<PAGE>
LGT ASSET MANAGEMENT
A PIONEER IN
GLOBAL
INVESTING
GT GLOBAL
AMERICA SMALL CAP
GROWTH FUND
GT GLOBAL
AMERICA VALUE FUND
ANNUAL REPORT
DECEMBER 31, 1995
[LOGO]
<PAGE>
TABLE
OF CONTENTS
<TABLE>
<S> <C>
Report from the Fund
Managers and Key
Portfolio Holdings..... 1
Report of Independent
Accountants............ F-1
Financial Statements... F-2
</TABLE>
REPORTS FROM THE FUND MANAGERS
The GT Global America Small Cap Growth Fund seeks long-term capital appreciation
by investing in equity securities of small capitalization companies domiciled in
the United States.
The GT Global America Value Fund seeks long-term capital appreciation by
investing in equity securities of medium to large capitalization issuers
domiciled in the United States which we believe are undervalued and therefore
offer above-average potential for capital appreciation.
PERFORMANCE REVIEW
As you can see from the numbers below, our two newest Funds got off to a good
start. However, investors should note that both Funds are designed as long-term
investments and have been in operation only a short period of time. As with any
performance information, it's important to remember that past performance does
not indicate future results.
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
As of December 31, 1995, the Fund's total return since its inception on October
18, 1995, was 3.24% for Class A shares; total return for Class B shares was
3.06%.
GT GLOBAL AMERICA VALUE FUND
As of December 31, 1995, the Fund's total return since its inception on October
18, 1995, was 11.64% for Class A shares; total return for Class B shares was
11.55%.
U.S. MARKET REVIEW
Overall, the U.S. market performed very well in 1995, posting large gains across
many different market sectors. Although earnings gains were good during the
year, most of the gains were attributable to the large decline in long-term
interest rates and the prospects for continued low inflation. With such
prominent macroeconomic trends in place, in the second half of the year the
market exhibited elements of a "throw money at anything that's moving"
mentality, with many of the year's best performers being companies that were
already at very high valuations.
1
<PAGE>
Such an environment seems to produce manic behavior, which in 1995 resulted in
companies such as Netscape* (yet to report a full year of profit) selling at a
$6 billion valuation (approximately 140 times cumulative revenues).
Unfortunately this type of behavior can cause other good quality companies to be
ignored if they are not in sectors perceived as "hot" at the moment. Given that
our investment process relies primarily on original research and strong
fundamentals, we look forward to a return to a market where companies are judged
on their intrinsic values rather than by concepts or simply stock price
momentum.
STRATEGY
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
The Fund uses a disciplined investment process. In this respect it is different
from many growth funds. The process continually guides the Fund in and out of
various sectors depending on company fundamentals and valuation trends.
In the first ten weeks of the Fund's operation, we purchased a number of
consumer products companies, that fulfilled the requirements of our investment
process. Going forward, we may consider supplementing our holdings in technology
and retail companies if values continue to prove attractive.
GT GLOBAL AMERICA VALUE FUND
The strategy of the Fund is to invest in companies whose earnings growth is
likely to exceed market expectations. Given that the U.S. economy appears to be
slowing, under current market conditions the Fund has relatively few investments
in traditional cyclical industries, such as paper, chemicals and steel, focusing
instead on interest rate sensitive stocks, such as financials.
OUTLOOK
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
Following the large gains of 1995, there are many questions about what to expect
in 1996. We do not believe the market is at excessive valuation levels, given
the environment of low interest rates and low inflation. Consequently, we are
not overly concerned by its all-time high. More worrisome is the potential for a
more sluggish economy in 1996 than is generally expected.
- --------------
* Of course, there can be no assurance the Fund held, holds or will hold these
or any other securities mentioned in this report.
2
<PAGE>
We expect a combination of high consumer debt levels, slowing or no growth from
our major trading partners, and the continued budget confusion in Washington to
have a depressing impact on overall growth this year. Such an environment,
however, is not necessarily bad for growth stock investing, as the more dominant
companies can often grow through such a sluggish period.
GT GLOBAL AMERICA VALUE FUND
Is there any more to look forward to in 1996? We think the answer depends on
whether or not the Fed keeps monetary policy sufficiently tight.
Up until the January 1996 cut in the Federal Funds Rate, monetary policy
certainly seemed tight enough to engineer a gradual deceleration in U.S.
economic growth. Many manufacturing indices indicate slowing economic activity
since August; unemployment claims have been rising since the beginning of 1995;
construction has turned soft; and retail sales were unspectacular over the
Christmas period. Most importantly, the upward pressure on producer prices
present during 1994 and the first half of 1995 seems to have waned, with
December's Producer Price Index (PPI) at 2.2% year-on-year.
The Consumer Price Index (CPI), meanwhile, which has been declining since April,
stood at 2.5% year on year for December. The January quarter-point cut in the
Federal Funds Rate from 5 3/4% to 5 1/2%, suggests Chairman Greenspan perceives
the current rate of economic growth in the U.S., and even a slightly higher
rate, to be safely non-inflationary. It is conceivable that the Federal Reserve
has been so skilled in controlling monetary policy that the U.S. economy will be
able to maintain non-inflationary growth longer than those worried about the
length of the bull market anticipate. Even more reassuring is that, in our
opinion, the rate of economic growth probably doesn't matter, as long as it is
positive. We feel the Federal Reserve just needs to keep monetary policy tight
enough to prevent the U.S. economy from engaging in excessively exuberant
behavior.
3
<PAGE>
Another important factor is expectations. Unfortunately, the benign inflationary
environment has already been partially discounted in the rally of 1995. Higher
expectations bring the potential for increased volatility. We think the steady
gains
of the past 12 months are probably behind us. However, we also believe a more
complete discounting of the benefits of non-inflationary growth is probably
merited and, therefore, further gains in the U.S. stock market appear likely
this year.
CHRISTIAN WIGNALL SORAYA BETTERTON
CHIEF INVESTMENT OFFICER PORTFOLIO MANAGER
GLOBAL EQUITIES GT GLOBAL AMERICA VALUE FUND
SAN FRANCISCO SAN FRANCISCO
KEVIN WENCK
PORTFOLIO MANAGER
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
SAN FRANCISCO
JANUARY 25, 1996
G.T. GLOBAL AMERICA GROWTH FUND
4
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
KEY PORTFOLIO HOLDINGS*
NCI BUILDING SYSTEMS, INC.
NCI designs, manufactures and sells metal building systems and components for
industrial and non-high-rise commercial buildings. Its products are marketed
through an authorized builder organization, and to contractors by a direct sales
force.
NATIONAL PICTURE & FRAME CO.
A designer, producer and marketer of a wide variety of picture frames, framed
mirrors and framed art, National Picture & Frame product lines include over 450
stock-keeping units and are offered in approximately 12,000 retail stores in
North America. The company sells primarily through major mass merchant
retailers.
LIFETIME HOAN CORP.
Lifetime Hoan designs, markets and distributes household cutlery, kitchenware,
cutting boards and other houseware products under its own trade names and
licensed names. The company sells to approximately 1,300 customers, including
department store chains, mass merchants and discount stores, supermarket chains,
national retailers, warehouse clubs, direct marketing companies and specialty
chains.
TRANS FINANCIAL BANCORP
With 47 offices in Kentucky and Tennessee, Trans Financial conducts commercial
banking and savings bank businesses through subsidiaries. The company's
commercial bank subsidiaries provide a full range of corporate and retail
banking services. In addition, Trans Financial offers investment products and
services, operates a mortgage banking business and provides travel services.
COMMERCIAL INTERTECH CORP.
Commercial Intertech and its subsidiaries design, make, sell and service
hydraulic components, fabricated metal products and fluid purification products.
REX STORES CORP.
A home entertainment and consumer electronic products and appliances retailer,
Rex owns 165 retail stores in 25 states, with a concentration in the Midwest and
Southeast. The company's stores offer over 1,000 products from approximately 55
manufacturers, including televisions, video and audio equipment, appliances and
personal computers.
- ------------------
* There can be no assurance the Fund will continue to hold these securities.
5
<PAGE>
RIO HOTEL & CASINO, INC.
As owner and operator of the 1,410-suite Rio Suite Hotel and Casino, Rio Hotel
offers an array of gaming, hotel and resort amenities. The hotel, located on a
45-acre elevated site near the Las Vegas Strip, has 89,000 square feet of casino
space.
RFS HOTEL INVESTORS, INC.
RFS Hotel Investors is a self-advised equity real estate investment trust
established to acquire equity interests in existing hotel properties. RFS
presently owns 42 hotels in 22 states, with a total of approximately 5800 rooms.
AMVESTORS FINANCIAL CORP.
Through its wholly owned American Investors Life Insurance Co., Amvestors
Financial sells single-premium deferred, single-premium immediate and flexible-
premium deferred annuities. The company designs its products and directs its
marketing efforts towards the savings and retirement market.
SYRATECH CORP.
Syratech designs, makes, imports and distributes tabletop and giftware products,
including sterling silver, silverplated and stainless steel flatware, sterling
silver, silverplated and brass holloware and seasonal merchandise, resin casual
furniture and plastic decorative wall accessories.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GLOBAL AMERICA SMALL CAP GROWTH PORTFOLIO
<S> <C>
SECTOR ALLOCATION OF NET ASSETS AS OF DECEMBER 31, 1995
SERVICES 26.3%
FINANCE 12.3%
CONSUMER DURABLES 10.0%
MATERIALS/BASIC INDUSTRY 7.3%
CONSUMER NON-DURABLES 7.1%
TECHNOLOGY 5.1%
CAPITAL GOODS 4.9%
HEALTH CARE 2.7%
SHORT TERM & OTHER INVESTMENTS 24.3%
</TABLE>
ALLOCATIONS WILL CHANGE BASED ON CURRENT MARKET CONDITIONS.
6
<PAGE>
GT GLOBAL AMERICA VALUE FUND
KEY PORTFOLIO HOLDINGS*
WATSON PHARMACEUTICALS, INC.
Engaged in the manufacture of generic medications, Watson specializes in newly
introduced products with limited or no generic competition and products that are
technically difficult to manufacture. Since 1991, revenues have increased 49% on
average annually; operating margins expanded from 13% in 1991 to 33% in 1995. We
see Watson's success as a result of operational leverage and steady improvement
in its mix of business and we expect potential new products and further growth
in sales of existing products to continue to drive earnings growth.
AMGEN, INC.
One of the most successful biotechnology companies in the U.S., Amgen has two
major products: Epogen, which stimulates the production of red blood cells; and
Neupogen, which stimulates the production of white blood cells. Despite investor
worries that the market for these products had flattened, Amgen has successfully
stimulated the Epogen dialysis market, particularly with the 1994 FDA approval
for higher drug doses. As a result, Epogen sales are projected to continue their
20% annual growth over the next several years. We believe Neupogen should
demonstrate healthy gains through 1997, driven by sales to the chemotherapy and
AIDS markets.
LEHMAN BROTHERS HOLDINGS, INC.
Lehman Brothers is an internationally focused investment bank. We consider
continued growth in its fixed income and equity divisions, along with further
internal restructuring efforts, a positive basis for expecting that profits and
share price may rise in the future.
GREEN TREE FINANCIAL CORP.
Green Tree originates loans for new manufactured housing, home improvements and
the second-hand manufactured housing mortgage market, which it recently entered.
The market for new manufactured housing mortgages is growing about 20% annually,
as manufactured housing is significantly cheaper than conventional housing of
comparable quality. Green Tree enjoys a 29% market share in the new housing
market and continues to gain share in the second-hand market.
MERCK & CO., INC.
Merck has two main divisions -- pharmaceuticals manufacturing and marketing, and
managed care. The managed care division (Medco), manages pharmacy
- ------------------
* There can be no assurance the Fund will continue to hold these securities.
7
<PAGE>
benefits for employers, insurers and other plan sponsors. New products, led by
the cardiovascular drug Cozaar and osteoporosis drug Fosamax, are driving growth
in the pharmaceutical division, while cost savings offered by Medco are fueling
15% annual growth in coverage and 30% in prescriptions.
CITICORP
Citicorp's Citibank division is one of the largest and most profitable major
banks in the world today, with 1,200 branches across more than 41 nations.
Globally diversified, more than half the company's earnings come from outside
the United States. We believe continued GDP growth in the developing world and
falling interest rates in the industrialized nations should bode well for
Citicorp in 1996.
EASTMAN KODAK CO.
Eastman Kodak, the largest photography company in the U.S., has undergone a
major transformation, shedding peripheral assets in pharmaceuticals, chemicals
and various other consumer products. In the process, Kodak has restructured its
balance sheet, paying down debt with proceeds of its divestitures. Over the next
few years, we believe it has the potential to reduce fixed costs and raise its
annual revenue growth rate through aggressive marketing in foreign countries and
the development of new photographic technologies.
MERCURY GENERAL CORP.
Mercury General is a major specialty writer of automobile insurance, operating
primarily in California, where it enjoys about a 3.9% market share. The company
has been able to offer rates for the majority of coverages that are among the
most competitive, as a result of careful underwriting, efficient claims
management and strict control of costs. An annual growth rate of 19.8% over the
past 10 years has been supported by consistent, above-industry-average
profitability, as measured by both underwriting results and return on equity.
8
<PAGE>
GENERAL ELECTRIC (GE) CO.
General Electric is a conglomerate with several major divisions. Sales in
plastics, one of the company's three main businesses, have been driven by growth
in electronic products (50% of sales), such as cellular telephones and compact
discs. Its NBC television network is currently the number one network in the
U.S. and expects to increase its advertising revenue significantly this year as
a result of the Superbowl, the Olympic games and the presidential election. Both
GE's cyclical divisions, aircraft engines and power systems, which have suffered
over the past few years, are showing signs of recovery in our opinion. GE has
increased operating margins from 11% to 14% over the last four years, and
management is confident it can earn a 15%-17% margin in 1998.
MONSANTO CO.
Monsanto is a large chemical company that produces agricultural pesticides,
industrial chemicals, plastics, fibers, pharmaceuticals and low-calorie
sweeteners. Over the past decade, the product mix has shifted from commodities
to less cyclical, higher value-added products. Round-up, an agricultural
pesticide, accounts for the bulk of profits for the agricultural segment and
continues to grow at 18%-20% annually in volume terms, thanks to conservation
tillage and price cuts. Improvement in prices worldwide, new product
introductions and economic growth in the U.S. are benefiting fibers and
chemicals.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GLOBAL AMERICA VALUE PORTFOLIO
<S> <C>
SECTOR ALLOCATION OF NET ASSETS AS OF DECEMBER 31, 1995
HEALTH CARE 19.8%
FINANCE 18.0%
MULTI-INDUSTRY/MISCELLANEOUS 13.9%
TECHNOLOGY 4.9%
MATERIALS/BASIC INDUSTRY 3.9%
ENERGY 3.8%
SERVICES 3.7%
CAPITAL GOODS 3.6%
CONSUMER NON-DURABLES 3.5%
SHORT-TERM INVESTMENTS & OTHER 24.9%
</TABLE>
ALLOCATIONS WILL CHANGE BASED ON CURRENT MARKET CONDITIONS.
9
<PAGE>
GT GLOBAL
AMERICA SMALL CAP
GROWTH FUND
GT GLOBAL
AMERICA VALUE FUND
FINANCIAL
STATEMENTS
<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 GT 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 GT 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
F-1
<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.
F-2
<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.
F-3
<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.
F-4
<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.
F-5
<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 GT Global Growth Series ("Company"). The
Company is organized as a Massachusetts business trust and is registered under
the Investment Company Act of 1940, as amended ("1940 Act"), as a diversified,
open-end management investment company. The Company has eight series of shares
in operation, each series corresponding to a distinct portfolio of investments.
The 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.
F-6
<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.
F-7
<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>
F-8
<PAGE>
GLOBAL AMERICA SMALL CAP GROWTH PORTFOLIO
GLOBAL AMERICA 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
F-9
<PAGE>
GLOBAL AMERICA 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.
F-10
<PAGE>
GLOBAL AMERICA 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.
F-11
<PAGE>
GLOBAL AMERICA 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.
F-12
<PAGE>
GLOBAL AMERICA 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.
F-13
<PAGE>
GLOBAL AMERICA 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.
F-14
<PAGE>
GLOBAL AMERICA SMALL CAP GROWTH PORTFOLIO
GLOBAL AMERICA VALUE PORTFOLIO
STATEMENTS OF ASSETS
AND LIABILITIES
December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
AMERICA GLOBAL
SMALL CAP AMERICA
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.
F-15
<PAGE>
GLOBAL AMERICA SMALL CAP GROWTH PORTFOLIO
GLOBAL AMERICA VALUE PORTFOLIO
STATEMENTS OF OPERATIONS
October 18, 1995 (commencement of operations) to December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
AMERICA GLOBAL
SMALL CAP AMERICA
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.
F-16
<PAGE>
GLOBAL AMERICA SMALL CAP GROWTH PORTFOLIO
GLOBAL AMERICA VALUE PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
October 18, 1995 (commencement of operations) to December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
AMERICA GLOBAL
SMALL CAP AMERICA
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.
F-17
<PAGE>
GLOBAL AMERICA SMALL CAP GROWTH PORTFOLIO
GLOBAL AMERICA VALUE PORTFOLIO
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
Contained below are ratios and supplemental data that have been derived
from information provided in the financial statements.
<TABLE>
<CAPTION>
GLOBAL AMERICA
SMALL CAP GLOBAL AMERICA
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.
F-18
<PAGE>
GLOBAL AMERICA SMALL CAP GROWTH PORTFOLIO
GLOBAL AMERICA 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
F-19
<PAGE>
GLOBAL AMERICA SMALL CAP GROWTH PORTFOLIO
GLOBAL AMERICA 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
F-20
<PAGE>
GLOBAL AMERICA SMALL CAP GROWTH PORTFOLIO
GLOBAL AMERICA 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.
F-21
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
<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. THE PROSPECTUS CONTAINS MORE COMPLETE
INFORMATION, INCLUDING CHARGES, EXPENSES AND RISKS. INVESTORS SHOULD READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
GT GLOBAL WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
GT GLOBAL INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside
the U.S.
GT GLOBAL EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
/ / GLOBAL THEME FUNDS
GT GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
GT GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture, or sell
telecommunications services or equipment
GT GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve, or maintain a country's infrastructure
GT GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
GT GLOBAL NATURAL RESOURCES FUND
Concentrates on companies that own, explore, or develop natural resources
GT GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
/ / REGIONALLY DIVERSIFIED FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim
GT GLOBAL EUROPE GROWTH FUND
Focuses on investment opportunities in the new, unified Europe
GT GLOBAL LATIN AMERICA GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
GT GLOBAL AMERICA GROWTH FUND
Concentrates on small and medium-sized companies in the U.S.
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
Invests in equity securities of small U.S. companies
GT GLOBAL AMERICA VALUE FUND
Concentrates on large cap equity securities of U.S. companies believed to be
undervalued
GT GLOBAL JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH 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]
THIS REPORT MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
<PAGE>
[LOGO]
GT Global, Inc.
Fifty California Street
27th Floor
San Francisco, California
94111-4624
DATED MATERIAL
PLEASE EXPEDITE
