Asset Management, Inc. (the "Manager") serves as each Portfolio's
investment manager and administrator. The distributor of the shares of each Fund
is GT Global, Inc. ("GT Global"). The Funds' transfer agent is GT Global
Investor Services, Inc. ("GT Services" or "Transfer Agent").
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TABLE OF CONTENTS
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<TABLE>
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PAGE NO.
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<S> <C>
Investment Objectives and Policies..................................................................................... 2
Options and Futures.................................................................................................... 4
Risk Factors........................................................................................................... 11
Investment Limitations................................................................................................. 12
Execution of Portfolio Transactions.................................................................................... 15
Trustees and Executive Officers........................................................................................ 16
Management............................................................................................................. 18
Valuation of Shares.................................................................................................... 20
Information Relating to Sales and Redemptions.......................................................................... 21
Taxes.................................................................................................................. 23
Additional Information................................................................................................. 26
Investment Results..................................................................................................... 27
Description of Debt Ratings............................................................................................ 32
Financial Statements................................................................................................... 34
</TABLE>
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Statement of Additional Information Page 1
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
INVESTMENT OBJECTIVES
AND POLICIES
- --------------------------------------------------------------------------------
SELECTION OF INVESTMENTS
The investment objective of each Fund is long-term capital appreciation. The
Small Cap Fund and Value Fund each seeks to achieve its investment objective by
investing all of its investable assets in the Small Cap Growth Portfolio ("Small
Cap Portfolio") and Value Portfolio, respectively, each of which is a subtrust
(a "series") of Growth Portfolio (an open-end management investment company)
with an investment objective that is identical to that of its corresponding
Fund. Whenever the phrase "all of the Funds' investable assets" is used herein
and in the Prospectus, it means that the only investment securities that will be
held by a Fund will be that Fund's interest in its corresponding Portfolio. A
Fund may withdraw its investment in its corresponding Portfolio at any time, if
the Board of Trustees of the Company determines that it is in the best interests
of such Fund and its shareholders to do so. Upon any such withdrawal, a Fund's
assets would be invested in accordance with the investment policies described
below and in the Prospectus with respect to its corresponding Portfolio.
For investment purposes, an issuer is considered as domiciled in the United
States if it is incorporated under the laws of any of its states or territories
or the District of Columbia, and either (i) at least 50% of the value of its
assets is located in the United States, or (ii) it normally derives at least 50%
of its income from operations or sales in the United States.
INVESTMENTS IN OTHER INVESTMENT COMPANIES
The Portfolios may invest in the securities of closed-end investment companies
within the limits of the Investment Company Act of 1940, as amended ("1940
Act"). These limitations currently provide that, in general, each Portfolio may
purchase shares of a closed-end investment company unless (a) such a purchase
would cause a Portfolio to own more than 3% of the total outstanding voting
stock of the investment company or (b) such a purchase would cause a Portfolio
to have more than 5% of its assets invested in the investment company or more
than 10% of its assets invested in an aggregate of all such investment
companies. Investment in investment companies may involve the payment of
substantial premiums above the value of such companies' portfolio securities.
The Portfolios do not intend to invest in such vehicles or funds unless the
Manager determines that the potential benefits of such investments justify the
payment of any applicable premiums. The yield of such securities will be reduced
by operating expenses of such companies including payments to the investment
managers of those investment companies.
WARRANTS OR RIGHTS
Warrants or rights may be acquired by a Portfolio in connection with other
securities or separately and provide the Portfolio with the right to purchase at
a later date other securities of the issuer. Investments in warrants may not
exceed 5% of the value of the Portfolio's net assets, and not more than 2% of
such assets may be invested in warrants or rights which are not listed on the
New York or American Stock Exchange. Warrants or rights acquired by a Portfolio
in units or attached to securities will be deemed to be without value for
purpose of this restriction.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Portfolio may make secured
loans of portfolio securities amounting to not more than 30% of its total
assets. Securities loans are made to broker/dealers or institutional investors
pursuant to agreements requiring that the loans continuously be secured by
collateral at least equal at all times to the value of the securities lent, plus
any accrued interest, "marked to market" on a daily basis. The collateral
received will consist of cash, U.S. short-term government securities, bank
letters of credit or such other collateral as may be permitted under a
Portfolios' investment policies and by regulatory agencies and approved by
Growth Portfolio's Board of Trustees. The Portfolios may pay reasonable
administrative and custodial fees in connection with the loans of their
securities. While the securities loans are outstanding, the Portfolios will
continue to receive the equivalent of the interest or dividends paid by the
issuer on the securities, as well as interest on the investment of the
collateral or a fee from the borrower. If the borrower failed to maintain the
requisite amount of collateral, the loan would terminate automatically and the
Portfolio could use the collateral to replace the securities while holding the
borrower liable for any excess of the replacement cost over the value of the
collateral. Each Portfolio has a right to call each loan at any time and obtain
the securities on five business days' notice. The Portfolios will not have the
right to vote equity securities while they are being lent, but they retain the
right to call for the return of the loaned securities at any time on reasonable
notice and may call in a loan in anticipation of
Statement of Additional Information Page 2
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
any important vote. The Portfolios also will be able to call such loans if the
Manager made the investment decision that the loaned securities should be sold.
On termination of a loan, the borrower would be required to return the
securities to the Portfolio and any gain or loss in market price during the loan
would inure to the Portfolio. The risks in lending portfolio securities, as with
other extensions of secured credit, consist of possible delays in receiving
additional collateral or in recovery of the securities or possible loss of
rights in the collateral should the borrower fail financially. In the event of
the default or bankruptcy by such party, the Portfolios would seek promptly to
liquidate the collateral. To the extent that the proceeds from any such sale of
such collateral upon a default in the obligation to repurchase were less than
the repurchase price, the Portfolios would suffer a loss. The law regarding the
rights of the Portfolios is unsettled with respect to a borrower becoming
subject to bankruptcy or similar proceedings. Under these circumstances, there
may be a restriction on the Portfolios' ability to sell the collateral and the
Portfolios could suffer a loss. Loans, however, will be made only to firms
deemed by the Manager to be of good standing and will not be made unless, in the
judgment of the Manager, the consideration to be earned from such loans would
justify the risk.
COMMERCIAL BANK OBLIGATIONS
For the purposes of each Portfolio's investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks are obligations of
the issuing bank and may be general obligations of the parent bank. Such
obligations, however, may be limited by the terms of a specific obligation and
by government regulation. Although a Portfolio typically will acquire
obligations issued and supported by the credit of U.S. having total assets at
the time of purchase of $1 billion or more, this $1 billion figure is not an
investment policy or restriction of any Portfolio. For the purposes of
calculation with respect to the $1 billion figure, the assets of a bank will be
deemed to include the assets of its U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS
Each Portfolio may enter into repurchase agreements, which are transactions in
which a Portfolio purchases a security from a bank or recognized securities
dealer and simultaneously commits to resell that security to the bank or dealer
at an agreed-upon price, date and market rate of interest unrelated to the
coupon rate or maturity of the purchased security. The Portfolios intend to
enter into repurchase agreements only with banks and dealers believed by the
Manager to present minimal credit risks in accordance with guidelines approved
by the Portfolios' Board of Trustees.
Each Portfolio will invest only in repurchase agreements collateralized at all
times in an amount at least equal to the repurchase price plus accrued interest.
To the extent that the proceeds from any sale of such collateral upon a default
in the obligation to repurchase were less than the repurchase price, the Fund
would suffer a loss. Repurchase agreements carry certain risks not associated
with direct investments in securities, including possible decline in the market
value of the underlying securities and delays and costs to the Portfolio if the
other party to the repurchase agreement becomes bankrupt. If the financial
institution which is party to the repurchase agreement petitions for bankruptcy
or otherwise becomes subject to bankruptcy or other liquidation proceedings,
there may be restrictions on the Portfolio's ability to sell the collateral and
the Portfolio could suffer a loss. However, with respect to financial
institutions whose bankruptcy or liquidation proceedings are subject to the U.S.
Bankruptcy Code, the Portfolios intends to comply with provisions under the U.S.
Bankruptcy Code that would allow it immediately to resell the collateral. The
Manager reviews and monitors the creditworthiness of such institutions under the
general supervision of Growth Portfolio's Board. There is no limitation on the
amount of the Portfolios' assets that may be subject to repurchase agreements at
any given time. The Portfolios will not enter into a repurchase agreement with a
maturity of more than seven days if, as a result, more than 15% of the value of
its net assets would be invested in such repurchase agreements and other
illiquid investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
Each Portfolio's borrowings will not exceed 33 1/3% of its total assets, i.e.,
each Portfolio's total assets at all times will equal at least 300% of the
amount of outstanding borrowings. No Portfolio will purchase securities while
borrowings are outstanding. If market fluctuations in the value of a Portfolio's
portfolio holdings or other factors cause the ratio of the Portfolio's total
assets to outstanding borrowings to fall below 300%, within three days
(excluding Sundays and holidays) of such event the Portfolio may be required to
sell portfolio securities to restore the 300% asset coverage, even though from
an investment standpoint such sales might be disadvantageous. Each Portfolio
also may borrow up to 5% of its total assets for temporary or emergency purposes
other than to meet redemptions. Any borrowing by a Portfolio may cause greater
fluctuation in the value of its shares than would be the case if the Portfolio
did not borrow.
Each Portfolio's fundamental investment limitations permit the Portfolio to
borrow money for leveraging purposes. Each Portfolio, however, currently is
prohibited, pursuant to a non-fundamental investment policy, from borrowing
money in order to purchase securities. Nevertheless, this policy may be changed
in the future by Growth Portfolio's Board of
Statement of Additional Information Page 3
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
Trustees. In the event that a Portfolio employs leverage in the future, it would
be subject to certain additional risks. Use of leverage creates an opportunity
for greater growth of capital but would exaggerate any increases or decreases in
a Portfolio's net asset value. When the income and gains on securities purchased
with the proceeds of borrowings exceed the costs of such borrowings, a
Portfolio's earnings or net asset value will increase faster than otherwise
would be the case; conversely, if such income and gains fail to exceed such
costs, a Portfolio's earnings or net asset value would decline faster than would
otherwise be the case.
Each Portfolio may enter into reverse repurchase agreements. A reverse
repurchase agreement is a borrowing transaction in which the Portfolio transfers
possession of a security to another party, such as a bank or broker/dealer in
return for cash, and agrees to repurchase the security in the future at an
agreed upon price, which includes an interest component. Each Portfolio also may
engage in "roll" borrowing transactions which involve the Portfolio's sale of
Government National Mortgage Association certificates or other securities
together with a commitment (for which a Portfolio may receive a fee) to purchase
similar, but not identical, securities at a future date. Each Portfolio will
maintain, in a segregated account with a custodian, cash, U.S. government
securities or other liquid securities in an amount sufficient to cover its
obligations under "roll" transactions and reverse repurchase agreements with
broker/dealers. No segregation is required for reverse repurchase agreements
with banks.
- --------------------------------------------------------------------------------
OPTIONS AND FUTURES
- --------------------------------------------------------------------------------
SPECIAL RISKS OF OPTIONS AND FUTURES
The use of options and futures contracts involves special considerations and
risks, as described below. Risks pertaining to particular instruments are
described in the sections that follow.
(1) Successful use of most of these instruments depends upon the
Manager's ability to predict movements of the overall securities markets,
which requires different skills than predicting changes in the prices of
individual securities. While the Manager is experienced in the use of these
instruments, there can be no assurance that any particular strategy adopted
will succeed.
(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of the
investments being hedged. For example, if the value of an instrument used in
a short hedge increased by less than the decline in value of the hedged
investment, the hedge would not be fully successful. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which the hedging instrument is traded. The effectiveness of
hedges using hedging instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
investments being hedged.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly
or partially offsetting the negative effect of unfavorable price movements
in the investments being hedged. However, hedging strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. For example, if a Portfolio entered
into a short hedge because the Manager projected a decline in the price of a
security in the Portfolio's securities portfolio, and the price of that
security increased instead, the gain from that increase might be wholly or
partially offset by a decline in the price of the hedging instrument.
Moreover, if the price of the hedging instrument declined by more than the
increase in the price of the security, the Portfolio could suffer a loss. In
either such case, the Portfolio would have been in a better position had it
not hedged at all.
(4) As described below, a Portfolio might be required to maintain assets
as "cover," maintain segregated accounts or make margin payments when it
takes positions in instruments involving obligations to third parties (I.E.,
instruments other than purchased options). If the Portfolio were unable to
close out its positions in such instruments, it might be required to
continue to maintain such assets or accounts or make such payments until the
position expired or matured. The requirements might impair the Portfolio's
ability to sell a portfolio security or make an investment at a time when it
would otherwise be favorable to do so, or require that the Portfolio sell a
portfolio security at a disadvantageous time. The Portfolio's ability to
close out a position in an instrument prior to expiration or maturity
Statement of Additional Information Page 4
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
depends on the existence of a liquid secondary market or, in the absence of
such a market, the ability and willingness of the other party to the
transaction ("contra party") to enter into a transaction closing out the
position. Therefore, there is no assurance that any position can be closed
out at a time and price that is favorable to a Portfolio.
WRITING CALL OPTIONS
A Portfolio may write (sell) call options on securities and indices. Call
options generally will be written on securities that, in the opinion of the
Manager, are not expected to make any major price moves in the near future but
that, over the long term, are deemed to be attractive investments for the
Portfolio.
A call option gives the holder (buyer) the right to purchase a security at a
specified price (the exercise price) at any time until (American style) or on
(European style) a certain date (the expiration date). So long as the obligation
of the writer of a call option continues, he or she may be assigned an exercise
notice, requiring him or her to deliver the underlying security against payment
of the exercise price. This obligation terminates upon the expiration of the
call option, or such earlier time at which the writer effects a closing purchase
transaction by purchasing an option identical to that previously sold.
Portfolio securities on which call options may be written will be purchased
solely on the basis of investment considerations consistent with each
Portfolio's investment objective. When writing a call option, a Portfolio, in
return for the premium, gives up the opportunity for profit from a price
increase in the underlying security above the exercise price, and retains the
risk of loss should the price of the security decline. Unlike one who owns
securities not subject to an option, a Portfolio has no control over when it may
be required to sell the underlying securities, since most options may be
exercised at any time prior to the option's expiration. If a call option that a
Portfolio has written expires, the Portfolio will realize a gain in the amount
of the premium; however, such gain may be offset by a decline in the market
value of the underlying security during the option period. If the call option is
exercised, the Portfolio will realize a gain or loss from the sale of the
underlying security, which will be increased or offset by the premium received.
Each Portfolio does not consider a security covered by a call option to be
"pledged" as that term is used in the Portfolio's policy that limits the
pledging or mortgaging of its assets.
Writing call options can serve as a limited short hedge because declines in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security appreciates to a price
higher than the exercise price of the call option, it can be expected that the
option will be exercised and a Portfolio will be obligated to sell the security
at less than its market value.
The premium that a Portfolio receives for writing a call option is deemed to
constitute the market value of an option. The premium a Portfolio will receive
from writing a call option will reflect, among other things, the current market
price of the underlying investment, the relationship of the exercise price to
such market price, the historical price volatility of the underlying investment,
and the length of the option period. In determining whether a particular call
option should be written, the Manager will consider the reasonableness of the
anticipated premium and the likelihood that a liquid secondary market will exist
for those options.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security from being called, or
to permit the sale of the underlying security. Furthermore, effecting a closing
transaction will permit a Portfolio to write another call option on the
underlying security with either a different exercise price or expiration date or
both.
Each Portfolio will pay transaction costs in connection with the writing of
options and in entering into closing purchase contracts. Transaction costs
relating to options activity normally are higher than those applicable to
purchases and sales of portfolio securities.
The exercise price of the options may be below, equal to or above the current
market values of the underlying securities or indices at the time the options
are written. From time to time, a Portfolio may purchase an underlying security
for delivery in accordance with the exercise of an option, rather than
delivering such security from its portfolio. In such cases, additional costs
will be incurred.
A Portfolio will realize a profit or loss from a closing purchase transaction if
the cost of the transaction is less or more, respectively, than the premium
received from writing the option. Because increases in the market price of a
call option generally will reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset in whole or in part by appreciation of the underlying
security owned by the Portfolio.
Statement of Additional Information Page 5
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GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
WRITING PUT OPTIONS
The Portfolios may write put options on securities and indices. A put option
gives the purchaser of the option the right to sell, and the writer (seller) the
obligation to buy, the underlying security at the exercise price at any time
until (American style) or on (European style) the expiration date. The operation
of put options in other respects, including their related risks and rewards, is
substantially identical to that of call options.
A Portfolio generally would write put options in circumstances where the Manager
wishes to purchase the underlying security for the Portfolio's portfolio at a
price lower than the current market price of the security. In such event, the
Portfolio would write a put option at an exercise price that, reduced by the
premium received on the option, reflects the lower price it is willing to pay.
Since the Portfolio also would receive interest on debt securities maintained to
cover the exercise price of the option, this technique could be used to enhance
current return during periods of market uncertainty. The risk in such a
transaction would be that the market price of the underlying security would
decline below the exercise price, less the premium received.
Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security depreciates to a price
lower than the exercise price of the put option, it can be expected that the put
option will be exercised and a Portfolio will be obligated to purchase the
security at greater than its market value.
PURCHASING PUT OPTIONS
Each Portfolio may purchase put options on securities and indices. As the holder
of a put option, a Portfolio would have the right to sell the underlying
security at the exercise price at any time until (American style) or on
(European style) the expiration date. A Portfolio may enter into closing sale
transactions with respect to such options, exercise such options or permit such
options to expire.
A Portfolio may purchase a put option on an underlying security ("protective
put") owned by the Portfolio in order to protect against an anticipated decline
in the value of the security. Such hedge protection is provided only during the
life of the put option when the Portfolio, as the holder of the put option, is
able to sell the underlying security at the put exercise price regardless of any
decline in the underlying security's market price. For example, a put option may
be purchased in order to protect unrealized appreciation of a security when the
Manager deems it desirable to continue to hold the security because of tax
considerations. The premium paid for the put option and any transaction costs
would reduce any profit otherwise available for distribution when the security
eventually is sold.
A Portfolio also may purchase put options at a time when the Portfolio does not
own the underlying security. By purchasing put options on a security it does not
own, a Portfolio seeks to benefit from a decline in the market price of the
underlying security. If the put option is not sold when it has remaining value,
and if the market price of the underlying security remains equal to or greater
than the exercise price during the life of the put option, the Portfolio will
lose its entire investment in the put option. In order for the purchase of a put
option to be profitable, the market price of the underlying security must
decline sufficiently below the exercise price to cover the premium and
transaction costs, unless the put option is sold in a closing sale transaction.
PURCHASING CALL OPTIONS
Each Portfolio may purchase call options on securities and indices. As the
holder of a call option, a Portfolio would have the right to purchase the
underlying security at the exercise price at any time until (American style) or
on (European style) the expiration date. A Portfolio may enter into closing sale
transactions with respect to such option, exercise such options or permit such
options to expire.
Call options may be purchased by a Portfolio for the purpose of acquiring the
underlying security for its portfolio. Utilized in this fashion, the purchase of
call options would enable a Portfolio to acquire the security at the exercise
price of the call option plus the premium paid. At times, the net cost of
acquiring the security in this manner may be less than the cost of acquiring the
security directly. This technique also may be useful to the Portfolios in
purchasing a large block of securities that would be more difficult to acquire
by direct market purchases. As long as it holds such a call option, rather than
the underlying security itself, a Portfolio is partially protected from any
unexpected decline in the market price of the underlying security and, in such
event, could allow the call option to expire, incurring a loss only to the
extent of the premium paid for the option.
Each Portfolio also may purchase call options on underlying securities it owns
in order to protect unrealized gains on call options previously written by it. A
call option could be purchased for this purpose where tax considerations make it
inadvisable to realize such gains through a closing purchase transaction. Call
options also may be purchased at times to
Statement of Additional Information Page 6
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GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
avoid realizing losses that would result in a reduction of a Portfolio's current
return. For example, where a Portfolio has written a call option on an
underlying security having a current market value below the price at which such
security was purchased by the Portfolio, an increase in the market price could
result in the exercise of the call option written by the Portfolio and the
realization of a loss on the underlying security. Accordingly, the Portfolio
could purchase a call option on the same underlying security, which could be
exercised to fulfill the Portfolio's delivery obligations under its written call
(if it is exercised). This strategy could allow the Portfolio to avoid selling
the portfolio security at a time when it has an unrealized loss; however, the
Portfolio would have to pay a premium to purchase the call option plus
transaction costs.
Aggregate premiums paid for put and call options will not exceed 5% of such
Portfolio's total assets at the time of purchase.
Options may be either listed on an exchange or traded over-the-counter ("OTC").
Listed options are third-party contracts (I.E., performance of the obligations
of the purchaser and seller is guaranteed by the exchange or clearing
corporation), and have standardized strike prices and expiration dates. OTC
options are two-party contracts with negotiated strike prices and expiration
dates. A Portfolio will not purchase an OTC option unless the Manager believes
that daily valuations for such options are readily obtainable. OTC options
differ from exchange-traded options in that OTC options are transacted with
dealers directly and not through a clearing corporation (which guarantees
performance). Consequently, there is a risk of non-performance by the dealer.
Since no exchange is involved, OTC options are valued on the basis of an average
of the last bid prices obtained from dealers unless a quotation from only one
dealer is available in which case only that dealer's price will be used. In the
case of OTC options, there can be no assurance that a liquid secondary market
will exist for any particular option at any specific time.
The staff of the Securities and Exchange Commission ("SEC") considers purchased
OTC options to be illiquid securities. A Portfolio may also sell OTC options
and, in connection therewith, set aside assets or cover its obligations with
respect to OTC options written by the Portfolio. The assets used as cover for
OTC options written by a Portfolio will be considered illiquid unless the OTC
options are sold to qualified dealers who agree that the Portfolio may
repurchase any OTC option it writes at a maximum price to be calculated by a
formula set forth in the option agreement. The cover for an OTC option written
subject to this procedure would be considered illiquid only to the extent that
the maximum repurchase price under the formula exceeds the intrinsic value of
the option.
A Portfolio's ability to establish and close out positions in exchange-listed
options depends on the existence of a liquid market. A Portfolio intends to
purchase or write only those exchange-traded options for which there appears to
be a liquid secondary market. However, there can be no assurance that such a
market will exist at any particular time. Closing transactions can be made for
OTC options only by negotiating directly with the contra party, or by a
transaction in the secondary market if any such market exists. Although a
Portfolio will enter into OTC options only with contra parties that are expected
to be capable of entering into closing transactions with the Portfolio, there is
no assurance that the Portfolio will in fact be able to close out an OTC option
position at a favorable price prior to expiration. In the event of insolvency of
the contra party, the Portfolio might be unable to close out an OTC option
position at any time prior to its expiration.
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When a Portfolio writes a call on
an index, it receives a premium and agrees that, prior to the expiration date,
the purchaser of the call, upon exercise of the call, will receive from the
Portfolio an amount of cash if the closing level of the index upon which the
call is based is greater than the exercise price of the call. The amount of cash
is equal to the difference between the closing price of the index and the
exercise price of the call times a specified multiple (the "multiplier"), which
determines the total dollar value for each point of such difference. When a
Portfolio buys a call on an index, it pays a premium and has the same rights as
to such call as are indicated above. When a Portfolio buys a put on an index, it
pays a premium and has the right, prior to the expiration date, to require the
seller of the put, upon the Portfolio's exercise of the put, to deliver to the
Portfolio an amount of cash if the closing level of the index upon which the put
is based is less than the exercise price of the put, which amount of cash is
determined by the multiplier, as described above for calls. When a Portfolio
writes a put on an index, it receives a premium and the purchaser has the right,
prior to the expiration date, to require the Portfolio to deliver to it an
amount of cash equal to the difference between the closing level of the index
and the exercise price times the multiplier, if the closing level is less than
the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Portfolio writes a
call on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. A Portfolio can
offset some of the risk of writing a call index option
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position by holding a diversified portfolio of securities similar to those on
which the underlying index is based. However, a Portfolio cannot, as a practical
matter, acquire and hold a portfolio containing exactly the same securities as
underlie the index and, as a result, bears a risk that the value of the
securities held will vary from the value of the index.
Even if a Portfolio could assemble a securities portfolio that exactly
reproduced the composition of the underlying index, it still would not be fully
covered from a risk standpoint because of the "timing risk" inherent in writing
index options. When an index option is exercised, the amount of cash that the
holder is entitled to receive is determined by the difference between the
exercise price and the closing index level on the date when the option is
exercised. As with other kinds of options, the Portfolio as the call writer will
not know that it has been assigned until the next business day at the earliest.
The time lag between exercise and notice of assignment poses no risk for the
writer of a covered call on a specific underlying security, such as common
stock, because there the writer's obligation is to deliver the underlying
security, not to pay its value as of a fixed time in the past. So long as the
writer already owns the underlying security, it can satisfy its settlement
obligations by simply delivering it, and the risk that its value may have
declined since the exercise date is borne by the exercising holder. In contrast,
even if the writer of an index call holds securities that exactly match the
composition of the underlying index, it will not be able to satisfy its
assignment obligations by delivering those securities against payment of the
exercise price. Instead, it will be required to pay cash in an amount based on
the closing index value on the exercise date; and by the time it learns that it
has been assigned, the index may have declined, with a corresponding decline in
the value of its securities portfolio. This "timing risk" is an inherent
limitation on the ability of index call writers to cover their risk exposure by
holding securities positions.
If a Portfolio has purchased an index option and exercises it before the closing
index value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Portfolio will be required to pay the
difference between the closing index value and the exercise price of the option
(times the applicable multiplier) to the assigned writer.
INTEREST RATE AND STOCK INDEX FUTURES CONTRACTS
Each Portfolio may enter into interest rate or stock index futures contracts
("Futures" or "Futures Contracts") as a hedge against changes in prevailing
levels of interest rates or stock price levels in order to establish more
definitely the effective return on securities held or intended to be acquired by
the Portfolio. A Portfolio's hedging may include sales of Futures as an offset
against the effect of expected increases in interest rates, or decreases in
stock prices, and purchases of Futures as an offset against the effect of
expected declines in interest rates, or increases in stock prices.
The Portfolios only will enter into Futures Contracts that are traded on futures
exchanges and are standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading thereon in the United States are
regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC").
Although techniques other than sales and purchases of Futures Contracts could be
used to reduce a Portfolio's exposure to interest rate and stock market
fluctuations, the Portfolio may be able to hedge its exposure more effectively
and at a lower cost through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument for a
specified price at a designated date, time and place. A stock index Futures
Contract provides for the delivery, at a designated date, time and place, of an
amount of cash equal to a specified dollar amount times the difference between
the stock index value at the close of trading on the contract and the price at
which the Futures Contract is originally struck; no physical delivery of stocks
comprising the index is made. Brokerage fees are incurred when a Futures
Contract is bought or sold, and margin deposits must be maintained at all times
the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for
financial instruments, Futures Contracts usually are closed out before the
delivery date. Closing out an open Futures Contract sale or purchase is effected
by entering into an offsetting Futures Contract purchase or sale, respectively,
for the same aggregate amount of the identical financial instrument and the same
delivery date. If the offsetting purchase price is less than the original sale
price, the Portfolio realizes a gain; if it is more, the Portfolio realizes a
loss. Conversely, if the offsetting sale price is more than the original
purchase price, the Portfolio realizes a gain; if it is less, the Portfolio
realizes a loss. The transaction costs also must be included in these
calculations. There can be no assurance, however, that a Portfolio will be able
to enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If a Portfolio is not able to enter into an
offsetting transaction, the Portfolio will continue to be required to maintain
the margin deposits on the Futures Contract.
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As an example of an offsetting transaction, the contractual obligations arising
from the sale of one September stock index Futures Contract on an exchange may
be fulfilled at any time before delivery under the Futures Contract is required
(I.E., on a specified date in September, the "delivery month") by the purchase
of the same September stock index Futures Contract on the same exchange. In such
instance, the difference between the price at which the Futures Contract was
sold and the price paid for the offsetting purchase, after allowance for
transaction costs, represents the profit or loss to the Portfolio.
Each Portfolio's Futures transactions will be entered into for hedging purposes;
that is, Futures Contracts will be sold to protect against a decline in the
price of securities that a Portfolio owns, or Futures Contracts will be
purchased to protect the Portfolio against an increase in the price of
securities it has committed to purchase or expects to purchase.
"Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by a Portfolio in order to initiate Futures trading and to maintain
the Portfolio's open positions in Futures Contracts. A margin deposit made when
the Futures Contract is entered into ("initial margin") is intended to ensure
the Portfolio's performance under the Futures Contract. The margin required for
a particular Futures Contract is set by the exchange on which the Futures
Contract is traded and may be significantly modified from time to time by the
exchange during the term of the Futures Contract.
Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Portfolio entered into the Futures
Contract will be made on a daily basis as the price of the underlying security
or index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.
RISKS OF USING FUTURES CONTRACTS. The prices of Futures Contracts are
volatile and are influenced by, among other things, actual and anticipated
changes in interest rates and in stock market movements, which in turn are
affected by fiscal and monetary policies and national and international
political and economic events.
There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities in the Portfolio's portfolio being
hedged. The degree of imperfection of correlation depends upon circumstances
such as variations in speculative market demand for Futures and for securities,
including technical influences in Futures trading; and differences between the
financial instruments being hedged and the instruments underlying the standard
Futures Contracts available for trading. A decision of whether, when and how to
hedge involves skill and judgment, and even a well-conceived hedge may be
unsuccessful to some degree because of unexpected market behavior or interest
rate trends.
Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and options on Futures Contract prices during a single trading day. The
daily limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option prices occasionally have moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.
If a Portfolio were unable to liquidate a Futures or option on Futures position
due to the absence of a liquid secondary market or the imposition of price
limits, it could incur substantial losses. The Portfolio would continue to be
subject to market risk with respect to the position. In addition, except in the
case of purchased options, the Portfolio would continue to be required to make
daily variation margin payments and might be required to maintain the position
being hedged by the Future or option or to maintain cash or securities in a
segregated account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid
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being subject to further calls. These liquidations could increase price
volatility of the instruments and distort the normal price relationship between
the Futures or options and the investments being hedged. Also, because initial
margin deposit requirements in the Futures market are less onerous than margin
requirements in the securities markets, there might be increased participation
by speculators in the Futures markets. This participation also might cause
temporary price distortions. In addition, activities of large traders in both
the Futures and securities markets involving arbitrage, "program trading" and
other investment strategies might result in temporary price distortions.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities, except that
options on Futures Contracts give the purchaser the right, in return for the
premium paid, to assume a position in a Futures Contract (a long position if the
option is a call and a short position if the option is a put) at a specified
exercise price at any time during the period of the option. Upon exercise of the
option, the delivery of the Futures position by the writer of the option to the
holder of the option will be accompanied by delivery of the accumulated balance
in the writer's Futures margin account, which represents the amount by which the
market price of the Futures Contract, at exercise, exceeds (in the case of a
call) or is less than (in the case of a put) the exercise price of the option on
the Futures Contract. If an option is exercised on the last trading day prior to
the expiration date of the option, the settlement will be made entirely in cash
equal to the difference between the exercise price of the option and the closing
level of the securities or index upon which the Futures Contract is based on the
expiration date. Purchasers of options who fail to exercise their options prior
to the exercise date suffer a loss of the premium paid.
The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities or indices.
If a Portfolio writes an option on a Futures Contract, it will be required to
deposit initial and variation margin pursuant to requirements similar to those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.
A Portfolio may seek to close out an option position by selling an option
covering the same Futures Contract and having the same exercise price and
expiration date. The ability to establish and close out positions on such
options is subject to the maintenance of a liquid secondary market.
LIMITATION ON USE OF FUTURES AND OPTIONS ON FUTURES
To the extent that a Portfolio enters into Futures Contracts and options on
Futures Contracts, in each case other than for BONA FIDE hedging purposes (as
defined by the CFTC), the aggregate initial margin and premiums required to
establish these positions (excluding the amount by which options are
"in-the-money") will not exceed 5% of the liquidation value of the Portfolio's
portfolio, after taking into account unrealized profits and unrealized losses on
any contracts the Portfolio has entered into. In general, a call option on a
Futures Contract is "in-the-money" if the value of the underlying Futures
Contract exceeds the strike, I.E., exercise, price of the call; a put option on
a Futures Contract is "in-the-money" if the value of the underlying Futures
Contract is exceeded by the strike price of the put. This guideline may be
modified by the Portfolios' and the Company's Board of Trustees without a
shareholder vote. This limitation does not limit the percentage of a Portfolio's
assets at risk to 5%.
COVER
Transactions using Futures Contracts and options (other than options that a
Portfolio has purchased) expose the Portfolio to an obligation to another party.
A Portfolio will not enter into any such transactions unless it owns either (1)
an offsetting ("covered") position in securities or other options or Futures
Contracts, or (2) cash, receivables and short-term debt securities with a value
sufficient at all times to cover its potential obligations not covered as
provided in (1) above. Each Portfolio will comply with SEC guidelines regarding
cover for these instruments and, if the guidelines so require, set aside cash,
U.S. government securities or other liquid securities.
Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Futures Contract or option is open, unless they
are replaced with other appropriate assets. If a large portion of a Portfolio's
assets is used for cover or otherwise set aside, it could affect portfolio
management or the Portfolio's ability to meet redemption requests or other
current obligations.
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RISK FACTORS
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For a description of the risk factors attendant to the Portfolios' use of
options and futures, see "Options and Futures -- Special Risks of Options and
Futures."
ILLIQUID SECURITIES. A Portfolio may invest up to 15% of its net assets in
illiquid securities. Securities may be considered illiquid if a Portfolio cannot
reasonably expect within seven days to sell the securities for approximately the
amount at which the Portfolio values such securities. See "Investment
Limitations." The sale of illiquid securities if they can be sold at all,
generally will require more time and result in higher brokerage charges or
dealer discounts and other selling expenses than the sale of liquid securities
such as securities eligible for trading on U.S. securities exchanges or in the
OTC markets. Moreover, restricted securities, which may be illiquid for purposes
of this limitation, often sell, if at all, at a price lower than similar
securities that are not subject to restrictions on resale.
Illiquid securities include those that are subject to restrictions contained in
the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, a Portfolio may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the Portfolio may be permitted to sell a
security under an effective registration statement. If, during such a period,
adverse market conditions were to develop, the Portfolio might obtain a less
favorable price than prevailed when it decided to sell.
Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended ("1933 Act"), including
private placements, repurchase agreements, commercial paper, foreign securities
and corporate bonds and notes. These instruments are often restricted securities
because the securities are sold in transactions not requiring registration.
Institutional investors generally will not seek to sell these instruments to the
general public, but instead will often depend either on an efficient
institutional market in which such unregistered securities can be readily resold
or on an issuer's ability to honor a demand for repayment. Therefore, the fact
that there are contractual or legal restrictions on resale to the general public
or certain institutions is not dispositive of the liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible restricted securities held by
a Portfolio, however, could affect adversely the marketability of such portfolio
securities and the Portfolio might be unable to dispose of such securities
promptly or at favorable prices.
With respect to liquidity determinations generally, Growth Portfolio's Board of
Trustees has the ultimate responsibility for determining whether specific
securities, including restricted securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the 1933 Act, are liquid or
illiquid. The Board of Trustees has delegated the function of making day-to-day
determinations of liquidity to the Manager in accordance with procedures
approved by the Portfolio's Board of Trustees. The Manager takes into account a
number of factors in reaching liquidity decisions, including, but not limited
to: (i) the frequency of trading in the security; (ii) the number of dealers who
make quotes for the security; (iii) the number of dealers who have undertaken to
make a market in the security; (iv) the number of other potential purchasers;
and (v) the nature of the security and how trading is effected (e.g., the time
needed to sell the security, how offers are solicited, and the mechanics of
transfer). The Manager monitors the liquidity of securities in each Portfolio's
securities portfolio and periodically reports such determinations to Growth
Portfolio's Board of Trustees.
RISKS OF DEBT SECURITIES. Each Portfolio is permitted to purchase investment
grade debt securities. In selecting securities for each Fund, the Manager
reviews and monitors the creditworthiness of each issuer and issue and analyzes
interest rate trends and specific developments which may affect individual
issuers, in addition to relying on ratings assigned by S&P,
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Moody's or another nationally recognized statistical rating organization
("NRSRO") as indicators of quality. Debt securities rated Baa by Moody's or BBB
by S&P are investment grade, although Moody's considers securities rated Baa to
have speculative characteristics. Changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity for such securities
to make principal and interest payments than is the case for higher grade debt
securities. Each Portfolio is also permitted to purchase debt securities that
are not rated by S&P, Moody's or another NRSRO but that the Manager determines
to be of comparable quality to that of rated securities in which such Portfolio
may invest. Such securities are included in the computation of any percentage
limitations applicable to the comparable rated securities.
Ratings of Portfolio securities represent the rating agencies' opinions
regarding their quality, are not a guarantee of quality and may be reduced after
a Portfolio has acquired the security. The Manager will consider such an event
in determining whether a Portfolio should continue to hold the security but is
not required to despose of it. Credit ratings attempt to evaluate the safety of
principal and interest payments and do not reflect an assessment of the
volatility of the security's market value or the liquidity of an investment in
the security. Also, NRSROs may fail to make timely changes in credit ratings in
response to subsequent events, so that an issuer's current financial condition
may be better or worse than the rating indicates.
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INVESTMENT LIMITATIONS
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THE FUNDS
The Small Cap Fund and Value Fund each has the following fundamental investment
policy to enable it to invest in the Small Cap Portfolio and Value Portfolio
respectively:
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
All other fundamental investment policies, and the non-fundamental policies, of
each Fund and its corresponding Portfolio are identical. Therefore, although the
following discusses the investment policies of each Portfolio and its Board of
Trustees, it applies equally to each Fund and its Board of Trustees.
Each Portfolio has adopted the following fundamental investment limitations as
fundamental policies which (unless otherwise noted) may not be changed without
approval by the affirmative vote of the lesser of (i) 67% of that Portfolio's
shares represented at a meeting at which more than 50% of the outstanding shares
are represented, or (ii) more than 50% of the Portfolio's outstanding shares
whenever a Fund requests to vote on a change in the investment limitations of
its corresponding Portfolio, such Fund will hold a meeting of its shareholders
and will cast its votes as instructed by the shareholders. No Portfolio may:
(1) Invest in companies for the purpose of exercising control or
management;
(2) Purchase or sell real estate; provided that a Portfolio may invest
in securities secured by real estate or interests therein or issued by
companies that invest in real estate or interests therein;
(3) Purchase or sell interests in oil, gas or other mineral exploration
or development programs, except that the Portfolio may invest in the
securities of companies that engage in these activities;
(4) Purchase or sell commodities or commodity contracts, except that the
Portfolio may purchase and sell futures contracts and options;
(5) Mortgage, pledge or in any other manner transfer as security for any
indebtedness, any of its assets except to secure permitted borrowings.
Collateral arrangements with respect to initial or variation margin for
futures contracts and options will not be deemed to be a pledge of a
Portfolio's assets;
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(6) Borrow money in excess of 33 1/3% of the Portfolio's total assets
(including the amount borrowed), less all liabilities and indebtedness
(other than borrowing). Transactions involving options, futures contracts,
options on futures contracts, and collateral arrangements relating thereto
will not be deemed to be borrowings;
(7) Purchase securities on margin or effect short sales, except that a
Portfolio may obtain such short-term credits as may be necessary for the
clearance of purchases or sales of securities and except in connection with
the use of options, futures contracts or options thereon. The Portfolios may
make deposits of margin in connection with futures contracts and options
thereon;
(8) Participate on a joint or a joint and several basis in any trading
account in securities. (The "bunching" of orders for the sale or purchase of
marketable portfolio securities with other accounts under the management of
the Manager to save brokerage costs or average prices among them is not
deemed to result in a securities trading account);
(9) Make loans, except that the Portfolio may purchase debt securities
and enter into repurchase agreements and make loans of portfolio securities;
(10) Purchase or retain the securities of an issuer if, to the knowledge
of the Portfolio after reasonable inquiry, any of the Trustees or officers
of the Portfolio or the Portfolio's investment adviser or distributor
individually own beneficially more than 1/2 of 1% of the outstanding
securities of such issuer and together own beneficially more than 5% of the
securities;
(11) Underwrite securities of other issuers, except to the extent that,
in connection with the disposition of portfolio securities, the Portfolio
may be deemed an underwriter under federal or state securities laws; and
(12) Invest more than 25% of the value of the Portfolio's total assets in
securities of issuers conducting their principal business activities in any
one industry, except that this limitation shall not apply to securities
issued or guaranteed as to principal and interest by the U.S. government or
any of its agencies or instrumentalities.
In addition, each Portfolio has adopted as a fundamental investment policy a
classification as a "diversified" portfolio under the 1940 Act. This means that,
with respect to 75% of the Portfolio's total assets, no more than 5% will be
invested in the securities of any one issuer, and the Portfolio will purchase no
more than 10% of the outstanding voting securities of any one issuer. This
policy cannot be changed without approval by the holders of a majority of the
Portfolio's outstanding voting securities as defined above and in the
Prospectus.
The following investment restrictions of each Portfolio are not fundamental
policies and may be changed by vote of the Portfolio's Board of Trustees without
shareholder approval. Each Portfolio may not:
(1) Invest more than 15% of its net assets in illiquid securities, a
term which means securities that cannot be disposed of within seven days in
the normal course of business at approximately the amount at which the
Portfolio has valued the securities and includes, among other things,
repurchase agreements maturing in more than seven days;
(2) Invest more than 5% of its assets in securities of companies which,
together with any predecessors, have been in operation for less than three
years;
(3) Borrow money except for temporary or emergency purposes (not for
leveraging) not in excess of 33 1/3% of the value of the Portfolio's total
assets;
(4) Enter into a futures contract or an option on a futures contract, in
each case other than for BONA FIDE hedging purposes (as defined by the
CFTC), if the aggregate initial margin and premiums required to establish
all of these positions (excluding the amount by which options are
"in-the-money") exceeds 5% of the liquidation value of the Portfolio's
portfolio, after taking into account unrealized profits and unrealized
losses on any contracts the Portfolio has entered into; or
(5) Purchase securities of other investment companies, except to the
extent permitted by the 1940 Act, in the open market at no more than
customary commission rates. This limitation does not apply to securities
received or acquired as dividends, through offers of exchange, or as a
result of reorganization, consolidation, or merger.
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A Portfolio will not knowingly exercise rights or otherwise acquire securities
when to do so would jeopardize the Portfolio's status under the 1940 Act as a
diversified investment company. If a percentage restriction on investment or
utilization of
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assets in a fundamental policy or restriction is adhered to at the time an
investment is made, a later change in percentage ownership of a security or kind
of securities resulting from changing market values or a similar type of event
will not be considered a violation of a Portfolio's investment policies or
restrictions. A Portfolio may exchange securities, exercise conversion or
subscription rights, warrants, or other rights to purchase common stock or other
equity securities and may hold, except to the extent limited by the 1940 Act,
any such securities so acquired without regard to the Portfolio's investment
policies and restrictions. The original cost of the securities so acquired will
be included in any subsequent determination of a Portfolio's compliance with the
investment percentage limitations referred to above and in the Prospectus.
Investors should refer to the Prospectus for further information with respect to
each Fund's investment objective, which may not be changed without the approval
of Fund shareholders, and its corresponding Portfolio's investment objective,
which may be changed without the approval of its shareholders, and other
investment policies, techniques and limitations which may or may not be changed
without shareholder approval.
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EXECUTION OF PORTFOLIO TRANSACTIONS
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Subject to policies established by Growth Portfolio's Board of Trustees, the
Manager is responsible for the execution of the Portfolios' securities
transactions and the selection of brokers/dealers who execute such transactions
on behalf of the Portfolios. In executing portfolio transactions, the Manager
seeks the best net results for each Portfolio, taking into account such factors
as the price (including the applicable brokerage commission or dealer spread),
size of the order, difficulty of execution and operational facilities of the
firm involved. Although the Manager generally seeks reasonably competitive
commission rates and spreads, payment of the lowest commission or spread is not
necessarily consistent with the best net results. While the Portfolios may
engage in soft dollar arrangements for research services, as described below,
the Portfolios have no obligation to deal with any broker/dealer or group of
broker/dealers in the execution of portfolio transactions.
Consistent with the interests of the Portfolios, the Manager may select brokers
to execute the Portfolios' securities transactions on the basis of the research
services they provide to the Manager for its use in managing the Portfolios and
its other advisory accounts. Such services may include furnishing analyses,
reports and information concerning issuers, industries, securities, geographic
regions, economic factors and trends, portfolio strategy, and performance of
accounts, and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). Research and brokerage
services received from such broker is in addition to, and not in lieu of, the
services required to be performed by the Manager under the Management Contract
(defined below). A commission paid to such broker may be higher than that which
another qualified broker would have charged for effecting the same transaction,
provided that the Manager determines in good faith that such commission is
reasonable in terms either of that particular transaction or the overall
responsibility of the Manager to the Portfolios and its other clients and that
the total commissions paid by each Fund will be reasonable in relation to the
benefits received by the Portfolios over the long term. Research services may
also be received from dealers who execute Portfolio transactions in
over-the-counter markets.
The Manager may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by the Portfolio toward payment of the Portfolio's
expenses, such as custodian fees.
Investment decisions for each Portfolio and for other investment accounts
managed by the Manager are made independently of each other in light of
differing conditions. However, the same investment decision occasionally may be
made for two or more of such accounts, including one or more Portfolios. In such
cases, simultaneous transactions may occur. Purchases or sales are then
allocated as to price or amount in a manner deemed fair and equitable to all
accounts involved. While in some cases this practice could have a detrimental
effect upon the price or value of the security as far as a Portfolio is
concerned, in other cases the Manager believes that coordination and the ability
to participate in volume transactions will be beneficial to the Portfolios.
Under a policy adopted by the Portfolios' Boards of Trustees, and subject to the
policy of obtaining the best net results, the Manager may consider a
broker/dealer's sale of the shares of the Funds and the other funds for which
the Manager serves as investment manager and/or administrator in selecting
broker/dealers for the execution of portfolio transactions. This policy does not
imply a commitment to execute portfolio transactions through all broker/dealers
that sell shares of the Funds and such other funds.
Each Portfolio contemplates that, consistent with the policy of obtaining the
best net results, brokerage transactions may be conducted through certain
companies that are members of Liechtenstein Global Trust. The Portfolios' Boards
of Trustees have adopted procedures in conformity with Rule 17e-1 under the 1940
Act to ensure that all brokerage commissions paid to such affiliates are
reasonable and fair in the context of the market in which they are operating.
Any such transactions will be effected and related compensation paid only in
accordance with applicable SEC regulations.
Aggregate brokerage commissions paid for the period October 18, 1995
(commencement of operations), to December 31, 1995, for the Small Cap Fund and
Value Fund were $3,317, and $1,032, respectively.
Statement of Additional Information Page 15
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
PORTFOLIO TRADING AND TURNOVER
Although the Portfolios generally do not intend to trade for short-term profits,
the securities in a Portfolio's portfolio will be sold whenever the Manager
believes it is appropriate to do so, without regard to the length of time a
particular security may have been held. The portfolio turnover rate will not be
a limiting factor when management deems portfolio changes appropriate.
Each Portfolio engages in portfolio trading when the Manager has concluded that
the sale of a security owned by the Portfolio and/or the purchase of another
security of better value can enhance principal and/or increase income. A
security may be sold to avoid any prospective decline in market value, or a
security may be purchased in anticipation of a market rise. Consistent with each
Portfolio's investment objective, a security also may be sold and a comparable
security purchased coincidentally in order to take advantage of what is believed
to be a disparity in the normal yield and price relationship between the two
securities.
Each Portfolio anticipates that its annual portfolio turnover rate should not
exceed 75%; however, the portfolio turnover rate will not be a limiting factor
when management deems portfolio changes appropriate. A 75% portfolio turnover
rate would occur if the lesser of the value of purchases or sales of portfolio
securities for a Portfolio for a year (excluding purchases of U.S. Treasury and
other securities with a maturity at the date of purchase of one year or less)
were equal to 75%; of the average monthly value of the securities, excluding
short-term investments, held by that Fund during such year. Higher portfolio
turnover involves correspondingly greater brokerage commissions and other
transaction costs that a Portfolio will bear directly.
- --------------------------------------------------------------------------------
TRUSTEES AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The Company's Trustees and Executive Officers are listed below.
<TABLE>
<CAPTION>
Name, Position(s) with the Principal Occupations and Business
Funds and Address Experience for the Past 5 Years
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
David A. Minella,* 43 Chairman, the Manager since October 1996; Director, Liechtenstein Global Trust (holding
Trustee, Chairman of the Board and company of the various international LGT companies) since 1990; President, Asset
President Management Division, Liechtenstein Global Trust since 1995; Director and President, LGT
50 California Street Asset Management Holdings, Inc. ("LGT Asset Management Holdings") since 1988; Director and
San Francisco, CA 94111 President, the Manager since 1989; Director, GT Global since 1987 and President, GT Global
from 1987 to 1995; Director, GT Services since 1990; President, GT Services from 1990 to
1995; Director, G.T. Global Insurance Agency, Inc. ("G.T. Insurance") since 1992; and
President, G.T. Insurance from 1992 to 1995. Mr. Minella also is a director or trustee of
each of the other investment companies registered under the 1940 Act that is managed or
administered by the Manager.
C. Derek Anderson, 54 Chief Executive Officer, Anderson Capital Management, Inc.; Chairman and Chief Executive
Trustee Officer, Plantagenet Holdings, Ltd. from 1991 to present; Director, Munsingwear, Inc.; and
220 Sansome Street Director, American Heritage Group Inc. and various other companies. Mr. Anderson also is a
Suite 400 director or trustee of each of the other investment companies registered under the 1940
San Francisco, CA 94104 Act that is managed or administered by the Manager.
</TABLE>
- --------------
* Mr. Minella is an "interested person" of the Company as defined by the 1940
Act due to his affiliation with the LGT companies.
Statement of Additional Information Page 16
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
<TABLE>
<CAPTION>
Name, Position(s) with the Principal Occupations and Business
Funds and Address Experience for the Past 5 Years
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
Frank S. Bayley, 55 Partner with Baker & McKenzie (a law firm): Director and Chairman, C.D.
Trustee Stimson Company (a private investment company); and Trustee, Seattle Art
Two Embarcadero Center Museum. Mr. Bayley also is a director or trustee of each of the other
Suite 2400 investment companies registered under the 1940 Act that is managed or
San Francisco, CA 94111 administered by the Manager.
Arthur C. Patterson, 52 Managing Partner, Accel Partners (a venture capital firm). He also
Trustee serves as a director of various computing and software companies. Mr.
One Embarcadero Center Patterson also is a director or trustee of each of the other investment
Suite 3820 companies registered under the 1940 Act that is managed or administered
San Francisco, CA 94111 by the Manager.
Ruth H. Quigley, 59 Private investor; and President, Quigley Friedlander & Co., Inc. (a
Trustee financial advisory services firm) from 1984 to 1986. Ms. Quigley also is
1055 California Street a director or trustee of each of the other investment companies
San Francisco, CA 94108 registered under the 1940 Act that is managed or administered by the
Manager.
F. Christian Wignall, 39 Director, LGT Asset Management Holdings since 1989; Senior Vice
Vice President and Chief President, Chief Investment Officer -- Global Equities and Director, the
Investment Officer -- Manager since 1987; and Chairman, Investment Policy Committee of the
Global Equities affiliated international LGT companies since 1990.
50 California Street
San Francisco, CA 94111
James R. Tufts, 37 President, GT Services since 1995; Senior Vice President -- Finance and
Vice President and Chief Administration, GT Global, GT Services and G.T. Insurance, from 1994 to
Financial Officer 1995; Senior Vice President -- Finance and Administration, LGT Asset
50 California Street Management Holdings and the Manager since 1994; Vice President --
San Francisco, CA 94111 Finance, LGT Asset Management Holdings, the Manager, GT Global and GT
Services from 1990 to 1994; Vice President -- Finance, G.T. Insurance
from 1992 to 1994; and a Director of the Manager, GT Global and GT
Services since 1991.
Kenneth W. Chancey, 50 Vice President -- Mutual Fund Accounting, the Manager since 1992; and
Vice President and Principal Vice President, Putnam Fiduciary Trust Company from 1989 to 1992.
Accounting Officer
50 California Street
San Francisco, CA 94111
Helge K. Lee, 48 Senior Vice President, General Counsel and Secretary, LGT Asset
Vice President and Secretary Management Holdings, the Manager, GT Global, GT Services and G.T.
50 California Street Insurance since February 1996. Senior Vice President, Secretary and
San Francisco, CA 94111 General Counsel, LGT Asset Management Holdings, the Manager, GT Global,
GT Services and G.T. Insurance from May 1994 to February 1996; Senior
Vice President, General Counsel and Secretary, Strong/Corneliuson
Management, Inc. and Secretary, each of the Strong Funds from October
1991 through May1994; and shareholder in the law firm of Godfrey & Kahn,
S.C., Milwaukee, Wisconsin for more than five years prior to October
1991.
</TABLE>
Statement of Additional Information Page 17
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
The Board of Trustees has a Nominating and Audit Committee, comprised of Ms.
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Company and its
Funds and recommending firms to serve as independent auditors of the Company.
Each of the Trustees and officers of the Company is also a Director and officer
of G.T. Investment Portfolios, Inc., G.T. Investment Funds, Inc. and G.T. Global
Developing Markets Fund, Inc. and a Trustee and officer of G.T. Greater Europe
Fund, G.T. Global Variable Investment Trust, G.T. Global Variable Investment
Series, Global High Income Portfolio and Global Investment Portfolio, which also
are registered investment companies managed by the Manager. Each Trustee and
Officer serves in total as a Director and or Trustee and Officer, respectively,
of 10 registered investment companies with 41 series managed or administered by
the Manager. The Company pays each Trustee who is not a director, officer or
employee of the Manager or any affiliated company $5,000 per annum plus $300 per
Fund for each meeting of the Board attended by the Trustee, and reimburses
travel and other expenses incurred in connection with attendance at such
meetings. Other Trustees and officers receive no compensation or expense
reimbursements from the Company. For the fiscal year ended December 31, 1995,
Mr. Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley, who are not directors,
officers or employees of the Manager or any affiliated company, received total
compensation of $24,342, $23,244, $21,933 and $23,012, respectively, from the
Company for their services as Trustees. For the year ended December 31, 1995,
Mr. Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley received total
compensation of $99,677, $95,369, $92,140 and $94,458, respectively, from the 40
investment companies managed or administered by the Manager for which he or she
served as a Director or Trustee. Fees and expenses disbursed to the Trustees
contained no accrued or payable pension or retirement benefits. As of the date
of this Statement of Additional Information, the officers and Trustees and their
families as a group owned in the aggregate beneficially or of record 2.61% of
the shares of the Value Fund and 1.17% of the shares of the Small Cap Fund.
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES RELATING TO THE FUNDS AND THE
PORTFOLIOS
Chancellor LGT Asset Management, Inc. (the "Manager") serves as each Portfolio's
investment manager and administrator under an Investment Management and
Administration Contract ("Portfolio Management Contract") between each Portfolio
and the Manager. The Manager serves as administrator to each Fund under an
administration contract between the Company and the Manager ("Administration
Contract"). The Administration Contract will not be deemed an advisory contract,
as defined under the 1940 Act. As investment manager and administrator, the
Manager makes all investment decisions for each Portfolio and, as administrator,
administers each Portfolio's and Fund's affairs. Among other things, the Manager
furnishes the services and pays the compensation and travel expenses of persons
who perform the executive, administrative, clerical and bookkeeping functions of
the Portfolio and the Funds, and provides suitable office space, and necessary
small office equipment and utilities. For these services, each Fund will pay
administration fees to the Manager at the annualized rate of 0.25% of the Fund's
average daily net assets. In addition, each Fund bears a pro rata portion of the
investment management and administration fee paid by its corresponding Portfolio
to the Manager. Each Portfolio pays such fees based on its average daily net
assets, computed daily and paid monthly, at the annualized rate of 0.475% on the
first $500 million, 0.45% on the next $500 million, 0.425% on the next $500
million, and 0.40% on all amounts thereafter.
The Portfolio Management Contract may be renewed with respect to a Portfolio for
one-year terms, provided that any such renewal has been specifically approved at
least annually by: (i) the Portfolios' Board of Trustees, or by the vote of a
majority of the Portfolio's outstanding voting securities (as defined in the
1940 Act), and (ii) a majority of Trustees who are not parties to the Management
Contract or "interested persons" of any such party (as defined in the 1940 Act),
cast in person at a meeting called for the specific purpose of voting on such
approval. The Portfolio Management Contract provides that with respect to each
Portfolio, and the Administration Contract provides that with respect to each
Fund, either the Company, each Portfolio or the Manager may terminate the
Contract without penalty upon sixty days' written notice to the other party. The
Portfolio Management Contract terminates automatically in the event of its
assignment (as defined in the 1940 Act).
Under the Portfolio Management Contract, the Manager has agreed to reimburse
each Portfolio if that Portfolio's annual ordinary expenses exceed the most
stringent limits prescribed by any state in which its corresponding Fund's
shares are offered for sale. Currently, the most restrictive applicable
limitation provides that a Fund's expenses may not exceed an annual rate of
2 1/2% of the first $30 million of average net assets, 2% of the next $70
million of average net assets and 1 1/2%
Statement of Additional Information Page 18
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
of assets in excess of that amount. Expenses which are not subject to this
limitation are interest, taxes, brokerage commissions, the amortization of
organizational expenses, payments of distribution fees, in part, and
extraordinary expenses. In addition, the Manager and GT Global voluntarily have
undertaken to limit the expenses of each Fund (exclusive of brokerage
commissions, taxes, interest and extraordinary expenses) to the maximum annual
level of 2.00% and 2.65% of the average daily net assets of each Fund's Class A
and Class B shares, respectively.
For the fiscal period October 18, 1995 (commencement of operations) to December
31, 1995, the Small Cap Portfolio and the Value Portfolio paid fees of $1,293
and $622, respectively, to the Manager. For the same period, the Small Cap
Growth Fund and Value Fund paid administration fees of $755 and $349,
respectively, to the Manager.
For the fiscal period October 18, 1995 (commencement of operations) to December
31, 1995, the Manager reimbursed the Small Cap Growth Portfolio and Value
Portfolio for their respective investment management and administration fees in
the amounts of $1,293 and $622, respectively; for the same period, the Small Cap
Fund and Value Fund paid administration fees of $755 and $349, respectively.
However, the Manager reimbursed each Fund for such fees in the amounts of $755
and $349, respectively. (Accordingly, the Manager reimbursed each Fund and its
respective Portfolio investment management and administration fees in the
aggregate amounts of $2,048 and $971, respectively.)
For the fiscal year ended December 31, 1995, the Manager, pursuant to a
voluntary expense undertaking to limit expenses to the maximum annual level of
2.00% and 2.65%, respectively, of average daily net assets of the Class A shares
and Class B shares of the Funds, reimbursed the Small Cap Fund and Value Fund
for expenses in the additional amounts of $65,079 and $66,907, respectively.
DISTRIBUTION SERVICES
Each Fund's Class A and Class B shares are offered continuously through the
Funds' principal underwriter and distributor, GT Global, on a "best efforts"
basis pursuant to separate Distribution Contracts between the Company and GT
Global. The Distribution Contracts were last approved with respect to each
Fund's Class A and Class B shares by the Board of Trustees on June 20, 1995.
As described in the Prospectus, the Company has adopted separate Distribution
Plans with respect to each class of shares of the Funds in accordance with the
provisions of Rule 12b-1 under the 1940 Act ("Class A Plan" and "Class B Plan")
(collectively, "Plans"). The rate of payment by each Fund under the Plans, as
described in the Prospectus, may not be increased without the approval of the
majority of the outstanding voting securities of the affected class of that
Fund. All expenses for which GT Global is reimbursed under the Class A Plan will
have been incurred within one year of such reimbursement. The Funds make no
payments under the Class A Plan or the Class B Plan to any party other than GT
Global, which is the distributor (principal underwriter) of the Class A and
Class B shares of each Fund.
Payments made for the period October 18, 1995 (commencement of operations) to
December 31, 1995 by the America Small Cap Fund and America Value Fund for Class
A and Class B shares were $467, and $1,609, and $176, and $817, respectively.
The Plans were last approved on June 15, 1994 by the Company's Board of
Trustees, including a majority of Trustees who are not "interested persons" of
the Company (as defined in the 1940 Act) and who have no direct or indirect
financial interests in the operation of the Plans or in any agreement related
thereto ("Qualified Trustees"). In approving the Plans, the Trustees determined
that the continuation of the Class A and Class B Plans was in the best interests
of the shareholders of the Funds. Agreements related to the Plans also must be
approved by vote of the Trustees and Qualified Trustees as described above.
Each Plan requires that, at least quarterly, the Trustees review the amounts
expended thereunder and the purposes for which such expenditures were made. Each
Plan requires that as long as it is in effect, the selection and nomination of
Trustees who are not "interested persons" of the Company will be committed to
the discretion of the Trustees who are not "interested persons" of the Company,
as defined in the 1940 Act.
As discussed in the Prospectus, GT Global collects sales charges on sales of
Class A shares of the Funds, retains certain amounts of such charges and
reallows other amounts of such charges to broker/dealers who sell shares of the
Funds.
Statement of Additional Information Page 19
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
The following table reviews the extent of such activity during the period
October 18, 1995 (commencement of operations) to December 31, 1995:
<TABLE>
<CAPTION>
SALES CHARGES AMOUNTS AMOUNTS
COLLECTED RETAINED REALLOWED
------------- ----------- -----------
<S> <C> <C> <C>
America Small Cap Fund............................................................. $ 3,729 $ 2,815 $ 914
America Value Fund................................................................. 1,650 326 1,324
</TABLE>
GT Global receives no compensation or reimbursements relating to its
distribution efforts with respect to Class A shares other than as described
above. GT Global receives any contingent deferred sales charges payable with
respect to redemptions of Class B shares.
For the period October 18, 1995 (commencement of operations) to December 31,
1995, GT Global collected contingent deferred sales charges for the America
Small Cap Fund and America Value Fund of $112 and $0, respectively.
TRANSFER AGENCY AND ACCOUNTING SERVICES
GT Global Investor Services, Inc. ("Transfer Agent") has been retained by the
Funds to perform shareholder servicing, reporting and general transfer agent
functions for the Funds. For these services, the Transfer Agent receives an
annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. The Transfer Agent also is reimbursed
by the Funds for its out-of-pocket expenses for such items as postage, forms,
telephone charges, stationery and office supplies.
For the period October 18, 1995 (commencement of operations) to December 31,
1995, the Small Cap Fund and Value Fund paid the Manager fees of $76 and $36,
respectively, for accounting services.
EXPENSES OF THE FUNDS
Each Fund and each Portfolio pays all expenses not assumed by the Manager, GT
Global and other agents. These expenses include, in addition to the advisory,
distribution, transfer agency, pricing and accounting agency and brokerage fees
discussed above, legal and audit expenses, custodian fees, trustees' fees,
organizational fees, fidelity bond and other insurance premiums, taxes,
extraordinary expenses and expenses of reports and prospectuses sent to existing
investors. The allocation of general Company expenses and expenses shared by the
Funds with one another, are made on a basis deemed fair and equitable, and may
be based on the relative net assets of the Funds or the nature of the services
performed and relative applicability to each Fund. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities, which
are capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses.
- --------------------------------------------------------------------------------
VALUATION OF SHARES
- --------------------------------------------------------------------------------
As described in the Prospectus, each Fund's net asset value per share for each
class of shares is determined at the close of regular trading on the New York
Stock Exchange, Inc. ("NYSE") (currently, 4:00 P.M. Eastern time, unless
weather, equipment failure or other factors contribute to an earlier closing
time). Currently, the NYSE is closed on weekends and on certain days relating to
the following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, July 4th, Labor Day, Thanksgiving Day and Christmas Day.
Each Portfolios securities and other assets are valued as follows:
Equity securities, which are traded on stock exchanges, are valued at the last
sale price on the exchange on which such securities are traded, as of the close
of business on the day the securities are being valued or, lacking any sales, at
the last available bid price. In cases where securities are traded on more than
one exchange, the securities are valued on the exchange determined by the
Manager to be the primary market. Securities traded in the OTC market are valued
at the last available bid price prior to the time of valuation.
Long-term debt obligations are valued at the mean of representative quoted bid
or asked prices for such securities or, if such prices are not available, at
prices for securities of comparable maturity, quality and type; however, when
the Manager
Statement of Additional Information Page 20
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
deems it appropriate, prices obtained for the day of valuation from a bond
pricing service will be used. Short-term debt investments are amortized to
maturity based on their cost, provided that such valuations represent fair
value.
Options on indices and securities purchased by the Portfolios are valued at
their last bid price in the case of listed options or at the average of the last
bid prices obtained from dealers in the case of OTC options. When market
quotations for futures and options on futures held by a Portfolio are readily
available, those positions will be valued based upon such quotations.
Securities and other assets for which market quotations are not readily
available (including restricted securities that are subject to limitations as to
their sale) are valued at fair value as determined in good faith by or under the
direction of the Portfolios' Board of Trustees. The valuation procedures applied
in any specific instance are likely to vary from case to case. However,
consideration generally is given to the financial position of the issuer and
other fundamental analytical data relating to the investment and to the nature
of the restrictions on disposition of the securities (including any registration
expenses that might be borne by a Portfolio in connection with such
disposition). In addition, other factors, such as the cost of the investment,
the market value of any unrestricted securities of the same class (both at the
time of purchase and at the time of valuation), the size of the holding, the
prices of any recent transactions or offers with respect to such securities and
any available analysts' reports regarding the issuer, generally are considered.
The fair value of any other assets is added to the value of all securities
positions to arrive at the value of a Fund's total assets (which, for each Fund
is the value of its investment in its corresponding Portfolio). A Fund's
liabilities, including accruals for expenses, are deducted from its total
assets. Once the total value of a Fund's net assets is so determined, that value
is then divided by the total number of shares outstanding (excluding treasury
shares), and the result, rounded to the nearer cent, is the net asset value per
share.
Events affecting the values of portfolio securities that occur between the time
their prices are determined and the close of regular trading on the NYSE will
not be reflected in the Funds' net asset values unless the Manager, under the
supervision of the Company's Board of Trustees, determines that the particular
event would materially affect net asset value. As a result, a Fund's net asset
value may be significantly affected by such trading on days when a shareholder
has no access to the Fund.
- --------------------------------------------------------------------------------
INFORMATION RELATING TO SALES
AND REDEMPTIONS
- --------------------------------------------------------------------------------
PAYMENT AND TERMS OF OFFERING
Payment for Class A or Class B shares purchased should accompany the purchase
order, or funds should be wired to the Transfer Agent as described in the
Prospectus. Payment, other than by wire transfer, must be made by check or money
order drawn on a U.S. bank. Checks or money orders must be payable in U.S.
dollars.
As a condition of this offering, if an order to purchase either class of shares
is cancelled due to nonpayment (for example, because a check is returned for
"not sufficient funds"), the person who made the order will be responsible for
any loss incurred by a Fund by reason of such cancellation, and if such
purchaser is a shareholder, that Fund shall have the authority as agent of the
shareholder to redeem shares in his or her account at their then-current net
asset value per share to reimburse that Fund for the loss incurred. Investors
whose purchase orders have been cancelled due to nonpayment may be prohibited
from placing future orders.
The Funds reserve the right at any time to waive or increase the minimum
requirements applicable to initial or subsequent investments with respect to any
person or class of persons. An order to purchase shares is not binding on a Fund
until it has been confirmed in writing by the Transfer Agent (or other
arrangements made with the Fund, in the case of orders utilizing wire transfer
of funds, as described above) and payment has been received. To protect existing
shareholders, the Funds reserve the right to reject any offer for a purchase of
shares by any individual.
Statement of Additional Information Page 21
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
SALES OUTSIDE THE UNITED STATES
Sales of Fund shares made through brokers outside the United States will be at
net asset value plus a sales commission, if any, established by that broker or
by local law. Such commission, if any, may be more or less than the sales
charges listed in the sales charge table included in the Prospectus.
LETTER OF INTENT -- CLASS A SHARES
The Letter of Intent ("LOI") is not a binding obligation to purchase the
indicated amount. During such time as Class A shares are held in escrow under an
LOI to ensure payment of applicable sales charges if the indicated amount is not
met, all dividends and capital gain distributions on escrowed shares will be
reinvested in additional Class A shares or paid in cash, as specified by the
shareholder. If the intended investment is not completed within the specified
13-month period, the purchaser must remit to GT Global the difference between
the sales charge actually paid and the sales charge which would have been
applicable if the total Class A purchases had been made at a single time. If
this amount is not paid to GT Global within 20 days after written request, the
appropriate number of escrowed shares will be redeemed and the proceeds paid to
GT Global.
A registered investment adviser, trust company or trust department seeking to
execute an LOI as a single purchaser with respect to accounts over which it
exercises investment discretion is required to provide the Transfer Agent with
information establishing that such entity has discretionary authority with
respect to the money invested (e.g. by providing a copy of the pertinent
investment advisory agreement). Class A shares purchased in this manner must be
restrictively registered with the Transfer Agent so that only the investment
adviser, trust company or trust department, and not the beneficial owner, will
be able to place purchase, redemption and exchange orders.
AUTOMATIC INVESTMENT PLAN -- CLASS A SHARES AND CLASS B SHARES
To establish participation in the Funds' Automatic Investment Plan ("AIP"),
investors or their broker/dealers should specify whether investment will be in
Class A shares or Class B shares and send the following documents to the
Transfer Agent: (1) an AIP Application; (2) a Bank Authorization Form; and (3) a
voided personal check from the pertinent bank account. The necessary forms are
provided at the back of the Funds' Prospectus. Providing that an investor's bank
accepts the Bank Authorization Form, investment amounts will be drawn on the
designated dates (monthly on the 25th day or beginning quarterly on the 25th day
of the month the investor first selects) in order to purchase full and
fractional shares of a Fund at the public offering price determined on that day.
In the event that the 25th day falls on a Saturday, Sunday or holiday, shares
will be purchased on the next business day. If an investor's check is returned
because of insufficient funds, a stop payment order or the account is closed,
the AIP may be discontinued, and any share purchase made upon deposit of such
check may be cancelled. Furthermore, the shareholder will be liable for any loss
incurred by a Fund by reason of such cancellation. Investors should allow one
month for the establishment of an AIP. An AIP may be terminated by the Transfer
Agent or the Funds upon 30 days' written notice or by the participant, at any
time, without penalty, upon written notice to the pertinent Fund or the Transfer
Agent.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
Class A or Class B shares of a Fund also may be purchased as the underlying
investment for an IRA meeting the requirements of Section 408(a) of the Internal
Revenue Code of 1986, as amended ("Code"). IRA applications are available from
brokers, or GT Global.
EXCHANGES BETWEEN FUNDS
Shares of a Fund may be exchanged for shares of other GT Global Mutual Funds,
based on their respective net asset values without imposition of any sales
charges provided that the registration remains identical. Class A shares may be
exchanged only for Class A shares of other GT Global Mutual Funds. Class B
shares may be exchanged only for Class B shares of other GT Global Mutual Funds.
The exchange privilege is not an option or right to purchase shares but is
permitted under the current policies of the respective GT Global Mutual Funds.
The privilege may be discontinued or changed at any time by any of the Funds
upon 60 days' prior written notice to the shareholders of such Fund and is
available only in states where the exchange may be made legally. Before
purchasing shares through the exercise of the exchange privilege, a shareholder
should obtain and read a copy of the Prospectus of the Fund to be purchased and
should consider the investment objective(s) of that Fund.
TELEPHONE REDEMPTIONS
A corporation or partnership wishing to utilize telephone redemption services
must submit a "Corporate Resolution" or "Certificate of Partnership" indicating
the names, titles and the required number of signatures of persons authorized to
act on its behalf. The certificate must be signed by a duly authorized
officer(s) and, in the case of a corporation, the corporate seal must be
affixed. All shareholders may request that redemption proceeds be transmitted by
bank wire
Statement of Additional Information Page 22
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
directly to the shareholder's predesignated account at a domestic bank or
savings institution if the proceeds are at least $1,000. Costs in connection
with the administration of this service, including wire charges, will be borne
by the Funds. Proceeds of less than $ 1,000 will be mailed to the shareholder's
registered address of record. The Funds and the Transfer Agent reserve the right
to refuse any telephone instructions and may discontinue the aforementioned
redemption options upon 30 days' written notice.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders owning Class A or Class B shares with a value of $10,000 or more of
any of the Funds, may establish a Systematic Withdrawal Plan ("SWP"). Under a
SWP, a shareholder will receive monthly or quarterly payments, in amounts of not
less than $100 per payment, through the automatic redemption of the necessary
number of shares on the designated dates (monthly or beginning quarterly on the
25th day of the month the investor first selects). In the event that the 25th
day falls on a Saturday, Sunday or holiday, the redemption will take place on
the prior business day. Certificates, if any, for the shares being redeemed must
be held by the Transfer Agent. Checks will be made payable to the designated
recipient and mailed within seven days. If the recipient is other than the
registered shareholder, the signature of each shareholder must be guaranteed on
the SWP application (see "How to Redeem Shares" in the Prospectus). A
corporation (or partnership) must also submit a "Corporation Resolution" or
"Certification of Partnership" indicating the names, titles, and signatures of
the individuals authorized to act on its behalf, and the SWP application must be
signed by a duly authorized officer(s) and the corporate seal affixed.
With respect to a SWP the maximum annual SWP withdrawal is 12% of the initial
account value. Withdrawals in excess of 12% of the initial account value
annually may result in assessment of a contingent deferred sales charge. See
"How to Invest" in the Prospectus.
Shareholders should be aware that systematic withdrawals may deplete or use up
entirely the initial investment and result in realized long-term or short-term
capital gains or losses. The SWP may be terminated at any time by the Transfer
Agent or a Fund upon 30 days' written notice or by a shareholder upon written
notice to a Fund or its Transfer Agent. Applications and further details
regarding establishment of a SWP are provided at the back of the Funds'
Prospectus.
SUSPENSION OF REDEMPTION PRIVILEGES
The Funds may suspend redemption privileges or postpone the date of payment for
more than seven days after a redemption order is received during any period: (1)
when the NYSE is closed other than customary weekend and holiday closings, or
when trading on the NYSE is restricted as directed by the SEC; (2) when an
emergency exists, as defined by the SEC, which will prohibit the Funds from
disposing of portfolio securities owned by them or in fairly determining the
value of their assets; or (3) as the SEC may otherwise permit.
REDEMPTIONS IN KIND
It is possible that conditions may arise in the future which would, in the
opinion of the Company's Board of Trustees, make it undesirable for a Fund to
pay for all redemptions in cash. In such cases and to the extent permitted by
Rule 18f-1 under the 1940 Act, the Board may authorize payment to be made in
portfolio securities or other property of a Fund's corresponding Portfolio, so
called "redemptions in kind." Payment of redemptions in kind will be made in
readily marketable securities. Such securities would be valued at the same value
assigned to them in computing the net asset value per share. Shareholders
receiving such securities would incur brokerage costs in selling any such
securities so received and would be subject to any increase or decrease in the
value of the securities until they were sold.
- --------------------------------------------------------------------------------
TAXES
- --------------------------------------------------------------------------------
TAXATION OF THE FUNDS
Each Fund is treated as a separate corporation for federal income tax purposes.
In order to qualify or continue to qualify for treatment as a regulated
investment company ("RIC") under the Code, each Fund must distribute to its
shareholders for each taxable year at least 90% of its investment company
taxable income (consisting generally of net investment income and net short-term
capital gain) ("Distribution Requirement") and must meet several additional
requirements. With respect to each Fund, these requirements include the
following: (1) the Fund must derive at least 90% of its gross
Statement of Additional Information Page 23
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
income each taxable year from dividends, interest, payments with respect to
securities loans and gains from the sale or other disposition of securities, or
other income (including gains from options or Futures) derived with respect to
its business of investing in securities ("Income Requirement"); (2) the Fund
must derive less than 30% of its gross income each taxable year from the sale or
other disposition of securities, options or futures held for less than three
months and that are not directly related to the Fund's principal business of
investing in securities (or options and futures with respect to securities)
("Short-Short Limitation"); (3) at the close of each quarter of the Fund's
taxable year, at least 50% of the value of its total assets must be represented
by cash and cash items, U.S. government securities, securities of other RICs and
other securities, with these other securities limited, with respect to any one
issuer, to an amount that does not exceed 5% of the value of the Fund's total
assets and that does not represent more than 10% of the issuer's outstanding
voting securities; and (4) at the close of each quarter of the Fund's taxable
year, not more than 25% of the value of its total assets may be invested in
securities (other than U.S. government securities or the securities of other
RICs) of any one issuer. Each Fund, as an investor in its corresponding
Portfolio, is deemed to own a proportionate share of the Portfolio's assets, and
to earn a proportionate share of the Portfolio's income, for purposes of
determining whether the Fund satisfies all of the requirements described above
to qualify as an RIC.
Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the
extent it fails to distribute by the end of any calendar year substantially all
of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
See the next section for a discussion of the tax consequences to each Fund of
hedging transactions engaged in by its corresponding Portfolio.
TAXATION OF THE PORTFOLIOS
GENERAL. Each Portfolio is treated as a separate partnership for federal
income tax purposes and is not a "publicly traded partnership." As a result,
each Portfolio is not subject to federal income tax; instead, each Fund, as an
investor in its corresponding Portfolio, is required to take into account in
determining its federal income tax liability its share of the Portfolio's
income, gains, losses, deductions and credits, without regard to whether it has
received any cash distributions from the Portfolio. Each Portfolio also is not
subject to New York income or franchise tax.
Because, as noted above, each Fund is deemed to own a proportionate share of its
corresponding Portfolio's assets, and to earn a proportionate share of its
corresponding Portfolio's income, for purposes of determining whether the Fund
satisfies the requirements to qualify as a RIC, each Portfolio intends to
conduct its operations so that its corresponding Fund will be able to satisfy
all those requirements.
Distributions to each Fund from its corresponding Portfolio (whether pursuant to
a partial or complete withdrawal or otherwise) will not result in the Fund's
recognition of any gain or loss for federal income tax purposes, except that (1)
gain will be recognized to the extent any cash that is distributed exceeds the
Fund's basis for its interest in its corresponding Portfolio before the
distribution, (2) income or gain will be recognized if the distribution is in
liquidation of the Fund's entire interest in its corresponding Portfolio and
includes a disproportionate share of any unrealized receivables held by the
Portfolio, and (3) loss will be recognized if a liquidation distribution
consists solely of cash and/or unrealized receivables. Each Fund's basis for its
interest in its corresponding Portfolio generally will equal the amount of cash
and the basis of any property the Fund invests in the Portfolio, increased by
the Fund's share of the Portfolio's net income and gains and decreased by (a)
the amount of cash and the basis of any property the Portfolio distributes to
the Fund and (b) the Fund's share of the Portfolio's losses.
OPTIONS AND FUTURES TRANSACTIONS. The use of hedging transactions, such as
selling (writing) and purchasing options and Futures, involves complex rules
that will determine, for federal income tax purposes, the character and timing
of recognition of the gains and losses a Portfolio realizes in connection
therewith. Gains from the disposition of options and Futures derived by a
Portfolio with respect to its business of investing in securities will qualify
as permissible income under the Income Requirement for its corresponding Fund.
However, income from the disposition by a Portfolio of options and Futures will
be subject to the Short-Short Limitation for its corresponding Fund if they are
held for less than three months.
If a Portfolio satisfies certain requirements, any increase in value of a
position that is part of a "designated hedge" will be offset by any decrease in
value (whether realized or not) of the offsetting hedging position during the
period of the hedge for purposes of determining whether the corresponding Fund
satisfies the Short-Short Limitation. Thus, only the net gain (if any) from the
designated hedge will be included in gross income for purposes of that
limitation. Each Portfolio intends that, when it engages in hedging
transactions, it will qualify for this treatment, but at the present time it is
not clear whether this treatment will be available for all those transactions.
To the extent this treatment is not available, a Portfolio
Statement of Additional Information Page 24
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
may be forced to defer the closing out of certain options and Futures, beyond
the time when it otherwise would be advantageous to do so, in order for its
corresponding Fund to qualify or continue to qualify as a RIC.
Futures that are subject to section 1256 of the Code (other than those that are
part of a "mixed straddle") ("Section 1256 Contracts") and that are held by a
Portfolio at the end of its taxable year generally will be deemed to have been
sold at market value for federal income tax purposes. Sixty percent of any net
gain or loss recognized on these deemed sales, and 60% of any net realized gain
or loss from any actual sales of Section 1256 Contracts, will be treated as
long-term capital gain or loss, and the balance will be treated as short-term
capital gain or loss.
TAXATION OF THE FUNDS' SHAREHOLDERS
Dividends and other distributions declared by a Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
A portion of the dividends from a Fund's investment company taxable income
(whether paid in cash or reinvested in additional shares) may be eligible for
the dividends-received deduction allowed to corporations. The eligible portion
may not exceed the aggregate dividends received by a Fund (directly or through a
Portfolio) from U.S. corporations. However, dividends received by a corporate
shareholder and deducted by it pursuant to the dividends-received deduction may
be subject indirectly to the alternative minimum tax.
If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, or nonresident alien fiduciary of a trust or
estate, foreign corporation or foreign partnership ("foreign shareholder")
generally will be subject to U.S. withholding tax (at a rate of 30% or lower
treaty rate). Withholding will not apply if a dividend paid by a Fund to a
foreign shareholder is "effectively connected with the conduct of a U.S. trade
or business," in which case the reporting and withholding requirements
applicable to domestic shareholders will apply. A distribution of net capital
gain by a Fund to a foreign shareholder generally will be subject to U.S.
federal income tax (at the rates applicable to domestic persons) only if the
distribution is "effectively connected" or the foreign shareholder is treated as
a nonresident alien individual for federal income tax purposes.
The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Fund, their shareholders and the Portfolios.
Investors are urged to consult their own tax advisers for more detailed
information and for information regarding any foreign, state and local taxes
applicable to distributions received from a Fund.
Statement of Additional Information Page 25
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
LIECHTENSTEIN GLOBAL TRUST
Liechtenstein Global Trust, formerly BIL GT Group, is composed of the Manager
and its worldwide affiliates. Other worldwide affiliates of Liechtenstein Global
Trust include LGT Bank in Liechtenstein, formerly Bank in Liechtenstein, an
international financial services institution founded in 1920. LGT Bank in
Liechtenstein has principal offices in Vaduz, Liechtenstein. Its subsidiaries
currently include LGT Bank in Liechtenstein (Deutschland) GmbH, formerly Bank in
Liechtenstein (Frankfurt) GmbH, and LGT Asset Management AG, formerly Bilfinanz
und Verwaltung AG, in Zurich, Switzerland.
Worldwide asset management affiliates also currently include LGT Asset
Management PLC, formerly G.T. Management PLC in London; LGT Asset Management
Ltd., formerly G.T. Management (Asia) Ltd. in Hong Kong; LGT Asset Management
Ltd., formerly G.T. Management (Japan) in Tokyo; LGT Asset Management Pte. Ltd.,
formerly G.T. Management (Singapore) PTE Ltd. in Singapore; LGT Asset Management
Ltd., formerly G.T. Management (Australia) Ltd. in Sydney; and LGT Asset
Management GmbH, formerly BIL Asset Management GmbH, located in Frankfurt.
CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, acts as custodian of the Portfolios' and the Funds' assets.
INDEPENDENT ACCOUNTANTS
The Company's and the Portfolios' independent accountants are Coopers & Lybrand
L.L.P., One Post Office Square, Boston, Massachusetts 02109. Coopers & Lybrand
L.L.P. conducts annual audits of the Funds, assists in the preparation of the
Funds' federal and state income tax returns and consults with the Company and
the Funds as to matters of accounting, regulatory filings and federal and state
income taxation.
USE OF NAME
The Manager has granted the Company the right to use the "GT" and "GT Global"
names and has reserved the right to withdraw its consent to the use of such
names by the Company and/or any of the Funds at any time, or to grant the use of
such names to any other company.
SHAREHOLDER LIABILITY
Under certain circumstances, shareholders of a Fund may be held personally
liable for the obligations of the Fund. The Company's Declaration of Trust
provides that shareholders shall not be subject to any personal liability for
the acts or obligations of a Fund or the Company and that every written
agreement, obligation or other undertaking made or issued by a Fund or the
Company shall contain a provision to the effect that shareholders are not
personally liable thereunder. The Declaration of Trust provides for
indemnification out of the Company's assets under certain circumstances, and
further provides that the Company shall, upon request, assume the defense of any
act or obligation of a Fund or the Company and that the Fund in which the
shareholder holds shares will indemnify the shareholder for all legal and other
expenses incurred therewith. Thus, the risk of any shareholder's incurring
financial loss beyond his or her investment, because of this theoretical
shareholder liability, is limited to circumstances in which the Fund or the
Company itself would be unable to meet its obligations.
Statement of Additional Information Page 26
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
A Fund's "Standardized Return", as referred to in the Prospectus (see "Other
Information -- Performance Information" in the Prospectus), is calculated for
Class A and Class B shares of each Fund as follows: Standardized Return ("T") is
computed by using the value at the end of the period ("EV") of a hypothetical
initial investment of $1,000 ("P") over a period of years ("n") according to the
following formula as required by the Securities and Exchange Commission: P(1+T)n
= EV. The following assumptions will be reflected in computations made in
accordance with this formula: (1) reinvestment of dividends and other
distributions at net asset value on the reinvestment date determined by the
Board; and (2) a complete redemption at the end of any period illustrated.
The Standardized Returns of each Fund's Class A shares, stated as aggregate
total return for the period October 18, 1995 (commencement of operations) to
December 31, 1995, were as follows:
<TABLE>
<S> <C>
Small Cap Fund -1.67%
Value Fund 6.33%
</TABLE>
As discussed in the Prospectus, each Fund may quote Non-Standardized Total
Returns that do not reflect the effect of sales charges. Non-Standardized
Returns may be quoted for the same or different time periods for which
Standardized Returns are quoted.
The Non-Standardized Returns of each Fund's Class A shares stated as aggregate
total return for the period October 18, 1995 (commencement of operations) to
December 31, 1995, were as follows:
<TABLE>
<S> <C>
Small Cap Fund 3.24%
Value Fund 11.64%
</TABLE>
The Standardized Returns of each Fund's Class B Shares, stated as aggregate
total return for the period October 18, 1995 (commencement of operations) to
December 31, 1995, were as follows:
<TABLE>
<S> <C>
Small Cap Fund -1.94%
Value Fund 6.55%
</TABLE>
The Non-Standardized Returns of each Fund's Class B Shares stated as aggregate
total return for the period October 18, 1995 (commencement of operations) to
December 31, 1995, were as follows:
<TABLE>
<S> <C>
Small Cap Fund 3.06%
Value Fund 11.55%
</TABLE>
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of the Fund's portfolio and operating expenses of a
Fund, so that current or past yield or total return should not be considered
representative of what an investment in a Fund may earn in any future period.
These factors and possible differences in the methods used in calculating
investment results should be considered when comparing a Fund's investment
results with those published for other investment companies and other investment
vehicles. A Fund's results also should be considered relative to the risks
associated with such Fund's investment objective and policies. A Fund will
include performance data for all classes of shares of that Fund in any
advertisement or information including performance data for the Fund.
In advertising and sales materials, GT Global may make reference to or discuss
its products, services and accomplishments. Among these accomplishments are that
in 1983 GT Global provided assistance to the government of Hong Kong in linking
its currency to the U.S. dollar, and that in 1987 Japan's Ministry of Finance
licensed LGT Asset Management Ltd. (Japan) as one of the first foreign
discretionary investment managers for Japanese investors. Such accomplishments,
however, should not be viewed as an endorsement of the Manager or GT Global by
the government of Hong Kong, Japan's Ministry of Finance or any other government
or government agency. Nor do any such accomplishments of the Manager or GT
Global provide any assurance that the GT Global Mutual Funds' investment
objectives will be achieved.
Statement of Additional Information Page 27
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
IMPORTANT POINTS TO NOTE ABOUT THE FOLLOWING WORLD FINANCIAL AND ECONOMIC DATA
Each Fund and GT Global may from time to time in advertisements, sales
literature and reports furnished to present and prospective shareholders compare
the Fund with the following:
(1) The Lehman Bros. Government/Corporate Bond Index, which is a
comprehensive measure of all public obligations of the U.S. Treasury
(excluding flower bonds and foreign targeted issues), all publicly issued
debt of agencies of the U.S. Government (excluding mortgage backed
securities), and all public, fixed rate, non-convertible investment grade
domestic corporate debt rated at least Baa by Moody's Investors Service,
Inc. or BBB by Standard and Poor's, or, in the case of nonrated bonds, BBB
by Fitch Investors Service (excluding Collateralized Mortgage Obligations).
(2) The Consumer Price Index, which is a measure of the average change
in prices over time in a fixed market basket of goods and services (e.g.,
food, clothing, shelter, fuels, transportation fares, charges for doctors'
and dentists' services, prescription medicines, and other goods and services
that people buy for day-to-day living). There is inflation risk which does
not affect a security's value but its purchasing power i.e. the risk of
changing price levels in the economy that affects security prices or the
price of goods and services.
(3) Data and mutual fund rankings published or prepared by Lipper
Analytical Data Services, Inc. ("Lipper"), CDA/Wiesenberger Investment
Companies Service ("CDA/Wiesenberger"), Morningstar, Inc. and/or other
companies that rank and/or compare mutual funds by overall performance,
investment objectives, assets, expense levels, periods of existence and/or
other factors. In this regard each Fund may be compared to the Fund's "peer
group" as defined by Lipper, CDA/Wiesenberger, Morningstar and/or other
firms, as applicable, or to specific funds or groups of funds within or
without such peer group. Lipper generally ranks funds on the basis of total
return, assuming reinvestment of distributions, but does not take sales
charges or redemption fees into consideration, and is prepared without
regard to tax consequences. In addition to the mutual fund rankings, the
Fund's performance may be compared to mutual fund performance indices
prepared by Lipper. Morningstar is a mutual fund rating service that also
rates mutual funds on the basis of risk-adjusted performance. Morningstar
ratings are calculated from a fund's three, five and ten year average annual
returns with appropriate fee adjustments and a risk factor that reflects
fund performance relative to the three-month U.S. Treasury bill monthly
returns. Ten percent of the funds in an investment category receive five
stars and 22.5% receive four stars. The ratings are subject to change each
month.
(4) Standard & Poor's 500 Composite Stock Price Index which is a widely
recognized index composed of the capitalization-weighted average of the
price of 500 of the largest publicly traded stocks in the U.S.
(5) Salomon Brothers Broad Investment Grade Index which is a widely used
index composed of U.S. domestic government, corporate and mortgage-backed
fixed income securities.
(6) Dow Jones Industrial Average.
(7) CNBC/Financial News Composite Index.
(8) Morgan Stanley Capital International World Indices, including, among
others, the Morgan Stanley Capital International U.S. Index.
(9) Datastream and Worldscope each is an on-line database retrieval
service for information including, but not limited to, international
financial and economic data.
(10) Various publications including, but not limited to ratings agencies
such as Moody's Investors Service, Fitch Investors Service, Standard &
Poor's.
(11) Wilshire Associates which is an on-line database for international
financial and economic data including performance measure for a wide range
of securities.
(12) Bank Rate National Monitor Index, which is an average of the quoted
rates for 100 leading banks and thrifts in ten U.S. cities.
(13) Average of Savings Accounts, which is a measure of all kinds of
savings deposits, including longer-term certificates (based on figures
supplied by the U.S. League of Savings Institutions). Savings accounts offer
a guaranteed rate of return on principal, but no opportunity for capital
growth. During a portion of the period, the maximum rates paid on some
savings deposits were fixed by law.
Statement of Additional Information Page 28
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
Indices, economic and financial data prepared by the research departments of
various financial organizations such as Salomon Brothers, Inc., Lehman Brothers,
Merrill Lynch, Pierce, Fenner & Smith, Inc., J. P. Morgan, Morgan Stanley, Smith
Barney, S.G. Warburg, Jardine Fleming, The Bank for International Settlements,
Asian Development Bank, Bloomberg, L.P., and Ibbottson Associates may be used,
as well as information reported by the Federal Reserve and the respective
Central Banks of various nations. In addition, GT Global may use performance
rankings, ratings and commentary reported periodically in national financial
publications, including but not limited to Money Magazine, Smart Money, Global
Finance, EuroMoney, Financial World, Forbes, Fortune, Business Week, Latin
Finance, the Wall Street Journal, Emerging Markets Weekly, Kiplinger's Guide To
Personal Finance, Barron's, The Financial Times, USA Today, The New York Times,
Far Eastern Economic Review, The Economist, Investors Business Daily,
Congressional Quarterly and Investors Business Digest. Each Fund may compare its
performance to that of other compilations or indices of comparable quality to
those listed above and other indices which may be developed and made available
in the future.
From time to time, each Fund and GT Global may refer to the number of
shareholders in the Funds or the aggregate number of shareholders in all GT
Global Mutual Funds or the dollar amount of each Fund's assets under management
in advertising materials.
GT Global believes each Fund is an appropriate investment for long-term
investment goals including, but not limited to funding retirement, paying for
education or purchasing a house. GT Global may provide information designed to
help individuals understand their investment goals and explore various financial
strategies. For example, GT Global may describe general principles of investing,
such as asset allocation, diversification and risk tolerance. Each Fund does not
represent a complete investment program and the investors should consider each
Fund as appropriate for a portion of their overall investment portfolio with
regard to their long-term investment goals. There is no assurance that any such
information will lead to achieving these goals or guarantee future results.
From time to time, GT Global may refer to or advertise the names of such
companies, or their products although there can be no assurance that any GT
Global Mutual Fund may own the securities of these companies.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical returns
of the capital markets in the United States, including common stocks, small
capitalization stocks, long-term corporate bonds, intermediate-term government
bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation
(based on the CPI), and combinations of various capital markets. The performance
of these capital markets are based on the returns of different indices.
GT Global Mutual Funds may use the performance of these capital markets in order
to demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any of
these capital markets. The risks associated with the security types in any
capital market may or may not correspond directly to those of the funds.
Ibbotson calculates total returns in the same method as the funds. The Funds may
also compare performance to that of other compilations or indices that may be
developed and made available in the future.
Each Fund may quote various measures of volatility and benchmark correlation
such as beta, standard deviation and R(2) in advertising. In addition, each Fund
may compare these measures to those of other funds. Measures of volatility seek
to compare each Fund's historical share price fluctuations or total returns
compared to those of a benchmark. All measures of volatility and correlation are
calculated using averages of historical data.
Each Fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging programs. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals, thereby
purchasing fewer shares when prices are high and more shares when prices are
low. While such a strategy does not assure a profit or guard against loss in a
declining market, the investor's average cost per share can be lower than if
fixed numbers of shares are purchased at the same intervals. In evaluating such
a plan, investors should consider their ability to continue purchasing shares
through periods of low price levels.
Each Fund may be available for purchase through retirement plans or other
programs offering deferral of income taxes, which may produce superior after tax
returns over time. For example, a $10,000 investment earning a taxable return of
10% annually would have an after-tax value of $17,976 after ten years, assuming
tax was deducted from the return each year at a 39.6% rate. An equivalent
tax-deferred investment would have an after-tax value of $19,626 after ten
years, assuming tax was deducted at a 39.6% rate from the deferred earnings at
the end of the ten-year period.
Each Fund may describe in its sales material and advertisements how an investor
may invest in the GT Global Mutual Funds through various retirement accounts and
plans that offer deferral of income taxes on investment earnings and may also
enable an investor to make pre-tax contributions. Because of their advantages,
these retirement accounts and plans
Statement of Additional Information Page 29
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
may produce returns superior to comparable non-retirement investments. In sales
materials and advertisements, the Funds may also discuss these accounts and
plans which include:
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS): Any individual who receives earned income
from employment (including self-employment) can contribute up to $2,000 (or if
less, 100% of compensation) each year to an IRA. If your spouse is not employed,
a total of $2,250 may be contributed each year to IRAs set up for you and your
spouse (subject to the maximum of $2,000 to either IRA). Some individuals may be
able to take an income tax deduction for the contribution. Regular contributions
may not be made for the year you become 70 1/2 or thereafter. Please consult
your tax advisor for more information.
ROLLOVER IRAS: Individuals who receive distributions from qualified retirement
plans (other than required distributions) and who wish to keep their savings
growing tax-deferred can rollover (or make a direct transfer of) their
distribution to a Rollover IRA. These accounts can also receive rollovers or
transfers from an existing IRA. If an "eligible roll-over distribution" from a
qualified employer-sponsored retirement plan is not directly rolled over to an
IRA (or certain qualified plans), withholding at the rate of 20% will be
required for federal income tax purposes. A distribution from a qualified plan
that is not an "eligible rollover distribution," including a distribution that
is one of a series of substantially equal periodic payments, generally is
subject to regular wage withholding or withholding at the rate of 10% (depending
on the type and amount of the distribution), unless you elect not to have any
withholding apply. Please consult your tax advisor for more information.
SEP-IRAS AND SALARY-REDUCTION SEP-IRAS: Simplified employee pension plans
("SEPs" or "SEP-IRAs") and salary-reduction SEPs provide self-employed
individuals (and any eligible employees) with benefits similar to Keogh-type
plans or Code Section 401(k) plans, but with fewer administrative requirements
and therefore potential lower annual administration expenses.
403(B)(7) CUSTODIAL ACCOUNTS: Employees of public schools and most other
not-for-profit organizations can make pre-tax salary reduction contributions to
these accounts.
PROFIT-SHARING (INCLUDING CODE SECTION 401(K)) AND MONEY PURCHASE PENSION
PLANS: Corporations can sponsor these qualified defined contribution plans for
their employees. A 401(k) plan, a type of profit-sharing plan, additionally
permits the eligible, participating employees to make pre-tax salary reduction
contributions to the plan (up to certain limitations).
GT Global may from time to time in its sales materials and advertising discuss
the risks inherent in investing. The major types of investment risks are market
risk, industry risk, credit risk, interest risk and inflation risk. Risk
represents the possibility that you may lose some or all of your investment over
a period of time. A basic tenet of investing is the greater the potential
reward, the greater the risk.
From time to time, the Funds and GT Global will quote certain data regarding:
industries, individual countries, regions, world stock exchanges, and economic
and demographic statistics from sources GT Global deems reliable including, but
not limited to, the economic and financial data of such financial organizations
as:
1) Stock market capitalization: Morgan Stanley Capital International World
Indices, International Finance Corporation and Datastream.
2) Stock market trading volume: Morgan Stanley Capital International World
Indices, International Finance Corporation, New York Stock Exchange, S&P
500, DJ, NASDAQ.
3) The number of listed companies: International Finance Corporation, LGT Guide
to World Equity Markets, Salomon Brothers, Inc., S.G. Warburg, NYSE, AMEX,
NASDAQ.
4) Wage rates: U.S. Department of Labor Statistics and Morgan Stanley Capital
International World Indices.
5) International industry performance: Morgan Stanley Capital International
World Indices, Wilshire Associates and Salomon Brothers, Inc.
6) Stock market performance: Morgan Stanley Capital International World
Indices, International Finance Corporation and Datastream, S&P 500, DJIA,
Wilshire Assoc.
7) The Consumer Price Index and inflation rate: The World Bank, Datastream and
International Finance Corporation, Ibbotson Assoc.
8) Gross Domestic Product (GDP): Datastream and The World Bank.
9) GDP growth rate: International Finance Corporation, The World Bank and
Datastream.
10) Population: The World Bank, Datastream and United Nations.
Statement of Additional Information Page 30
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
11) Average annual growth rate (%) of population: The World Bank, Datastream and
United Nations.
12) Age distribution within populations: Organization for Economic Cooperation
and Development and United Nations.
13) Total exports and imports by year: International Finance Corporation, The
World Bank and Datastream.
14) Top three companies by country, industry or market: International Finance
Corporation, LGT Guide to World Equity Markets, Salomon Brothers Inc., S.G.
Warburg.
15) Foreign direct investments to developing countries: The World Bank and
Datastream.
16) Supply, consumption, demand and growth in demand of certain products,
services and industries, including, but not limited to electricity, water,
transportation, construction materials, natural resources, technology, other
basic infrastructure, financial services, health care services and supplies,
consumer products and services and telecommunications equipment and services
(sources of such information may include, but would not be limited to, The
World Bank, OECD, IMF, Bloomberg and Datastream).
17) Standard deviation and performance returns for U.S. and non-U.S. equity and
bond markets: Morgan Stanley Capital International.
18) Countries restructuring their debt, including those under the Brady Plan:
the Manager.
19) Political and economic structure of countries: Economist Intelligence Unit.
20) Government and corporate bonds -- credit ratings, yield to maturity and
performance returns: Salomon Brothers, Inc.
21) Dividend yields for U.S. and non-U.S. companies: Bloomberg.
IMPORTANT POINTS TO NOTE ABOUT DATA RELATING TO WORLD EQUITY AND BOND MARKETS
Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable, but which may be
subject to revision and which has not been independently verified by the Company
or GT Global. The authors and publishers of such material are not to be
considered as "experts" under the Securities Act of 1933, as amended, on account
of the inclusion of such information herein.
GT Global believes that this information may be useful to investors considering
whether and to what extent to diversify their invesments through the purchase of
mutual funds investing in securities on a global basis. However, this data is
not a representation of the past performance of any of these Funds, nor is it a
prediction of such performance. The performance of the Funds will differ from
the historical performance of relevant indices. The performance of indices does
not take expenses into account, while each Fund incurs expenses in its
operations, which will reduce performance. Each Fund is actively managed, I.E.,
the Manager, as each Fund's investment manager, actively purchases and sells
securities in seeking each Fund's investment objective. Moreover, each Fund may
invest a portion of its assets in corporate bonds, while certain indices relate
only to government bonds. Each of these factors will cause the performance of
each Fund to differ from relevant indices.
THE GT ADVANTAGE
The Manager has developed a unique team approach to its global money management
which we call the GT Advantage. The Manager's money management style combines
the best of the "top-down" and "bottom-up" investment manager strategies. The
top-down approach is implemented by the Manager's Global Investment Policy
Committee, which sets broad guidelines for asset allocation and currency
management, based on the Manager's own macroeconomic forecasts and research from
our worldwide offices. The bottom-up approach utilizes regional teams of
individual portfolio managers to implement the committee's guidelines by
selecting local securities that offer strong growth and income potential.
Statement of Additional Information Page 31
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
COMMERCIAL PAPER RATINGS
Standard & Poor's Ratings Group ("S&P"). "A-1" and "A-2" are the two highest
commercial paper rating categories:
A-1. This highest category indicates that the degree of safety regarding timely
payment is strong. Issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.
A-2. Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
Moody's Investors Service, Inc. ("Moody's"). "Prime-1" and "Prime-2" are the two
highest commercial paper rating categories.
Prime-1. Issuers (or supporting institutions) assigned this highest rating have
a superior ability for repayment of short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; well
established access to a range of financial markets and assured sources of
alternate liquidity.
Prime-2. Issuers (or supporting institutions) assigned this rating have a strong
ability for repayment of short-term debt obligations. This will normally be
evidenced by mny of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affect by external conditions. Ample alternate liquidity is maintained.
DESCRIPTION OF BOND RATINGS
MOODY'S rates the long-term debt securities issued by various entities from
"Aaa" to "C." Investment grade ratings are as follows:
Aaa -- Best quality. These securities carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large, or by an exceptionally stable margin and
principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa -- High quality by all standards. Together with the Aaa group they
comprise what generally are known as high yield bonds. They are rated lower
than the best bond because margins of protection may not be as large as in
Aaa securities, fluctuation of protective elements may be of greater
amplitude, or there may be other elements present which make the long-term
risks appear somewhat greater than for securities rated Aaa.
A -- Upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa -- Medium grade obligations (i.e., they are neither highly protected
nor poorly secured). Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
S&P rates the long-term securities debt of various entities in categories
ranging from "AAA" to "D" according to quality. Investment grade ratings are as
follows:
AAA -- Highest rating. Capacity to pay interest and repay principal is
extremely strong.
Statement of Additional Information Page 32
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
AA -- High grade. Very strong capacity to pay interest and repay
principal. Generally, these bonds differ from AAA issues only in a small
degree.
A -- Have a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of change
in circumstances and economic conditions, than debt in higher rated
categories.
BBB -- Regarded as having adequate capacity to pay interest and repay
principal. These bonds normally exhibit adequate protection parameters, but
adverse economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay principal than for
debt in higher rated categories.
Further, both Moody's and S&P provide sovereign assessments and implied debt
ratings to sovereign governments. These assessments and ratings are broad
qualitative statements about that government's capacity to meet its senior debt
obligations. These assessments and ratings are then translated to the letter
grade debt ratings described above.
Statement of Additional Information Page 33
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of GT Global America Small Cap Growth Fund and
GT Global America Value Fund for the period October 18, 1995 (commencement of
operations) to December 31, 1995 appear on the following pages.
Statement of Additional Information Page 34
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of G.T. Global Growth Series:
We have audited the accompanying statements of assets and liabilities of GT
Global America Small Cap Growth Fund and GT Global America Value Fund, two funds
organized as series of G.T. Global Growth Series, Inc. as of December 31, 1995,
the related statements of operations, the statements of changes in net assets
and the financial highlights for the period from October 18, 1995 (commencement
of operations) to December 31, 1995. These financial statements and the
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global America Small Cap Growth Fund and GT Global America Value Fund as of
December 31, 1995, the results of their operations, the changes in their net
assets and the financial highlights for the period from October 18, 1995
(commencement of operations) to December 31, 1995, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 12, 1996
Statement of Additional Information Page 35
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
STATEMENTS OF ASSETS
AND LIABILITIES
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL:
---------------------------------
AMERICA SMALL CAP AMERICA
GROWTH FUND VALUE FUND
----------------- ----------
<S> <C> <C>
Assets:
Investments in Portfolio (cost $3,741,456
and $1,823,811, respectively) (Note 1).... $3,746,249 $1,878,488
Receivable for Fund shares sold............ 185,631 230,850
Receivable from LGT Asset Management, Inc.
(Note 2).................................. 67,127 67,878
Unamortized organizational costs (Note
1)........................................ 60,925 60,925
----------------- ----------
Total assets............................. 4,059,932 2,238,141
----------------- ----------
Liabilities:
Payable for Fund shares repurchased........ 30,975 --
Payable for organization expenses (Note
1)........................................ 16,862 28,340
Payable for service and distribution
expenses (Note 2)......................... 1,900 900
Payable for transfer agent fees (Note 2)... 1,400 1,063
Payable for Trustees' fees and expenses
(Note 2).................................. 1,110 1,110
Payable for registration and filing fees... 888 388
Payable for administration fees (Note 2)... 755 349
Payable for fund accounting fees (Note
2)........................................ 76 35
----------------- ----------
Total liabilities........................ 53,966 32,185
----------------- ----------
Net assets................................... $4,005,966 $2,205,956
----------------- ----------
----------------- ----------
Class A:
Net asset value and redemption price per
share
($1,930,628 DIVIDED BY 163,547 shares
outstanding and
$870,221 DIVIDED BY 68,213 shares
outstanding, respectively).................. $ 11.80 $ 12.76
----------------- ----------
----------------- ----------
Maximum offering price per share
(100/95.25 of $11.80 and 100/95.25 of
$12.76, respectively) *..................... $ 12.39 $ 13.40
----------------- ----------
----------------- ----------
Class B:+
Net asset value and offering price per share
($2,023,723 DIVIDED BY 171,740 shares
outstanding and
$1,254,320 DIVIDED BY 98,395 shares
outstanding, respectively).................. $ 11.78 $ 12.75
----------------- ----------
----------------- ----------
Advisor Class:
Net asset value, offering price per share,
and redemption price per share
($51,615 DIVIDED BY 4,372 shares outstanding
and
$81,415 DIVIDED BY 6,377 shares outstanding,
respectively)............................... $ 11.81 $ 12.77
----------------- ----------
----------------- ----------
Net assets consist of:
Paid in capital (Note 3)................... $3,997,103 $2,150,231
Undistributed net investment income........ 4,070 1,048
Net unrealized appreciation of investments
-- Portfolio.............................. 4,793 54,677
----------------- ----------
Total -- representing net assets applicable
to capital shares outstanding............... $4,005,966 $2,205,956
----------------- ----------
----------------- ----------
<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.
Statement of Additional Information Page 36
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
STATEMENTS OF OPERATIONS
October 18, 1995 (commencement of operations) to December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL:
------------------------------------
AMERICA SMALL CAP AMERICA
GROWTH FUND VALUE FUND
----------------- -------------
<S> <C> <C>
Investment income:
Interest income -- Portfolio............... $ 9,113 $ 3,185
Dividend income -- Portfolio............... 2,009 1,154
-------- -------------
Total investment income.................. 11,122 4,339
-------- -------------
Expenses:
Expenses -- Portfolio...................... 6,377 5,706
Registration and filing fees............... 59,000 59,000
Amortization of organization costs (Note
1)........................................ 2,575 2,575
Transfer agent fees (Note 2)............... 2,210 1,400
Service and distribution expenses: (Note 2)
Class A.................................. 467 176
Class B.................................. 1,609 817
Trustees' fees and expenses (Note 2)....... 1,110 1,110
Administration fees (Note 2)............... 755 349
Fund accounting fees (Note 2).............. 76 36
-------- -------------
Total expenses before reimbursement...... 74,179 71,169
-------- -------------
Expenses reimbursable by LGT Asset
Management, Inc. (Note 2).............. (67,127) (67,878)
-------- -------------
Net expenses............................. 7,052 3,291
-------- -------------
Net investment income........................ 4,070 1,048
Net realized and unrealized gain on
investments during the period:
Net unrealized appreciation of investments
-- Portfolio.............................. 4,793 54,677
-------- -------------
Net increase in net assets resulting from
operations.................................. $ 8,863 $ 55,725
-------- -------------
-------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 37
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
October 18, 1995 (commencement of operations) to December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GT GLOBAL:
----------------------------------------
AMERICA SMALL CAP AMERICA
GROWTH FUND VALUE FUND
----------------- -----------------
<S> <C> <C>
Increase in net assets
Operations:
Net investment income...................... $ 4,070 $ 1,048
Net unrealized appreciation of investments
-- Portfolio.............................. 4,793 54,677
----------------- -----------------
Net increase in net assets resulting from
operations................................ 8,863 55,725
----------------- -----------------
Capital share transactions: (Note 3)
Increase from capital shares sold and
reinvested................................ 4,974,031 2,211,337
Decrease from capital shares repurchased... (1,076,928) (161,106)
----------------- -----------------
Net increase from capital share
transactions.............................. 3,897,103 2,050,231
----------------- -----------------
Total increase in net assets................. 3,905,966 2,105,956
Net assets:
Beginning of period........................ 100,000 100,000
----------------- -----------------
End of period.............................. $ 4,005,966 $2,205,956
----------------- -----------------
----------------- -----------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 38
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
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 SMALL CAP GROWTH FUND AMERICA VALUE FUND
------------------------------------- -------------------------------------
OCTOBER 18, 1995 OCTOBER 18, 1995
(COMMENCEMENT OF OPERATIONS) (COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1995 TO DECEMBER 31, 1995
------------------------------------- -------------------------------------
CLASS CLASS ADVISOR CLASS CLASS ADVISOR
A(D) B(D) CLASS(D) A(D) B(D) CLASS(D)
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $11.43 $11.43 $11.43 $11.43 $11.43 $11.43
------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income................. 0.04* 0.02* 0.05* 0.03** 0.01** 0.04**
Net realized and unrealized gain on
investments.......................... 0.33 0.33 0.33 1.30 1.31 1.30
------- ------- ------- ------- ------- -------
Net increase from investment
operations......................... 0.37 0.35 0.38 1.33 1.32 1.34
------- ------- ------- ------- ------- -------
Net asset value, end of period.......... $11.80 $11.78 $11.81 $12.76 $12.75 $12.77
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
Total investment return (c)............. 3.24%(b) 3.06%(b) 3.32%(b) 11.64%(b) 11.55%(b) 11.72%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $1,931 $2,024 $ 52 $ 870 $1,254 $ 81
Ratio of net investment income (loss) to
average net assets:
With reimbursement by LGT
(Note 2)............................. 1.68%(a) 1.03%(a) 2.03%(a) 1.10%(a) 0.45%(a) 1.45%(a)
Without reimbursement by LGT.......... (20.52)%(a) (21.17)%(a) (20.17)%(a) (47.44)%(a) (48.09)%(a) (47.09)%(a)
Ratio of expenses to average net assets:
With reimbursement by LGT
(Note 2)............................. 2.00%(a) 2.65%(a) 1.65%(a) 2.00%(a) 2.65%(a) 1.65%(a)
Without reimbursement by LGT.......... 24.20%(a) 24.85%(a) 23.85%(a) 50.54%(a) 51.19%(a) 50.19%(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 $(0.47), $(0.49), and $(0.46) 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 $(1.11), $(1.13), and $(1.10) for Class
A, Class B, and Advisor Class, respectively, from October 18, 1995 to
December 31, 1995.
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 39
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
NOTES TO
FINANCIAL STATEMENTS
December 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global America Small Cap Growth Fund and GT Global America Value Fund
("Funds") are separate series of G.T. Global Growth Series ("Company"). The
Company is organized as a Massachusetts business trust and is registered under
the Investment Company Act of 1940, as amended ("1940 Act"), 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 Funds invest substantially all of their investable assets in Global America
Small Cap Growth Portfolio and Global America Value Portfolio ("Portfolios"),
respectively, which are registered as open-end management investment companies
under the 1940 Act and have investment objectives, policies and limitations
substantially identical to those of the Funds. The value of a Fund's investment
in a Portfolio reflects the Fund's proportionate interest in the net assets of
the Portfolio. The financial statements of the Portfolios, including the
Portfolios of Investments, are included elsewhere in this Report and should be
read in conjunction with the Funds' financial statements.
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 in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles, and,
therefore, the financial statements may include certain estimates made by
management.
(A) INVESTMENT VALUATION
Valuation of securities and other investment practices by the Portfolios are
discussed in Note 1 of the Portfolios' Notes to Financial Statements which are
included elsewhere in this Report.
(B) TAXES
It is the policy of the Funds 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.
(C) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Funds 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 Portfolios and timing differences.
(D) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by each Fund in connection with its organization, its initial
registration with the Securities and Exchange Commission and with various states
and the initial public offering of its shares aggregated $63,500. These expenses
are being amortized on a straightline basis over a five-year period.
2. RELATED PARTIES
LGT Asset Management, Inc. ("LGT", formerly known as G.T. Capital Management,
Inc.) is the Funds' investment manager and administrator. Each Fund pays
administration fees to LGT at the annualized rate of 0.25% of the Fund's average
daily net assets. These fees are computed daily and paid monthly, and are
subject to reduction in any year to the extent that the Fund's expenses
(exclusive of brokerage commissions, taxes, interest, distribution-related
expenses and extraordinary items) 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.
Statement of Additional Information Page 40
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
GT Global, Inc. ("GT Global," formerly known as G.T. Global Financial Services,
Inc.), 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 Funds' 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 December 31, 1995, GT Global retained
$2,815 and $326 of such sales charges for GT Global America Small Cap Growth
Fund and GT Global America Value Fund, respectively. 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 contingent deferred sales charges ("CDSCs"), in
accordance with the Funds' current prospectus. For the period ended December 31,
1995, GT Global collected CDSCs in the amount of $112 for the GT Global America
Small Cap Growth 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 Directors has
adopted separate plans of distribution with respect to the Funds' Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the
Funds reimburse GT Global for a portion of its shareholder servicing and
distribution expenses. Under the Class A Plan, the Funds may pay GT Global a
service fee at the annualized rate of up to 0.25% of the average daily net
assets of the Funds' 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 Funds' Class A shares, less any amounts paid by the Funds 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, the Funds may pay GT Global a service fee
at the annualized rate of up to 0.25% of the average daily net assets of the
Funds' 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 Funds'
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 the Funds' 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 Funds' Class A, Class B, and Advisor Class shares, respectively.
If necessary, this limitation will be effected by waivers by LGT of
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
Funds' 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
Fund 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% annually, of each of the
Fund's average daily net assets. The annual fee rate is derived by applying
0.03% to the first $5 billion of assets of all registered mutual funds advised
by LGT ("GT Funds") and 0.02% to the assets in excess of $5 billion and dividing
the result by the aggregate assets of the GT Funds.
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.
Statement of Additional Information Page 41
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
3. CAPITAL SHARES
At December 31, 1995, 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
<TABLE>
<CAPTION>
GT GLOBAL:
--------------------------------------------
AMERICA SMALL CAP
GROWTH FUND AMERICA VALUE FUND
--------------------- ---------------------
OCTOBER 18, 1995 OCTOBER 18, 1995
(COMMENCEMENT OF (COMMENCEMENT OF
OPERATIONS) TO OPERATIONS) TO
DECEMBER 31, 1995 DECEMBER 31, 1995
--------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold........................................................................ 189,034 $2,222,360 70,225 $ 874,678
Shares repurchased................................................................. (28,403) (333,346) (4,928) (61,818)
--------- ---------- --------- ----------
Net increase....................................................................... 160,631 $1,889,014 65,297 $ 812,860
--------- ---------- --------- ----------
--------- ---------- --------- ----------
<CAPTION>
OCTOBER 18, 1995 OCTOBER 18, 1995
(COMMENCEMENT OF (COMMENCEMENT OF
OPERATIONS) TO OPERATIONS) TO
DECEMBER 31, 1995 DECEMBER 31, 1995
--------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
CLASS B
Shares sold........................................................................ 232,055 $2,734,475 103,345 $1,292,349
Shares repurchased................................................................. (63,231) (743,582) (7,866) (99,288)
--------- ---------- --------- ----------
Net increase....................................................................... 168,824 $1,990,893 95,479 $1,193,061
--------- ---------- --------- ----------
--------- ---------- --------- ----------
<CAPTION>
OCTOBER 18, 1995 OCTOBER 18, 1995
(COMMENCEMENT OF (COMMENCEMENT OF
OPERATIONS) TO OPERATIONS) TO
DECEMBER 31, 1995 DECEMBER 31, 1995
--------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
ADVISOR CLASS
Shares sold........................................................................ 1,456 $ 17,196 3,461 $ 44,310
Shares repurchased................................................................. -- -- -- --
--------- ---------- --------- ----------
Net increase....................................................................... 1,456 $ 17,196 3,461 $ 44,310
--------- ---------- --------- ----------
--------- ---------- --------- ----------
</TABLE>
Statement of Additional Information Page 42
<PAGE>
SMALL CAP GROWTH PORTFOLIO
VALUE PORTFOLIO
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
ANNUAL REPORT
To the Shareholders and Board of Trustees of Global America Small Cap Growth
Portfolio and Global America Value Portfolio:
We have audited the accompanying statements of assets and liabilities of Global
America Small Cap Growth Portfolio and Global America Value Portfolio, including
the portfolios of investments, as of December 31, 1995, the related statements
of operations, the statements of changes in net assets and supplementary data
for the period from October 18, 1995 (commencement of operations) to December
31, 1995. These financial statements and the supplementary data are the
responsibility of the Portfolios' management. Our responsibility is to express
an opinion on these financial statements and the supplementary data based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the supplementary data referred to
above present fairly, in all material respects, the financial position of Global
America Small Cap Growth Portfolio and Global America Value Portfolio as of
December 31, 1995, the results of their operations, the changes in their net
assets and the supplementary data for the period from October 18, 1995
(commencement of operations) to December 31, 1995, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 12, 1996
Statement of Additional Information Page 43
<PAGE>
SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Shares Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Services (26.3%)
Rio Hotel and Casino, Inc.-/- ..................................... 10,200 $ 121,125 3.2
LEISURE & TOURISM
Claire's Stores, Inc. .............................................. 6,600 116,324 3.1
RETAILERS-APPAREL
Friedman's, Inc. "A"-/- ............................................ 6,000 115,500 3.1
RETAILERS-OTHER
United Video Satellite Group, Inc. "A"-/- .......................... 4,000 108,000 2.9
CABLE TELEVISION
AnnTaylor Stores, Inc.-/- .......................................... 10,400 106,600 2.8
RETAILERS-APPAREL
Younkers, Inc.-/- ................................................. 4,100 104,038 2.8
RETAILERS-APPAREL
Michaels Stores, Inc.-/- ........................................... 7,500 103,125 2.8
RETAILERS-OTHER
Anchor Gaming-/- .................................................. 3,300 75,075 2.0
LEISURE & TOURISM
Ascent Entertainment Group, Inc.-/- ................................ 3,900 61,425 1.6
BROADCASTING & PUBLISHING
Buckle, Inc.-/- .................................................... 3,300 58,575 1.6
RETAILERS-APPAREL
META Group, Inc.-/- ................................................ 500 15,313 0.4
CONSUMER SERVICES
------------
985,100
------------
Finance (12.3%)
Trans Financial, Inc. .............................................. 7,100 126,913 3.4
BANKS-REGIONAL
RFS Hotel Investors, Inc. ......................................... 7,800 119,925 3.2
REAL ESTATE INVESTMENT TRUST
AmVestors Financial Corp. .......................................... 10,000 111,250 3.0
INSURANCE-LIFE
Winston Hotels, Inc. ............................................... 8,200 97,375 2.6
REAL ESTATE
Mid-America Apartment Communities, Inc. ............................ 100 2,475 0.1
REAL ESTATE
------------
457,938
------------
Consumer Durables (10.0%)
Lifetime Hoan Corp.-/- ............................................. 14,400 133,200 3.6
APPLIANCES & HOUSEHOLD
REX Stores Corp.-/- ............................................... 7,000 124,250 3.3
CONSUMER ELECTRONICS
Syratech Corp.-/- .................................................. 5,800 116,725 3.1
APPLIANCES & HOUSEHOLD
------------
374,175
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 44
<PAGE>
SMALL CAP GROWTH PORTFOLIO
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Shares Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Materials/Basic Industry (7.3%)
NCI Building Systems, Inc.-/- ...................................... 6,000 $ 148,500 4.0
BUILDING MATERIALS & COMPONENTS
Commercial Intertech Corp. ......................................... 6,900 125,063 3.3
METALS - NON-FERROUS
------------
273,563
------------
Consumer Non-Durables (7.1%)
National Picture & Frame Co.-/- .................................... 15,000 138,750 3.7
HOUSEHOLD PRODUCTS
Haggar Corp. ....................................................... 6,200 111,600 3.0
TEXTILES & APPAREL
Hart Brewing, Inc. ................................................. 1,000 15,250 0.4
BEVERAGES - ALCOHOLIC
------------
265,600
------------
Technology (5.1%)
Dallas Semiconductor Corp.-/- ...................................... 5,600 116,200 3.1
SEMICONDUCTORS
SQA, Inc.-/- ....................................................... 1,000 19,250 0.5
SOFTWARE
Objective Systems Integrators, Inc.-/- ............................. 300 16,425 0.4
COMPUTERS & PERIPHERALS
Citrix Systems, Inc.-/- ............................................ 500 16,250 0.4
COMPUTERS & PERIPHERALS
MetaTools, Inc.-/- ................................................. 500 13,000 0.3
SOFTWARE
Visioneer, Inc.-/- ................................................ 500 11,125 0.3
COMPUTERS & PERIPHERALS
Pixar, Inc.-/- ..................................................... 100 2,888 0.1
COMPUTERS & PERIPHERALS
------------
195,138
------------
Capital Goods (4.9%)
Plasma & Materials Technologies, Inc.-/- .......................... 10,200 114,750 3.1
ELECTRICAL PLANT/EQUIPMENT
Belmont Homes, Inc.-/- ............................................ 3,100 56,188 1.5
CONSTRUCTION
Westell Technologies, Inc.-/- ...................................... 500 12,563 0.3
TELECOM EQUIPMENT
------------
183,501
------------
Health Care (2.7%)
Coventry Corp.-/- .................................................. 4,900 101,061 2.7
HEALTH CARE SERVICES
------------ -----
TOTAL EQUITY INVESTMENTS (cost $2,831,283) ........................... 2,836,076 75.7
------------ -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 45
<PAGE>
SMALL CAP GROWTH PORTFOLIO
<TABLE>
<CAPTION>
Principal Market % of Net
Short-Term Investments Amount Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Treasury Bills (18.6%)
United States (18.6%)
United States Treasury Bill, effective yield 5.48%, due 1/11/96
(cost $699,319) ................................................. 700,000 $ 699,319 18.6
------------ -----
<CAPTION>
Market % of Net
Repurchase Agreement Value Assets {d}
- ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
Dated December 29, 1995, with State Street Bank & Trust Company, due
January 2, 1996, for an effective yield of 5.55%, collateralized by
$405,000 U.S. Treasury Bills, 6.125% due 5/15/98 (market value of
collateral is $416,109, including accrued interest). (cost
$407,188) ........................................................ 407,188 10.9
------------ -----
TOTAL INVESTMENTS (cost $3,937,790)* ................................. 3,942,583 105.2
Other Assets and Liabilities ......................................... (196,234) (5.2)
------------ -----
NET ASSETS ........................................................... $ 3,746,349 100.0
------------ -----
------------ -----
</TABLE>
- ----------------
{d} Percentages indicated are based on net assets of $3,746,349.
-/- Non-income producing security.
* For Federal income tax purposes, cost is $3,937,790 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 95,442
Unrealized depreciation: (90,649)
-------------
Net unrealized appreciation: $ 4,793
-------------
-------------
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 46
<PAGE>
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Shares Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Health Care (19.8%)
Watson Pharmaceuticals, Inc.-/- ................................... 1,620 $ 79,380 4.2
PHARMACEUTICALS
Amgen, Inc.-/- .................................................... 1,310 77,781 4.1
BIOTECHNOLOGY
Merck & Co., Inc. ................................................. 1,140 74,955 4.0
PHARMACEUTICALS
Pharmacia & Upjohn, Inc. ........................................... 1,870 72,463 3.9
PHARMACEUTICALS
U.S. Surgical Corp. ................................................ 3,190 68,186 3.6
MEDICAL TECHNOLOGY & SUPPLIES
------------
372,765
------------
Finance (18.0%)
Lehman Brothers Holdings, Inc. ..................................... 3,600 76,500 4.1
INVESTMENT MANAGEMENT
Green Tree Financial Corp. ........................................ 2,850 75,169 4.0
CONSUMER FINANCE
Citicorp ........................................................... 1,110 74,648 4.0
BANKS-MONEY CENTER
Mercury General Corp. .............................................. 1,555 74,251 3.9
INSURANCE - PROPERTY-CASUALTY
ITT Hartford Group, Inc.-/- ........................................ 565 27,332 1.5
INSURANCE - MULTI-LINE
Investors Financial Services Corp.-/- .............................. 500 10,375 0.5
OTHER FINANCIAL
------------
338,275
------------
Multi-Industry/Miscellaneous (13.9%)
Eastman Kodak Co. ................................................. 1,110 74,370 4.0
MISCELLANEOUS
General Electric Co. ............................................... 1,025 73,800 3.9
CONGLOMERATE
Polaroid Corp. ..................................................... 1,450 68,694 3.7
MISCELLANEOUS
ITT Corp. - New-/- ................................................. 565 29,945 1.6
CONGLOMERATE
ITT Industries, Inc. .............................................. 565 13,560 0.7
CONGLOMERATE
------------
260,369
------------
Technology (4.9%)
Cisco Systems, Inc.-/- ............................................. 795 59,326 3.2
NETWORKING
Objective Systems Integrators, Inc.-/- ............................. 300 16,425 0.9
COMPUTERS & PERIPHERALS
Pixar, Inc.-/- ..................................................... 500 14,438 0.8
COMPUTERS & PERIPHERALS
------------
90,189
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 47
<PAGE>
VALUE PORTFOLIO
<TABLE>
<CAPTION>
Market % of Net
Equity Investments Shares Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Materials/Basic Industry (3.9%)
Monsanto Co. ....................................................... 600 $ 73,500 3.9
------------
CHEMICALS
Energy (3.8%)
Sonat Offshore Drilling Co. ........................................ 1,610 72,048 3.8
------------
OIL
Services (3.7%)
HFS, Inc.-/- ....................................................... 855 69,896 3.7
------------
LEISURE & TOURISM
Capital Goods (3.6%)
Lockheed Martin Corp. .............................................. 850 67,150 3.6
------------
AEROSPACE/DEFENSE
Consumer Non-Durables (3.5%)
Coca-Cola Co. ..................................................... 735 54,573 2.9
BEVERAGES - NON-ALCOHOLIC
Estee Lauder Cos. "A"-/- ........................................... 200 6,975 0.4
PERSONAL CARE/COSMETICS
Boston Beer Co., Inc. "A"-/- ....................................... 200 4,750 0.2
BEVERAGES - ALCOHOLIC
------------
66,298
------------ -----
TOTAL EQUITY INVESTMENTS (cost $1,355,813) ........................... 1,410,490 75.1
------------ -----
<CAPTION>
Principal Market % of Net
Short-Term Investments Amount Value Assets {d}
- ---------------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
Treasury Bills (21.2%)
United States (21.2%)
United States Treasury Bill, effective yield 5.48%, due 1/11/96
(cost $399,611) ................................................. 400,000 399,611 21.2
------------ -----
<CAPTION>
Market % of Net
Repurchase Agreement Value Assets {d}
- ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
Dated December 29, 1995, with State Street Bank and Trust Company,
due January 2, 1996, for an effective yield of 5.55%,
collateralized by $84,000 U.S. Treasury Notes, 6.125% due 5/15/98
(market value of collateral is $86,304, including accrued
interest). (cost $84,039) ....................................... 84,039 4.5
------------ -----
TOTAL INVESTMENTS (cost $1,839,463) * ............................... 1,894,140 100.8
Other Assets and Liabilities ......................................... (15,552) (0.8)
------------ -----
NET ASSETS ........................................................... $ 1,878,588 100.0
------------ -----
------------ -----
</TABLE>
- ----------------
{d} Percentages indicated are based on net assets of $1,878,588.
-/- Non-income producing security.
* For Federal income tax purposes, cost is $1,839,463 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 85,039
Unrealized depreciation: (30,362)
-------------
Net unrealized appreciation: $ 54,677
-------------
-------------
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 48
<PAGE>
SMALL CAP GROWTH PORTFOLIO
VALUE PORTFOLIO
STATEMENTS OF ASSETS
AND LIABILITIES
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP
GROWTH VALUE
PORTFOLIO PORTFOLIO
---------- ----------
<S> <C> <C>
Assets:
Investments in securities, at value (cost
$3,937,790 and $1,839,463, respectively)
(Note 1).................................. $3,942,583 $1,894,140
U.S. currency.............................. 699,173 392
Unamortized organizational costs (Note
1)........................................ 23,986 23,986
Dividends receivable....................... 1,968 870
---------- ----------
Total assets............................. 4,667,710 1,919,388
---------- ----------
Liabilities:
Payable for securities purchased........... 901,394 22,595
Payable for organization expenses (Note
1)........................................ 15,418 15,418
Payable for custodian fees................. 3,256 2,164
Payable for investment management and
administration fees (Note 2).............. 1,293 623
---------- ----------
Total liabilities........................ 921,361 40,800
---------- ----------
Net assets................................... $3,746,349 $1,878,588
---------- ----------
---------- ----------
Net assets consist of:
Paid in capital............................ $3,736,811 $1,825,278
Accumulated net investment income (loss)... 4,745 (1,367)
Net unrealized appreciation of
investments............................... 4,793 54,677
---------- ----------
Total -- representing net assets applicable
to shares of beneficial interest
outstanding................................. $3,746,349 $1,878,588
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 49
<PAGE>
SMALL CAP GROWTH PORTFOLIO
VALUE PORTFOLIO
STATEMENTS OF OPERATIONS
October 18, 1995 (commencement of operations) to December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP
GROWTH VALUE
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
Investment income: (Note 1)
Interest income............................ $ 9,113 $ 3,185
Dividend income............................ 2,009 1,154
--------- ---------
Total investment income.................. 11,122 4,339
--------- ---------
Expenses:
Custodian fees............................. 4,070 4,070
Investment management and administration
fees (Note 2)............................. 1,293 622
Amortization of organization costs (Note
1)........................................ 1,014 1,014
--------- ---------
Total expenses............................. 6,377 5,706
--------- ---------
Net investment income (loss)................. 4,745 (1,367)
Net realized and unrealized gain on
investments during the period: (Note 1)
Net unrealized appreciation of
investments............................... 4,793 54,677
--------- ---------
Net increase in net assets resulting from
operations.................................. $ 9,538 $ 53,310
--------- ---------
--------- ---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 50
<PAGE>
SMALL CAP GROWTH PORTFOLIO
VALUE PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
October 18, 1995 (commencement of operations) to December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP
GROWTH VALUE
PORTFOLIO PORTFOLIO
---------- ----------
<S> <C> <C>
Increase in net assets
Operations:
Net investment income (loss)............... $ 4,745 $ (1,367)
Net unrealized appreciation of
investments............................... 4,793 54,677
---------- ----------
Net increase in net assets resulting from
operations................................ 9,538 53,310
---------- ----------
Beneficial interest transactions:
Contributions.............................. 4,573,559 1,861,769
Withdrawals................................ (936,848) (136,591)
---------- ----------
Net increase from beneficial interest
transactions.............................. 3,636,711 1,725,178
---------- ----------
Total increase in net assets................. 3,646,249 1,778,488
Net assets:
Beginning of period........................ 100,100 100,100
---------- ----------
End of period.............................. $3,746,349 $1,878,588
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 51
<PAGE>
SMALL CAP GROWTH PORTFOLIO
VALUE PORTFOLIO
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
Contained below are ratios and supplemental data that have been derived
from information provided in the financial statements.
<TABLE>
<CAPTION>
SMALL CAP
GROWTH PORTFOLIO VALUE PORTFOLIO
---------------------------- ----------------------------
OCTOBER 18, 1995 OCTOBER 18, 1995
(COMMENCEMENT OF OPERATIONS) (COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1995 TO DECEMBER 31, 1995
---------------------------- ----------------------------
<S> <C> <C>
Ratios and supplemental data:
Net assets, end of period (in
000's)....................... $3,746 $1,879
Ratio of net investment income
(loss) to average net
assets....................... 1.74% (a) (1.04)% (a)
Ratio of expenses to average
net assets................... 2.33% (a) 4.33% (a)
Portfolio turnover rate....... --% --%
</TABLE>
- ----------------
(a) Annualized
The accompanying notes are an integral part of the financial statements.
Statement of Additional Information Page 52
<PAGE>
SMALL CAP GROWTH PORTFOLIO
VALUE PORTFOLIO
NOTES TO
FINANCIAL STATEMENTS
December 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Global America Small Cap Growth Portfolio and Global America Value Portfolio
("Portfolios") are organized as New York Trusts and are registered under the
Investment Company Act of 1940, as amended ("1940 Act"), as diversified,
open-end management investment companies. The following is a summary of
significant accounting policies consistently followed by the Portfolios in the
preparation of the financial statements. The policies are in conformity with
generally accepted accounting principles, and, therefore, the financial
statements may include certain estimates made by management.
(A) PORTFOLIO VALUATION
The Portfolios calculate the net asset value of and complete orders to purchase
or repurchase Portfolio shares of beneficial interest 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 Asset Management, Inc.
("LGT", formerly known as G.T. Capital Management, Inc.) 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 foreign exchange translation
and 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
Portfolios' Board of Trustees.
(B) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Portfolios, it is the
Portfolios' 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 Portfolios
under each agreement at its maturity.
(C) OPTION ACCOUNTING PRINCIPLES
When a Portfolio writes a call or put option, an amount equal to the premium
received is included in the 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 a
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. A
Portfolio can write options only on a covered basis, which, for a call, requires
that the Portfolio holds the underlying security and, for a put, requires the
Portfolio to set aside cash, U.S. government securities or other liquid,
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 Portfolios may use options to manage their exposure to the
stock market and to fluctuations in currency values or interest rates.
The premium paid by a Portfolio for the purchase of a call or put option is
included in the Portfolio's "Statement of Assets and Liabilities" as an
investment
Statement of Additional Information Page 53
<PAGE>
SMALL CAP GROWTH PORTFOLIO
VALUE PORTFOLIO
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which a Portfolio has purchased expires on the stipulated
expiration date, the Portfolio realizes a loss in the amount of the cost of the
option. If a Portfolio enters into a closing sale transaction, the 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 a 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 a 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 a 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
a 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 a
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 a
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, a 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 Portfolio as unrealized gains or losses. When the contract
is closed, the 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 Portfolio is that the change in
value of the underlying securities may not correlate to the change in value of
the contracts. The Portfolios may use futures contracts to manage their exposure
to the stock market and to fluctuations in currency values or 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. A 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 Portfolio to
subsequently invest at less advantageous prices.
(F) PORTFOLIO SECURITIES LOANED
Cash collateral is received by the Portfolios 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 December 31, 1995, there were no securities on loan to brokers.
(G) TAXES
It is the policy of the Portfolios to meet the requirements of the Internal
Revenue Code of 1986, as amended ("Code"). Therefore, no provision has been made
for Federal taxes on income, capital gains, or unrealized appreciation of
securities held.
(H) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the 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
$25,000 for each Portfolio. These expenses are being amortized on a straightline
basis over a five-year period.
(I) INDEXED SECURITIES
A 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.
(J) RESTRICTED SECURITIES
A 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.
2. RELATED PARTIES
LGT is the Portfolios' investment manager and administrator. Each Portfolio pays
investment
Statement of Additional Information Page 54
<PAGE>
SMALL CAP GROWTH PORTFOLIO
VALUE PORTFOLIO
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. These fees are computed daily and paid monthly.
The Portfolios pay each of their Trustees who is not an employee, officer or
director of LGT, GT Global or GT Global Investor Services, Inc. $500 per year
plus $150 for each meeting of the board or any committee thereof attended by the
Trustees.
At December 31, 1995, all of the shares of beneficial interest of the Portfolios
were owned either by GT Global America Small Cap Growth Fund and GT Global
America Value Fund or LGT.
3. PURCHASES AND SALES OF SECURITIES
For the period ended December 31, 1995, purchases and sales of investment
securities by the Global America Small Cap Growth Portfolio, other than
short-term investments, aggregated $2,831,283 and $0, respectively. Purchases
and sales of investment securities by the Global America Value Portfolio, other
than short-term investments, aggregated $1,355,813 and $0, respectively. There
were no purchases or sales of U.S. government obligations by the Portfolios for
the period ended December 31, 1995.
Statement of Additional Information Page 55
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
NOTES
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Statement of Additional Information Page 56
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 57
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 58
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 INVESTMENT COUNSELOR OR CALL GT GLOBAL
DIRECTLY AT 1-800-824-1580.
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 CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / REGIONALLY DIVERSIFIED FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
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 SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. companies
GT GLOBAL AMERICA GROWTH FUND
Concentrates on small and medium-sized companies in the U.S.
GT GLOBAL AMERICA VALUE FUND
Concentrates on equity securities of large cap U.S. companies believed to be
undervalued
GT GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND 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]
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
STATEMENT OF ADDITIONAL INFORMATION, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY G.T.
GLOBAL GROWTH SERIES, CHANCELLOR LGT ASSET MANAGEMENT, INC. OR GT GLOBAL,
INC. THIS STATEMENT OF ADDITIONAL INFORMATION DOES NOT CONSTITUTE AN OFFER
TO SELL OR SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER IN SUCH JURISDICTION.
AMESA604MC
