<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 28, 1997
FILE NO. 2-57526
811-2699
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
POST-EFFECTIVE AMENDMENT NO. 39
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 35
------------------------
G.T. GLOBAL GROWTH SERIES
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
50 CALIFORNIA STREET, 27TH FLOOR,
SAN FRANCISCO, CALIFORNIA 94111
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(415) 392-6181
------------------------
<TABLE>
<S> <C>
DAVID J. THELANDER, ESQ. ARTHUR J. BROWN, ESQ.
VICE PRESIDENT & R. DARRELL MOUNTS, ESQ
ASSISTANT GENERAL COUNSEL KIRKPATRICK & LOCKHART LLP
CHANCELLOR LGT ASSET MANAGEMENT, INC. 1800 MASSACHUSETTS AVENUE, N.W.,
50 CALIFORNIA STREET, 27TH FLOOR 2ND FLOOR
SAN FRANCISCO, CALIFORNIA 94111 WASHINGTON, D.C. 20036
(NAME AND ADDRESS OF AGENT FOR SERVICE) (202) 778-9000
</TABLE>
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE:
/ / IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B) OF RULE 485
/ / ON PURSUANT TO PARAGRAPH (B) OF RULE 485
/ / 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(1) OF RULE 485
/X/ ON MAY 1, 1997 PURSUANT TO PARAGRAPH (A)(1) OF RULE 485
/ / 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(2) OF RULE 485
/ / ON PURSUANT TO PARAGRAPH (A)(2) OF RULE 485
/ / THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.
PURSUANT TO RULE 24F-2 UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
REGISTRANT HAS ELECTED TO REGISTER AN INDEFINITE NUMBER OF ITS SHARES OF
BENEFICIAL INTEREST. A RULE 24F-2 NOTICE FOR REGISTRANT'S FISCAL YEAR ENDED
DECEMBER 31, 1996 WILL BE FILED ON OR BEFORE FEBRUARY 28, 1997.
CERTAIN SERIES OF THE G.T. GLOBAL GROWTH SERIES ARE "FEEDER FUNDS" IN A
"MASTER/FEEDER" FUND ARRANGEMENT. THIS POST-EFFECTIVE AMENDMENT NO. 39 INCLUDES
A SIGNATURE PAGE FOR THE MASTER TRUST, GROWTH PORTFOLIO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
G.T. GLOBAL GROWTH SERIES
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN FORM N-1A AND THIS AMENDMENT
PROSPECTUS -- CLASS A AND CLASS B
<TABLE>
<CAPTION>
ITEM NO. OF
PART A OF FORM N-1A CAPTIONS IN PROSPECTUS
- -------------------------------------------- -----------------------------------------------------------------
<S> <C> <C>
1. Cover Page....................... Cover Page
2. Synopsis......................... Prospectus Summary
3. Condensed Financial
Information..................... Financial Highlights
4. General Description of
Registrant...................... Investment Objectives and Policies; Risk Factors; Management;
Other Information
5. Management of the Fund........... Management
5A. Management's Discussion of Fund
Performance..................... See Registrant's current Annual Report
6. Capital Stock and Other
Securities...................... Alternative Purchase Plan; Dividends, Other Distributions and
Federal Income Taxation; Other Information
7. Purchase of Securities Being
Offered......................... Alternative Purchase Plan; How to Invest; How to Make Exchanges;
Calculation of Net Asset Value; Management
8. Redemption or Repurchase......... Alternative Purchase Plan; How to Redeem Shares; Calculation of
Net Asset Value
9. Pending Legal Proceedings........ Not applicable
</TABLE>
<PAGE>
G.T. GLOBAL GROWTH SERIES
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN FORM N-1A AND THIS AMENDMENT
PROSPECTUS -- ADVISOR CLASS
<TABLE>
<CAPTION>
ITEM NO. OF
PART A OF FORM N-1A CAPTIONS IN PROSPECTUS
- -------------------------------------------- -----------------------------------------------------------------
<S> <C> <C>
1. Cover Page....................... Cover Page
2. Synopsis......................... Prospectus Summary
3. Condensed Financial
Information..................... Financial Highlights
4. General Description of
Registrant...................... Investment Objectives and Policies; Risk Factors; Management;
Other Information
5. Management of the Fund........... Management
5A. Management's Discussion of Fund
Performance..................... See Registrant's current Annual Report
6. Capital Stock and Other
Securities...................... Dividends, Other Distributions and Federal Income Taxation; Other
Information
7. Purchase of Securities Being
Offered......................... How to Invest; How to Make Exchanges; Calculation of Net Asset
Value; Management
8. Redemption or Repurchase......... How to Redeem Shares; Calculation of Net Asset Value
9. Pending Legal Proceedings........ Not applicable
</TABLE>
<PAGE>
G.T. GLOBAL GROWTH SERIES
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN FORM N-1A AND THIS AMENDMENT
STATEMENT OF ADDITIONAL INFORMATION -- CLASS A AND CLASS B
<TABLE>
<CAPTION>
ITEM NO. OF
PART B OF FORM N-1A CAPTIONS IN STATEMENT OF ADDITIONAL INFORMATION
- -------------------------------------------- -----------------------------------------------------------------
<S> <C> <C>
10. Cover Page....................... Cover Page
11. Table of Contents................ Table of Contents
12. General Information and
History......................... Cover Page
13. Investment Objectives and
Policies........................ Investment Objectives and Policies; Investment Limitations;
Options and Futures; Risk Factors
14. Management of the Fund........... Trustees and Executive Officers; Management
15. Control Persons and Principal
Holders of Securities........... Trustees and Executive Officers; Management
16. Investment Advisory and Other
Services........................ Management; Additional Information
17. Brokerage Allocation and Other
Practices....................... Execution of Portfolio Transactions
18. Capital Stock and Other
Securities...................... Additional Information
19. Purchase, Redemption and Pricing
of Securities Being Offered..... Valuation of Shares; Information Relating to
Sales and Redemptions
20. Tax Status....................... Taxes
21. Underwriters..................... Management
22. Calculation of Performance
Data............................ Investment Results
23. Financial Statements............. Financial Statements
</TABLE>
<PAGE>
G.T. GLOBAL GROWTH SERIES
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN FORM N-1A AND THIS AMENDMENT
STATEMENT OF ADDITIONAL INFORMATION -- ADVISOR CLASS
<TABLE>
<CAPTION>
ITEM NO. OF
PART B OF FORM N-1A CAPTIONS IN STATEMENT OF ADDITIONAL INFORMATION
- ------------------------------------------- ---------------------------------------------------------------
<S> <C> <C>
10. Cover Page...................... Cover Page
11. Table of Contents............... Table of Contents
12. General Information and Cover Page
History........................
13. Investment Objectives and Investment Objectives and Policies; Investment Limitations;
Policies....................... Options and Futures; Risk Factors
14. Management of the Fund.......... Trustees and Executive Officers; Management
15. Control Persons and Principal Trustees and Executive Officers; Management
Holders of Securities..........
16. Investment Advisory and Other Management; Additional Information
Services.......................
17. Brokerage Allocation and Other Execution of Portfolio Transactions
Practices......................
18. Capital Stock and Other Additional Information
Securities.....................
19. Purchase, Redemption and Pricing Valuation of Shares; Information Relating to
of Securities Being Offered.... Sales and Redemptions
20. Tax Status...................... Taxes
21. Underwriters.................... Management
22. Calculation of Performance Investment Results
Data...........................
23. Financial Statements............ Financial Statements
</TABLE>
<PAGE>
G.T. GLOBAL GROWTH SERIES
CONTENTS OF POST-EFFECTIVE AMENDMENT
THIS POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT OF G.T. GLOBAL
GROWTH SERIES CONTAINS THE FOLLOWING DOCUMENTS:
<TABLE>
<S> <C> <C>
Facing Sheet
Contents
Cross-Reference Sheet
Part A -- Prospectuses
-- GT Global Equity Funds -- Class A and Class B
-- GT Global Equity Funds -- Advisor Class
Part B -- Statements of Additional Information
-- GT Global Equity Funds -- Class A and Class B
-- GT Global Equity Funds -- Advisor Class
-- GT Global America Small Cap Growth Fund and GT Global America
Value Fund -- Class A and Class B
-- GT Global America Small Cap Growth Fund and GT Global America
Value Fund -- Advisor Class
Part C -- Other Information
Signature Page -- G.T. Global Growth Series
-- Growth Portfolio
Exhibits
</TABLE>
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS -- MAY 1, 1997
- --------------------------------------------------------------------------------
<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 MID CAP GROWTH FUND
("EUROPE FUND") ("AMERICA MID CAP 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>
THE PACIFIC FUND, THE EUROPE FUND, THE JAPAN FUND, THE INTERNATIONAL FUND AND
THE WORLDWIDE FUND each seeks long-term growth of capital by investing primarily
in equity securities of issuers domiciled in its Primary Investment Area (as
defined herein).
THE AMERICA MID CAP FUND seeks long-term growth of capital by investing
primarily in equity securities of companies domiciled in the United States that,
at the time of purchase, have market capitalizations of $1 billion to $5 billion
("mid cap companies").
THE AMERICA SMALL CAP FUND seeks long-term capital appreciation by investing all
of its investable assets in the Small Cap Growth Portfolio, which, in turn,
invests primarily in equity securities of companies domiciled in the United
States that, at the time of purchase, have market capitalizations of up to $1
billion ("small cap companies").
THE AMERICA VALUE FUND seeks long-term capital appreciation by investing all of
its investable assets in the Value Portfolio, which, in turn, invests primarily
in equity securities of companies domiciled in the United States that, at the
time of purchase, have market capitalizations of greater than $500 million and
which Chancellor LGT Asset Management, Inc. (the "Manager") believes to be
undervalued in relation to long-term earning power or other factors.
Individually, a "Fund" or "Portfolio" and, collectively, the "Funds" or the
"Portfolios."
Each Portfolio's investment objective is identical to that of its corresponding
Fund. There can be no
assurance that any Fund or Portfolio will achieve its investment objective. The
investment experience of the America Small Cap Fund and the America Value Fund
will correspond directly with the investment experience of their corresponding
Portfolios.
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.
The Funds and the Portfolios are managed and/or administered by 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 May 1, 1997 has been filed with the
Securities and Exchange Commission ("SEC") 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 ADVISER.
[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...................................................................... 8
Alternative Purchase Plan................................................................. 22
Investment Objectives and Policies........................................................ 23
Risk Factors.............................................................................. 29
How to Invest............................................................................. 32
How to Make Exchanges..................................................................... 39
How to Redeem Shares...................................................................... 40
Shareholder Account Manual................................................................ 42
Calculation of Net Asset Value............................................................ 43
Dividends, Other Distributions and Federal Income Taxation................................ 44
Management................................................................................ 45
Other Information......................................................................... 51
</TABLE>
Prospectus Page 2
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
- ------------------------------------------------------------
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>
The Funds and the Portfolios: Each Fund is a diversified series of G.T. Global Growth Series
(the "Company"). Each Portfolio is a diversified series of Growth
Portfolio.
Investment Objectives: The Pacific Fund, the Europe Fund, the Japan Fund, the
International Fund, the Worldwide Fund and the America Mid Cap
Fund seek long-term growth of capital; the America Small Cap Fund
and the America Value Fund seek long-term capital appreciation.
Principal Investments: The Pacific Fund, the Europe Fund, the Japan Fund, the
International Fund and the Worldwide Fund each invests primarily
in equity securities of issuers domiciled in its Primary
Investment Area (as defined herein).
The America Mid Cap Fund invests primarily in equity securities of
mid cap companies domiciled in the United States.
The America Small Cap Fund invests all of its investable assets in
the Small Cap Growth Portfolio, which, in turn, invests primarily
in equity securities of small cap companies domiciled in the
United States.
The America Value Fund invests all of its investable assets in the
Value Portfolio, which, in turn, invests primarily in equity
securities of companies domiciled in the United States that, at
the time of purchase, have market capitalizations of greater than
$500 million and which the Manager believes to be undervalued in
relation to long-term earning power or other factors.
Principal 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.
The Pacific Fund, the Europe Fund, the Japan Fund and the
International Fund each invests primarily, and the Worldwide Fund
may invest a significant portion of its assets in, foreign
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. 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.
The Pacific Fund, the Europe Fund, the Japan Fund, the America Mid
Cap Fund, and the Portfolios each invests a significant portion of
its assets in issuers in a particular country or region of the
world. As a result, such Funds or Portfolios may be subject to
greater risks and may experience greater volatility than a fund
that is more broadly diversified geographically.
</TABLE>
Prospectus Page 3
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Each Fund may engage in certain foreign currency, options and
futures transactions, and each Portfolio may engage in certain
options and futures transactions, to attempt to hedge against the
overall level of investment currency risk associated with its
present or planned investments. Such transactions involve certain
risks and transaction costs.
See "Investment Objectives and Policies" and "Risk Factors."
Investment Manager: 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 $84 billion in total assets as of December 31, 1996.
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. See
"Management."
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: Class A and Class B shares of 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, which are open-end management investment
companies advised and/or administered by the Manager. See "How to
Invest" and "Shareholder Account Manual."
Exchange Privileges: Shares of a class of a Fund may be exchanged without a sales
charge for shares of the corresponding class of other GT Global
Mutual Funds. See "How to Make Exchanges" and "Shareholder Account
Manual."
Redemptions: Shares may be redeemed through brokers/dealers or the Fund's
transfer agent, GT Global Investor Services, Inc. ("Transfer
Agent"). See "How to Redeem Shares" and "Shareholder Account
Manual."
Dividends and Other
Distributions: Dividends are paid annually from net investment income and
realized net short-term capital gain; other distributions are paid
annually from net capital gain and net gains from foreign currency
transactions, if any.
</TABLE>
Prospectus Page 4
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
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 each Fund are quoted daily in the
financial section of most newspapers.
Other Features:
Class A Shares: Letter of Intent Dollar Cost Averaging Program
Quantity Discounts Automatic Investment Plan
Right of Accumulation Systematic Withdrawal 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 5
<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 (1):
<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 (2):
Maximum sales charge on purchases
(as a % of offering price)....................... 4.75% None 4.75% None 4.75% None 4.75% None
Sales charges on reinvested distributions to
shareholders..................................... None None None None None None None None
Maximum deferred sales charge (as a % of net asset
value at time of purchase or sale, whichever is
less)............................................ 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 (3):
(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)............. % % % % % % % %
------- ------- ------- ------- ------- ------- ------- -------
Total Fund Operating Expenses..................... % % % % % % % %
------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
GT GLOBAL AMERICA
GT GLOBAL GT GLOBAL GT GLOBAL
JAPAN AMERICA SMALL MID CAP 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 (2):
Maximum sales charge on purchases
(as a % of offering price)....................... 4.75% None 4.75% None 4.75% None 4.75% None
Sales charges on reinvested distributions to
shareholders..................................... None None None None None None None None
Maximum deferred sales charge (as a % of net asset
value at time of purchase or sale, whichever is
less)............................................ 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 (3):
(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)............. % % % % % % % %
------- ------- ------- ------- ------- ------- ------- -------
Total Fund Operating Expenses..................... % % % % % % % %
------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
Prospectus Page 6
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES:
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Funds, 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 (4)......................................................... $ $ $ $
Class B shares
Assuming a complete redemption at end of period (5)......................
Assuming no redemption...................................................
GT Global International Growth Fund
Class A shares (4).........................................................
Class B shares
Assuming a complete redemption at end of period (5)......................
Assuming no redemption...................................................
GT Global New Pacific Growth Fund
Class A shares (4).........................................................
Class B shares
Assuming a complete redemption at end of period (5)......................
Assuming no redemption...................................................
GT Global Europe Growth Fund
Class A shares (4).........................................................
Class B shares
Assuming a complete redemption at end of period (5)......................
Assuming no redemption...................................................
GT Global Japan Growth Fund
Class A shares (4).........................................................
Class B shares
Assuming a complete redemption at end of period (5)......................
Assuming no redemption...................................................
GT Global America Small Cap Growth Fund
Class A shares (4).........................................................
Class B shares
Assuming a complete redemption at end of period (5)......................
Assuming no redemption...................................................
GT Global America Mid Cap Growth Fund
Class A shares (4).........................................................
Class B shares
Assuming a complete redemption at end of period (5)......................
Assuming no redemption...................................................
GT Global America Value Fund
Class A shares (4).........................................................
Class B shares
Assuming a complete redemption at end of period (5)......................
Assuming no redemption...................................................
</TABLE>
- --------------
(1) THESE TABLES ARE INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUNDS. Long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers, Inc. rules regarding investment companies. THE "HYPOTHETICAL
EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE EXPENSES. THE FUNDS' AND
THE PORTFOLIOS' ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. The
tables and the assumption in the Hypothetical Example of a 5% annual return
are required by regulation of the SEC applicable to all mutual funds. The 5%
annual return is not a prediction of and does not represent the Funds' or
the Portfolios projected or actual performance.
(2) 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."
(3) Expenses are based on the Funds' fiscal year ended December 31, 1996. "Other
expenses" include custody, transfer agency, legal, audit and other operating
expenses. See "Management" herein and the Statement of Additional
Information for more information. With respect to Class A shares, without
reimbursement, "Other expenses" and "Total Fund Operating Expenses" would
have been % and %, respectively, for the America Small Cap Fund and
its Portfolio, and % and %, respectively, for the America Value Fund
and its Portfolio. With respect to Class B shares, without reimbursement,
"Other expenses" and "Total Fund Operating Expenses" would have been %
and %, respectively, for the America Small Cap Fund and its Portfolio,
and % and %, respectively, for the America Value Fund and its
Portfolio. The Funds also offer Advisor Class shares to certain categories
of investors. See "Alternative Purchase Plan." Advisor Class shares are not
subject to 12b-1 distribution and service fees.
The Board of Trustees of the Company believes that the aggregate per share
expenses of the America Small Cap Fund and the America Value Fund and each
of their corresponding Portfolios will be approximately equal to the
expenses each such Fund would incur if its assets were invested directly in
the type of securities being held by its corresponding Portfolio.
(4) Assumes payment of maximum sales charge by investor.
(5) Assumes deduction of applicable contingent deferred sales charge.
Prospectus Page 7
<PAGE>
GT GLOBAL EQUITY FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The tables below provide condensed financial information concerning income and
capital changes for one share of each class of shares of each Fund offered
through this Prospectus 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 fiscal year
ended December 31, 1996 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,
---------------------------------------------------------------------------------------
1996 1995 1994 1993* 1992 1991 1990
---------- ---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <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%
</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.
* The selected per share data were 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 8
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL WORLDWIDE GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B++
-------------------------------------- ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
JUNE 9, 1987
(COMMENCEMENT APRIL 1,
YEAR ENDED DECEMBER OF OPERATIONS) 1993
31, THROUGH YEAR ENDED DECEMBER 31, TO
--------------------- DECEMBER 31, --------------------------------- DECEMBER 31,
1989 1988 1987 1996 1995 1994 1993*
--------- --------- -------------- --------- --------- --------- ------------
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.
* The selected per share data were 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 9
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL INTERNATIONAL GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
----------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------------
1996 1995 1994 1993* 1992 1991 1990
--------- --------- ---------- ---------- ---------- ---------- ----------
<S> <C> <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 (c)... 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% --%(d) --%(d) --%(d) --%(d)
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.
* The selected per share data were calculated based upon weighted average
shares outstanding during the period.
** The per share data reflects a 3 for 1 stock split effective August 14, 1989.
(a) Not annualized.
(b) Annualized.
(c) 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.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 10
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL INTERNATIONAL GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
------------------------------------------------- ------------------------------------------------
APRIL 1,
1993
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, TO
------------------------------------------------- ----------------------------------- DECEMBER
1989** 1988** 1987** 1986** 1996 1995 1994 31, 1993*
---------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <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)(c).................. 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)......... --%(d) --%(d) --%(d) --%(d) 2.43% 2.40%(d) --%(d)
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.
* The selected per share data were calculated based upon weighted average
shares outstanding during the period.
** The per share data reflects a 3 for 1 stock split effective August 14, 1989.
(a) Not annualized.
(b) Annualized.
(c) 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.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 11
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
-----------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <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
(c)..................... 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% --%(d) --%(d) --%(d) --%(d) --%(d)
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 selected per share data were calculated based upon weighted average
shares outstanding during the period.
** The per share data reflects a 2 for 1 stock split effective August 14, 1989.
(a) Not annualized.
(b) Annualized.
(c) 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.
(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 NEW PACIFIC GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
------------------------------------------------- ----------------------------------------------------
APRIL 1,
1993
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, TO
------------------------------------------------- --------------------------------------- DECEMBER
1989** 1988** 1987** 1986** 1996 1995* 1994 31, 1993
---------- ---------- ---------- ---------- ----------- ----------- ----------- ----------
<S> <C> <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)(c)........ 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)..... --%(d) --%(d) --%(d) --%(d) 2.59% --%(d) --%(d)
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 selected per share data were calculated based upon weighted average
shares outstanding during the period.
** The per share data reflects a 2 for 1 stock split effective August 14, 1989.
(a) Not annualized.
(b) Annualized.
(c) 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.
(d) 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 EUROPE GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
-------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------------
1996 1995* 1994* 1993* 1992* 1991 1990
--------- --------- --------- ---------- ---------- ------------ ------------
<S> <C> <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(c) 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 (c)........... 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%(d) --%(d) --%(d) --%(d) --%(d)
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.
* The selected per share data were calculated based upon weighted average
shares outstanding during the period.
** 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%.
(a) Not annualized.
(b) Annualized.
(c) 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.
(d) 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 EUROPE GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
----------------------------------------------- -------------------------------------------------
APRIL 1,
1993
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, TO
----------------------------------------------- ------------------------------------ DECEMBER
1989** 1988** 1987** 1986** 1996 1995* 1994* 31, 1993*
---------- --------- ---------- --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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)(c)................ 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)...... --%(d) --%(d) --%(d) --%(d) 2.54% 2.46%(d) --%(d)
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.
* These selected per share data were calculated based upon weighted average
shares outstanding during the period.
** 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%.
(a) Not annualized.
(b) Annualized.
(c) 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.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 15
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
CLASS A(D) CLASS B(D)
---------------------------------------- ----------------------------------------
OCTOBER 18, 1995 OCTOBER 18, 1995
(COMMENCEMENT OF OPERATIONS) (COMMENCEMENT OF OPERATIONS)
1996 THROUGH DECEMBER 31, 1995 1996 THROUGH DECEMBER 31, 1995
---------- ---------------------------- ---------- ----------------------------
<S> <C> <C> <C> <C>
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
(a)(c)....................... 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) The selected per share data were calculated based upon weighted average
shares outstanding during the period.
Prospectus Page 16
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL AMERICA MID CAP GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
----------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
------- ---------- ---------- ---------- ---------- --------- ---------
<S> <C> <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 (c)......... 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.
* The selected per share data were calculated based upon weighted average
shares outstanding during the period.
** 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.
(b) Annualized.
(c) Total investment return does not include sales charge.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 17
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL AMERICA MID CAP GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
----------------------------------- ----------------------------------------------------
JUNE 9,
1987
(COMMENCEMENT APRIL 1,
OF 1993
YEAR ENDED OPERATIONS) TO
DECEMBER 31, THROUGH YEAR ENDED DECEMBER 31, DECEMBER
--------------------- DECEMBER -------------------------------------- 31,
1989 1988 31, 1987 1996 1995 1994* 1993*
--------- --------- --------- --------- --------- ---------- ---------
<S> <C> <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 (a)(c)... 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.
* The selected per share data were calculated based upon weighted average
shares outstanding during the period.
** 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.
(b) Annualized.
(c) Total investment return does not include sales charge.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 18
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL AMERICA VALUE FUND
<TABLE>
<CAPTION>
CLASS A(D) CLASS B(D)
---------------------------------------- ----------------------------------------
OCTOBER 18, 1995 OCTOBER 18, 1995
(COMMENCEMENT OF OPERATIONS) (COMMENCEMENT OF OPERATIONS)
1996 THROUGH DECEMBER 31, 1995 1996 THROUGH DECEMBER 31, 1995
---------- ---------------------------- ---------- ----------------------------
<S> <C> <C> <C> <C>
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) The selected per share data were calculated based upon weighted average
shares outstanding during the period.
Prospectus Page 19
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL JAPAN GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
-------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
1996 1995* 1994 1993 1992* 1991 1990
-------- ---------- --------- --------- --------- --------- ---------
<S> <C> <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 (c)... 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%(d) --%(d) --%(d) --%(d) --%(d)
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.
* The selected per share data were 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)%.
**** 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) 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.
(d) 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 JAPAN GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
----------------------------------------------- ----------------------------------------------
APRIL 1,
1993
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, TO
----------------------------------------------- --------------------------------- DECEMBER
1989 1988** 1987** 1986** 1996 1995* 1994 31, 1993
--------- --------- --------- -------- ------- --------- --------- ---------
<S> <C> <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)(c).................. 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)........ --%(d) --%(d) --%(d) --%(d) 2.79% 2.68% --%(d)
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.
* The selected per share data were 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)%.
**** 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) 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.
(d) 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
ALTERNATIVE PURCHASE PLAN
- --------------------------------------------------------------------------------
DIFFERENCES BETWEEN THE CLASSES. The primary difference 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
shares 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.
REDUCED SALES CHARGES. Class A share purchases of $50,000 or more and Class A
share purchases made 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
Prospectus Page 22
<PAGE>
GT GLOBAL EQUITY FUNDS
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 that are sponsored by organizations that 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; (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 composing or affiliated with Liechtenstein Global Trust; and (e) any
of the companies composing or affiliated with Liechtenstein Global Trust.
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
AND POLICIES
- --------------------------------------------------------------------------------
THE PACIFIC FUND, THE EUROPE FUND,
THE JAPAN FUND, THE INTERNATIONAL FUND AND
THE WORLDWIDE FUND
The Pacific Fund, the Europe Fund, the Japan Fund, the International Fund and
the Worldwide Fund each seeks long-term growth of capital. The Funds 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. Equity securities in which the Funds may invest
include common stocks, preferred stocks, convertible debt securities and
warrants to acquire such securities. The Funds' Primary Investment Areas include
the following countries:
PACIFIC FUND -- Australia, Hong Kong, India, Indonesia, Malaysia, New Zealand,
Pakistan, the Philippines, Singapore, South Korea, Taiwan and Thailand
EUROPE FUND -- Austria, Belgium, Denmark, Finland, France, Germany, Greece,
Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland, Turkey and the United Kingdom
JAPAN FUND -- Japan
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
WORLDWIDE FUND -- same as International Fund, but including the United States
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.
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
Prospectus Page 23
<PAGE>
GT GLOBAL EQUITY FUNDS
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 is designed for investors wishing to
concentrate their investment in a particular market but still desiring the
professional management, liquidity and diversification afforded by a mutual
fund.
For purposes of this Prospectus, 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.
The Pacific Fund, Europe Fund, Japan Fund, International Fund and Worldwide 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: (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 that have operations in
the Primary Investment Area or which stand to benefit from political and
economic events in the Primary Investment Area.
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 60% of the Worldwide Fund's assets
normally are invested in the equity securities of U.S. issuers.
The Pacific Fund, Europe Fund, Japan Fund, International Fund and Worldwide Fund
may invest up to 35% of their total assets in debt securities, including U.S.
and foreign government securities and corporate debt securities, 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 Funds 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 description
of Moody's and S&P ratings.
THE AMERICA MID CAP FUND, THE AMERICA SMALL CAP FUND AND THE AMERICA VALUE FUND
The investment objective of the America Mid Cap Fund is long term growth of
capital. The investment objective of the America Small Cap Fund and America
Value Fund is long term capital appreciation.
The America Mid Cap Fund seeks its investment objective by investing, under
normal circumstances, at least 65% of its total assets in equity securities of
mid cap companies domiciled in the United States. Equity securities in which the
Fund may invest include common stocks, preferred stocks, convertible debt
securities and warrants to acquire such securities. The Fund may also invest up
to 35% of its total assets in the equity securities of (a) issuers domiciled in
the United States that are not mid cap companies; and (b) issuers domiciled
outside the United States, including (i) securities of issuers in countries that
are not located in the United States but are linked by tradition, economic
markets, cultural similarities or geography to the United States; and (ii)
securities of issuers located elsewhere in the world that have operations in the
United States or which stand to benefit from political or economic events in the
United States. In addition, the Fund may invest up to 35% of its total assets in
investment grade debt securities including U.S. and foreign government
securities and corporate debt securities, including Samurai and Yankee bonds,
Euro bonds and Depositary Receipts. The issuers of such debt securities may or
may not be domiciled in the United States.
Prospectus Page 24
<PAGE>
GT GLOBAL EQUITY FUNDS
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 United States.
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, 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 Small Cap Portfolio also may invest up to 10% of its total assets in
securities of foreign issuers in the form of ADRs or other similar securities
convertible into securities of foreign issuers.
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 issuers domiciled in the United States that, at the time of purchase, have
market capitalizations of greater than $500 million and which the Manager
believes to be undervalued in relation to long-term earning power or other
factors. 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. The America Value Portfolio also may invest up to 10% of its
total assets in securities of foreign issuers in the form of American Depository
Receipts ("ADRs") or other similar securities convertible into securities of
foreign issuers.
For purposes of this Prospectus, 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.
For purposes of this Prospectus, 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.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In managing the Pacific Fund, Europe Fund, Japan Fund, International Fund and
Worldwide 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.
In selecting equity securities for the Mid Cap Fund and the Small Cap Portfolio,
the Manager uses a multi-stage process to identify companies that possess
sustainable above average growth at an attractive offering price. The process
for selecting small and mid cap growth stocks consists of four components: asset
allocation, industry diversification, stock selection and quality control. The
Manager tracks individual companies and categorizes them into industry groups.
Purchases and sales of individual securities are based on the ratings
established by the Manager on a weekly basis. Stocks ranked in the top 30% are
buys, and the bottom 30% are sells. The quality control process ensures
consistency with the industry and asset allocation guidelines as well as stock
guidelines. There is no assurance that this process will produce better or more
consistent results than other investment processes.
Prospectus Page 25
<PAGE>
GT GLOBAL EQUITY FUNDS
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 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.
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 Mid Cap Fund may seek to take
advantage of differences in relative values of fixed income securities among
various countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, 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. During such time a Fund or Portfolio may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Pacific Fund, Europe Fund, Japan Fund,
International Fund, Worldwide Fund and America Mid Cap Fund may invest up to
100% of its total assets in cash (U.S. dollars, foreign currencies or
multinational currency units) and/or high quality debt securities or money
market instruments issued by corporations, the U.S. or a foreign government. In
addition, for temporary defensive purposes, most or all investments of the
Pacific Fund, Europe Fund, Japan Fund, International Fund and Worldwide Fund may
be made in the United States and denominated in U.S. dollars. Under a defensive
strategy, each Portfolio may hold U.S. dollars and/ or may invest any portion of
its assets in high quality 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 Mid Cap 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.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
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
total 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.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Manager believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of a Fund in
Prospectus Page 26
<PAGE>
GT GLOBAL EQUITY FUNDS
privatizations in appropriate circumstances. In certain foreign countries, the
ability of foreign entities such as the Fund to participate in privatizations
may be limited by local law, or the terms on which the Fund may be permitted to
participate may be less advantageous than those for local investors. There can
be no assurance that foreign governments will continue to sell companies
currently owned or controlled by them or that privatization programs will be
succesful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. 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. Each Fund or Portfolio may borrow up to 33 1/3% of its total
assets. However, no additional investments will be made if a Fund or Portfolio's
borrowings exceed 5% of its total assets. Any borrowing by a Fund or Portfolio
may cause greater fluctuation in the value of its shares than would be the case
if a Fund or Portfolio did not borrow.
A reverse repurchase agreement is a borrowing transaction in which a Fund or a
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. A "roll"
borrowing transaction involves a Fund or Portfolio's sale of securities together
with its commitment (for which that Fund or Portfolio may receive a fee) to
purchase similar, but not identical, securities at a future date.
SECURITIES LENDING. The Funds or Portfolios may lend their portfolio securities
to broker/dealers or to other institutional investors. Securities lending allows
a Fund or Portfolio to retain ownership of the securities loaned and, at the
same time earn additional income that may be used to offset a Fund's or
Portfolio's custody fees. 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. While a loan is outstanding, the borrower must
maintain with the Fund's or Portfolio's custodian collateral consisting of cash,
U.S. government securities or certain irrevocable letters of credit equal to at
least the value of the borrowed securities, plus any accrued interest. 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.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. 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.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Pacific Fund, Europe
Fund, Japan Fund, International Fund, Worldwide Fund and America Mid Cap Fund
may use forward currency contracts, futures contracts, options on securities,
options on indices, options on currencies and options on futures contracts to
attempt to hedge against the overall level of investment risk normally
associated with each such Fund's portfolio. In addition, each Portfolio may use
options on securities, options on indices, futures contracts and options on
futures contracts to attempt to hedge against the overall level of investment
risk normally associated with its 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
Prospectus Page 27
<PAGE>
GT GLOBAL EQUITY FUNDS
Portfolio may enter into such instruments up to the full value of its portfolio
assets. See "Risk Factors -- Options, Futures and Forward Currency Strategies"
herein and 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 Mid Cap 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 Mid Cap
Fund may enter into forward currency contracts either with respect to specific
transactions or with respect to such Fund's portfolio positions. The Pacific
Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund and America
Mid Cap 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 to hedge against overall
fluctuations in the securities markets or market sectors generally or in a
specific market sector.
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
purchase 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.
AMERICAN DEPOSITORY RECEIPTS. The Funds and the Portfolios may invest in
securities of foreign issuers in the form of 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.
OTHER INFORMATION. The investment objective of each Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
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 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 are not fundamental policies and may be
changed by vote of the Company's Board of Trustees, without shareholder
approval.
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.
OTHER INFORMATION REGARDING THE PORTFOLIOS. As previously described, 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. Because its corresponding Fund will invest only
in its corresponding Portfolio, that Fund's shareholders will acquire only an
indirect interest in the investments of that Portfolio.
Prospectus Page 28
<PAGE>
GT GLOBAL EQUITY FUNDS
The America Small Cap Fund and America Value Fund may each redeem 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. A change in a Portfolio's investment objective, policies
or limitations which is not approved by the Board or shareholders of the
corresponding Fund could require the Fund to redeem its interest in the
Portfolio. Any such redemption could result in a distribution in kind of
portfolio securities (as opposed to a cash distribution) by the Portfolio. In
addition, a distribution in kind could result in a less diversified portfolio of
investments for the Fund and could adversely affect the liquidity of the Fund.
Should such a distribution occur, the Fund could incur brokerage fees or other
transaction costs in converting such securities to cash. Upon redemption, 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.
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.
The America Small Cap Fund and America Value Fund may each be materially
affected by the actions of large investors in its corresponding Portfolio, if
any. For example, as with all open-end investment companies, if a large investor
were to redeem its interest in a Portfolio, (1) that Portfolio's remaining
investors could experience higher pro rata operating expenses, thereby producing
lower returns; and (2) 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.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that any Fund or Portfolio will achieve its
investment objective. Each Fund's net asset value will fluctuate, reflecting
fluctuations of its securities and its net currency exposure, or fluctuations in
the market value of the securities of its corresponding Portfolio. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. In addition, the value of debt securities held by a Fund or
Portfolio will fluctuate with changes in the perceived creditworthiness of the
issuers of such securities and interest rates.
FOREIGN INVESTING. Investing in foreign securities 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 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
Prospectus Page 29
<PAGE>
GT GLOBAL EQUITY FUNDS
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. In addition, certain costs attributable to foreign
investing, such as custody charges, are higher than those attributable to
domestic investing. A Fund's interest and dividends from foreign issuers may be
subject to non-U.S. withholding taxes, thereby reducing its net investment
income.
With respect to some foreign countries, there is the increased 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.
Because the Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide
Fund and America Mid Cap Fund may invest substantially in securities denominated
in currencies other than the U.S. dollar, and because they may hold foreign
currencies, they 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 the
Funds' shares, and also may affect the value of dividends and interest earned by
the Funds and gains and losses realized by the Funds. 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.
The exchange rates between the U.S. dollar and other currencies are determined
by supply and demand in the currency exchange markets, the international balance
of payments, governmental intervention, speculation and other economic and
political conditions. 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 U.S. dollars.
In addition, many of the currencies in emerging market countries have
experienced steady devaluations relative to the U.S. dollar and major
devaluations have historically occured in certain countries.
INVESTING IN EMERGING MARKETS. Investing in emerging markets involves risks
relating to potential political and economic instability within such markets and
the risks of expropriation, nationalization, confiscation of assets and property
or the imposition of restrictions on foreign investment and on repatriation of
capital invested. In the event of such expropriation, nationalization or other
confiscation in any emerging market, a Fund could lose its entire investment in
that market.
Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.
Economies in emerging markets generally are dependent heavily upon international
trade and, accordingly, have been and may continue to be affected adversely by
trade barriers, exchange controls, managed adjustments in relative currency
values and other protectionist measures imposed or negotiated by the countries
with which they trade. These economies also have been and may continue to be
affected adversely by economic conditions in the countries in which they trade.
The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States and
other major markets. There also may be a lower level of monitoring and
regulation of emerging securities markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
In addition, brokerage commissions, custodial services and other costs relating
to investment in foreign markets generally are more expensive than in the United
States, particularly with respect to emerging markets. Such markets have
different settlement and clearance procedures. In certain markets there have
been times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of a Fund to make intended securities purchases due to settlement
problems could cause the Fund to forego attractive investment opportunities.
Inability to
Prospectus Page 30
<PAGE>
GT GLOBAL EQUITY FUNDS
dispose of a portfolio security caused by settlement problems could result
either in losses to the Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to sell the
security, could result in possible liability to the purchaser.
JAPAN. The Japan Fund invests primarily in equity securities of issuers
domiciled in Japan. The Japan Fund's performance will be closely tied to
economic and political conditions in Japan, and its performance is expected to
be more volatile than more geographically diversified funds. Changes in
regulatory, tax or economic policy in Japan could significantly affect the
Japanese securities markets, and therefore the Japan Fund's performance.
Japan's economic growth has declined significantly since 1990. The general
government position has deteriorated as result of weakening economic growth and
stimulative measures taken to support economic activity and to restore financial
stability. Although the decline in interest rates and fiscal stimulation
packages have helped to contain recessionary forces, uncertainties remain. Japan
is also heavily dependent upon international trade, so its economy is expecially
sensitive to trade barriers and disputes.
The common stocks of many Japanese companies trade at high price-earnings
ratios. Differences in accounting methods make it difficult to compare the
earnings of Japanese companies with those of companies in other countries,
especially the U.S. In general, however, reported net income in Japan is
understated relative to U.S. accounting standards and this is one reason why
price-earnings ratios of the stocks of Japanese companies have tended
historically to be higher than those for U.S. stocks. In addition, Japanese
companies have tended to have higher growth rates than U.S. companies and
Japanese interest rates have generally been lower than in the U.S., both of
which factors tend to result in lower discount rates and higher price-earnings
ratios in Japan than in the U.S.
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 also not always
equally enforced.
In addition, Japan's banking industry is undergoing problems related to bad
loans and declining values in real estate.
PACIFIC REGION COUNTRIES. The Pacific Fund invests primarily in equity
securities of issuers located in Pacific region countries other than Japan.
Certain of the risks associated with international investments are heightened
for investments in Pacific region countries. For example, some of the currencies
of Pacific region countries have experienced steady devaluations relative to the
U.S. dollar, and major adjustments have been made periodically in certain such
currencies. Certain countries, such as India, face serious exchange constraints.
Jurisdictional disputes also exist between South Korea and North Korea.
In addition, Hong Kong will revert to Chinese Administration on July 1, 1997.
Investments in Hong Kong may be subject to expropriation, nationalization or
confiscation, in which case the fund could lose its entire investment in Hong
Kong. In addition, the reversion of Hong Kong also presents a risk that the Hong
Kong dollar will be devalued and a risk of possible loss of investor confidence
in Hong Kong's currency, stock market and assets.
SMALL CAP COMPANIES. The Small Cap Portfolio invests primarily in equity
securities of small cap companies domiciled in the United States. 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, 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 Small Cap Portfolio to dispose of securities of
these small cap companies at prevailing market prices in order to meet
redemptions.
OPTIONS, FUTURES AND FORWARD CURRENCY CONTRACTS. Although the Pacific Fund,
Europe Fund, Japan Fund, International Fund, Worldwide Fund and America Mid Cap
Fund are authorized to enter into options, futures and forward
Prospectus Page 31
<PAGE>
GT GLOBAL EQUITY FUNDS
currency transactions and the Portfolios are authorized to enter into options
and futures transactions, a Fund or Portfolio might not enter into any such
transactions. Options, futures and foreign currency transactions involve certain
risks, which include: (1) dependence on the Manager's ability to predict
movements in the prices of individual securities, fluctuations in the general
securities markets or in the appropriate market sector and movements in interest
rates and currency markets; (2) imperfect correlation, or even no correlation,
between movements in the price of options, forward contracts, 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 or options thereon or to use forward currency
contracts are different from those needed to select the securities in which a
Fund invests; (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 loss of principal under certain conditions; (6) 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 (7) the possible
need to defer closing out of certain options, futures contracts and options
thereon and forward currency contracts in order to qualify or continue to
qualify for the beneficial tax treatment afforded regulated investment companies
under the Internal Revenue Code of 1986, as amended, ("Code"). See "Dividends,
Other Distributions and Federal Income Taxation" herein and "Taxes" in the
Statement of Additional Information.
CONCENTRATION. The Pacific Fund, the Europe Fund the Japan Fund, the America Mid
Cap Fund and the Portfolios each invests a significant portion of its assets in
a particular country or region of the world. As a result, such Funds may be
subject to greater risks and may experience greater volatility than a fund that
is more broadly diversified geographically.
ILLIQUID SECURITIES. Each Fund or Portfolio may invest up to 15% of its net
assets in securities for which no readily available market exists, so-called
"illiquid securities." Illiquid securities may be more difficult to value than
liquid securities and the sale of illiquid securities generally will require
more time and result in higher brokerage charges or dealer discounts and other
selling expenses than the sale of liquid securities. Moreover, illiquid
restricted securities often sell at a price lower than similar securities that
are not subject to restrictions on resale.
- --------------------------------------------------------------------------------
HOW TO INVEST
- --------------------------------------------------------------------------------
GENERAL. 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. 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). 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. In particular, the Funds and GT Global may reject purchase
orders or exchanges by investors who appear to follow, in the Manager's
judgment, a market-timing strategy or otherwise engage in excessive trading. See
"How to Make Exchanges -- Limitations on Purchase Orders and Exchanges."
Prospectus Page 32
<PAGE>
GT GLOBAL EQUITY FUNDS
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."
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. Physical certificates representing a Fund's shares will not be
issued unless a written request is submitted to the Transfer Agent. 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 the next determined 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 DEALER
OF 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 broker/ dealers 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/dealer on
behalf of a single client so that the broker/dealer'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 without a sales charge based on the aggregate purchase
amount equalling at least
Prospectus Page 33
<PAGE>
GT GLOBAL EQUITY FUNDS
$500,000 will be subject to a contingent deferred sales charge for the first
year after their purchase equal to 1% of the lower of the original purchase
price or the net asset value of such shares at the time of redemption. See
"Contingent Deferred Sales Charge -- Class A Shares."
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 sales charge waivers (i) and (vii), described below under "Sales
Charge Waivers -- Class A Shares."
The following purchases 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, including purchases 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") and
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, and trustees or other fiduciaries purchasing shares for employee
benefit plans which are sponsored by organizations with collective retirement
plan assets of $500,000 or more and have less than 100 employees, and purchases
of at least $500,000 by trustees or other fiduciaries of employee benefit plans
with collective retirement plan assets of $100 million or more.
(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
Prospectus Page 34
<PAGE>
GT GLOBAL EQUITY FUNDS
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.
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
Prospectus Page 35
<PAGE>
GT GLOBAL EQUITY FUNDS
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. 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 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) shares redeemed more
than one year after their purchase. Such shares purchased 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 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
Each Fund's public offering price for Class B shares 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. Because 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 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 other 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.
<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, it will
be assumed that the redemption is made first of shares acquired pursuant to the
reinvestment of dividends and distributions; then of shares purchased seven
years or more prior to the redemption; and finally, of shares held for the
longest period of time within the applicable six-year period. For shares
acquired in an exchange, the length of holding period will be measured from the
date of original purchase.
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
Prospectus Page 36
<PAGE>
GT GLOBAL EQUITY FUNDS
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 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: (1) exchanges, as
described below; (2) redemptions in connection with each Fund's systematic
withdrawal plan not in excess of 12% of the value of the account annually; (3)
total or partial redemptions made within one year following the death or
disability of a shareholder; (4) 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;
(5) total or partial redemptions resulting from a distribution following
retirement in the case of a tax-qualified employer-sponsored retirement plan;
(6) 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; (7) a one-time reinvestment in Class B shares of the Fund
within 180 days of a prior redemption; (8) redemptions pursuant to the Fund's
right to liquidate a shareholder's account involuntarily; (9) 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;
(10) redemptions made in connection with participant-directed exchanges between
options in an employer-sponsored benefit plan; (11) redemptions made for the
purpose of providing cash to fund a loan to a participant in a tax-qualified
retirement plan; (12) 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; (13) 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; (14)
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 (15) 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. Investors may purchase either Class A or Class B
shares of a fund through the GT Global Dollar Cost Averaging Program whereby 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
Prospectus Page 37
<PAGE>
GT GLOBAL EQUITY FUNDS
approach. 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. Investors
should contact their brokers or GT Global for more information.
PORTFOLIO REBALANCING PROGRAM. The GT Global Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of GT Global Mutual Funds. The Program automatically
rebalances their 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." 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.
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 broker/dealers may charge a fee for
establishing accounts relating to the Program. Investors should contact their
broker/dealers or GT Global for more information.
Prospectus Page 38
<PAGE>
GT GLOBAL EQUITY FUNDS
HOW TO MAKE EXCHANGES
- --------------------------------------------------------------------------------
Shares of any Fund may be exchanged for shares of the same class 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. 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
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. The terms of the exchange offer may be modified at any
time, on 60 days' prior written notice to shareholders.
An investor interested in making an exchange should contact his 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.
LIMITATIONS ON PURCHASE ORDERS AND EXCHANGES. The GT Global Mutual Funds are not
intended to serve as vehicles for frequent trading in response to short-term
fluctuations in the market. Due to the disruptive effect that market-timing
investment strategies and excessive trading can have on efficient portfolio
management, each GT Global Mutual Fund and GT Global reserves the right to
refuse purchase orders and exchanges by any person or group, if, in the
Manager's judgment, such person or group was following a market-timing strategy
or was otherwise engaging in excessive trading.
In addition, each GT Global Mutual Fund and GT Global reserves the right to
refuse purchase orders and exchanges by any person or group if, in the Manager's
judgment, the Fund would not be able to invest the money effectively in
accordance with that Fund's investment objective and policies or would otherwise
potentially be adversely affected. Although a GT Global Mutual Fund will attempt
to give investors prior notice whenever it is reasonably able to do so, it may
impose the above restrictions at any time.
Finally, as described above, the Funds and GT Global reserve the right to reject
any purchase order.
Prospectus Page 39
<PAGE>
GT GLOBAL EQUITY FUNDS
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
Fund shares 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. If a redeeming shareholder owns
both Class A and Class B shares of a Fund, 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. If the shares are held in the broker/dealer's "street name," the
redemption must be made through the broker/dealer. Broker/ dealers may honor a
redemption request either by repurchasing shares from a redeeming shareholder at
the shares' net asset value next determined 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 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. 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 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. The shareholder's bank may charge a bank wire service fee.
REDEMPTIONS BY TELEPHONE. Redemption requests may be made by telephone by
calling the Transfer Agent at the appropriate toll free number provided in the
Shareholder Account Manual. Shareholders who hold certificates for shares may
not redeem by telephone. REDEMPTION REQUESTS MAY NOT BE MADE BY TELEPHONE FOR
THIRTY DAYS FOLLOWING ANY CHANGE OF THE SHAREHOLDER'S ADDRESS OF RECORD.
Shareholders automatically have telephone privileges to authorize redemptions.
The Funds, GT
Prospectus Page 40
<PAGE>
GT GLOBAL EQUITY FUNDS
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 shareholder of record 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 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 41
<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 42
<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 proportionate share of total assets of 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 Funds' 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 service and distribution fees 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 service and distribution fees
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 absence of any service and distribution fees
applicable to 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 fee accrual differential between the classes.
Prospectus Page 43
<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 44
<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 Fund shares are purchased within 30 days before or after redeeming
other shares of the same Fund (regardless of class) at a loss, all or 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.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by Chancellor LGT
Asset Management, Inc. (the "Manager") as the investment manager of the Pacific
Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund, America Mid
Cap 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
Prospectus Page 45
<PAGE>
GT GLOBAL EQUITY FUNDS
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 Mid Cap 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 Mid Cap
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 Mid Cap 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. These
undertakings may be changed or eliminated in the future.
The Manager also serves as each Fund's and each Portfolio's pricing and
accounting agent. For these services the Manager receives a fee at an annual
rate 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, compose 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 December 31, 1996, the Manager and its worldwide asset management
affiliates manage approximately $62 billion. In the United States, as of
December 31, 1996, the Manager manages or administers approximately $10 billion
of GT Global Mutual Funds. As of December 31, 1996, assets entrusted to
Liechtenstein Global Trust total approximately $84 billion.
On October 31, 1996, Chancellor Capital Management, Inc. ("Chancellor Capital")
merged with LGT Asset Management, Inc., and the resulting entity was named
Chancellor 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.
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
Prospectus Page 46
<PAGE>
GT GLOBAL EQUITY FUNDS
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>
Barbara Mignogna* Portfolio Manager since 1997 Portfolio Manager for the Manager
New York since 1993. Ms. Mignogna has been the
Head of the North American Small Cap
Growth Equity Management Group for
the Manager since 1995. Prior
thereto, Ms. Mignogna was a Portfolio
Manager and Analyst with J.R.O.
Associates from 1988 to 1993.
Mark J. Cunneen* Portfolio Manager since 1997 Portfolio Manager for the Manager
New York since 1992. From February 1992 until
December 1992, Mr. Cunneen was
President of DC Capital Inc., an
investment management firm.
</TABLE>
- --------------
*Employees of Chancellor Capital prior to October 31, 1996.
Prospectus Page 47
<PAGE>
GT GLOBAL EQUITY FUNDS
AMERICA MID CAP FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Ellen H. Adams* Portfolio Manager since 1997 Ms. Adams has been the Head of North
New York American Equity for the Manager since
1995, Director of Equity Research for
the Manager from May 1993 until 1995,
and a Portfolio Manager and Analyst
for the Manager from 1992 until May
1993. Prior thereto, Ms. Adams was a
Portfolio Manager for Neuberger and
Berman from 1987 until 1992.
Ann B. Hutchins* Portfolio Manager since 1997 Portfolio Manager for the Manager
New York since 1994. Prior thereto, Ms.
Hutchins was Equity Portfolio Manager
and Research Analyst for Cadence
Capital Management from 1988 until
1994.
</TABLE>
AMERICA VALUE PORTFOLIO
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE PORTFOLIO LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Ted J. Ujazdowski* Portfolio Manager since 1997 Portfolio Manager for the Manager
New York since 1983. Mr. Ujazdowski has been
Director of the Manager's Value Group
since June 1987.
Adam D. Scheiner* Portfolio Manager since 1997 Portfolio Manager and Analyst of the
New York Manager's Value Group since June
1993. Prior thereto, Mr. Scheiner was
a Securities Analyst at Prudential
Securities Incorporated from 1989
until June 1993.
</TABLE>
- --------------
*Employees of Chancellor Capital prior to October 31, 1996.
Prospectus Page 48
<PAGE>
GT GLOBAL EQUITY FUNDS
WORLDWIDE FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Soraya M. Betterton Portfolio Manager since 1989 Portfolio Manager for the Manager.
San Francisco
Roger Yates Portfolio Manager since 1996 Mr. Yates has been International Chief
London Investment Officer for the Manager
since September 1996. From 1994 to
1996, Mr. Yates was the Chief
Investment Officer and Portfolio
Manager for Europe and the United
Kingdom for the Manager. From 1988 to
1994, Mr. Yates was an Investment
Manager for Morgan Grenfell Asset
Management.
John Nadell Portfolio Manager since 1996 Mr. Nadell has been an Investment
San Francisco Analyst for the Manager since May
1994. Mr. Nadell was an Investment
Analyst for Pacific Equity Management
from October 1990 to May 1994.
</TABLE>
JAPAN FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- -------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Andrew Callender Portfolio Manager since 1997 Portfolio Manager for the Manager
Tokyo since 1990.
</TABLE>
INTERNATIONAL 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).
Roger Yates Portfolio Manager since 1996 Mr. Yates has been International Chief
London Investment Officer for the Manager
since September 1996. From 1994 to
1996, Mr. Yates was the Chief
Investment Officer and Portfolio
Manager for Europe and the United
Kingdom for the Manager. From 1988 to
1994, Mr. Yates was an Investment
Manager for Morgan Grenfell Asset
Management.
</TABLE>
Prospectus Page 49
<PAGE>
GT GLOBAL EQUITY FUNDS
With respect to America Small Cap Portfolio, America Mid Cap Fund and America
Value Portfolio, the Manager utilizes a team approach that relies on its
bottom-up, research-intensive, process-driven stock selection capability to
build the various investment portfolios. The Manager's disciplined process
combines the inputs of analysts performing fundamental and quantitative
research, various committees that set the Manager's firmwide economic forecasts
and sector and industry allocations, and portfolio management teams responsible
for stock selection decisions. While individual members of the Manager's
investment team are assigned primary responsibility for the day-to-day
management of America Small Cap Portfolio, America Mid Cap Fund and America
Value Portfolio, the Portfolios and the Fund, along with similarly managed
accounts, are reviewed on a regular basis by the applicable investment team to
monitor compliance with applicable investment guidelines.
In placing orders for the Funds' and Portfolios' portfolio transactions, the
Manager seeks to obtain the best net results. 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 affiliates of Liechtenstein Global Trust. High
portfolio turnover (over 100%) involves correspondingly greater brokerage
commissions and other transaction costs that the Funds or the Portfolios will
bear directly and could result in the realization of net capital gains which
would be taxable when distributed to shareholders. See "Dividends, Other
Distributions, and Federal Income Taxation."
DISTRIBUTION OF FUND SHARES. GT Global is the distributor 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 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
Prospectus Page 50
<PAGE>
GT GLOBAL EQUITY FUNDS
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, 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. 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. Under
certain circumstances, duplicate mailings of the foregoing reports to the same
household may be consolidated.
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 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
Prospectus Page 51
<PAGE>
GT GLOBAL EQUITY FUNDS
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. Shares for which no voting instructions are received will be voted
in the same proportion as the shares for which voting instructions are received.
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 one-, 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 reinvestment of all dividends and capital gain distributions.
In addition, in order to more completely represent a Fund's performance or more
accurately compare such performance to other measures of investment return, a
Fund also may include in advertisements, sales literature and shareholder
reports other total return performance data ("Non-Standardized Return").
Non-Standardized Return reflects percentage rates of return encompassing all
elements of return (i.e., income and capital appreciation or depreciation); it
assumes reinvestment of all dividends and capital gain
distributions. Non-Standardized Return may be quoted for the same or different
periods as those for which Standardized Return is quoted; it may consist of an
aggregate or average annual percentage rate of return, actual year-by-year rates
or any combination thereof. Non-Standardized Return may or may not take sales
charges into account; performance data calculated without taking the effect of
sales charges into account will be higher than data including the effect of such
charges.
Each Fund's performance data reflect past performance and will not necessarily
be 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
Prospectus Page 52
<PAGE>
GT GLOBAL EQUITY FUNDS
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 53
<PAGE>
GT GLOBAL EQUITY FUNDS
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 54
<PAGE>
GT GLOBAL EQUITY FUNDS
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 55
<PAGE>
GT GLOBAL EQUITY FUNDS
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 56
<PAGE>
GT GLOBAL EQUITY FUNDS
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 57
<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 MID CAP 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.
<TABLE>
<S> <C>
-----------------------------------------------------------
Date
X X
--------------------------------------------------------- ----------------------------------------------------------
X X
--------------------------------------------------------- ----------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
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:
<TABLE>
<CAPTION>
<S> <C>
------------------------------------------- --------------------------------------------------
------------------------------------------- --------------------------------------------------
------------------------------------------- --------------------------------------------------
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.
<TABLE>
<CAPTION>
<S> <C>
---------------------------------------------------------------------------------------------------------------------------------
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>
<TABLE>
<S> <C>
[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>
<TABLE>
<S> <C> <C>
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]
<TABLE>
<S> <C>
GT GLOBAL MUTUAL FUNDS AUTOMATIC INVESTMENT PLAN
</TABLE>
<TABLE>
<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>
<S> <C> <C> <C>
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, INCLUDING FEES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING
MARKET INVESTING AND THE RISKS OF INVESTING IN RELATED INDUSTRIES, PLEASE
CONTACT YOUR FINANCIAL ADVISER 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 MID CAP GROWTH FUND
Concentrates on 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 EQUITY FUNDS: ADVISOR CLASS
PROSPECTUS -- MAY 1, 1997
- --------------------------------------------------------------------------------
<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 MID CAP GROWTH FUND
("EUROPE FUND") ("AMERICA MID CAP 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>
THE PACIFIC FUND, THE EUROPE FUND, THE JAPAN FUND, THE INTERNATIONAL FUND AND
THE WORLDWIDE FUND each seeks long-term growth of capital by investing primarily
in equity securities of issuers domiciled in its Primary Investment Area (as
defined herein).
THE AMERICA MID CAP FUND seeks long-term growth of capital by investing
primarily in equity securities of companies domiciled in the United States that,
at the time of purchase, have market capitalizations of $1 billion to $5 billion
("mid cap companies").
THE AMERICA SMALL CAP FUND seeks long-term capital appreciation by investing all
of its investable assets in the Small Cap Growth Portfolio, which, in turn,
invests primarily in equity securities of companies domiciled in the United
States that, at the time of purchase, have market capitalizations of up to $1
billion ("small cap companies").
THE AMERICA VALUE FUND seeks long-term capital appreciation by investing all of
its investable assets in the Value Portfolio, which, in turn, invests primarily
in equity securities of companies domiciled in the United States that, at the
time of purchase, have market capitalizations of greater than $500 million and
which Chancellor LGT Asset Management, Inc. (the "Manager") believes to be
undervalued in relation to long-term earning power or other factors.
Individually, a "Fund" or "Portfolio" and, collectively, the "Funds" or the
"Portfolios."
Each Portfolio's investment objective is identical to that of its corresponding
Fund. There can be no assurance that any Fund or Portfolio will achieve its
investment objective. The investment experience of the America Small Cap Fund
and the America Value Fund will correspond directly with the investment
experience of their corresponding Portfolios.
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.
The Funds and the Portfolios are managed and/or administered by 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.
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a front-
end or contingent deferred sales charge or Rule 12b-1 fees.
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 May 1, 1997, has been filed with
the Securities and Exchange Commission ("SEC") 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 ADVISER.
[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...................................................................... 7
Investment Objectives and Policies........................................................ 21
Risk Factors.............................................................................. 26
How to Invest............................................................................. 30
How to Make Exchanges..................................................................... 32
How to Redeem Shares...................................................................... 33
Shareholder Account Manual................................................................ 35
Calculation of Net Asset Value............................................................ 36
Dividends, Other Distributions and Federal Income Taxation................................ 37
Management................................................................................ 38
Other Information......................................................................... 43
</TABLE>
Prospectus Page 2
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
- ------------------------------------------------------------
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>
The Funds and the Portfolios: Each Fund is a diversified series of G.T. Global Growth Series
(the "Company"). Each Portfolio is a diversified series of Growth
Portfolio.
Investment Objectives: The Pacific Fund, the Europe Fund, the Japan Fund, the
International Fund, the Worldwide Fund and the America Mid Cap
Fund seek long-term growth of capital; the America Small Cap Fund
and the America Value Fund seek long-term capital appreciation.
Principal Investments: The Pacific Fund, the Europe Fund, the Japan Fund, the
International Fund and the Worldwide Fund each invests primarily
in equity securities of issuers domiciled in its Primary
Investment Area (as defined herein).
The America Mid Cap Fund invests primarily in equity securities of
mid cap companies domiciled in the United States.
The America Small Cap Fund invests all of its investable assets in
the Small Cap Growth Portfolio, which, in turn, invests primarily
in equity securities of small cap companies domiciled in the
United States.
The America Value Fund invests all of its investable assets in the
Value Portfolio, which, in turn, invests primarily in equity
securities of companies domiciled in the United States that, at
the time of purchase, have market capitalizations of greater than
$500 million and which the Manager believes to be undervalued in
relation to long-term earning power or other factors.
Principal 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.
The Pacific Fund, the Europe Fund, the Japan Fund and the
International Fund each invests primarily, and the Worldwide Fund
may invest a significant portion of its assets in, foreign
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. 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.
The Pacific Fund, the Europe Fund, the Japan Fund, the America Mid
Cap Fund and the Portfolios each invests a significant portion of
its assets in issuers in a particular country or region of the
world. As a result, such Funds or Portfolios may be subject to
greater risks and may experience greater volatility than a fund
that is more broadly diversified geographically.
Each Fund may engage in certain foreign currency, options and
futures transactions, and each Portfolio may engage in certain
options and futures transactions, to attempt to hedge against the
overall level of investment or currency risk associated with its
present or planned investments. Such transactions involve certain
risks and transaction costs.
</TABLE>
Prospectus Page 3
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
See "Investment Objectives and Policies" and "Risk Factors."
Investment Manager: 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 $84 billion in total assets as of December 31, 1996.
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. See
"Management."
Advisor Class shares are offered through this Prospectus to (a)
Advisor Class Shares: trustees or other fiduciaries purchasing shares for employee
benefit plans that are sponsored by organizations that 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; (c) any
account with assets of at 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 composing or affiliated with Liechtenstein Global
Trust; and (e) any of the companies composing or affiliated with
Liechtenstein Global Trust.
Shares Available Through: Advisor Class shares of each Fund's shares of beneficial interest
are available through Financial Advisors who have entered into
agreements with the Fund's distributor, GT Global, Inc. ("GT
Global") and certain of its affiliates. See "How to Invest" and
"Shareholder Account Manual."
Exchange Privileges: Advisor Class shares of a Fund may only be exchanged for Advisor
Class shares of other GT Global Mutual Funds, which are open-end
management investment companies advised and/or administered by the
Manager. See "How to Make Exchanges" and "Shareholder Account
Manual."
Redemptions: Shares may be redeemed through the Funds' transfer agent, GT
Global Investor Services, Inc. ("Transfer Agent"). See "How to
Redeem Shares" and "Shareholder Account Manual."
Dividends and Other
Distributions: Dividends are paid annually from net investment income and
realized net short-term capital gain; other distributions are paid
annually from realized net capital gain and net gains from foreign
currency transactions, if any.
Reinvestment: Distributions and other distributions may be reinvested
automatically in Advisor Class shares of the distributing Fund or
in Advisor Class shares of other GT Global Mutual Funds.
Net Asset Value: Advisor Class shares are expected to be quoted daily in the
financial section of most newspapers.
</TABLE>
Prospectus Page 4
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
SUMMARY OF INVESTOR COSTS. The expenses and maximum transactions costs
associated with investing in the Advisor Class shares of each Fund are reflected
in the following tables (1):
<TABLE>
<CAPTION>
GT GLOBAL GT GLOBAL GT GLOBAL
GT GLOBAL GT GLOBAL NEW GT GLOBAL GT GLOBAL AMERICA AMERICA GT GLOBAL
WORLDWIDE INTERNATIONAL PACIFIC EUROPE JAPAN SMALL CAP MID CAP AMERICA
GROWTH GROWTH GROWTH GROWTH GROWTH GROWTH GROWTH VALUE
FUND FUND FUND FUND FUND FUND FUND FUND
--------- ------------- ----------- --------- --------- --------- --------- ---------
ADVISOR ADVISOR ADVISOR ADVISOR ADVISOR ADVISOR ADVISOR ADVISOR
CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS
--------- ------------- ----------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION COSTS:
Maximum sales charge on
purchases (as a % of
offering price)............ None None None None None None None None
Sales charges on reinvested
distributions to
shareholders............... None None None None None None None None
Maximum deferred sales
charges (as a % of net
asset value at time of
purchase or sale, whichever
is less)................... None None None None None None None None
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
(2):
(AS A % OF AVERAGE NET
ASSETS)
Investment management and
administration fees........ .98% .97% .97% .96% .81% .73% .39% .73%
12b-1 distribution and
service fees............... None None None None None None None None
Other expenses.............. % % % % % % % %
--------- ----- ----- --------- --------- --------- --------- ---------
Total Fund Operating
Expenses................... % % % % % % 1.11% %
--------- ----- ----- --------- --------- --------- --------- ---------
--------- ----- ----- --------- --------- --------- --------- ---------
</TABLE>
Prospectus Page 5
<PAGE>
GT GLOBAL EQUITY FUNDS
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES:
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Funds, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
GT Global Worldwide Growth Fund
Advisor Class shares....................................................... $15 $50 $107 $199
GT Global International Growth Fund
Advisor Class shares....................................................... 14 45 99 180
GT Global New Pacific Growth Fund
Advisor Class shares....................................................... 15 50 108 200
GT Global Europe Growth Fund
Advisor Class shares....................................................... 15 49 105 194
GT Global Japan Growth Fund
Advisor Class shares....................................................... 17 56 119 225
GT Global America Small Cap Growth Fund
Advisor Class shares....................................................... 16 52 N/A N/A
GT Global America Mid Cap Growth Fund
Advisor Class shares....................................................... 11 35 81 140
GT Global America Value Fund
Advisor Class shares....................................................... 16 52 N/A N/A
<FN>
- ------------------
* THESE TABLES ARE INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUNDS. 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. The above tables and the assumption in the Hypothetical Example of a
5% annual return are required by regulation of the SEC applicable to all
mutual funds; the 5% annual return is not a prediction of and does not
represent the Funds' projected or actual performance.
Expenses are based on the Fund's fiscal year ended December 31, 1996.
"Other expenses" include custody, transfer agent, legal, audit and other
operating expenses. See "Management" herein and the Statement of Additional
Information for more information. Investors purchasing Advisor Class shares
through financial planners, trust companies, bank trust departments or
registered investment advisers, or under a "wrap fee" program, will be
subject to additional fees charged by such entities or by the sponsors of
such programs. Where any account advised by one of the companies composing
or affiliated with Liechtenstein Global Trust invests in Advisor Class
shares of a Fund, such account shall not be subject to duplicative advisory
fees. The Board of Trustees of the Company believes that the aggregate per
share expenses of the America Small Cap Fund and the America Value Fund and
each of 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.
</TABLE>
Prospectus Page 6
<PAGE>
GT GLOBAL EQUITY FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The tables below provide condensed financial information concerning income and
capital changes for one share of each class of shares 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 fiscal year ended December 31, 1996, and
the financial statements and notes for the America Small Cap Fund and America
Value Fund, for the period October 18, 1996 (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,
-------------------------------------------------------------------------------------------
1996 1995 1994 1993* 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- -------- --------
<S> <C> <C> <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 $10.18
--------- --------- --------- --------- --------- --------- -------- --------
Net investment income
(loss).................. (0.00) (0.00) 0.04 0.07 0.10 0.11 (0.01)
Net realized and
unrealized gain (loss)
on investments.......... 1.74 (1.16) 3.92 0.39 2.29 (1.82) 3.82
--------- --------- --------- --------- --------- --------- -------- --------
Net increase (decrease)
in net asset value
resulting from
investment operations... 1.74 (1.16) 3.96 0.46 2.39 (1.71) 3.81
--------- --------- --------- --------- --------- --------- -------- --------
Distributions:
Net investment
income................ (0.00) (0.00) (0.00) (0.00) (0.15) (0.09) (0.00)
Net realized gain on
investments........... (0.45) (0.78) (0.96) (0.06) (0.00) (0.00) (0.36)
--------- --------- --------- --------- --------- --------- -------- --------
Total
distributions....... (0.45) (0.78) (0.96) (0.06) (0.15) (0.09) (0.36)
--------- --------- --------- --------- --------- --------- -------- --------
Net asset value, end of
period.................. $16.82 $15.53 $17.47 $14.47 $14.07 $11.83 $13.63
--------- --------- --------- --------- --------- --------- -------- --------
--------- --------- --------- --------- --------- --------- -------- --------
Total investment return
(c)(a).................. 11.23% (6.65)% 27.6% 3.3% 20.3% (12.5)% 37.6%
--------- --------- --------- --------- --------- --------- -------- --------
--------- --------- --------- --------- --------- --------- -------- --------
Ratios and supplemental
data:
Net assets, end of period
(in 000's).............. $ $145,982 $182,467 $193,997 $141,310 $126,868 $85,894 $38,263
Ratio of net investment
income (loss) to average
net assets.............. (0.06)% (0.01)% 0.9% 0.5% 0.8% 0.7% (0.1)%
Ratio of expenses to
average net assets:
With expense reduction
(b)................... 1.87% 1.81% 1.9% 2.1% 2.0% 2.1% 2.0%
Without expense
reductions (b)........ 1.93% 1.84% --%(d) --%(d) --%(d) --%(d) --%(d)
Portfolio turnover
rate++++................ 113% 86% 92% 95% 122% 107% 91%
<FN>
- ------------------
+ 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 selected per share data were 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.
</TABLE>
Prospectus Page 7
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL WORLDWIDE GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B++ ADVISOR CLASS+++
------------------------ ---------------------------------------------- ---------------------------
JUNE 9, 1987
(COMMENCEMENT
OF
YEAR OPERATIONS) APRIL 1, 1993 YEAR JUNE 1, 1995
ENDED THROUGH YEAR ENDED DECEMBER 31, TO ENDED TO
DECEMBER DECEMBER 31, ------------------------------ DECEMBER 31, DECEMBER DECEMBER 31,
31, 1988 1987 1996 1995 1994 1993* 31, 1996 1995
-------- ------------- -------- -------- -------- ------------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value,
beginning of period..... $8.84 $10.00 $15.34 $17.39 $15.67 $15.26
-------- ------------- -------- -------- -------- ------------- -------- --------
Net investment income
(loss).................. 0.02 (0.05) (0.12) (0.11) (0.04) 0.03
Net realized and
unrealized gain (loss)
on
investments............. 1.42 (1.11) 1.73 (1.16) 2.72 2.02
-------- ------------- -------- -------- -------- ------------- -------- --------
Net increase (decrease)
in net asset value
resulting from
investment
operations.............. 1.44 (1.16) 1.61 (1.27) 2.68 2.05
-------- ------------- -------- -------- -------- ------------- -------- --------
Distributions:
Net investment
income................ (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Net realized gain on
investments........... (0.10) (0.00) (0.45) (0.78) (0.96) (0.45)
-------- ------------- -------- -------- -------- ------------- -------- --------
Total
distributions....... (0.10) (0.00) (0.45) (0.78) (0.96) (0.45)
-------- ------------- -------- -------- -------- ------------- -------- --------
Net asset value, end of
period.................. $10.18 $8.84 $16.50 $15.34 $17.39 $16.86
-------- ------------- -------- -------- -------- ------------- -------- --------
-------- ------------- -------- -------- -------- ------------- -------- --------
Total investment return
(c)(a).................. 16.3% (11.60)%(a) 10.52% (7.32)% 17.3% 13.46%
-------- ------------- -------- -------- -------- ------------- -------- --------
-------- ------------- -------- -------- -------- ------------- -------- --------
Ratios and supplemental
data:
Net assets, end of period
(in 000's).............. $11,673 $6,570 $56,095 $52,567 $20,592 $1,693
Ratio of net investment
income (loss) to average
net assets (b).......... 0.2% (1.4)%(b) (0.71)% (0.66)% (0.4)% 0.29%
Ratio of expenses to
average net assets:
With expense reduction
(b)................... 2.0% 2.8% 2.52% 2.46% 2.5% 1.52%
Without expense
reduction (b)......... --%(d) --%(d) 2.58% 2.49% --%(d) 1.58%
Portfolio turnover
rate++++................ 181% 271% 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.
+++ On 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.
* The selected per share data were 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 8
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL INTERNATIONAL GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------
<CAPTION>
1996 1995 1994 1993* 1992 1991 1990
---------- ---------- ---------- ------------ ------------ ------------ ------------
<S> <C> <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 and foreign
currency................... (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 (c)................... 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% --%(d) --%(d) --%(d) --%(d)
Portfolio turnover
rate+++...................... 75% 96% 90% 89% 83% 58%
<CAPTION>
<S> <C> <C>
1989 1988
------------ -----------
<S> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning of
period....................... $6.77 $5.71
------------ -----------
Net investment income
(loss)....................... 0.01 (0.01)
Net realized and unrealized
gain (loss) on
investments.................. 2.60 1.12
------------ -----------
Net increase (decrease) in net
asset value resulting from
investment
operations................... 2.61 1.11
------------ -----------
Distributions:
Net investment income....... (0.00) (0.00)
Net realized gain on
investments and foreign
currency................... (0.13) (0.05)
In excess of net realized
gain on investments........ (0.00) (0.00)
------------ -----------
Total distributions..... (0.13) (0.05)
------------ -----------
Net asset value, end of
period....................... $9.25 $6.77
------------ -----------
------------ -----------
Total investment
return (c)................... 38.6% 19.4%
------------ -----------
------------ -----------
Ratios and supplemental data:
Net assets, end of period
(in 000's)................... $136,975 $29,792
Ratio of net investment income
(loss) to average net
assets....................... 0.1% (0.2)%
Ratio of expenses to average
net assets:
With expense
reduction.................. 1.9% 2.1%
Without expense
reduction.................. --%(d) --%(d)
Portfolio turnover
rate+++...................... 82% 115%
</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 selected per share data were calculated based upon weighted average
shares outstanding during the period.
** The per share data reflects a 3 for 1 stock split effective August 14,
1989.
(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 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.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 9
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL INTERNATIONAL GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
------------------------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, APRIL 1, 1993
YEAR ENDED DECEMBER 31, TO
------------------------- ----------------------------------- DECEMBER 31,
1987** 1986** 1996 1995 1994 1993*
----------- ----------- --------- --------- ----------- --------------
Per Share Operating Performance:
Net asset value, beginning of period..... $6.13 $4.16 $9.07 $10.98 $8.74
----------- ----------- --------- --------- ----------- --------------
Net investment income (loss)............. (0.01) (0.05) (0.04) (0.10) (0.01)
Net realized and unrealized gain (loss)
on investments.......................... 0.35 2.22 0.32 (0.82) 2.25
----------- ----------- --------- --------- ----------- --------------
Net increase (decrease) in net asset
value resulting from investment
operations.............................. 0.34 2.17 0.28 (0.92) 2.24
----------- ----------- --------- --------- ----------- --------------
Distributions:
Net investment income.................. (0.00) (0.00) (0.00) (0.04) (0.00)
Net realized gain on investments and
foreign currency...................... (0.76) (0.20) (0.24) (0.95) (0.00)
In excess of net realized gain on
investments........................... (0.00) (0.00) (0.20) (0.00) (0.00)
----------- ----------- --------- --------- ----------- --------------
Total distributions................ (0.76) (0.20) (0.44) (0.99) (0.00)
----------- ----------- --------- --------- ----------- --------------
Net asset value, end of period........... $5.71 $6.13 $8.91 $9.07 $10.98
----------- ----------- --------- --------- ----------- --------------
----------- ----------- --------- --------- ----------- --------------
Total investment return (a)(c)........... 6.2% 53.7% 3.15% (8.36)% 25.6%
----------- ----------- --------- --------- ----------- --------------
----------- ----------- --------- --------- ----------- --------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..... $17,178 $12,052 $69,654 $71,794 $30,745
Ratio of net investment income (loss) to
average net assets (b).................. (0.3)% (0.9)% (0.41)% (0.69)% (0.4)%
Ratio of expenses to average net assets:
With expense reduction (b)............. 1.9% 1.9% 2.35% 2.35% 2.4%
Without expense reduction (b).......... --%(d) --%(d) 2.43% 2.40%(d) --%(d)
Portfolio turnover rate+++............... 198% 122% 75% 96% 90%
<CAPTION>
ADVISOR CLASS++
--------------------------------
<S> <C> <C>
JUNE 1, 1995
YEAR ENDED TO
DECEMBER 31, DECEMBER 31,
1996 1995
-------------- ---------------
Per Share Operating Performance:
Net asset value, beginning of period..... $8.49
-------------- ---------------
Net investment income (loss)............. 0.03
Net realized and unrealized gain (loss)
on investments.......................... 1.03
-------------- ---------------
Net increase (decrease) in net asset
value resulting from investment
operations.............................. 1.06
-------------- ---------------
Distributions:
Net investment income.................. (0.00)
Net realized gain on investments and
foreign currency...................... (0.24)
In excess of net realized gain on
investments........................... (0.20)
-------------- ---------------
Total distributions................ (0.44)
-------------- ---------------
Net asset value, end of period........... $9.11
-------------- ---------------
-------------- ---------------
Total investment return (a)(c)........... 12.56%
-------------- ---------------
-------------- ---------------
Ratios and supplemental data:
Net assets, end of period (in 000's)..... $ 381
Ratio of net investment income (loss) to
average net assets (b).................. 0.59%
Ratio of expenses to average net assets:
With expense reduction (b)............. 1.35%
Without expense reduction (b).......... 1.43%
Portfolio turnover rate+++............... 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.
++ On 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.
* The selected per share data were calculated based upon weighted average
shares outstanding during the period.
** The per share data reflects a 3 for 1 stock split effective August 14, 1989.
(a) Not annualized.
(b) Annualized.
(c) 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.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 10
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
--------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------------
1996 1995(D) 1994 1993 1992 1991 1990
---------- ---------- ------------ ------------ ------------ ------------ ------------
<S> <C> <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 and foreign
currency................... (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 (c)................... 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% --%(d) --%(d) --%(d) --%(d) --%(d)
Portfolio turnover
rate+++...................... 63% 87% 117% 72% 85% 75%
<CAPTION>
1989* 1988*
------------ -----------
<S> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning of
period....................... $8.74 $7.25
------------ -----------
Net investment income
(loss)....................... (0.01) 0.01
Net realized and unrealized
gain (loss) on
investments.................. 4.21 1.66
------------ -----------
Net increase (decrease) in net
asset value resulting from
investment
operations................... 4.20 1.67
------------ -----------
Distributions:
Net investment income....... (0.00) (0.00)
Net realized gain on
investments and foreign
currency................... (0.33) (0.18)
In excess of net realized
gain on investments........ (0.00) (0.00)
------------ -----------
Total distributions....... (0.33) (0.18)
------------ -----------
Net asset value, end of
period....................... $12.61 $8.74
------------ -----------
------------ -----------
Total investment
return (c)................... 48.1% 23.2%
------------ -----------
------------ -----------
Ratio and supplemental data:
Net assets, end of period
(in 000's)................... $170,071 $56,342
Ratio of net investment income
(loss) to average net
assets....................... (0.1)% 0.0%
Ratio of expenses to average
net assets:
With expense
reductions................. 2.0% 2.2%
Without expense
reductions................. --%(d) --%(d)
Portfolio turnover
rate+++...................... 70% 107%
</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 selected per share data were calculated based upon weighted average
shares outstanding during the period.
** The per share data reflects a 2 for 1 stock split effective August 14, 1989.
(a) Not annualized.
(b) Annualized.
(c) 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.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 11
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL NEW PACIFIC GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
--------------------------- ---------------------------------------------------------
YEAR ENDED DECEMBER 31, APRIL 1, 1993
YEAR ENDED DECEMBER 31, TO
--------------------------- ---------------------------------------- DECEMBER 31,
1987* 1986* 1996 1995* 1994 1993
------------ ------------ ------------ ---------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning of
period........................ $14.98 $8.82 $11.96 $15.79 $11.27
------------ ------------ ------------ ---------- ------------ --------------
Net investment income (loss)... (0.01) (0.05) 0.03 (0.06) (0.10)
Net realized and unrealized
gain (loss) on investments.... 0.51 6.22 0.75 (3.15) 5.27
------------ ------------ ------------ ---------- ------------ --------------
Net increase (decrease) in net
asset value resulting from
investment operations......... 0.50 6.17 0.78 (3.21) 5.17
------------ ------------ ------------ ---------- ------------ --------------
Distributions:
Net investment income........ (0.00) (0.01) (0.02) (0.00) (0.00)
Net realized gain on
investments and foreign
currency.................... (8.23) (0.00) (0.43) (0.55) (0.65)
In excess of net realized
gain on investments......... (0.00) (0.00) (0.00) (0.07) (0.00)
------------ ------------ ------------ ---------- ------------ --------------
Total distributions........ (8.23) (0.01) (0.45) (0.62) (0.65)
------------ ------------ ------------ ---------- ------------ --------------
Net asset value, end of
period........................ $7.25 $14.98 $12.29 $11.96 $15.79
------------ ------------ ------------ ---------- ------------ --------------
------------ ------------ ------------ ---------- ------------ --------------
Total investment
return (a)(c)................. 5.7% 69.9% 6.54% (20.30)% 46.3%
------------ ------------ ------------ ---------- ------------ --------------
------------ ------------ ------------ ---------- ------------ --------------
Ratio and supplemental data:
Net assets, end of period
(in 000's).................... $ 38,780 $ 50,647 $130,887 $120,171 $72,122
Ratio of net investment income
(loss) to average net assets
(b)........................... (0.2)% (0.5)% 0.26% (0.54)% (0.9)%
Ratio of expenses to average
net assets:
With expense
reductions (b).............. 1.9% 1.4% 2.54% 2.46% 2.5%
Without expense reductions
(b)......................... --%(d) --%(d) 2.59% --%(d) --%(d)
Portfolio turnover rate+++..... 215% 229% 63% 87% 117%
<CAPTION>
ADVISOR CLASS++
-----------------------------
JUNE 1, 1995
YEAR ENDED TO
DECEMBER 31, DECEMBER 31,
1986 1995(D)
------------ --------------
<S> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning of
period........................ $12.89
------------ --------------
Net investment income (loss)... 0.09
Net realized and unrealized
gain (loss) on investments.... 0.05
------------ --------------
Net increase (decrease) in net
asset value resulting from
investment operations......... 0.14
------------ --------------
Distributions:
Net investment income........ (0.15)
Net realized gain on
investments and foreign
currency.................... (0.43)
In excess of net realized
gain on investments......... (0.00)
------------ --------------
Total distributions........ (0.58)
------------ --------------
Net asset value, end of
period........................ $12.45
------------ --------------
------------ --------------
Total investment
return (a)(c)................. 1.07%
------------ --------------
------------ --------------
Ratio and supplemental data:
Net assets, end of period
(in 000's).................... $ 935
Ratio of net investment income
(loss) to average net assets
(b)........................... 1.26%
Ratio of expenses to average
net assets:
With expense
reductions (b).............. 1.54%
Without expense reductions
(b)......................... 1.59%
Portfolio turnover rate+++..... 63%
</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.
++ On 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.
* The selected per share data were calculated based upon weighted average
shares outstanding during the period.
** The per share data reflects a 2 for 1 stock split effective August 14, 1989.
(a) Not annualized.
(b) Annualized.
(c) 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.
(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 EUROPE GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
--------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------------------
1996 1995* 1994* 1993* 1992* 1991 1990
------------ ------------ ---------- ------------ ------------ -------------- --------------
<S> <C> <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(c) 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) (0.00) (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 (c)......... 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
reductions....... 1.89% 1.81%(d) --%(d) --%(d) --%(d) --%(d)
Portfolio turnover
rate+++............ 108% 91% 67% 65% 55% 34%
<CAPTION>
1989** 1988**
------------ ----------
<S> <C> <C>
Per Share Operating
Performance:
Net asset value,
beginning of
period............. $7.77 $7.76
------------ ----------
Net investment
income............. (0.02) (0.07)
Net realized and
unrealized gain
(loss) on
investments and
foreign currency... 3.19 0.87
------------ ----------
Net increase
(decrease) in net
asset value
resulting from
investment
operations......... 3.17 0.80
------------ ----------
Distributions:
Net investment
income........... (0.00) (0.00)
Net realized gain
on investments...
In excess of net
investment
income........... (0.00) (0.79)
In excess of net
realized gain on
investments...... (0.00) (0.00)
------------ ----------
Total
distributions.. (0.00) (0.79)
------------ ----------
Net asset value, end
of year............ $10.94 $7.77
------------ ----------
------------ ----------
Total investment
return (c)......... 40.7% 11.1%
------------ ----------
------------ ----------
Ratios and
supplemental data:
Net assets, end of
period (in
000's)............. $382,428 $8,376
Ratio of net
investment income
(loss) to average
net assets......... (0.6)% (1.0)%
Ratio of expenses to
average net assets:
With expense
reductions....... 1.9% 3.6%
Without expense
reductions....... --%(d) --%(d)
Portfolio turnover
rate+++............ 43% 153%
</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 selected per share data were calculated based upon weighted average
shares outstanding during the period.
** 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%.
(a) Not annualized.
(b) Annualized.
(c) 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.
(d) 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 EUROPE GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
ADVISOR
CLASS A+ CLASS B+ CLASS++
-------------------------- ----------------------------------------------------- --------------
YEAR ENDED DECEMBER 31, APRIL 1, 1993
YEAR ENDED DECEMBER 31, TO YEAR ENDED
-------------------------- ------------------------------------ DECEMBER 31, DECEMBER 31,
1987** 1986** 1996 1995(D) 1994* 1993* 1996
------------ ----------- ------------ --------- --------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value, beginning of
period........................ $9.62 $6.82 $9.97 $10.79 $9.02
------------ ----------- ------------ --------- --------- -------------- --------------
Net investment income (loss)... (0.00)+++ (0.03)+++ (0.03) (0.00) 0.00
Net realized and unrealized
gain (loss) on investments and
foreign currency.............. 0.57 2.83 0.94 (0.69) 1.85
------------ ----------- ------------ --------- --------- -------------- --------------
Net increase (decrease) in net
asset value resulting from
investment operations......... 0.57 2.80 0.91 (0.69) 1.85
------------ ----------- ------------ --------- --------- -------------- --------------
Distributions:
Net investment income........ (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................. (2.43) (0.00) (0.04)
In excess of net realized
gain on investments......... (0.00) (0.00) (0.00) (0.13) (0.00)
------------ ----------- ------------ --------- --------- -------------- --------------
Total distributions...... (2.43) (0.00) (0.07) (0.13) (0.08)
------------ ----------- ------------ --------- --------- -------------- --------------
Net asset value, end of
period........................ $7.76 $9.62 $10.81 $9.97 $10.79
------------ ----------- ------------ --------- --------- -------------- --------------
------------ ----------- ------------ --------- --------- -------------- --------------
Total investment return
(a)(c)........................ 6.6% 41.0% 9.20% (6.38)% 20.5%
------------ ----------- ------------ --------- --------- -------------- --------------
------------ ----------- ------------ --------- --------- -------------- --------------
Ratios and supplemental data:
Net assets, end of period (in
000's)........................ $10,227 $9,809 $73,025 $81,602 $34,048
Ratio of net investment income
(loss) to average net assets
(b)........................... (0.00)%+++ (0.4)%+++ (0.27)% (0.04)% (0.1)%(b)
Ratio of expenses to average
net assets:
With expense reductions
(b)......................... 2.0%+++ 2.0%+++ 2.48% 2.38% 2.6%
Without expense reductions
(b)......................... --%(d) --%(d) 2.54% 2.46%(d) --%(d)
Portfolio turnover rate+++..... 193% 102% 108% 91% 67%
<CAPTION>
JUNE 1, 1995
TO
DECEMBER 31,
1995(D)
--------------
<S> <C>
Per Share Operating
Performance:
Net asset value, beginning of
period........................ $10.24
--------------
Net investment income (loss)... 0.08
Net realized and unrealized
gain (loss) on investments and
foreign currency.............. 0.71
--------------
Net increase (decrease) in net
asset value resulting from
investment operations......... 0.79
--------------
Distributions:
Net investment income........ (0.14)
In excess of net investment
income...................... (0.04)
Net realized gain on
investments.................
In excess of net realized
gain on investments......... (0.00)
--------------
Total distributions...... (0.18)
--------------
Net asset value, end of
period........................ $10.85
--------------
--------------
Total investment return
(a)(c)........................ 7.75%
--------------
--------------
Ratios and supplemental data:
Net assets, end of period (in
000's)........................ $ 718
Ratio of net investment income
(loss) to average net assets
(b)........................... 0.73%
Ratio of expenses to average
net assets:
With expense reductions
(b)......................... 1.48%
Without expense reductions
(b)......................... 1.54%
Portfolio turnover rate+++..... 108%
</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.
++ On 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.
* The selected per share data were calculated based upon weighted average
shares outstanding during the period.
** 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%.
(a) Not annualized.
(b) Annualized.
(c) 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.
(d) 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 AMERICA SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
CLASS A(D)
-----------------------------------------------------------
OCTOBER 18,
1995
(COMMENCEMENT
OF
OPERATIONS)
YEAR ENDED THROUGH
DECEMBER 31, DECEMBER 31,
1996 1995
--------------- ----------------------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year.......... $ $11.43
------- -------
Net investment income (loss)................ 0.04*
Net realized and unrealized gain (loss) on
investments................................ 0.33
------- -------
Net increase (decrease) in net asset value
resulting from investment operations....... 0.37
------- -------
Net asset value, end of year................ $ $11.80
------- -------
Total investment return (a)(c).............. 3.24%
------- -------
Ratios and supplemental data:
Net assets, end of period (in 000's)........ $ $1,931
Ratio of net investment income (loss) to
average net assets:
With reimbursement by the Manager (b)..... 1.68%
Without reimbursement by the Manager
(b)...................................... (20.52)%
Ratio of expenses to average net assets:
With reimbursement by the Manager (b)..... 2.00%
Without reimbursement by the Manager
(b)...................................... 24.20%
<CAPTION>
CLASS B(D)
-----------------------------------------------------------
OCTOBER 18,
1995
(COMMENCEMENT
OF
OPERATIONS)
YEAR ENDED THROUGH
DECEMBER 31, DECEMBER 31,
1996 1995
--------------- ----------------------------
<S> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year.......... $ $11.43
------- -------
Net investment income (loss)................ 0.02*
Net realized and unrealized gain (loss) on
investments................................ 0.33
------- -------
Net increase (decrease) in net asset value
resulting from investment operations....... 0.35
------- -------
Net asset value, end of year................ $ $11.78
------- -------
Total investment return (a)(c).............. 3.06%
------- -------
Ratios and supplemental data:
Net assets, end of period (in 000's)........ $ $2,024
Ratio of net investment income (loss) to
average net assets:
With reimbursement by the Manager (b)..... 1.03%
Without reimbursement by the Manager
(b)...................................... (21.17)%
Ratio of expenses to average net assets:
With reimbursement by the Manager (b)..... 2.65%
Without reimbursement by the Manager
(b)...................................... 24.85%
<CAPTION>
ADVISOR CLASS(D)
-----------------------------------------------------------
OCTOBER 18,
1995
(COMMENCEMENT
OF
OPERATIONS)
YEAR ENDED THROUGH
DECEMBER 31, DECEMBER 31,
1996 1995
--------------- ----------------------------
Per Share Operating Performance:
Net asset value, beginning of year.......... $ $11.43
------- -------
Net investment income (loss)................ 0.05*
Net realized and unrealized gain (loss) on
investments................................ 0.33
------- -------
Net increase (decrease) in net asset value
resulting from investment operations....... 0.38
------- -------
Net asset value, end of year................ $ $11.81
------- -------
Total investment return (a)(c).............. 3.32%
------- -------
Ratios and supplemental data:
Net assets, end of period (in 000's)........ $ $ 52
Ratio of net investment income (loss) to
average net assets:
With reimbursement by the Manager (b)..... 2.03%
Without reimbursement by the Manager
(b)...................................... (20.17)%
Ratio of expenses to average net assets:
With reimbursement by the Manager (b)..... 1.65%
Without reimbursement by the Manager
(b)...................................... 23.85%
</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) The selected per share data were calculated based upon weighted average
shares outstanding during the period.
Prospectus Page 15
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL AMERICA MID CAP GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
----------------------------------------------------------------------------
1996 1995 1994* 1993 1992 1991
---------- ---------- ------------ ---------- ---------- ---------
<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
---------- ---------- ------------ ---------- ---------- ---------
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) in net asset value
resulting from investment operations............. 4.17 2.59 1.35 4.43 2.29
---------- ---------- ------------ ---------- ---------- ---------
Distributions:
Net investment income........................... (0.21) (0.02) (0.00) (0.00) (0.01)
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 year...................... $19.07 $17.69 $17.17 $17.12 $14.13
---------- ---------- ------------ ---------- ---------- ---------
---------- ---------- ------------ ---------- ---------- ---------
Total investment return (a)(c).................... 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%
<CAPTION>
1990 1989 1988
--------- -------- --------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year................ $12.84 $8.76 $8.56
--------- -------- --------
Net investment income (loss)...................... (0.01) 0.10** (0.40)
Net realized and unrealized gain (loss) on
investments...................................... (0.94) 4.65 1.35
--------- -------- --------
Net increase (decrease) in net asset value
resulting from investment operations............. (0.95) 4.75 0.95
--------- -------- --------
Distributions:
Net investment income........................... (0.00) (0.10) (0.00)
Net realized gain on investments................ (0.00) (0.57) (0.75)
--------- -------- --------
Total distributions........................... (0.00) (0.67) (0.75)
--------- -------- --------
Net asset value, end of year...................... $11.89 $12.84 $8.76
--------- -------- --------
--------- -------- --------
Total investment return (a)(c).................... (7.4)% 54.8% 11.1%
--------- -------- --------
--------- -------- --------
Ratios and supplemental data:
Net assets, end of period (in 000's).............. $ 65,413 $ 9,930 $ 1,548
Ratio of net investment income (loss) to average
net assets....................................... (0.1)% 1.2%* (4.7)%
Ratio of expenses to average net assets........... 2.0% 1.9%* 5.1%
Portfolio turnover rate+++........................ 145% 133% 184%
</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 selected per share data were calculated based upon weighted average
shares outstanding during the period.
** 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.
(b) Annualized.
(c) Total investment return does not include sales charge.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 16
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL AMERICA MID CAP GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
ADVISOR
CLASS A+ CLASS B+ CLASS++
-------------- -------------------------------------------------- --------------
JUNE 9, 1987
(COMMENCEMENT
OF OPERATIONS) APRIL 1, 1993
THROUGH YEAR ENDED DECEMBER 31, TO YEAR ENDED
DECEMBER 31, --------------------------------- DECEMBER 31, DECEMBER 31,
1987 1996 1995 1994* 1993* 1996
-------------- -------- -------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year...... $10.00 $ $ 17.50 $ 17.09 $15.90 $
------- -------- -------- ------------ ------- -------
Net investment income (loss)............ (0.19) 0.10 (0.09) (0.29)
Net realized and unrealized gain (loss)
on investments......................... (1.25) 3.87 2.55 2.78
------- -------- -------- ------------ ------- -------
Net increase (decrease) in net asset
value resulting from investment
operations............................. (1.44) 3.97 2.46 2.49
------- -------- -------- ------------ ------- -------
Distributions:
Net investment income................. (0.00) (0.12) (0.00) (0.00)
Net realized gain on investments...... (0.00) (2.58) (2.05) (1.30)
------- -------- -------- ------------ ------- -------
Total distributions................. (0.00) (2.70) (2.05) (1.30)
------- -------- -------- ------------ ------- -------
Net asset value, end of year............ $ 8.56 $ $ 18.77 $ 17.50 $17.09 $
------- -------- -------- ------------ ------- -------
------- -------- -------- ------------ ------- -------
Total investment return (a)(c).......... (14.4)% 22.42% 15.06% 16.1%
------- -------- -------- ------------ ------- -------
------- -------- -------- ------------ ------- -------
Ratios and supplemental data:
Net assets, end of period (in 000's).... $1,039 $ $348,435 $ 80,060 $1,982 $
Ratio of net investment income (loss) to
average net assets (b)................. (2.7)% 0.59% (0.48)% (1.3)%
Ratio of expenses to average net assets
(b).................................... 3.8% 2.11% %2.23 2.2%
Portfolio turnover rate+++.............. 505% 71% % 102 92%
<CAPTION>
JUNE 1, 1995
TO
DECEMBER 31,
1995
---------------
<S> <C>
Per Share Operating Performance:
Net asset value, beginning of year...... $20.61
---------------
Net investment income (loss)............ 0.21
Net realized and unrealized gain (loss)
on investments......................... 1.09
---------------
Net increase (decrease) in net asset
value resulting from investment
operations............................. 1.30
---------------
Distributions:
Net investment income................. (0.28)
Net realized gain on investments...... (2.58)
---------------
Total distributions................. (2.86)
---------------
Net asset value, end of year............ $19.05
---------------
---------------
Total investment return (a)(c).......... 6.01%
---------------
---------------
Ratios and supplemental data:
Net assets, end of period (in 000's).... $1,394
Ratio of net investment income (loss) to
average net assets (b)................. 1.59%
Ratio of expenses to average net assets
(b).................................... 1.11%
Portfolio turnover rate+++.............. 71%
</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.
++ On 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.
* The selected per share data were calculated based upon weighted average
shares outstanding during the period.
** 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.
(b) Annualized.
(c) Total investment return does not include sales charge.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 17
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL AMERICA VALUE FUND
<TABLE>
<CAPTION>
CLASS A(D)
---------------------------------
<S> <C> <C>
OCTOBER 18, 1995
(COMMENCE-
MENT OF OPERATIONS)
THROUGH
YEAR ENDED DECEMBER 31, 1996 DECEMBER 31, 1995
--------------- ---------------
Per Share Operating Performance:
Net asset value, beginning of year................. $11.43
------- -------
Net investment income (loss)....................... 0.03*
Net realized and unrealized gain (loss) on
investments....................................... 1.30
------- -------
Net increase (decrease) in net asset value
resulting from investment operations.............. 1.33
------- -------
Net asset value, end of year....................... $12.76
------- -------
Total investment return (c)(a)..................... 11.64%
------- -------
Ratios and supplemental data:
Net assets, end of period (in 000's)............... $870
Ratio of net investment income (loss) to average
net assets:
With reimbursement by the Manager (b)............ 1.10%
Without reimbursement by the Manager (b)......... (47.44)%
Ratio of expenses to average net assets:
With reimbursement by the Manager (b)............ 2.00%
Without reimbursement by the Manager (b)......... 50.54%
<CAPTION>
CLASS B(D)
---------------------------------
<S> <C> <C>
OCTOBER 18, 1995
(COMMENCE-
MENT OF OPERATIONS)
THROUGH
YEAR ENDED DECEMBER 31, 1996 DECEMBER 31, 1995
--------------- ---------------
Per Share Operating Performance:
Net asset value, beginning of year................. $11.43
------- -------
Net investment income (loss)....................... 0.01*
Net realized and unrealized gain (loss) on
investments....................................... 1.31
------- -------
Net increase (decrease) in net asset value
resulting from investment operations.............. 1.32
------- -------
Net asset value, end of year....................... $12.75
------- -------
Total investment return (c)(a)..................... 11.55%
------- -------
Ratios and supplemental data:
Net assets, end of period (in 000's)............... $1,254
Ratio of net investment income (loss) to average
net assets:
With reimbursement by the Manager (b)............ 0.45%
Without reimbursement by the Manager (b)......... (48.09)%
Ratio of expenses to average net assets:
With reimbursement by the Manager (b)............ 2.65%
Without reimbursement by the Manager (b)......... 51.19%
<CAPTION>
ADVISOR CLASS(D)
---------------------------------
OCTOBER 18, 1995
(COMMENCE-
MENT OF OPERATIONS)
THROUGH
YEAR ENDED DECEMBER 31, 1996 DECEMBER 31, 1995
--------------- ---------------
Per Share Operating Performance:
Net asset value, beginning of year................. $11.43
------- -------
Net investment income (loss)....................... 0.04*
Net realized and unrealized gain (loss) on
investments....................................... 1.30
------- -------
Net increase (decrease) in net asset value
resulting from investment operations.............. 1.34
------- -------
Net asset value, end of year....................... $12.77
------- -------
Total investment return (c)(a)..................... 11.72%
------- -------
Ratios and supplemental data:
Net assets, end of period (in 000's)............... $81
Ratio of net investment income (loss) to average
net assets:
With reimbursement by the Manager (b)............ 1.45%
Without reimbursement by the Manager (b)......... (47.09)%
Ratio of expenses to average net assets:
With reimbursement by the Manager (b)............ 1.65%
Without reimbursement by the Manager (b)......... 50.19%
</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) The selected per share data were calculated based upon weighted average
shares outstanding during the period.
Prospectus Page 18
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL JAPAN GROWTH FUND
<TABLE>
<CAPTION>
CLASS A+
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------
1996 1995* 1994 1993 1992* 1991
--------- --------- ----------- ----------- ------------ -----------
<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
--------- --------- ----------- ----------- ------------ -----------
Net investment income (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) in net asset
value resulting from investment
operations............................. 0.22 0.75 2.91 (2.40) (0.32)
--------- --------- ----------- ----------- ------------ -----------
Distributions:
Net realized gain on investments and
foreign currency..................... (1.37) (0.21) (0.00) (0.06) (0.00)
--------- --------- ----------- ----------- ------------ -----------
Total distributions............... (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 (c)............. 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 income (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............... 1.99% 1.91% 2.1% 2.2%*** 2.2%
Without expense reductions............ 2.14% 2.03%(d) --%(d) --%(d) --%(d)
Portfolio turnover rate+++.............. 67% 49% 104% 115% 251%
<CAPTION>
1990 1989 1988**
----------- ----------- -----------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $16.39 $10.57 $10.36
----------- ----------- -----------
Net investment income (loss)............ (0.05)**** (0.19) (0.20)
Net realized and unrealized gain (loss)
on investments......................... (4.60) 6.57 2.44
----------- ----------- -----------
Net increase (decrease) in net asset
value resulting from investment
operations............................. (4.65) 6.38 2.24
----------- ----------- -----------
Distributions:
Net realized gain on investments and
foreign currency..................... (0.26) (0.56) (2.03)
----------- ----------- -----------
Total distributions............... (0.26) (0.56) (2.03)
----------- ----------- -----------
Net asset value, end of period.......... $11.48 $16.39 $10.57
----------- ----------- -----------
----------- ----------- -----------
Total investment return (c)............. (28.7)% 60.7% 21.9%
----------- ----------- -----------
----------- ----------- -----------
Ratios and supplemental data:
Net assets, end of period (in 000's).... $51,693 $48,405 $18,591
Ratio of net investment income (loss) to
average net assets..................... (1.2)%**** (1.6)% (1.5)%
Ratio of expenses to average net assets:
With expense reductions............... 2.2 %*** 2.1% 2.2%
Without expense reductions............ --%(d) --%(d) --%(d)
Portfolio turnover rate+++.............. 138% 108% 150%
</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 selected per share data were 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)%.
**** 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) 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.
(d) Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reduction, if any.
Prospectus Page 19
<PAGE>
GT GLOBAL EQUITY FUNDS
GT GLOBAL JAPAN GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
CLASS A+ CLASS B+
------------------------- -------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, APRIL 1, 1993
YEAR ENDED DECEMBER 31, TO
------------------------- ------------------------------------------ DECEMBER 31,
1987** 1986** 1986 1995* 1994 1993
----------- ----------- ------------ ------------ ------------ ----------------
Per Share Operating Performance:
Net asset value, beginning of period.... $9.88 $6.20 $12.02 $11.57 $9.85
----------- ----------- ------------ ------------ ------------ -------
Net investment income (loss)............ (0.15) (0.14) (0.12) (0.13) (0.18)
Net realized and unrealized gain (loss)
on investments......................... 4.52 3.91 0.25 0.79 1.90
----------- ----------- ------------ ------------ ------------ -------
Net increase (decrease) in net asset
value resulting from investment
operations............................. 4.37 3.77 0.13 0.66 1.72
----------- ----------- ------------ ------------ ------------ -------
Distributions:
Net realized gain on investments and
foreign currency..................... (3.89) (0.09) (1.37) (0.21) (0.00)
----------- ----------- ------------ ------------ ------------ -------
Total distributions............... (3.89) (0.09) (1.37) (0.21) (0.00)
----------- ----------- ------------ ------------ ------------ -------
Net asset value, end of period.......... $10.36 $9.88 $10.78 $12.02 $11.57
----------- ----------- ------------ ------------ ------------ -------
----------- ----------- ------------ ------------ ------------ -------
Total investment return (a)(c).......... 52.1% 61.3% 1.20% 5.81% 17.5%
----------- ----------- ------------ ------------ ------------ -------
----------- ----------- ------------ ------------ ------------ -------
Ratios and supplemental data:
Net assets, end of period (in 000's).... $10,049 $7,313 $41,274 $27,355 $3,699
Ratio of net investment income (loss) to
average net assets (b)................. (2.4)% (1.6)% (1.05)% (0.97)% (0.9)%
Ratio of expenses to average net assets:
With expense reductions (b)........... 3.0% 2.2% 2.64% 2.56% 2.7%
Without expense reductions (b)........ --%(d) --%(d) 2.79% 2.68% --%(d)
Portfolio turnover rate+++.............. 319% 207% 67% 49% 104%
<CAPTION>
ADVISOR CLASS++
-----------------------------------
<S> <C> <C>
JUNE 1, 1995
YEAR ENDED TO
DECEMBER 31, DECEMBER 31,
1996 1995*
---------------- ----------------
Per Share Operating Performance:
Net asset value, beginning of period.... $10.50
------- -------
Net investment income (loss)............ (0.00)
Net realized and unrealized gain (loss)
on investments......................... 1.89
------- -------
Net increase (decrease) in net asset
value resulting from investment
operations............................. 1.89
------- -------
Distributions:
Net realized gain on investments and
foreign currency..................... (1.37)
------- -------
Total distributions............... (1.37)
------- -------
Net asset value, end of period.......... $11.02
------- -------
------- -------
Total investment return (a)(c).......... 18.14%
------- -------
------- -------
Ratios and supplemental data:
Net assets, end of period (in 000's).... $558
Ratio of net investment income (loss) to
average net assets (b)................. (0.05)%
Ratio of expenses to average net assets:
With expense reductions (b)........... 1.64%
Without expense reductions (b)........ 1.79%
Portfolio turnover rate+++.............. 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.
++ On 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.
* The selected per share data were 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)%.
*** 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) 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.
(d) 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
INVESTMENT OBJECTIVES
AND POLICIES
- --------------------------------------------------------------------------------
THE PACIFIC FUND, THE EUROPE FUND,
THE JAPAN FUND, THE INTERNATIONAL FUND AND
THE WORLDWIDE FUND
The Pacific Fund, the Europe Fund, the Japan Fund, the International Fund and
the Worldwide Fund each seeks long-term growth of capital. The Funds 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. Equity securities in which the Funds may invest
include common stocks, preferred stocks, convertible debt securities and
warrants to acquire such securities. The Funds' Primary Investment Areas include
the following countries:
PACIFIC FUND -- Australia, Hong Kong, India, Indonesia, Malaysia, New Zealand,
Pakistan, the Philippines, Singapore, South Korea, Taiwan and Thailand
EUROPE FUND -- Austria, Belgium, Denmark, Finland, France, Germany, Greece,
Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland, Turkey and the United Kingdom
JAPAN FUND -- Japan
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
WORLDWIDE FUND -- same as International Fund, but including the United States
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.
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 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 is
designed for investors wishing to concentrate their investment in a particular
market but still desiring the professional management, liquidity and
diversification afforded by a mutual fund.
For purposes of this Prospectus, 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.
The Pacific Fund, Europe Fund, Japan Fund, International Fund and Worldwide 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: (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 that have operations in
the Primary Investment Area or which stand to benefit from political and
economic events in the Primary Investment Area.
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 60% of the Worldwide Fund's assets
normally are invested in the equity securities of U.S. issuers.
Prospectus Page 21
<PAGE>
GT GLOBAL EQUITY FUNDS
The Pacific Fund, Europe Fund, Japan Fund, International Fund and Worldwide Fund
may invest up to 35% of their total assets in debt securities, including 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 Funds 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. Moody's considers securities rated in the lowest
category of investment grade, i.e., securities rated Baa, to have speculative
characteristics. See the Statement of Additional Information for a description
of Moody's and S&P ratings.
THE AMERICA MID CAP FUND, THE AMERICA SMALL CAP FUND AND THE AMERICA VALUE FUND
The investment objective of the America Mid Cap Fund is long term growth of
capital. The investment objective of the America Small Cap Fund and America
Value Fund is long term capital appreciation.
The America Mid Cap Fund seeks its investment objective by investing, under
normal circumstances, at least 65% of its total assets in equity securities of
mid cap companies domiciled in the United States. Equity securities in which the
Fund may invest include common stocks, preferred stocks, convertible debt
securities and warrants to acquire such securities. The Fund may also invest up
to 35% of its total assets in the equity securities of (a) issuers domiciled in
the United States that are not mid cap companies; and (b) issuers domiciled
outside the United States, including (i) securities of issuers in countries that
are not located in the United States but are linked by tradition, economic
markets, cultural similarities or geography to the United States; and (ii)
securities of issuers located elsewhere in the world that have operations in the
United States or which stand to benefit from political or economic events in the
United States. In addition, the Fund may invest up to 35% of its total assets in
investment grade debt securities including U.S. and foreign government
securities and corporate debt securities, including Samurai and Yankee bonds,
Euro bonds and Depositary Receipts. The issuers of such debt securities may or
may not be domiciled in the United States.
The America Small Cap Fund seeks its investment objective by investing all of
its investable assets in the America Small Cap Portfolio, which, in turn,
normally invests at least 65% of its total assets in equity securities,
including common stocks, convertible preferred stocks, convertible debt
securities and warrants of small cap companies domiciled in the United States.
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, 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 Small Cap Portfolio also may invest up to 10% of its total assets in
securities of foreign issuers in the form of ADRs or other similar securities
convertible into securities of foreign issuers.
The America Value Fund seeks its investment objective by investing all of its
investable assets in the America Value Portfolio, which, 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 issuers domiciled in the United States that, at the time of purchase, have
market capitalizations of greater than $500 million and which the Manager
believes to be undervalued in relation to long-term earning power or other
factors. 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. The America Value Portfolio also may invest up to 10% of its
total assets in securities of foreign issuers in the form of ADRs or other
similar securities convertible into securities of foreign issuers.
For purposes of this Prospectus, market capitalization means the total market
value of a company's
Prospectus Page 22
<PAGE>
GT GLOBAL EQUITY FUNDS
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.
For purposes of this Prospectus, 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.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In managing the Pacific Fund, Europe Fund, Japan Fund, International Fund and
Worldwide 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.
In selecting equity securities for the Mid Cap Fund and the Small Cap Portfolio,
the Manager uses a multi-stage process to identify companies that possess
sustainable above average growth at an attractive offering price. The process
for selecting small and mid cap growth stocks consists of four components: asset
allocation, industry diversification, stock selection and quality control. The
Manager tracks individual companies and categorizes them into industry groups.
Purchases and sales of individual securities are based on the ratings
established by the Manager on a weekly basis. Stocks ranked in the top 30% are
buys, and the bottom 30% are sells. The quality control process ensures
consistency with the industry and asset allocation guidelines as well as stock
guidelines. There is no assurance that this process will produce better or more
consistent results than other investment processes.
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 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.
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 market place. Such values are a function of yield, maturity, issue
classification and quality characteristics, coupled with expectations regarding
the economy, movements in the general level 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 Mid Cap Fund may seek to take
advantage of differences in relative values of fixed income securities among
various countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Manager may employ a temporary defensive investment strategy if it
determines such a strategy to be warranted due to market, economic or political
Prospectus Page 23
<PAGE>
GT GLOBAL EQUITY FUNDS
conditions. During such time a Fund or Portfolio may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Pacific Fund, Europe Fund, Japan Fund,
International Fund, Worldwide Fund and America Mid Cap Fund may invest up to
100% of its total assets in cash (U.S. dollars, foreign currencies or
multinational currency units) and/or high quality debt securities or money
market instruments issued by corporations, or the U.S. or a foreign government.
In addition, for temporary defensive purposes, most or all investments of the
Pacific Fund, Europe Fund, Japan Fund, International Fund and Worldwide Fund may
be made in the United States and denominated in U.S. dollars. Under a defensive
strategy, each Portfolio may hold U.S. dollars and/ or may invest any portion of
its assets in high quality 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 Mid Cap 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.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
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
total 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.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Manager believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of a Fund in privatizations in appropriate
circumstances. In certain foreign countries, the ability of foreign entities
such as the Fund to participate in privatizations may be limited by local law,
or the terms on which the Fund may be permitted to participate may be less
advantageous than those for local investors. There can be no assurance that
foreign governments will continue to sell companies currently owned or
controlled by them or that privatization programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. 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. Each Fund or Portfolio may borrow up to 33 1/3% of its total
assets. However, no additional investments will be made if a Fund or Portfolio's
borrowings exceed 5% of its total assets. Any borrowing by a Fund or Portfolio
may cause greater fluctuation in the value of its shares than would be the case
if a Fund or Portfolio did not borrow.
A reverse repurchase agreement is a borrowing transaction in which a Fund or a
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. A "roll"
borrowing transaction involves a Fund or Portfolio's sale of securities together
with its commitment (for which that Fund or Portfolio may receive a fee) to
purchase similar, but not identical, securities at a future date.
SECURITIES LENDING. The Funds or Portfolios may lend their portfolio securities
to broker/dealers or to other institutional investors. Securities lending allows
a Fund or Portfolio to retain ownership of the securities loaned and, at the
same time's earn additional income that may be used to offset a Fund's or
Portfolio's custody fees. 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. While a loan is outstanding, the borrower must
maintain with the Fund's or the Portfolio's custodian collateral consisting of
cash, U.S. government securities or certain irrevocable letters of credit equal
to
Prospectus Page 24
<PAGE>
GT GLOBAL EQUITY FUNDS
at least the value of the borrowed securities, plus any accrued interest. 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.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. 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.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Pacific Fund, Europe
Fund, Japan Fund, International Fund, Worldwide Fund and America Mid Cap Fund
may use forward currency contracts, futures contracts, options on securities,
options on indices, options on currencies and options on futures contracts to
attempt to hedge against the overall level of investment risk normally
associated with each such Fund's portfolio. In addition, each Portfolio may use
options on securities, options on indices, futures contracts and options on
futures contracts to attempt to hedge against the overall level of investment
risk normally associated with its 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. See "Risk Factors -- Options, Futures and Forward Currency Strategies"
herein and 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 Mid Cap 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 Mid Cap
Fund may enter into forward currency contracts either with respect to specific
transactions or with respect to such Fund's portfolio positions. The Pacific
Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund and America
Mid Cap 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 to hedge against overall
fluctuations in the securities markets or market sectors generally or in a
specific market sector.
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
purchase 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
Prospectus Page 25
<PAGE>
GT GLOBAL EQUITY FUNDS
the debt portion of its portfolio against changes in the general level of
interest rates.
OTHER INFORMATION. The investment objective of each Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
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 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 are not fundamental policies and may be
changed by vote of the Company's Board of Trustees, without shareholder
approval.
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.
OTHER INFORMATION REGARDING THE PORTFOLIOS. As previously described, 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. Because its corresponding Fund will invest only
in its corresponding Portfolio, that Fund's shareholders will acquire only an
indirect interest in the investments of that Portfolio.
The America Small Cap Fund and America Value Fund may each redeem 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. A change in a Portfolio's investment objective, policies
or limitations which is not approved by the Board or shareholders of the
corresponding Fund could require the Fund to redeem its interest in the
Portfolio. Any such redemption could result in a distribution in kind of
portfolio securities (as opposed to a cash distribution) by the Portfolio. In
addition, a distribution in kind could result in a less diversified portfolio of
investments for the Fund and could adversely affect the liquidity of the Fund.
Should such a distribution occur, the Fund could incur brokerage fees or other
transaction costs in converting such securities to cash. Upon redemption, 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.
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.
The America Small Cap Fund and America Value Fund may each be materially
affected by the actions of large investors in its corresponding Portfolio, if
any. For example, as with all open-end investment companies, if a large investor
were to redeem its interest in a Portfolio, (1) that Portfolio's remaining
investors could experience higher pro rata operating expenses, thereby producing
lower returns; and (2) 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
Prospectus Page 26
<PAGE>
GT GLOBAL EQUITY FUNDS
effective voting control over the operation of that Portfolio.
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that any Fund or Portfolio will achieve its
investment objective. Each Fund's net asset value will fluctuate, reflecting
fluctuations of its securities and its net currency exposure, or fluctuations in
the market value of the securities of its corresponding Portfolio. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. In addition, the value of debt securities held by a Fund or
Portfolio will fluctuate with changes in the perceived creditworthiness of the
issuers of such securities and interest rates.
FOREIGN INVESTING. Investing in foreign securities 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 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. In addition, certain costs attributable to foreign
investing, such as custody charges, are higher than those attributable to
domestic investing. A Fund's interest and dividends from foreign issuers may be
subject to non-U.S. withholding taxes, thereby reducing its net investment
income.
With respect to some foreign countries, there is the increased 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.
Because the Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide
Fund and America Mid Cap Fund may invest substantially in securities denominated
in currencies other than the U.S. dollar, and because they may hold foreign
currencies, they 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 the
Fund's shares, and also may affect the value of dividends and interest earned by
the Funds and gains and losses realized by the Funds. 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.
The exchange rates between the U.S. dollar and other currencies are determined
by supply and demand in the currency exchange markets, the international balance
of payments, governmental intervention, speculation and other economic and
political conditions. 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 U.S. dollars.
INVESTING IN EMERGING MARKETS. Investing in emerging markets involves risks
relating to potential political and economic instability within such markets and
the risks of expropriation, nationalization, confiscation of assets and property
or the imposition of restrictions on foreign investment and on repatriation of
capital invested. In the event of such expropriation, nationalization or other
confiscation in any emerging market, a Fund could lose its entire investment in
that market.
Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and
Prospectus Page 27
<PAGE>
GT GLOBAL EQUITY FUNDS
rapid fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.
Economies in emerging markets generally are dependent heavily upon international
trade and, accordingly, have been and may continue to be affected adversely by
trade barriers, exchange controls, managed adjustments in relative currency
values and other protectionist measures imposed or negotiated by the countries
with which they trade. These economies also have been and may continue to be
affected adversely by economic conditions in the countries in which they trade.
The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States and
other major markets. There also may be a lower level of monitoring and
regulation of emerging securities markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
In addition, brokerage commissions, custodial services and other costs relating
to investment in foreign markets generally are more expensive than in the United
States, particularly with respect to emerging markets. Such markets have
different settlement and clearance procedures. In certain markets there have
been times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of a Fund to make intended securities purchases due to settlement
problems could cause the Fund to forego attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to sell the
security, could result in possible liability to the purchaser.
JAPAN. The Japan Fund invests primarily in equity securities of issuers
domiciled in Japan. The Japan Fund's performance will be closely tied to
economic and political conditions in Japan, and its performance is expected to
be more volatile than more geographically diversified funds. Changes in
regulatory, tax or economic policy in Japan could significantly affect the
Japanese securities markets, and therefore the Japan Fund's performance.
Japan's economic growth has declined significantly since 1990. The general
government position has deteriorated as result of weakening economic growth and
stimulative measures taken to support economic activity and to restore financial
stability. Although the decline in interest rates and fiscal stimulation
packages have helped to contain recessionary forces, uncertainties remain. Japan
is also heavily dependent upon international trade, so its economy is especially
sensitive to trade barriers and disputes.
The common stocks of many Japanese companies trade at high price-earnings
ratios. Differences in accounting methods make it difficult to compare the
earnings of Japanese companies with those of companies in other countries,
especially the U.S. In general, however, reported net income in Japan is
understated relative to U.S. accounting standards and this is one reason why
price-earnings ratios of the stocks of Japanese companies have tended
historically to be higher than those for U.S. stocks. In addition, Japanese
companies have tended to have higher growth rates than U.S. companies and
Japanese interest rates have generally been lower than in the U.S., both of
which factors tend to result in lower discount rates and higher price-earnings
ratios in Japan than in the U.S.
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 also not always
equally enforced.
In addition, Japan's banking industry is undergoing problems related to bad
loans and declining values in real estate.
PACIFIC REGION COUNTRIES. The Pacific Fund invests primarily in equity
securities of issuers located in Pacific region countries other than Japan.
Certain of the risks associated with international investments are heightened
for investments in Pacific region countries. For example, some of the currencies
of Pacific region countries have experienced steady devaluations relative to the
U.S. dollar, and major adjustments have been made periodically in certain such
currencies. Certain countries, such as India, face serious exchange constraints.
Jurisdictional disputes also exist between South Korea and North Korea. In
addition, a Fund may invest in Hong Kong, which will revert to Chinese
Administration on July 1, 1997.
Prospectus Page 28
<PAGE>
GT GLOBAL EQUITY FUNDS
Investments in Hong Kong may be subject to expropriation, nationalization or
confiscation, in which case the fund could lose its entire investment in Hong
Kong. In addition, the reversion of Hong Kong also presents a risk that the Hong
Kong dollar will be devalued and a risk of possible loss of investor confidence
in Hong Kong's currency stock market and assets.
SMALL CAP COMPANIES. The Small Cap Portfolio invests primarily in equity
securities of small cap companies domiciled in the United States. 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, 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 Small Cap Portfolio to dispose of securities of
these small cap companies at prevailing market prices in order to meet
redemptions.
OPTIONS, FUTURES AND FORWARD CURRENCY CONTRACTS. Although the Pacific Fund,
Europe Fund, Japan Fund, International Fund, Worldwide Fund and America Mid Cap
Fund are authorized to enter into options, futures and forward currency
transactions and the Portfolios are authorized to enter into options and futures
transactions, a Fund or Portfolio might not enter into any such transactions.
Options, futures and foreign currency transactions involve certain risks, which
include: (1) dependence on the Manager's ability to predict movements in the
prices of individual securities, fluctuations in the general securities markets
or in the appropriate market sector and movements in interest rates and currency
markets; (2) imperfect correlation, or even no correlation, between movements in
the price of options, forward contracts, 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 or options thereon or to use forward currency contracts are different
from those needed to select the securities in which a Fund invests; (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 loss
of principal under certain conditions; (6) 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 (7) the possible need to defer closing out of
certain options, futures contracts and options thereon and forward currency
contracts in order to qualify or continue to qualify for the beneficial tax
treatment afforded regulated investment companies under the Internal Revenue
Code of 1986, as amended, ("Code"). See "Dividends, Other Distributions and
Federal Income Taxation" herein and "Taxes" in the Statement of Additional
Information.
CONCENTRATION. The Pacific Fund, the Europe Fund and the Japan Fund each invests
a significant portion of its assets in a particular country or region of the
world. As a result, such Funds may be subject to greater risks and may
experience greater volatility than a fund that is more broadly diversified
geographically.
ILLIQUID SECURITIES. Each Fund or Portfolio may invest up to 15% of its net
assets in securities for which no readily available market exists, so-called
"illiquid securities." Illiquid securities may be more difficult to value than
liquid securities and the sale of illiquid securities generally will require
more time and result in higher brokerage charges or dealer discounts and other
selling expenses than the sale of liquid securities. Moreover, illiquid
restricted securities often sell at a price lower than similar securities that
are not subject to restrictions on resale.
Prospectus Page 29
<PAGE>
GT GLOBAL EQUITY FUNDS
HOW TO INVEST
- --------------------------------------------------------------------------------
GENERAL. Advisor Class shares are offered through this Prospectus to (a)
trustees or other fiduciaries purchasing shares for employee benefit plans that
are sponsored by organizations that 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
at 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 ("Wrap Fee Account"); (d) accounts
advised by one of the companies composing or affiliated with Liechtenstein
Global Trust; and (e) any of the companies composing or affiliated with
Liechtenstein Global Trust. Financial planners, trust companies, bank trust
companies and registered investment advisers referenced in subpart (b) and
sponsors of "wrap fee" programs referenced in subpart (c) are collectively
referred to as "Financial Advisors." Investors in Wrap Fee Accounts and Advisory
Accounts may only purchase Advisor Class shares through Financial Advisors who
have entered into agreements with GT Global and certain of its affiliates.
Investors may be charged a fee by their brokers or agents if they effect
transactions other than through a dealer.
All purchase orders will be executed at the public offering price next
determined after the purchase order is received. Orders received by GT Global
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 FUNDS AND GT GLOBAL RESERVE THE RIGHT TO
REJECT ANY PURCHASE ORDER. In particular, the Funds and GT Global may reject
purchase orders or exchanges by investors who appear to follow, in the Manager's
judgement, a market-timing strategy or otherwise engage in excessive trading.
See "How to Make Exchanges -- Limitations on Purchase Orders and Exchanges."
Fiduciaries and Financial Advisors may be required to provide information
satisfactory to GT Global concerning their eligibility to purchase Advisor Class
shares. For specific information on opening an account, please contact your
Financial Advisor or GT Global.
PURCHASES BY BANK WIRE. Shares of the Funds may also be purchased 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. Accordingly, a bank wire
received by the close of regular trading on the NYSE on a Business Day will be
effected that day. A wire investment is considered received when the Transfer
Agent is notified that the bank wire has been credited to a Fund. Prior
telephonic or facsimile notice that a bank wire is being sent must be provided
to the Transfer Agent. A 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. For
more information, please refer to the Shareholder Account Manual in this
Prospectus.
CERTIFICATES. Physical certificates representing a Fund's shares will not be
issued unless a written request is submitted to the Transfer Agent. 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.
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.
Prospectus Page 30
<PAGE>
GT GLOBAL EQUITY FUNDS
The Program will automatically rebalance their 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." 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.
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 cancelled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Certain broker/ dealers may
charge a fee for establishing accounts relating to the Program. Investors should
contact their broker/dealers or GT Global for more information.
Prospectus Page 31
<PAGE>
GT GLOBAL EQUITY FUNDS
HOW TO MAKE EXCHANGES
- --------------------------------------------------------------------------------
Advisor Class shares of any Fund may be exchanged for Advisor Class shares of
other GT Global Mutual Funds (including the other Equity Funds), based on their
respective net asset values, provided that the registration remains identical.
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 -- Taxes." 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
Up to four exchanges each year per Fund may be made without charge. A $7.50
service charge will be imposed on each subsequent exchange. Exchange requests
received in good order by the Transfer Agent before the close of regular trading
on the NYSE on any Business Day will be processed at the net asset value
calculated on that day. The terms of the exchange offer may be modified at any
time, on 60 days' prior written notice.
EXCHANGES BY TELEPHONE. A shareholder may give exchange information to his or
her Financial Advisor. 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 Fund employs 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.
Investors in Wrap Fee Accounts and Advisory Accounts interested in making an
exchange should contact their Financial Advisors to request the prospectus of
the other GT Global Mutual Fund(s) being considered. Other investors should
contact GT Global. See the Shareholder Account Manual in this Prospectus.
LIMITATIONS ON PURCHASE ORDERS AND EXCHANGES. The GT Global Mutual Funds are not
intended to serve as vehicles for frequent trading in response to short-term
fluctuations in the market. Due to the disruptive effect that market-timing
investment strategies and excessive trading can have on efficient portfolio
management, each GT Global Mutual Fund and GT Global reserves the right to
refuse purchase orders and exchanges by any person or group, if, in the
Manager's judgment, such person or group was following a market-timing strategy
or was otherwise engaging in excessive trading.
In addition, each GT Global Mutual Fund and GT Global reserves the right to
refuse purchase orders and exchanges by any person or group if, in the Manager's
judgment, the Fund would not be able to invest the money effectively in
accordance with that Fund's investment objective and policies or would otherwise
potentially be adversely affected. Although a GT Global Mutual Fund will attempt
to give investors prior notice whenever it is reasonably able to do so, it may
impose the above restrictions at any time.
Finally, as described above, the Funds and GT Global reserve the right to reject
any purchase order.
Prospectus Page 32
<PAGE>
GT GLOBAL EQUITY FUNDS
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
Shares of each Fund may be redeemed at their net asset value and redemption
proceeds will be sent within seven days of the execution of a redemption
request. 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. Redemptions will be effected at the net asset value
next determined after the Transfer Agent has received the request in good order
and any required supporting documentation. Redemption requests 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 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.
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 for each wire
redemption sent, but reserves the right to do so in the future. The
shareholder's bank may charge a bank wire service fee.
REDEMPTIONS BY TELEPHONE. Redemption requests may be made by telephone by
calling the Transfer Agent at the appropriate toll free number provided in the
Shareholder Account Manual. Shareholders who hold certificates for shares may
not redeem by telephone. REDEMPTION REQUESTS MAY NOT BE MADE BY TELEPHONE FOR
THIRTY DAYS FOLLOWING ANY CHANGE OF THE SHAREHOLDER'S ADDRESS OF RECORD.
Shareholders automatically have telephone privileges to authorize redemptions.
The Fund, 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 Fund employs 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 shareholder of record and/or requests that redemption
proceeds be mailed to an address other than the shareholder's address of record
require a signature guarantee. In addition, if the shareholder's address of
record has been changed within the preceding thirty days, a signature guarantee
is required. Redemptions of shares for which certificates have been issued must
be accompanied by properly endorsed share certificates.
OTHER IMPORTANT REDEMPTION INFORMATION. A request for redemption will not be
processed until all of the necessary documentation has been received in good
order. A shareholder in a Wrap Fee Account or Advisory Account who is in doubt
about what documents are required should contact his or her Financial Advisor.
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
Prospectus Page 33
<PAGE>
GT GLOBAL EQUITY FUNDS
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.
GT Global reserves the right to redeem the shares of any Advisory Account or
Wrap Fee Account if the amount invested in GT Global Mutual Funds through such
account is reduced to less than $500 through redemptions or other action by the
shareholder. Written notice will be given to the shareholder at least 60 days
prior to the date fixed for such redemption, during which time the shareholder
may increase the amount invested in GT Global Mutual Funds through such account
to an aggregate amount of $500 or more.
For additional information on how to redeem shares, see the Shareholder Account
Manual in this Prospectus, or contact your Financial Advisor.
Prospectus Page 34
<PAGE>
GT GLOBAL EQUITY FUNDS
SHAREHOLDER ACCOUNT MANUAL
- --------------------------------------------------------------------------------
Purchase, exchange and redemption orders should be placed in accordance with
this Manual. It is recommended that investors in Wrap Fee Accounts and Advisory
Accounts make such orders through their Financial Advisor. PLEASE BE CAREFUL TO
REFERENCE "ADVISOR CLASS" IN ALL INSTRUCTIONS PROVIDED. 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
A new account may be opened by calling 1-800-223-2138 to obtain an account
number. WITHIN SEVEN DAYS OF PURCHASE A COMPLETED ACCOUNT APPLICATION CONTAINING
THE APPROPRIATE TAXPAYER IDENTIFICATION NUMBER MUST BE SENT 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 their financial advisor or GT Global at
1-800-223-2138.
Prospectus Page 35
<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 the America Value Fund,
is the value of each such Fund's proportionate share of total assets of 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 will be valued in U.S. dollars based
on the prevailing exchange rates on that day.
Certain of the Funds' 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.
Prospectus Page 36
<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 Advisor Class shares of a Fund will be higher than the
per share income dividends on shares of other classes of that Fund as a result
of the service and distribution fee applicable to those other shares.
SHAREHOLDERS MAY ELECT:
/ / to have all dividends and other distributions automatically reinvested in
additional Advisor Class shares of the distributing Fund (or other GT Global
Mutual Funds); or
/ / to receive dividends in cash and have other distributions automatically
reinvested in additional Advisor Class shares of the distributing Fund (or
other GT Global Mutual Funds); or
/ / to receive other distributions in cash and have dividends automatically
reinvested in additional Advisor Class shares of the distributing Fund (or
other GT Global Mutual Funds); or
/ / to receive dividends and other distributions in cash.
Automatic reinvestments in additional Advisor Class shares are made at net asset
value 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 ADVISOR CLASS SHARES OF THE DISTRIBUTING FUND.
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 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
Prospectus Page 37
<PAGE>
GT GLOBAL EQUITY FUNDS
and whether such distributions are paid in cash or reinvested in additional
shares.
Each Fund provides federal tax information to its shareholders annually,
including information about dividends and other distributions paid during the
preceding year and, under certain circumstances, the shareholders' respective
shares of any foreign taxes paid by the Fund, in which event each shareholder
would be required to include in his or her gross income his or her pro rata
share of those taxes but might be entitled to claim a credit or deduction for
them.
Each Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other noncorporate
shareholders who have not furnished to the Fund a correct taxpayer
identification number or a properly completed claim for exemption on Form W-8 or
W-9. Withholding at that rate also is required from dividends and capital gain
distributions payable to such shareholders who otherwise are subject to backup
withholding. Fund accounts opened via a bank wire purchase (see "How to Invest
- -- Purchases Through the Distributor") are considered to have uncertified
taxpayer identification numbers unless a completed Form W-8 or W-9 or Account
Application is received by the Transfer Agent within seven days after the
purchase. A shareholder should contact the Transfer Agent if the shareholder is
uncertain whether a proper taxpayer identification number is on file with a
Fund.
A redemption of Fund shares may result in taxable gain or loss to the redeeming
shareholder, depending upon whether the redemption proceeds are more or less
than the shareholder's adjusted basis for the redeemed shares. An exchange of
Fund shares for shares of another GT Global Mutual Fund (including another Fund)
generally will have similar tax consequences. In addition, if shares of a Fund
are purchased within 90 days before or after redeeming other shares of the same
Fund (regardless of class) at a loss, all or a part of the loss will not be
deductible and instead will increase the basis of the newly purchased shares.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting each Fund and its shareholders. See "Taxes"
in the Statement of Additional Information for a further discussion. There may
be other federal, state, local or foreign tax considerations applicable to a
particular investor. Prospective investors therefore are urged to consult their
tax advisers.
- --------------------------------------------------------------------------------
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.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by Chancellor LGT
Asset Management, Inc. (the "Manager") as the investment manager of the Pacific
Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund and America
Mid Cap 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
Prospectus Page 38
<PAGE>
GT GLOBAL EQUITY FUNDS
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 Mid Cap 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. The Manager and GT Global have undertaken to limit each Fund's,
other than America Small Cap Fund's, America Value Fund's and America Mid Cap
Fund's, expenses (exclusive of brokerage commissions, taxes, interest and
extraordinary expenses) to the annual level of 1.90% of the average daily net
assets of each such Fund's Advisor Class shares. The Manager and GT Global also
have undertaken to limit expenses of the America Small Cap Fund, America Growth
Fund and America Value Fund (exclusive of brokerage commissions, taxes, interest
and extraordinary expenses) to the maximum annual level of 1.65% of the average
daily net assets of each such Fund's Advisor Class shares. These undertakings
may be changed or eliminated in the future.
The Manager also serves as each Fund's and each Portfolio's pricing and
accounting agent. For these services the Manager receives a fee at an annual
rate 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, compose 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 December 31, 1996, the Manager and its worldwide asset management
affiliates manage approximately $62 billion. In the United States, as of
December 31, 1996, the Manager manages or administers approximately $10 billion
of GT Global Mutual Funds. As of December 31, 1996, assets entrusted to
Liechtenstein Global Trust total approximately $84 billion.
On October 31, 1996, Chancellor Capital Management, Inc. ("Chancellor Capital")
merged with LGT Asset Management, Inc., and the resulting entity was named
Chancellor 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.
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.
Prospectus Page 39
<PAGE>
GT GLOBAL EQUITY FUNDS
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 Portfolio Manager for the Manager and LGT Asset Management Ltd. (Asia).
Hong Kong since 1993
</TABLE>
EUROPE FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- ----------------------- --------------------- ------------------------------------------------------------------------
<S> <C> <C>
Anna Powell Portfolio Manager Portfolio Manager for LGT Asset Management PLC (London) and the Manager
London since 1995 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>
Barbara Mignogna* Portfolio Manager Portfolio Manager for the Manager since 1993. Ms. Mignogna has been the
New York since 1997 Head of the North American Small Cap Growth Equity Management Group for
the Manager since 1995. Prior thereto, Ms. Mignogna was a Portfolio
Manager and Analyst with J.R.O. Associates from 1988 to 1993.
Mark J. Cunneen* Portfolio Manager Portfolio Manager for the Manager since 1992. From February 1992 until
New York since 1997 December 1992, Mr. Cunneen was President of DC Capital Inc., an
investment management firm.
</TABLE>
AMERICA MID CAP FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- ----------------------- --------------------- ------------------------------------------------------------------------
<S> <C> <C>
Ellen H. Adams* Portfolio Manager Ms. Adams has been the Head of North American Equity for the Manager
New York since 1997 since 1995, Director of Equity Research for the Manager from May 1993
until 1995, and a Portfolio Manager and Analyst for the Manager from
1992 until May 1993. Prior thereto, Ms. Adams was a Portfolio Manager
for Neuberger and Berman from 1987 until 1992.
Ann B. Hutchins* Portfolio Manager Portfolio Manager for the Manager since 1994. Prior thereto, Ms.
New York since 1997 Hutchins was Equity Portfolio Manager and Research Analyst for Cadence
Capital Management from 1988 until 1994.
</TABLE>
- --------------
* Employees of Chancellor Capital prior to October 31, 1996.
Prospectus Page 40
<PAGE>
GT GLOBAL EQUITY FUNDS
AMERICA VALUE PORTFOLIO
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE PORTFOLIO LAST FIVE YEARS
- ----------------------- --------------------- ------------------------------------------------------------------------
<S> <C> <C>
Ted J. Ujazdowski* Portfolio Manager Portfolio Manager for the Manager since 1983. Mr. Ujazdowski has been
since 1997 Director of the Manager's Value Group since June 1987.
Adam D. Scheiner* Portfolio Manager Portfolio Manager and Analyst of the Manager's Value Group since June
since 1997 1993. Prior thereto, Mr. Scheiner was a Securities Analyst at
Prudential Securities Incorporated from 1989 until June 1993.
</TABLE>
WORLDWIDE FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- ----------------------- --------------------- ------------------------------------------------------------------------
<S> <C> <C>
Soraya M. Betterton Portfolio Manager Portfolio Manager for the Manager.
San Francisco since 1989
Roger Yates Portfolio Manager Mr. Yates has been International Chief Investment Officer for the
London since 1996 Manager since September 1996. From 1994 to 1996, Mr. Yates was the
Chief Investment Officer and Portfolio Manager for Europe and the
United Kingdom for the Manager. From 1988 to 1994, Mr. Yates was an
Investment Manager for Morgan Grenfell Asset Management.
John Nadell Portfolio Manager Mr. Nadell has been an Investment Analyst for the Manager since May
San Francisco since 1996 1994. Mr. Nadell was an Investment Analyst for Pacific Equity
Management from October 1990 to May 1994.
</TABLE>
JAPAN FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- ----------------------- --------------------- ------------------------------------------------------------------------
<S> <C> <C>
Andrew Callender Portfolio Manager Portfolio Manager for the Manager since 1990.
Tokyo since 1997
</TABLE>
INTERNATIONAL FUND
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND LAST FIVE YEARS
- ----------------------- --------------------- ------------------------------------------------------------------------
<S> <C> <C>
Michael Lindsell Portfolio Manager Chief Investment Officer -- Japan for LGT Asset Management Ltd. as well
Tokyo since 1992 as Portfolio Manager for the Manager since 1992. Prior thereto, Mr.
Lindsell was a Director of Warburg Asset Management (Tokyo).
Roger Yates Portfolio Manager Mr. Yates has been International Chief Investment Officer for the
London since 1996 Manager since September 1996. From 1994 to 1996, Mr. Yates was the
Chief Investment Officer and Portfolio Manager for Europe and the
United Kingdom for the Manager. From 1988 to 1994, Mr. Yates was an
Investment Manager for Morgan Grenfell Asset Management.
</TABLE>
- --------------
* Employees of Chancellor Capital prior to October 31, 1996.
Prospectus Page 41
<PAGE>
GT GLOBAL EQUITY FUNDS
With respect to America Small Cap Portfolio, America Mid Cap Fund and America
Value Portfolio, the Manager utilizes a team approach that relies on its
bottom-up, research-intensive, process-driven stock selection capability to
build the various investment portfolios. The Manager's disciplined process
combines the inputs of analysts performing fundamental and quantitative
research, various committees that set the Manager's firmwide economic forecasts
and sector and industry allocations, and portfolio management teams responsible
for stock selection decisions. While individual members of the Manager's
investment team are assigned primary responsibility for the day-to-day
management of America Small Cap Portfolio, America Mid Cap Fund and America
Value Portfolio, the Portfolios and the Fund, along with similarly managed
accounts, are reviewed on a regular basis by the applicable investment team to
monitor compliance with applicable investment guidelines.
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 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. High portfolio turnover (over
100%) involves correspondingly greater brokerage commissions and other
transaction costs that the Funds or the Portfolios will bear directly and could
result in the realization of net capital gains which would be taxable when
distributed to shareholders. See "Dividends, Other Distributions, and Federal
Income Taxations."
DISTRIBUTION OF FUND SHARES. GT Global is the distributor, or principal
underwriter, of each Fund's Advisor Class 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.
The Manager or an affiliate thereof may make ongoing payments to Financial
Advisors and others that facilitate the administration and servicing of Advisor
Class shareholder accounts.
GT Global, at its own expense, may also provide promotional incentives to
broker/dealers that sell shares of the Funds and/or shares of other GT Global
Mutual Funds. In some instances 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 GT Global Mutual Funds, and/or other events sponsored by
the broker/dealer.
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.
Prospectus Page 42
<PAGE>
GT GLOBAL EQUITY FUNDS
OTHER INFORMATION
- --------------------------------------------------------------------------------
CONFIRMATIONS AND REPORTS TO SHAREHOLDERS. Each time a transaction is made that
affects a shareholder's account in a Fund, the shareholder will receive from the
Transfer Agent a confirmation statement reflecting the transaction.
Confirmations for transactions effected pursuant to a Fund's automatic dividend
reinvestment program may be provided quarterly. Shortly after the end of the
Funds' fiscal year on December 31 and fiscal half-year on June 30 of each year,
shareholders will receive an annual and semiannual report, respectively. 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.
Under certain circumstances, duplicate mailings of the foregoing reports to the
same household may be consolidated.
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 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.
Each Fund offers Advisor Class shares through this Prospectus to certain
investors. Each Fund also offers Class A and Class B shares to investors through
a separate prospectus. Each class of shares will experience different asset
values and dividends as a result of different expenses borne by each class of
shares. The per share net asset value of the Advisor Class shares of a Fund
generally will be higher than that of a Class A and B shares of that Fund
because of the higher expenses borne by the Class A and B shares. Consequently,
during comparable periods, the Funds expect the total return on an investment in
shares of the Advisor Class will be higher than the total return on Class A or B
shares.
Pursuant to the Company's Declaration of Trust, the Company may issue an
unlimited number of shares for each of the Funds, including an unlimited number
of Class A, Class B and Advisor Class shares of each Fund. Each share of a Fund
represents an interest in the Fund only, has no par value, represents an equal
proportionate interest in the Fund with other shares of the Fund and is entitled
to such dividends and distributions out of the income earned and gain realized
on the assets belonging to the Fund as may be declared by the Board of Trustees.
Each Class A, Class B and Advisor Class share of each Fund is equal as to
earnings, assets and voting privileges to each other share in such Fund, except
as noted above, and each class bears the
Prospectus Page 43
<PAGE>
GT GLOBAL EQUITY FUNDS
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. Shares for which no voting instructions are received will be voted
in the same proportion as the shares for which voting instructions are received.
SHAREHOLDER INQUIRIES. Shareholder inquiries may be made by calling the Funds
toll-free at (800) 223-2138 or by writing to the Funds at P.O. Box 7893, San
Francisco, CA 94120-7893.
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 one-, 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.
In addition, in order to more completely represent a Fund's performance or more
accurately compare such performance to other measures of investment return, a
Fund also may include in advertisements, sales literature and shareholder
reports other total return performance data ("Non-Standardized Return").
Non-Standardized Return reflects percentage rates of return encompassing all
elements of return (i.e., income and capital appreciation or depreciation); it
assumes reinvestment of all dividends and capital gain distributions.
Non-Standardized Return may be quoted for the same or different periods as those
for which Standardized Return is quoted; it may consist of an aggregate or
average annual percentage rate of return, actual year-by-year rates or any
combination thereof. Non-Standardized Return may or may not take sales charges
into account; performance data calculated without taking the effect of sales
charges into account will be higher than data including the effect of such
charges.
Each Fund's performance data reflects past performance and is 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
Prospectus Page 44
<PAGE>
GT GLOBAL EQUITY FUNDS
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 45
<PAGE>
GT GLOBAL EQUITY FUNDS
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 46
<PAGE>
GT GLOBAL EQUITY FUNDS
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 47
<PAGE>
GT GLOBAL EQUITY FUNDS
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 48
<PAGE>
GT GLOBAL EQUITY FUNDS
NOTES
- --------------------------------------------------------------------------------
Prospectus Page 49
<PAGE>
<TABLE>
<S> <C>
[LOGO]
GT GLOBAL MUTUAL FUNDS
P.O. Box 7345
SAN FRANCISCO, CA 94120-7345 ADVISOR CLASS
800/223-2138 ACCOUNT APPLICATION
</TABLE>
<TABLE>
<S> <C>
/ / INDIVIDUAL / / JOINT TENANT / / GIFT/TRANSFER FOR MINOR / / TRUST / / CORP.
ACCOUNT REGISTRATION / / NEW ACCOUNT / / ACCOUNT REVISION (Account No.: -------------------------------------)
NOTE: Trust registrations should specify name of trustee(s), beneficiary(ies) and date of trust instrument. Registration for Uniform
Gifts/Transfers to Minors accounts should be in the name of one custodian and one minor and include the state under which the
custodianship is created.
----------------------------------------------------------------
- ------------------------------------------------------------ Social Security Number / / or Tax I.D. Number / / (Check
Owner applicable box)
- ------------------------------------------------------------ If more than one owner, social security number or taxpayer
Co-owner 1 identification number should be provided for first owner listed.
- ------------------------------------------------------------ If a purchase is made under Uniform Gift/Transfer to Minors Act,
Co-owner 2 social security number of the minor must be provided.
Resident of / / U.S. / / Other (specify) ----------------
- -------------------------------------------------------------------------------------- ( )
Street Address ---------------------------
- -------------------------------------------------------------------------------------- Home Telephone
City, State, Zip Code ( )
---------------------------
Business Telephone
FUND SELECTION $500 minimum initial investment for each Fund is required. Checks should be made payable to "GT GLOBAL."
</TABLE>
<TABLE>
<S> <C> <C> <C>
INITIAL INITIAL
INVESTMENT INVESTMENT
407 / / GT GLOBAL WORLDWIDE GROWTH FUND $ 413 / / GT GLOBAL LATIN AMERICA GROWTH FUND $
---------- ----------
405 / / GT GLOBAL INTERNATIONAL GROWTH FUND $ 424 / / GT GLOBAL AMERICA SMALL CAP GROWTH $
---------- FUND ----------
416 / / GT GLOBAL EMERGING MARKETS FUND $ 406 / / GT GLOBAL AMERICA MID CAP GROWTH FUND $
---------- ----------
411 / / GT GLOBAL HEALTH CARE FUND $ 423 / / GT GLOBAL AMERICA VALUE FUND $
---------- ----------
415 / / GT GLOBAL TELECOMMUNICATIONS FUND $ 404 / / GT GLOBAL JAPAN GROWTH FUND $
---------- ----------
419 / / GT GLOBAL INFRASTRUCTURE FUND $ 410 / / GT GLOBAL GROWTH & INCOME FUND $
---------- ----------
417 / / GT GLOBAL FINANCIAL SERVICES FUND $ 409 / / GT GLOBAL GOVERNMENT INCOME FUND $
---------- ----------
421 / / GT GLOBAL NATURAL RESOURCES FUND $ 408 / / GT GLOBAL STRATEGIC INCOME FUND $
---------- ----------
422 / / GT GLOBAL CONSUMER PRODUCTS $ 418 / / GT GLOBAL HIGH INCOME FUND $
AND SERVICES FUND ---------- ----------
402 / / GT GLOBAL NEW PACIFIC GROWTH FUND $ 401 / / GT GLOBAL DOLLAR FUND $
---------- ----------
403 / / GT GLOBAL EUROPE GROWTH FUND $
----------
TOTAL INITIAL INVESTMENT: $
----------
</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 ADVISOR CLASS
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 AGENTS, ASSIGNS AND SUCCESSORS UNDERSTAND AND AGREE THAT THE
ACCOUNT WILL BE SUBJECT TO THE TELEPHONE EXCHANGE AND TELEPHONE REDEMPTION
PRIVILEGES DESCRIBED IN THE CURRENT PROSPECTUS TO WHICH THIS APPLICATION IS
ATTACHED AND AGREE THAT 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)
CERTIFY(IES) 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 CERTIFICATION REQUIRED TO AVOID BACKUP WITHHOLDING.
<TABLE>
<S> <C>
----------------------------------------------------------
Date
X X
---------------------------------------------------------- ----------------------------------------------------------
X X
---------------------------------------------------------- ----------------------------------------------------------
</TABLE>
<PAGE>
ACCOUNT PRIVILEGES
CAPITAL GAINS AND DIVIDEND DISTRIBUTIONS
All capital gains and dividend distributions will be reinvested in additional
shares of Advisor class unless appropriate boxes below are checked:
/ / Pay capital gain distributions only in cash / / Pay dividends only in
cash / / Pay capital gain distributions AND dividends in cash.
SPECIAL CAPITAL GAINS AND DIVIDEND DISTRIBUTIONS OPTION
Pay distributions noted above to another GT Global Mutual Fund:
Fund Name --------------------------------------------------------------------
<TABLE>
<S> <C>
TELEPHONE EXCHANGE AND REDEMPTION AUTHORITY TO TRANSMIT REDEMPTION PROCEEDS TO
PRE-DESIGNATED ACCOUNT
I/We, either directly or through the Authorized Agent, if any, named By completing the following section, redemptions that
below, hereby authorize the Transfer Agent of the GT Global Mutual exceed $1,000 may be wired or mailed to a Pre-Designated
Funds, to honor any telephone, telex or telegraphic instructions Account at your bank. (Wiring instructions may be obtained
reasonably believed to be authentic for redemption and/or exchange from your bank.) A bank wire service fee may be charged.
between a similar class of shares of any of the Funds distributed by ----------------------------------------------------------
GT Global, Inc. Name of Bank
----------------------------------------------------------
Bank Address
----------------------------------------------------------
Bank A.B.A Number Account Number
----------------------------------------------------------
Names(s) in which Bank Account is Established
A corporation (or partnership) must also submit a
"Corporate Resolution" (or "Certificate of Partnership")
indicating the names and titles of Officers authorized to
act on its behalf.
</TABLE>
<TABLE>
<S> <C> <C> <C>
FOR USE BY AUTHORIZED AGENT ONLY
We hereby submit this Account Application for the purchase of Advisor Class shares in accordance with the terms of our Advisor Class
Agreement with GT Global, Inc. and with the Prospectus and Statement of Additional Information of each Fund purchased.
- ------------------------------------------------------------------------------------------------------------------------------------
Advisor's Name
- ------------------------------------------------------------------------------------------------------------------------------------
Main Office Address Branch Number (if applicable) Representative's Number Representative's Name
( )
- -------------------------------------------------------------------------------------------------------------------------
Branch Address Telephone
- -------------------------------------------------------------------------------------------------------------------------
Advisor's Authorized Signature Title
</TABLE>
<PAGE>
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, INCLUDING FEES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING
MARKET INVESTING AND THE RISKS OF INVESTING IN RELATED INDUSTRIES, PLEASE
CONTACT YOUR FINANCIAL ADVISER 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 MID CAP GROWTH FUND
Concentrates on 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.
EQUPV705MC
<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 MID CAP 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
May 1, 1997
- --------------------------------------------------------------------------------
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 Mid Cap 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 (the "Company"), a 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 May
1, 1997, 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 the "Transfer Agent").
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Investment Objectives and Policies....................................................................................... 2
Options, Futures, and Currency Strategies................................................................................ 5
Risk Factors............................................................................................................. 13
Investment Limitations................................................................................................... 17
Execution of Portfolio Transactions...................................................................................... 19
Trustees and Executive Officers.......................................................................................... 21
Management............................................................................................................... 23
Valuation of Shares...................................................................................................... 25
Information Relating to Sales and Redemptions............................................................................ 26
Taxes.................................................................................................................... 28
Additional Information................................................................................................... 31
Investment Results....................................................................................................... 32
Description of Debt Ratings.............................................................................................. 38
Financial Statements..................................................................................................... 39
</TABLE>
[LOGO]
Statement of Additional Information Page 1
<PAGE>
GT GLOBAL GROWTH FUNDS
INVESTMENT OBJECTIVES
AND POLICIES
- --------------------------------------------------------------------------------
SELECTION OF INVESTMENTS
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.
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.
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 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 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 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
STATEMENT OF ADDITIONAL INFORMATION PAGE 2
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Fund may make secured loans
of its securities holdings 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 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. 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. Loans 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
A repurchase agreement is a transaction 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
STATEMENT OF ADDITIONAL INFORMATION PAGE 3
<PAGE>
GT GLOBAL GROWTH FUNDS
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 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, or 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.
TEMPORARY DEFENSIVE STRATEGIES
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 Investors Service, Inc.
("Moody's") or A-1 by Standard & Poor's Ratings Group ("S&P") at the time of
investment or, if unrated, deemed by the Manager to be of comparable quality.
STATEMENT OF ADDITIONAL INFORMATION PAGE 4
<PAGE>
GT GLOBAL GROWTH FUNDS
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 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
STATEMENT OF ADDITIONAL INFORMATION PAGE 5
<PAGE>
GT GLOBAL GROWTH FUNDS
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 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
STATEMENT OF ADDITIONAL INFORMATION PAGE 6
<PAGE>
GT GLOBAL GROWTH FUNDS
(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 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.
STATEMENT OF ADDITIONAL INFORMATION PAGE 7
<PAGE>
GT GLOBAL GROWTH FUNDS
Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. 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
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
STATEMENT OF ADDITIONAL INFORMATION PAGE 8
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
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
STATEMENT OF ADDITIONAL INFORMATION PAGE 9
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
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
STATEMENT OF ADDITIONAL INFORMATION PAGE 10
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
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
STATEMENT OF ADDITIONAL INFORMATION PAGE 11
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
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 or 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.
STATEMENT OF ADDITIONAL INFORMATION PAGE 12
<PAGE>
GT GLOBAL GROWTH FUNDS
RISK FACTORS
- --------------------------------------------------------------------------------
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.
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.
FOREIGN SECURITIES
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.
STATEMENT OF ADDITIONAL INFORMATION PAGE 13
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
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
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
STATEMENT OF ADDITIONAL INFORMATION PAGE 14
<PAGE>
GT GLOBAL GROWTH FUNDS
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."
CONCENTRATION. To the extent a Fund invests a significant portion of its
assets in securities of issuers located in a particular country or region of the
world, such Fund may be subject to greater risks and may experience greater
volatility than a fund that is more broadly diversified geographically.
SPECIAL CONSIDERATIONS AFFECTING WESTERN EUROPEAN COUNTRIES. 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 Western 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 in Western Europe, it is impossible to predict the
long-term impact of the implementation of these programs on the securities owned
by a Fund.
SPECIAL CONSIDERATIONS AFFECTING RUSSIA AND EASTERN EUROPEAN COUNTRIES.
Investing in Russia and Eastern European countries involves a high degree of
risk and special considerations not typically associated with investing in the
United States securities markets, and should be considered highly speculative.
Such risks include: (1) delays in settling portfolio transactions and risk of
loss arising out of the system of share registration and custody; (2) the risk
that it may be impossible or more difficult than in other countries to obtain
and/or enforce a judgment; (3) pervasiveness of corruption and crime in the
economic system; (4) currency exchange rate volatility and the lack of available
currency hedging instruments; (5) higher rates of inflation (including the risk
of social unrest associated with periods of hyper-inflation) and high
unemployment; (6) controls on foreign investment and local practices disfavoring
foreign investors and limitations on repatriation of invested capital, profits
and dividends, and on a Fund's ability to exchange local currencies for U.S.
dollars; (7) political instability and social unrest and violence; (8) the risk
that the governments of Russia and Eastern European countries may decide not to
continue to support the economic reform programs implemented recently and could
follow radically different political and/or economic policies to the detriment
of investors, including non-market-oriented policies such as the support of
certain industries at the expense of other sectors or investors, or a return to
the centrally planned economy that existed when such countries had a communist
form of government; (9) the financial condition of companies in these countries,
including large amounts of inter-company debt which may create a payments crisis
on a national scale; (10) dependency on exports and the corresponding importance
of international trade; (11) the risk that the tax system in these countries
will not be reformed to prevent inconsistent, retroactive and/or exorbitant
taxation; and (12) the underdeveloped nature of the securities markets.
SPECIAL CONSIDERATIONS AFFECTING PACIFIC REGION COUNTRIES. Many of the Asia
Pacific region countries may be subject to a greater degree of social, political
and economic instability than is the case in the United States. Such instability
may result
STATEMENT OF ADDITIONAL INFORMATION PAGE 15
<PAGE>
GT GLOBAL GROWTH FUNDS
from, among other things, the following: (i) authoritarian governments or
military involvement in political and economic decision making, and changes in
government through extra-constitutional means; (ii) popular unrest associated
with demands for improved political, economic and social conditions; (iii)
internal insurgencies; (iv) hostile relations with neighboring countries; and
(v) ethnic, religious and racial disaffection. Such social, political and
economic instability could significantly disrupt the principal financial markets
in which a Fund invests and adversely affect the value of a Fund's assets. In
addition, there may be the possibility of asset expropriations or future
confiscatory levels of taxation affecting the Funds.
Several of the Asia Pacific region countries have or in the past have had
hostile relationships with neighboring nations or have experienced internal
insurgency. Thailand has experienced border conflicts with Laos and Cambodia,
and India is engaged in border disputes with several of its neighbors, including
China and Pakistan. An uneasy truce exists between North Korea and South Korea,
and the recurrence of hostilities remains possible. Reunification of North Korea
and South Korea could have a detrimental effect on the economy of South Korea.
Also, China continues to claim sovereignty over Taiwan and recently has
conducted military maneuvers near Taiwan.
The economies of most of the Asia Pacific region countries are heavily dependent
upon international trade and are accordingly affected by protective trade
barriers and the economic conditions of their trading partners, principally the
United States, Japan, China and the European Community. The enactment by the
United States or other principal trading partners of protectionist trade
legislation, reduction of foreign investment in the local economies and general
declines in the international securities markets could have a significant
adverse effect upon the securities markets of the Asia Pacific region countries.
In addition, the economies of some of the Asia Pacific region countries,
Australia and Indonesia, for example, are vulnerable to weakness in world prices
for their commodity exports, including crude oil.
China is scheduled to assume sovereignty over Hong Kong in July 1997. Although
China has committed by treaty to preserve the economic and social freedoms
enjoyed in Hong Kong for fifty years after regaining control of Hong Kong, the
continuation of the current form of the economic system in Hong Kong after the
reversion will depend on the actions of the government of China. In addition,
such reversion has increased sensitivity in Hong Kong to political developments
and statements by public figures in China. Business confidence in Hong Kong,
therefore, can be significantly affected by such developments and statements,
which in turn can affect markets and business performance.
In addition, the reversion of Hong Kong also presents a risk that the Hong Kong
dollar will be devaluated and a risk of possible loss of investor confidence in
the Hong Kong markets and dollar. However, factors exist that are likely to
mitigate this risk. First, China has stated its intention to implement a "one
country, two systems" policy, which would preserve monetary sovereignty and
leave control in the hands of the Hong Kong Monetary Authority ("HKMA").
Second, fixed rate parity with the U.S. dollar is seen as critical to
maintaining investors' confidence in the transition to Chinese rule and,
therefore, it is anticipated that, in the event international investors lose
confidence in Hong Kong dollar assets, the HKMA would intervene to support the
currency, though such intervention cannot be assured. Third, Hong Kong's and
China's sizable combined foreign exchange reserve may be used to support the
value of the Hong Kong dollar, provided that China does not appropriate such
reserves for other uses, which is not anticipated, but cannot be assured.
Finally, China would be likely to experience significant adverse political and
economic consequences if confidence in the Hong Kong dollar and the territory
assets were to be endangered.
SPECIAL CONSIDERATIONS AFFECTING LATIN AMERICAN COUNTRIES. 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 have had and may continue to have very negative effects on the
economies and securities markets of certain Latin American countries. Certain
Latin American countries are also among the largest debtors to commercial banks
and foreign governments. At times certain Latin American countries have declared
moratoria on the payment of principal and/or interest on external debt. In
addition, certain Latin American securities markets have experienced high
volatility in recent years.
Latin American countries may also close certain sectors of their economies to
equity investments by foreigners. Further due to the absence of securities
markets and publicly owned corporations and due to restrictions on direct
investment by foreign entities, investments may only be made in certain Latin
American countries solely or primarily through governmentally approved
investment vehicles or companies.
Certain Latin American countries may have managed currencies that are maintained
at artificial levels to the U.S. dollar rather than at levels determined by the
market. This type of system can lead to sudden and large adjustments in the
currency which, in turn, can have a disruptive and negative effect on foreign
investors. For example, in late 1994, the value of the Mexican peso lost more
than one-third of its value relative to the U.S. dollar.
STATEMENT OF ADDITIONAL INFORMATION PAGE 16
<PAGE>
GT GLOBAL GROWTH FUNDS
SPECIAL CONSIDERATIONS AFFECTING EMERGING MARKETS. Investing in the
securities of companies in emerging markets may entail special risks relating to
potential political and economic instability and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility 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 value 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, especially 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
reliable than in more developed markets. In such emerging markets there may be
share registration and delivery delays or failures.
Many emerging market 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 emerging market countries.
DEBT SECURITIES
Each Fund is permitted to purchase investment grade debt securities. In
selecting debt securities for investment, 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 Standard & Poor's Ratings Group ("S&P"), Moody's
Investors Service, Inc. ("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 debt securities represent the rating agencies' opinions regarding
their quality, are not a guarantee of quality and may be reduced after a Fund
has acquired the security. The Manager will consider such an event in
determining whether a Fund should continue to hold the security but is not
required to dispose of it. Credit ratings attempt to evaluate the safety of
principal and interest payments and do not reflect an assessment of the
volatility of the security's market value or the liquidity of an investment in
the security. Also, NRSROs may fail to make timely changes in credit ratings in
response to subsequent events, so that an issuer's current financial condition
may be better or worse than the rating indicates. For a description of Moody's
and S&P ratings, see "Description of Debt Ratings" herein.
- --------------------------------------------------------------------------------
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;
STATEMENT OF ADDITIONAL INFORMATION PAGE 17
<PAGE>
GT GLOBAL GROWTH FUNDS
(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;
(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) 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
(3) 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.
----------------------------
If a percentage restriction on investment or utilization of assets in an
investment 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 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.
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 OTC 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 For the fiscal year ended December
31, 1996, the Europe Fund paid to LGT Bank in Liechtenstein AG and LGT Bank in
Liechtenstein (
- ------), each an "affiliated" broker, aggregate brokerage commissions of $
- ---------- and $
- ----------, respectively, for transactions involving purchases and sales of
portfolio securities which represented
- --% and
- --%, respectively, of the total brokerage commissions paid by the Europe Fund,
and
- --% and
- --%, respectively, of the aggregate dollar amount of transactions involving
payment of commissions by the Europe Fund.
For the fiscal year ended December 31, 1996, the International Fund paid to LGT
Bank in Liechtenstein AG aggregate brokerage commissions of $
- ---- for transactions involving purchases and sales of portfolio securities
which represented
- ---% of the total brokerage commissions paid by the International Fund, and
- ---% of the aggregate dollar amount of transactions involving payment of
commissions by the International 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 tranactions 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 1996 1995 1994
- -------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
America Fund.............................................................. $ $ 878,569 $ 1,082,311
Europe Fund............................................................... $ $ 3,877,784 $ 2,185,831
International Fund........................................................ $ $ 1,889,228 $ 1,090,763
Japan Fund................................................................ $ $ 440,117 $ 838,666
Pacific Fund.............................................................. $ $ 3,310,887 $ 2,746,761
Worldwide Fund............................................................ $ $ 1,007,167 $ 954,962
</TABLE>
PORTFOLIO TRADING AND TURNOVER
Although the Funds generally do not intend to trade for short-term profits, the
securities held by a Fund 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. The portfolio turnover rate
will not be a limiting factor when management deems portfolio changes
appropriate. Higher portfolio turnover involves correspondingly greater
brokerage commissions and other transaction costs that the Funds will bear
directly, and may result in the realization of net capital gains that are
taxable when distributed to each Fund's shareholders. The portfolio turnover
rates for the fiscal years ended December 31, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
America Fund.......................................................................................... % 71%
Europe Fund........................................................................................... 108
International Fund.................................................................................... 75
Japan Fund............................................................................................ 67
Pacific Fund.......................................................................................... 63
Worldwide Fund........................................................................................ 113
</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>
William J. Guilfoyle*, 38 Director, LGT Asset Management, Inc. since 1996; Director, G.T. Insurance Agency ("G.T.
Director, Chairman of the Board and Insurance") since 1996; Director, Liechtenstein Global Trust AG (holding company of the
President various international LGT companies) Advisory Board since January 1996; President, GT
50 California Street Global since 1995; President and Chief Executive Officer, G.T. Insurance since 1995;
San Francisco, CA 94111 Director, Liechtenstein Global Trust AG from 1995 to January 1996; Senior Vice President
and Director, Sales and Marketing, G.T. Insurance from April 1995 to November 1995; Vice
President and Director of Marketing, GT Global from 1987 to 1995; Senior Vice President,
Retail Marketing, G.T. Insurance from 1993 to 1995; Vice President, G.T. Insurance from
1992 to 1993; and Director, Mutual Fund Forum (an industry group of mutual fund and
broker/dealer firms). Mr. Guilfoyle 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, 55 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, 57 Partner with Baker & McKenzie (a law firm); Director and Chairman, C.D. Stimson Company (a
Trustee private investment company). Mr. Bayley also is a director or trustee of each of the other
Two Embarcadero Center investment companies registered under the 1940 Act that is managed or administered by the
Suite 2400 Manager.
San Francisco, CA 94111
Arthur C. Patterson, 53 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, 61 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.
Robert G. Wade, Jr.*, 69 Consultant to the Manager; Chairman of the Board of Chancellor Capital Management, Inc.
Director from January 1995 to October 1996; President, Chief Executive Officer and Chairman of the
1166 Avenue of the Americas Board of Chancellor Capital Management, Inc. from 1988 to January 1995.
New York, NY 10036
</TABLE>
- --------------
* Mr. Guilfoyle and Mr. Wade are "interested persons" of the Company as
defined by the 1940 Act due to their 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, 38 Chief Information Officer for the Manager since October 1996; President,
Vice President and Chief GT Services since 1995; Senior Vice President -- Finance and
Financial Officer Administration, GT Global, GT Services and G.T. Insurance from 1994 to
50 California Street 1995; Senior Vice President -- Finance and Administration, LGT Asset
San Francisco, CA 94111 Management and the Manager from 1994 to October 1996; Vice President --
Finance, LGT Asset Management, the Manager, GT Global and GT Services
from 1990 to 1994; Vice President -- Finance, G.T. Insurance from 1992
to 1994; and Director of LGT Asset Management, GT Global and GT Services
since 1991.
Kenneth W. Chancey, 51 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, 50 Executive Vice President, Asset Management Division, Liechtenstein
Vice President and Secretary Global Trust since October 1996; Senior Vice President, LGT Asset
50 California Street Management, GT Global, GT Services and G.T. Insurance from February 1996
San Francisco, CA 94111 to October 1996; Vice President, the Manager, LGT Asset Management, GT
Global, GT Services and G.T. Insurance from May 1994 to February 1996;
General Counsel, the Manager, LGT Asset Management, GT Global, GT
Services and G.T. Insurance from May 1994 to October 1996; Secretary,
the Manager, LGT Asset Management, GT Global, GT Services and G.T.
Insurance from May 1994 to October 1996; Senior Vice President, General
Counsel and Secretary, Strong/ Corneliuson Management, Inc.; and
Secretary, each of the Strong Funds from October 1991 to May 1994.
</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., G.T. Global
Developing Markets Fund, Inc. and GT Global Floating Rate Fund, Inc., and a
Trustee and officer of G.T. Global Eastern 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 11 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, 1996, 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 $
- ------, $
- ------, $
- ------ and $
- ------, respectively, for their services as Trustees. For the year ended
December 31, 1996, Mr. Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley
received total compensation of $
- ------, $
- ------, $
- ------ and $
- ------, respectively, from the 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
- --% of the outstanding shares of any Fund.
STATEMENT OF ADDITIONAL INFORMATION PAGE 22
<PAGE>
GT GLOBAL GROWTH FUNDS
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
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.
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).
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 1996 1995 1994
- ---------------------------------------------------- ----------- ----------- -----------
America Fund........................................ $ $4,425,913 $1,283,893
<S> <C> <C> <C>
Europe Fund......................................... $ $6,161,265 $8,319,087
International Fund.................................. $ $4,027,923 $5,368,669
Japan Fund.......................................... $ $1,167,576 $1,345,064
Pacific Fund........................................ $ $5,176,333 $5,563,245
Worldwide Fund...................................... $ $2,050,983 $3,355,681
</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.
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, 1996.
<TABLE>
<CAPTION>
FUND CLASS A CLASS B
- ------------------------------------------------------------------------------------ ------------- -------------
<S> <C> <C>
America Fund........................................................................ $ $
Europe Fund......................................................................... $ $
International Fund.................................................................. $ $
Japan Fund.......................................................................... $ $
Pacific Fund........................................................................ $ $
Worldwide Fund...................................................................... $ $
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION PAGE 23
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
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 Class A shares
of the Funds. 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 .................................................. 1996 $ $ $
1995 2,101,049 336,010 1,765,039
1994 1,213,567 80,807 1,132,760
Europe Fund ................................................... 1996 $ $ $
1995 258,281 51,964 206,317
1994 2,448,091 137,252 2,310,839
International Fund ............................................ 1996 $ $ $
1995 322,537 50,454 272,083
1994 1,230,657 106,490 1,124,167
Japan Fund .................................................... 1996 $ $ $
1995 480,623 78,489 402,134
1994 945,666 23,730 921,936
Pacific Fund .................................................. 1996 $ $ $
1995 734,983 141,263 593,720
1994 3,088,807 260,474 2,828,333
Worldwide Fund ................................................ 1996 $ $ $
1995 180,015 28,527 151,488
1994 1,067,748 89,742 978,006
</TABLE>
GT Global receives contingent deferred sales charges payable with respect to
redemptions of Class B shares and certain Class A shares. For the fiscal years
ended December 31, 1996, December 31, 1995 and December 31, 1994, GT Global
collected contingent deferred sales charges in the following amounts:
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -------------
<S> <C> <C> <C>
America Fund......................................................... $ $ 925,863 $ 130,809
Europe Fund.......................................................... $ $ 510,319 $ 237,076
International Fund................................................... $ $ 329,959 $ 32,916
Japan Fund........................................................... $ $ 213,714 $ 88,454
Pacific Fund......................................................... $ $ 758,951 $ 280,90
Worldwide Fund....................................................... $ $ 260,049 $ 13,472
</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. The Manager also serves as
each Fund's pricing and accounting agent. For the fiscal years ended December
31, 1995 and December 31, 1996, the transfer agency and accounting services fees
for the America Fund, Europe Fund, International Fund, Japan Fund, Pacific Fund,
and Worldwide Fund were $79,918 and $
- ------, $62,660 and $
- ------, $40,655 and $
- ------, $14,483 and $
- ------, $53,724 and $
- ------ and $22,092 and $
- ------, respectively.
STATEMENT OF ADDITIONAL INFORMATION PAGE 24
<PAGE>
GT GLOBAL GROWTH FUNDS
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, 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.
- --------------------------------------------------------------------------------
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.
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. The value of each security denominated in a currency other than
U.S. dollars will be translated into U.S. dollars at the prevailing exchange
rate as determined by the Manager on that day. 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
STATEMENT OF ADDITIONAL INFORMATION PAGE 25
<PAGE>
GT GLOBAL GROWTH FUNDS
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 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.
- --------------------------------------------------------------------------------
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.
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.
STATEMENT OF ADDITIONAL INFORMATION PAGE 26
<PAGE>
GT GLOBAL GROWTH FUNDS
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 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,
STATEMENT OF ADDITIONAL INFORMATION PAGE 27
<PAGE>
GT GLOBAL GROWTH FUNDS
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, the Board may authorize payment
to be made in portfolio securities or other property of a Fund, so called
"redemptions in kind." Payment of redemptions in kind will be made in readily
marketable securities. Such securities would be valued at the same value
assigned to them in computing the net asset value per share. Shareholders
receiving such securities would incur brokerage costs in selling any such
securities so received and would be subject to any increase or decrease in the
value of the securities until they were sold.
- --------------------------------------------------------------------------------
TAXES
- --------------------------------------------------------------------------------
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.
STATEMENT OF ADDITIONAL INFORMATION PAGE 28
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
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.
STATEMENT OF ADDITIONAL INFORMATION PAGE 29
<PAGE>
GT GLOBAL GROWTH FUNDS
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 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 30
<PAGE>
GT GLOBAL GROWTH FUNDS
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
LIECHTENSTEIN GLOBAL TRUST
Liechtenstein Global Trust AG, 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, 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 that 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 31
<PAGE>
GT GLOBAL GROWTH FUNDS
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
STANDARDIZED RETURNS
Each Fund's "Standardized Returns," as referred to in the Prospectus (see "Other
Information -- Performance Information" in the Prospectus), is calculated
separately for Class A, Class B and Advisor Class shares of each Fund, as
follows: Standardized Return (average annual total return ("T")) is computed by
using the ending redeeming value ("ERV") of a hypothetical initial investment of
$1,000 ("P") over a period of years ("n") according to the following formula as
required by the SEC: P(1+T) to the (n)th power=ERV. 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) for Advisor Class shares, deduction of a sales charge is not
applicable; (4) reinvestment of dividends and other distributions at net asset
value on the reinvestment date determined by the Company's Board of Directors;
and (5) a complete redemption at the end of any period illustrated.
The Standardized Returns for the Class A, Class B and Advisor Class shares of
the America Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
AMERICA FUND AMERICA FUND AMERICA FUND
PERIOD (CLASS A) (CLASS B) (ADVISOR CLASS)
- ------------------------------------------------------------------------- --------------- --------------- ---------------
<S> <C> <C> <C>
Fiscal year ended October 31, 1996....................................... % % %
June 1, 1995 (commencement of operations) through October 31, 1996....... % % %
</TABLE>
The Standardized Returns for the Class A, Class B and Advisor Class shares of
the Europe Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
EUROPE FUND EUROPE FUND EUROPE FUND
PERIOD (CLASS A) (CLASS B) (ADVISOR CLASS)
- --------------------------------------------------------------------------- ------------- ------------- ---------------
<S> <C> <C> <C>
Fiscal year ended October 31, 1996......................................... % % %
June 1, 1995 (commencement of operations) through October 31, 1996......... % % %
</TABLE>
The Standardized Returns for the Class A, Class B and Advisor Class shares of
the International Fund, stated as average annualized total returns for the
periods shown, were:
<TABLE>
<CAPTION>
INTERNATIONAL FUND INTERNATIONAL FUND INTERNATIONAL FUND
PERIOD (CLASS A) (CLASS B) (ADVISOR CLASS)
- ------------------------------------------------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C>
Fiscal year ended October 31, 1996........................... % % %
June 1, 1995 (commencement of operations) through October 31,
1996........................................................ % % %
</TABLE>
The Standardized Returns for the Class A, Class B and Advisor Class shares of
the Japan Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
JAPAN FUND JAPAN FUND JAPAN FUND
PERIOD (CLASS A) (CLASS B) (ADVISOR CLASS)
- ------------------------------------------------------------------------------ ------------- ------------- ---------------
<S> <C> <C> <C>
Fiscal year ended October 31, 1996............................................ % % %
June 1, 1995 (commencement of operations) through October 31, 1996............ % % %
</TABLE>
The Standardized Returns for the Class A, Class B and Advisor Class shares of
the Pacific Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
PACIFIC FUND PACIFIC FUND PACIFIC FUND
PERIOD (CLASS A) (CLASS B) (ADVISOR CLASS)
- ---------------------------------------------------------------------------- ------------- ------------- ---------------
<S> <C> <C> <C>
Fiscal year ended October 31, 1996.......................................... % % %
June 1, 1995 (commencement of operations) through October 31, 1996.......... % % %
</TABLE>
The Standardized Returns for the Class A, Class B and Advisor Class shares of
the Worldwide Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
WORLDWIDE FUND WORLDWIDE FUND WORLDWIDE FUND
PERIOD (CLASS A) (CLASS B) (ADVISOR CLASS)
- ------------------------------------------------------------------- ----------------- ----------------- -----------------
<S> <C> <C> <C>
Fiscal year ended October 31, 1996................................. % % %
June 1, 1995 (commencement of operations) through October 31,
1996.............................................................. % % %
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION PAGE 32
<PAGE>
GT GLOBAL GROWTH FUNDS
NON-STANDARDIZED RETURNS
In addition to Standardized Returns, each Fund also may include in
advertisements, sales literature and shareholder reports other total return
performance data ("Non-Standardized Return"). Non-Standardized Return is
calculated separately for Class A, Class B and Advisor Class shares of each Fund
and may be calculated according to several different formulas. Non-Standardized
Returns may be quoted for the same or different time periods for which
Standardized Returns are quoted. Non-Standardized Returns for Class A and Class
B shares 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. Advisor Class shares are
not subject to sales charges.
Aggregate Non-Standardized Return ("T") is computed by using the ending value of
the account ("VOA") of a hypothetical initial investment of $1,000 ("P")
according to the following formula: T=(VOA/P)-1. Aggregate Non-Standardized
Return assumes reinvestment of dividends and other distributions and, as set
forth below, may or may not take sales charges into account.
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A, Class B and Advisor Class shares of the America Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
AMERICA FUND AMERICA FUND AMERICA FUND
PERIOD (CLASS A) (CLASS B) (ADVISOR CLASS)
- ------------------------------------------------------------------------- --------------- --------------- ---------------
<S> <C> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996....... % % %
</TABLE>
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A, Class B and Advisor Class shares of the Europe Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
EUROPE FUND EUROPE FUND EUROPE FUND
PERIOD (CLASS A) (CLASS B) (ADVISOR CLASS)
- --------------------------------------------------------------------------- ------------- ------------- ---------------
<S> <C> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996......... % % %
</TABLE>
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A, Class B and Advisor Class shares of the International Fund,
stated as aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
INTERNATIONAL FUND INTERNATIONAL FUND INTERNATIONAL FUND
PERIOD (CLASS A) (CLASS B) (ADVISOR CLASS)
- ------------------------------------------------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C>
June 1, 1995 (commencement of operations) through October 31,
1996........................................................ % % %
</TABLE>
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A, Class B and Advisor Class shares of the Japan Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
JAPAN FUND JAPAN FUND JAPAN FUND
PERIOD (CLASS A) (CLASS B) (ADVISOR CLASS)
- ------------------------------------------------------------------------------ ------------- ------------- ---------------
<S> <C> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996............ % % %
</TABLE>
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A, Class B and Advisor Class shares of the Pacific Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
PACIFIC FUND PACIFIC FUND PACIFIC FUND
PERIOD (CLASS A) (CLASS B) (ADVISOR CLASS)
- ---------------------------------------------------------------------------- ------------- ------------- ---------------
<S> <C> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996.......... % % %
</TABLE>
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A, Class B and Advisor Class shares of the Worldwide Fund, stated
as aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
WORLDWIDE FUND WORLDWIDE FUND WORLDWIDE FUND
PERIOD (CLASS A) (CLASS B) (ADVISOR CLASS)
- ------------------------------------------------------------------- ----------------- ----------------- -----------------
<S> <C> <C> <C>
June 1, 1995 (commencement of operations) through October 31,
1996.............................................................. % % %
</TABLE>
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of each Fund's portfolio and operating expenses of
each Fund, so that current or past yield or total return should not be
considered representative of what an investment in each 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 each Fund's
investment results with those published for other investment companies and other
investment vehicles. Each 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 33
<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 or BBB by S&P, or, in
the case of nonrated bonds, BBB by Fitch Investors Service, Inc. ("Fitch")
(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 Gross National Product ("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 in 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 34
<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, S&P and Fitch.
(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, Mutual Fund 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 1933 Act 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 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.
STATEMENT OF ADDITIONAL INFORMATION PAGE 35
<PAGE>
GT GLOBAL GROWTH FUNDS
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): If you have earned income from employment
(including self-employment), you can contribute each year to an IRA up to the
lesser of (1) $2,000 for yourself or $4,000 for you and your spouse, regardless
of whether your spouse is employed, or (2) 100% of compensation. 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: Simplified employee pension plans ("SEPs" or "SEP-IRAs") 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.
CODE SECTION 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 SECTION 401(K)) AND MONEY PURCHASE PENSION
PLANS: Corporations can sponsor these qualified defined contribution plans for
their employees. A Section 401(k) plan, a type of profit-sharing plan,
additionally
STATEMENT OF ADDITIONAL INFORMATION PAGE 36
<PAGE>
GT GLOBAL GROWTH FUNDS
permits the eligible, participating employees to make pre-tax salary reduction
contributions to the plan (up to certain limitations).
SIMPLE RETIREMENT PLANS: Employers with no more than 100 employees who do not
maintain another retirement plan may establish a Savings Incentive Match Plan
for Employees ("SIMPLE") either as separate IRAs or as part of Code Section
401(k) plan. SIMPLEs are not subject to the complicated nondiscrimination rules
that generally apply to qualified retirement plans.
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, liquidity 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 data regarding industries,
companies, 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, IFC and Datastream.
2) Stock market trading volume: Morgan Stanley Capital International World
Indices and IFC.
3) The number of listed companies: IFC, 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, IFC and Datastream.
7) The Consumer Price Index and inflation rate: The World Bank, Datastream and
IFC.
8) Gross Domestic Product (GDP): Datastream and The World Bank.
9) GDP growth rate: IFC, 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: IFC, The World Bank and Datastream.
14) Top three companies by country, industry or market: IFC, 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,
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 37
<PAGE>
GT GLOBAL GROWTH FUNDS
GT GLOBAL ADVANTAGE
As part of Liechtenstein Global Trust, GT Global continues a 75-year tradition
of service to individuals and institutions. Today we bring investors a
combination of experience, worldwide resources, a global perspective, investment
talent and a time tested investment discipline. With investment professionals in
nine offices worldwide, we witness world events and economic developments
firsthand.
The key to achieving consistent results is following a disciplined investment
process. Our approach to asset allocation takes advantage of GT Global's
worldwide presence and global perspective. Our "macroeconomic" worldview
determines our overall strategy of regional, country and sector allocations. Our
bottom up process of security selection combines fundamental research with
quantitative analysis through our proprietary models.
Built in checks and balances strengthen the process, enhancing professional
experience and judgment with an objective assessment of risk. Ultimately, each
security we select has passed a ranking system that helps our portfolio teams
determine when to buy and when to sell.
- --------------------------------------------------------------------------------
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
DESCRIPTION OF COMMERCIAL PAPER RATINGS
Moody's employs the designations "Prime-1" and "Prime-2" to indicate commercial
paper having the highest capacity for timely repayment. Issuers rated Prime-1
(or supporting institutions) 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; and well-established access to a range of
financial markets and assured sources of alternate liquidity. Issuers rated
Prime-2 (or supporting institutions) have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many 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 affected by external
conditions. Ample alternate liquidity is maintained.
S&P rates commercial paper in four categories. "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. Those
issues determined to possess extremely strong safety characteristics will be
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."
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 edged." 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 are generally known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term
risk appear somewhat larger than the Aaa securities.
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.
STATEMENT OF ADDITIONAL INFORMATION PAGE 38
<PAGE>
GT GLOBAL GROWTH FUNDS
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies
that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa to B in its corporate bond rating system. The modifier 1
indicates that the company ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.
S&P rates the 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.
PLUS (+) OR MINUS (-): The ratings from "AA" to "BBB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of each Fund as of December 31, 1996, and for
the fiscal year then ended, appear on the following pages.
STATEMENT OF ADDITIONAL INFORMATION PAGE 39
<PAGE>
GT GLOBAL GROWTH FUNDS
NOTES
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION PAGE 40
<PAGE>
GT GLOBAL GROWTH FUNDS
NOTES
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION PAGE 41
<PAGE>
GT GLOBAL GROWTH FUNDS
NOTES
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION PAGE 42
<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, INCLUDING FEES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING
MARKET INVESTING AND THE RISKS OF INVESTING IN RELATED INDUSTRIES, PLEASE
CONTACT YOUR FINANCIAL ADVISER 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 MID CAP GROWTH FUND
Concentrates on 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.
EQUSA610MC
<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 MID CAP GROWTH FUND:
GT GLOBAL JAPAN GROWTH FUND:
ADVISOR CLASS
50 California Street, 27th Floor
San Francisco, California 94111
(415) 392-6181
Toll Free: (800) 824-1580
Statement of Additional Information
May 1, 1997
- --------------------------------------------------------------------------------
This Statement of Additional Information relates to the Advisor Class 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 Mid Cap
Growth Fund ("America Fund") and GT Global Japan Growth Fund ("Japan Fund")
(collectively, "Funds," or singly, a "Fund"). Each Fund is a diversified series
of G.T. Global Growth Series (the "Company"), a 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 Advisor Class Prospectus dated May 1, 1997, 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 the "Transfer Agent").
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Investment Objectives and Policies....................................................................................... 2
Options, Futures, and Currency Strategies................................................................................ 5
Risk Factors............................................................................................................. 14
Investment Limitations................................................................................................... 19
Execution of Portfolio Transactions...................................................................................... 21
Trustees and Executive Officers.......................................................................................... 23
Management............................................................................................................... 25
Valuation of Shares...................................................................................................... 26
Information Relating to Sales and Redemptions............................................................................ 27
Taxes.................................................................................................................... 28
Additional Information................................................................................................... 31
Investment Results....................................................................................................... 32
Description of Debt Ratings.............................................................................................. 39
Financial Statements..................................................................................................... 41
</TABLE>
[LOGO]
Statement of Additional Information Page 1
<PAGE>
GT GLOBAL GROWTH FUNDS
INVESTMENT OBJECTIVES
AND POLICIES
- --------------------------------------------------------------------------------
SELECTION OF INVESTMENTS
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.
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.
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 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 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 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
Statement of Additional Information Page 2
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Fund may make secured loans
of its securities holdings 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 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. 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. Loans 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.
Statement of Additional Information Page 3
<PAGE>
GT GLOBAL GROWTH FUNDS
REPURCHASE AGREEMENTS
A repurchase agreement is a transaction 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 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 or 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.
TEMPORARY DEFENSIVE STRATEGIES
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 Investors Service, Inc.
("Moody's") or A-1 by Standard & Poor's Ratings Group ("S&P") at the time of
investment or, if unrated, deemed by the Manager to be of comparable quality.
Statement of Additional Information Page 4
<PAGE>
GT GLOBAL GROWTH FUNDS
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 threat increase might by 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 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
Statement of Additional Information Page 5
<PAGE>
GT GLOBAL GROWTH FUNDS
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 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 more than its market value.
Statement of Additional Information Page 6
<PAGE>
GT GLOBAL GROWTH FUNDS
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 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 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
Statement of Additional Information Page 7
<PAGE>
GT GLOBAL GROWTH FUNDS
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 in over-the-counter
("OTC") markets. 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 extent 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
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 calls 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
Statement of Additional Information Page 8
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
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
Statement of Additional Information Page 9
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
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
Statement of Additional Information Page 10
<PAGE>
GT GLOBAL GROWTH FUNDS
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 be
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, usually 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.
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
Statement of Additional Information Page 11
<PAGE>
GT GLOBAL GROWTH FUNDS
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 of
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.
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
Statement of Additional Information Page 12
<PAGE>
GT GLOBAL GROWTH FUNDS
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 or 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.
Statement of Additional Information Page 13
<PAGE>
GT GLOBAL GROWTH FUNDS
RISK FACTORS
- --------------------------------------------------------------------------------
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.
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.
FOREIGN SECURITIES
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
Statement of Additional Information Page 14
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
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
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 U.S. dollars between the receipt of
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.
Statement of Additional Information Page 15
<PAGE>
GT GLOBAL GROWTH FUNDS
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 transactions usually are subject to fixed
commissions, which generally are higher than negotiated commissions on U.S.
transactions. In addition, foreign securities 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 whose those taxes may be recaptured. See "Taxes."
CONCENTRATION. To the extent a Fund invests a significant portion of its
assets in securities of issuers located in a particular country or region of the
world, such Fund may be subject to greater risks and may experience greater
volatility than a fund that is more broadly diversified geographically.
SPECIAL CONSIDERATIONS AFFECTING WESTERN EUROPEAN COUNTRIES. 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 Western 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 in Western Europe, it is impossible to predict the
long-term impact of the implementation of these programs on the securities owned
by a Fund.
SPECIAL CONSIDERATIONS AFFECTING RUSSIA AND EASTERN EUROPEAN
COUNTRIES. Investing in Russia and Eastern European countries involves a high
degree of risk and special considerations not typically associated with
investing in the United States securities markets, and should be considered
highly speculative. Such risks include: (1) delays in settling portfolio
transactions and risk of loss arising out of the system of share registration
and custody; (2) the risk that it may be impossible or more difficult than in
other countries to obtain and/or enforce a judgment; (3) pervasiveness of
corruption and crime in the economic system; (4) currency exchange rate
volatility and the lack of available currency hedging instruments; (5) higher
rates of inflation (including the risk of social unrest associated with periods
of hyper-inflation) and high unemployment; (6) controls on foreign investment
and local practices disfavoring foreign investors and limitations on
repatriation of invested capital, profits and dividends, and on a Fund's ability
to exchange local currencies for U.S. dollars; (7) political instability and
social unrest and violence; (8) the risk that the governments of Russia and
Eastern European countries may decide not to continue to support the economic
reform programs implemented recently and could follow radically different
political and/or economic policies to the detriment of investors, including
non-market-oriented policies such as the support of certain industries at the
expense of other sectors or investors, or a return to the centrally planned
economy that existed when such countries had a communist form of government; (9)
the financial condition of companies in these countries, including large amounts
of inter-company debt which may create a payments
Statement of Additional Information Page 16
<PAGE>
GT GLOBAL GROWTH FUNDS
crisis on a national scale; (10) dependency on exports and the corresponding
importance of international trade; (11) the risk that the tax system in these
countries will not be reformed to prevent inconsistent, retroactive and/or
exorbitant taxation; and (12) the underdeveloped nature of the securities
markets.
SPECIAL CONSIDERATIONS AFFECTING PACIFIC REGION COUNTRIES. Many of the Asia
Pacific region countries may be subject to a greater degree of social, political
and economic instability than is the case in the United States. Such instability
may result from, among other things, the following: (i) authoritarian
governments or military involvement in political and economic decision making,
and changes in government through extra-constitutional means; (ii) popular
unrest associated with demands for improved political, economic and social
conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring
countries; and (v) ethnic, religious and racial disaffection. Such social,
political and economic instability could significantly disrupt the principal
financial markets in which a Fund invests and adversely affect the value of a
Fund's assets. In addition, there may be the possibility of asset expropriations
or future confiscatory levels of taxation affecting the Funds.
Several of the Asia Pacific region countries have or in the past have had
hostile relationships with neighboring nations or have experienced internal
insurgency. Thailand has experienced border conflicts with Laos and Cambodia,
and India is engaged in border disputes with several of its neighbors, including
China and Pakistan. An uneasy truce exists between North Korea and South Korea,
and the recurrence of hostilities remains possible. Reunification of North Korea
and South Korea could have a detrimental effect on the economy of South Korea.
Also, China continues to claim sovereignty over Taiwan and recently has
conducted military maneuvers near Taiwan.
The economies of most of the Asia Pacific region countries are heavily dependent
upon international trade and are accordingly affected by protective trade
barriers and the economic conditions of their trading partners, principally the
United States, Japan, China and the European Community. The enactment by the
United States or other principal trading partners of protectionist trade
legislation, reduction of foreign investment in the local economies and general
declines in the international securities markets could have a significant
adverse effect upon the securities markets of the Asia Pacific region countries.
In addition, the economies of some of the Asia Pacific region countries,
Australia and Indonesia, for example, are vulnerable to weakness in world prices
for their commodity exports, including crude oil.
China is scheduled to assume sovereignty over Hong Kong in July 1997. Although
China has committed by treaty to preserve the economic and social freedoms
enjoyed in Hong Kong for fifty years after regaining control of Hong Kong, the
continuation of the current form of the economic system in Hong Kong after the
reversion will depend on the actions of the government of China. In addition,
such reversion has increased sensitivity in Hong Kong to political developments
and statements by public figures in China. Business confidence in Hong Kong,
therefore, can be significantly affected by such developments and statements,
which in turn can affect markets and business performance.
In addition, the reversion of Hong Kong also presents a risk that the Hong Kong
dollar will be devaluated and a risk of possible loss of investor confidence in
the Hong Kong markets and dollar. However, factors exist that are likely to
mitigate this risk. First, China has stated its intention to implement a "one
country, two systems" policy, which would preserve monetary sovereignty and
leave control in the hands of the Hong Kong Monetary Authority ("HKMA").
Second, fixed rate parity with the U.S. dollar is seen as critical to
maintaining investors' confidence in the transition to Chinese rule and,
therefore, it is anticipated that, in the event international investors lose
confidence in Hong Kong dollar assets, the HKMA would intervene to support the
currency, though such intervention cannot be assured. Third, Hong Kong's and
China's sizable combined foreign exchange reserve may be used to support the
value of the Hong Kong dollar, provided that China does not appropriate such
reserves for other uses, which is not anticipated, but cannot be assured.
Finally, China would be likely to experience significant adverse political and
economic consequences if confidence in the Hong Kong dollar and the territory
assets were to be endangered.
SPECIAL CONSIDERATIONS AFFECTING LATIN AMERICAN COUNTRIES. 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 have had and may continue to have very negative effects on the
economies and securities markets of certain Latin American countries. Certain
Latin American countries are also among the largest debtors to commercial banks
and foreign governments. At times certain Latin American countries have declared
moratoria on the payment of principal and/or interest on external debt. In
addition, certain Latin American securities markets have experienced high
volatility in recent years.
Latin American countries may also close certain sectors of their economies to
equity investments by foreigners. Further due to the absence of securities
markets and publicly owned corporations and due to restrictions on direct
investment by
Statement of Additional Information Page 17
<PAGE>
GT GLOBAL GROWTH FUNDS
foreign entities, investments may only be made in certain Latin American
countries solely or primarily through governmentally approved investment
vehicles or companies.
Certain Latin American countries may have managed currencies that are maintained
at artificial levels to the U.S. dollar rather than at levels determined by the
market. This type of system can lead to sudden and large adjustments in the
currency which, in turn, can have a disruptive and negative effect on foreign
investors. For example, in late 1994, the value of the Mexican peso lost more
than one-third of its value relative to the U.S. dollar.
SPECIAL CONSIDERATIONS AFFECTING EMERGING MARKETS. Investing in the
securities of companies in emerging markets may entail special risks relating to
potential political and economic instability and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility 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 value 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, especially 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
reliable than in more developed markets. In such emerging markets there may be
share registration and delivery delays or failures.
Many emerging market 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 emerging market countries.
DEBT SECURITIES
Each Fund is permitted to purchase investment grade debt securities. In
selecting debt securities for investment, 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 Standard & Poor's Ratings Group ("S&P"), Moody's
Investors Service, Inc. ("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 debt securities represent the rating agencies' opinions regarding
their quality, are not a guarantee of quality and may be reduced after a Fund
has acquired the security. The Manager will consider such an event in
determining whether a Fund should continue to hold the security but is not
required to dispose of it. Credit ratings attempt to evaluate the safety of
principal and interest payments and do not reflect an assessment of the
volatility of the security's market value or the liquidity of an investment in
the security. Also, NRSROs may fail to make timely changes in credit ratings in
response to subsequent events, so that an issuer's current financial condition
may be better or worse than the rating indicates. For a description of Moody's
and S&P ratings, see "Description of Debt Ratings" herein.
Statement of Additional Information Page 18
<PAGE>
GT GLOBAL GROWTH FUNDS
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;
(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.
Statement of Additional Information Page 19
<PAGE>
GT GLOBAL GROWTH FUNDS
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) 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
(3) Enter into a futures contract, an option on a future 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.
----------------------------
If a percentage restriction on investment or utilization of assets in an
investment 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 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.
Statement of Additional Information Page 20
<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 OTC 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
Statement of Additional Information Page 21
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
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. 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. For the fiscal year ended December 31, 1996, the Europe
Fund paid to LGT bank in Lichtenstein AG and LGT Bank in Lichtenstein, each on
"affiliated" broker, aggregate brokerage commissions of $
- ------ and $
- ------, respectively, for transactions involving purchases and sales of
portfolio securities which represented
- --% and
- --%, respectively, of the total brokerage commissions paid by the Europe Fund,
and
- --% and
- --%, respectively, of the aggregate dollar amount of transactions involving
payment of commissions by the Europe Fund.
For the fiscal year ended December 31, 1996, the International Fund paid to LGT
Bank in Liechtenstein AG aggregate brokerage commissions of $
- ---- for transactions involving purchases and sales of portfolio securities
which represented
- ---% of the total brokerage commissions paid by the International Fund, and
- ---% of the aggregate dollar amount of transactions involving payment of
commissions by the International 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 1996 1995 1994
- -------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
America Fund.............................................................. $ $ 878,569 $ 1,082,311
Europe Fund............................................................... $ $ 3,877,784 $ 2,185,831
International Fund........................................................ $ $ 1,889,228 $ 1,090,763
Japan Fund................................................................ $ $ 440,117 $ 838,666
Pacific Fund.............................................................. $ $ 3,310,887 $ 2,746,761
Worldwide Fund............................................................ $ $ 1,007,167 $ 954,962
</TABLE>
PORTFOLIO TRADING AND TURNOVER
Although the Funds generally do not intend to trade for short-term profits, the
securities held by a Fund 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. The portfolio turnover rate
will not be a limiting factor when management deems portfolio changes
appropriate. Higher portfolio turnover involves correspondingly greater
brokerage commissions and other transaction costs that the Funds will bear
directly, and may result in the realization of net capital gains that are
taxable when distributed to each Fund's shareholders. The portfolio turnover
rates for the fiscal years ended December 31, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
America Fund.......................................................................................... % 71%
Europe Fund........................................................................................... 108
International Fund.................................................................................... 75
Japan Fund............................................................................................ 67
Pacific Fund.......................................................................................... 63
Worldwide Fund........................................................................................ 113
</TABLE>
Statement of Additional Information Page 22
<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>
William J. Guilfoyle*, 38 Director, LGT Asset Management, Inc. since 1996; Director, G.T. Insurance Agency ("G.T.
Director, Chairman of the Board and Insurance") since 1996; Director, Liechtenstein Global Trust AG (holding company of the
President various international LGT companies) Advisory Board since January 1996; President, GT
50 California Street Global since 1995; President and Chief Executive Officer, G.T. Insurance since 1995;
San Francisco, CA 94111 Director, Liechtenstein Global Trust AG from 1995 to January 1996; Senior Vice President
and Director, Sales and Marketing, G.T. Insurance from April 1995 to November 1995; Vice
President and Director of Marketing, GT Global from 1987 to 1995; Senior Vice President,
Retail Marketing, G.T. Insurance from 1993 to 1995; Vice President, G.T. Insurance from
1992 to 1993; and Director, Mutual Fund Forum (an industry group of mutual fund and
broker/dealer firms). Mr. Guilfoyle 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, 55 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, 57 Partner with Baker & McKenzie (a law firm); Director and Chairman, C.D. Stimson Company (a
Trustee private investment company). Mr. Bayley also is a director or trustee of each of the other
Two Embarcadero Center investment companies registered under the 1940 Act that is managed or administered by the
Suite 2400 Manager.
San Francisco, CA 94111
Arthur C. Patterson, 53 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, 61 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.
Robert G. Wade, Jr.*, 69 Consultant to the Manager; Chairman of the Board of Chancellor Capital Management, Inc.
Director from January 1995 to October 1996; President, Chief Executive Officer and Chairman of the
1166 Avenue of the Americas Board of Chancellor Capital Management, Inc. from 1988 to January 1995.
New York, NY 10036
</TABLE>
- --------------
* Mr. Guilfoyle and Mr. Wade are "interested persons" of the Company as
defined by the 1940 Act due to their affiliation with the LGT companies.
Statement of Additional Information Page 23
<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, 38 Chief Information Officer for the Manager since October 1996; President,
Vice President and Chief GT Services since 1995; Senior Vice President -- Finance and
Financial Officer Administration, GT Global, GT Services and G.T. Insurance from 1994 to
50 California Street 1995; Senior Vice President -- Finance and Administration, LGT Asset
San Francisco, CA 94111 Management and the Manager from 1994 to October 1996; Vice President --
Finance, LGT Asset Management, the Manager, GT Global and GT Services
from 1990 to 1994; Vice President -- Finance, G.T. Insurance from 1992
to 1994; and Director of LGT Asset Management, GT Global and GT Services
since 1991.
Kenneth W. Chancey, 51 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, 50 Executive Vice President, Asset Management Division, Liechtenstein
Vice President and Secretary Global Trust since October 1996; Senior Vice President, LGT Asset
50 California Street Management, GT Global, GT Services and G.T. Insurance from February 1996
San Francisco, CA 94111 to October 1996; Vice President, the Manager, LGT Asset Management, GT
Global, GT Services and G.T. Insurance from May 1994 to February 1996;
General Counsel, the Manager, LGT Asset Management, GT Global, GT
Services and G.T. Insurance from May 1994 to October 1996; Secretary,
the Manager, LGT Asset Management, GT Global, GT Services and G.T.
Insurance from May 1994 to October 1996; Senior Vice President, General
Counsel and Secretary, Strong/ Corneliuson Management, Inc.; and
Secretary, each of the Strong Funds from October 1991 to May 1994.
</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., G.T. Global
Developing Markets Fund, Inc. and G.T. Global Floating Rate Fund, Inc., and a
Trustee and officer of G.T. Global Eastern Europe Fund, GT 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 11 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, 1996, 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 $
- ------, $
- ------, $
- ------ and $
- ------, respectively, for their services as Trustees. For the year ended
December 31, 1996, Mr. Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley
received total compensation of $
- ------, $
- ------, $
- ------ and $
- ------, respectively, from the 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
- --% of the outstanding shares of any Fund.
Statement of Additional Information Page 24
<PAGE>
GT GLOBAL GROWTH FUNDS
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
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.
The Management Contract may be renewed for 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).
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 1996 1995 1994
- ------------------------------------------------------------ --------------- --------------- ---------------
<S> <C> <C> <C>
America Fund................................................ $ $ 4,425,913 $ 1,283,893
Europe Fund................................................. $ $ 6,161,265 $ 8,319,087
International Fund.......................................... $ $ 4,027,923 $ 5,368,669
Japan Fund.................................................. $ $ 1,167,576 $ 1,345,064
Pacific Fund................................................ $ $ 5,176,333 $ 5,563,245
Worldwide Fund.............................................. $ $ 2,050,983 $ 3,355,681
</TABLE>
DISTRIBUTION SERVICES
Each Fund's Advisor Class shares are offered continuously through the Funds'
principal underwriter and distributor, GT Global, on a "best efforts" basis
without a sales charge or a contingent deferred sales charge. -
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.
The Manager also serves as each Fund's pricing and accounting agent. For the
fiscal years ended December 31, 1995 and December 31, 1996, the transfer agency
and accounting services fees for the America Fund, Europe Fund, International
Fund, Japan Fund, Pacific Fund and Worldwide Fund were $79,918 and $
- ------, $62,660 and $
- ------, $40,655 and $
- ------, $14,483 and $
- ------, $53,724 and $
- ------, and $22,092 and $
- ------, respectively.
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. Certain of these expenses, such as custodial fees and
brokerage fees generally are higher for non-U.S. securities. 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.
- --------------------------------------------------------------------------------
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.
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.
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. The value of each security denominated in a currency other than
U.S. dollars will be translated into U.S. dollars at the prevailing exchange
rate as determined by the Manager on that day. 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 value) 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.
Statement of Additional Information Page 26
<PAGE>
GT GLOBAL GROWTH FUNDS
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 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.
- --------------------------------------------------------------------------------
INFORMATION RELATING TO SALES
AND REDEMPTIONS
- --------------------------------------------------------------------------------
PAYMENT AND TERMS OF OFFERING
Payment for Advisor Class shares purchased should accompany the purchase order,
or funds should be wired to the Transfer Agent as described in the Prospectus.
Payment, other than by wire transfer, must be made by check or money order drawn
on a U.S. bank. Checks or money orders must be payable in U.S. dollars.
As a condition of this offering, if an order to purchase either class of shares
is cancelled due to nonpayment (for example, because a check is returned for
"not sufficient funds"), the person who made the order will be responsible for
any loss incurred by a Fund by reason of such cancellation, and if such
purchaser is a shareholder, that Fund shall have the authority as agent of the
shareholder to redeem shares in his or her account at their then-current net
asset value per share to reimburse that Fund for the loss incurred. Investors
whose purchase orders have been cancelled due to nonpayment may be prohibited
from placing future orders.
The Funds reserve the right at any time to waive or increase the minimum
requirements applicable to initial or subsequent investments with respect to any
person or class of persons. An order to purchase shares is not binding on a Fund
until it has been confirmed in writing by the Transfer Agent (or other
arrangements made with the Fund, in the case of orders utilizing wire transfer
of funds, as described above) and payment has been received. To protect existing
shareholders, the Funds reserve the right to reject any offer for a purchase of
shares by any individual.
SALES OUTSIDE THE UNITED STATES
Sales of Fund shares made through brokers outside the United States will be at
net asset value plus a sales commission, if any, established by that broker or
by local law. Such commission, if any, may be more or less than the sales
charges listed in the sales charge table included in the Prospectus.
EXCHANGES BETWEEN FUNDS
Shares of a Fund may be exchanged for shares of other GT Global Mutual Funds,
based on their respective net asset values without imposition of any sales
charges provided that the registration remains identical. Advisor Class shares
may be exchanged only for Advisor Class shares of other 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.
Statement of Additional Information Page 27
<PAGE>
GT GLOBAL GROWTH FUNDS
TELEPHONE REDEMPTIONS
A corporation or partnership wishing to utilize telephone redemption services
must submit a "Corporate Resolution" or "Certificate of Partnership" indicating
the names, titles and the required number of signatures of persons authorized to
act on its behalf. The certificate must be signed by a duly authorized
officer(s) and, in the case of a corporation, the corporate seal must be
affixed. All shareholders may request that redemption proceeds be transmitted by
bank wire directly to the shareholder's predesignated account at a domestic bank
or savings institution if the proceeds are at least $1,000. Costs in connection
with the administration of this service, including wire charges, will be borne
by the Funds. Proceeds of less than $1,000 will be mailed to the shareholder's
registered address of record. The Funds and the Transfer Agent reserve the right
to refuse any telephone instructions and may discontinue the aforementioned
redemption options upon 30 days' written notice.
SUSPENSION OF REDEMPTION PRIVILEGES
The Funds may suspend redemption privileges or postpone the date of payment for
more than seven days after a redemption or der 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 delivered in payment of redemptions 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
- --------------------------------------------------------------------------------
GENERAL
Each Fund is treated as a separate corporation for federal income purposes. In
order to continue to qualify for treatment as a regulated investment company
("RIC") under the Internal Revenue Code of 1986, as amended ("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
Statement of Additional Information Page 28
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
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
Statement of Additional Information Page 29
<PAGE>
GT GLOBAL GROWTH FUNDS
reporting and withholding requirements applicable to domestic shareholders will
apply. A distribution of net capital gain by a Fund to foreign shareholders
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 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 30
<PAGE>
GT GLOBAL GROWTH FUNDS
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
LIECHTENSTEIN GLOBAL TRUST
Liechtenstein Global Trust AG, formerly BIL GT Group, is composed of the Manager
and its worldwide affiliates. Other worldwide affiliates of the 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 Investment Trust
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 that 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 31
<PAGE>
GT GLOBAL GROWTH FUNDS
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
STANDARDIZED RETURNS
Each Fund's "Standardized Returns," 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 (average annual total return ("T")) is computed by using the ending
redeeming value ("ERV") of a hypothetical initial investment of $1,000 ("P")
over a period of years ("n") according to the following formula as required by
the SEC: P(1+T) to the (n)th power=ERV. 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 Company's Board of Directors; and (4)
a complete redemption at the end of any period illustrated.
The Standardized Returns for the Class A and Class B shares of the America Fund,
stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
AMERICA FUND AMERICA FUND
PERIOD (CLASS A) (CLASS B)
- ------------------------------------------------------------------------------------------ --------------- ---------------
<S> <C> <C>
Fiscal year ended October 31, 1996........................................................ % %
June 1, 1995 (commencement of operations) through October 31, 1996........................ % %
</TABLE>
The Standardized Returns for the Class A and Class B shares of the Europe Fund,
stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
EUROPE FUND EUROPE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
Fiscal year ended October 31, 1996.......................................................... % %
June 1, 1995 (commencement of operations) through October 31, 1996.......................... % %
</TABLE>
The Standardized Returns for the Class A and Class B shares of the International
Fund, stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
INTERNATIONAL FUND INTERNATIONAL FUND
PERIOD (CLASS A) (CLASS B)
- ---------------------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C>
Fiscal year ended October 31, 1996................................................ % %
June 1, 1995 (commencement of operations) through October 31, 1996................ % %
</TABLE>
The Standardized Returns for the Class A and Class B shares of the Japan Fund,
stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
JAPAN FUND JAPAN FUND
PERIOD (CLASS A) (CLASS B)
- ----------------------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
Fiscal year ended October 31, 1996............................................................. % %
June 1, 1995 (commencement of operations) through October 31, 1996............................. % %
</TABLE>
The Standardized Returns for the Class A and Class B shares of the Pacific Fund,
stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
PACIFIC FUND PACIFIC FUND
PERIOD (CLASS A) (CLASS B)
- --------------------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
Fiscal year ended October 31, 1996........................................................... % %
June 1, 1995 (commencement of operations) through October 31, 1996........................... % %
</TABLE>
The standardized Returns for the Class A and Class B shares of the Worldwide
Fund, stated as average annualized total returns for the periods show, were:
<TABLE>
<CAPTION>
WORLDWIDE FUND WORLDWIDE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
Fiscal year ended October 31, 1996.................................................... % %
June 1, 1995 (commencement of operations) through October 31, 1996.................... % %
</TABLE>
Statement of Additional Information Page 32
<PAGE>
GT GLOBAL GROWTH FUNDS
NON-STANDARDIZED RETURNS
In addition to Standardized Returns, each Fund also may include in
advertisements, sales literature and shareholder reports other total return
performance data ("Non-Standardized Return"). Non-Standardized Return is
calculated separately for Class A and Class B shares of each Fund and may be
calculated according to several different formulas. Non-Standardized Returns may
be quoted for the same or different time periods for which Standardized Returns
are quoted. Non-Standardized Returns 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.
Average annual Non-Standardized Return ("T") is computed by using the ending
redeeming value ("ERV") of a hypothetical initial investment of $1,000 ("P")
over a period of years ("n") according to the following formula as required by
the SEC: P(1+T) to the (n)th power=ERV. The following assumptions will be
reflected in computations made in accordance with this formula: (1) no deduction
of sales charges; (2) reinvestment of dividends and other distributions at net
asset value on the reinvestment date determined by the Board; and (3) a complete
redemption at the end of any period illustrated.
The average annual Non-Standardized Returns for the Class A and Class B shares
of the America Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
AMERICA FUND AMERICA FUND
PERIOD (CLASS A) (CLASS B)
- ------------------------------------------------------------------------------------------ --------------- ---------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996........................ % %
</TABLE>
The average annual Non-Standardized Returns for the Class A and Class B shares
of the Europe Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
EUROPE FUND EUROPE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996.......................... % %
</TABLE>
The average annual Non-Standardized Returns for the Class A and Class B shares
of the International Fund, stated as average annualized total returns for the
periods shown, were:
<TABLE>
<CAPTION>
INTERNATIONAL FUND INTERNATIONAL FUND
PERIOD (CLASS A) (CLASS B)
- ---------------------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996................ % %
</TABLE>
The average annual Non-Standardized Returns for the Class A and Class B shares
of the Japan Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
JAPAN FUND JAPAN FUND
PERIOD (CLASS A) (CLASS B)
- ----------------------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996............................. % %
</TABLE>
The average annual Non-Standardized Returns for the Class A and Class B shares
of the Pacific Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
PACIFIC FUND PACIFIC FUND
PERIOD (CLASS A) (CLASS B)
- --------------------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996........................... % %
</TABLE>
The average annual Non-Standardized Returns for the Class A and Class B shares
of the Worldwide Fund, stated as average annualized total returns for the
periods shown, were:
<TABLE>
<CAPTION>
WORLDWIDE FUND WORLDWIDE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996.................... % %
</TABLE>
Aggregate Non-Standardized Return ("T") is computed by using the ending value of
the account ("VOA") of a hypothetical initial investment of $1,000 ("P")
according to the following formula: T=(VOA/P)-1. Aggregate Non-Standardized
Return assumes reinvestment of dividends and other distributions and, as set
forth below, may or may not take sales charges into account.
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A and Class B shares of the America Fund, stated as aggregate
total returns for the periods shown, were:
<TABLE>
<CAPTION>
AMERICA FUND AMERICA FUND
PERIOD (CLASS A) (CLASS B)
- ------------------------------------------------------------------------------------------ --------------- ---------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996........................ % %
</TABLE>
Statement of Additional Information Page 33
<PAGE>
GT GLOBAL GROWTH FUNDS
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A and Class B shares of the Europe Fund, stated as aggregate total
returns for the periods shown, were:
<TABLE>
<CAPTION>
EUROPE FUND EUROPE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996.......................... % %
</TABLE>
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A and Class B shares of the International Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
INTERNATIONAL FUND INTERNATIONAL FUND
PERIOD (CLASS A) (CLASS B)
- ---------------------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996................ % %
</TABLE>
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A and Class B shares of the Japan Fund, stated as aggregate total
returns for the periods shown, were:
<TABLE>
<CAPTION>
JAPAN FUND JAPAN FUND
PERIOD (CLASS A) (CLASS B)
- ----------------------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996............................. % %
</TABLE>
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A and Class B shares of the Pacific Fund, stated as aggregate
total returns for the periods shown, were:
<TABLE>
<CAPTION>
PACIFIC FUND PACIFIC FUND
PERIOD (CLASS A) (CLASS B)
- --------------------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996........................... % %
</TABLE>
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A and Class B shares of the Worldwide Fund, stated as aggregate
total returns for the periods shown, were:
<TABLE>
<CAPTION>
WORLDWIDE FUND WORLDWIDE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996.................... % %
</TABLE>
The aggregate Non-Standardized Returns (taking sales charges into account) for
the Class A and Class B of the America Fund, stated as aggregate total returns
for the periods shown, were:
<TABLE>
<CAPTION>
AMERICA FUND AMERICA FUND
PERIOD (CLASS A) (CLASS B)
- ------------------------------------------------------------------------------------------ --------------- ---------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996........................ % %
</TABLE>
The aggregate Non-Standardized Returns (taking sales charges into account) for
the Class A and Class B shares of the Europe Fund, stated as aggregate total
returns for the periods shown, were:
<TABLE>
<CAPTION>
EUROPE FUND EUROPE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996.......................... % %
</TABLE>
The aggregate Non-Standardized Returns (taking sales charges into account) for
the Class A and Class B shares of the International Fund, stated as aggregate
total returns for the periods shown, were:
<TABLE>
<CAPTION>
INTERNATIONAL FUND INTERNATIONAL FUND
PERIOD (CLASS A) (CLASS B)
- ---------------------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996................ % %
</TABLE>
The aggregate Non-Standardized Returns (taking sales charges into account) for
the Class A and Class B shares of the Japan Fund, stated as aggregate total
returns for the periods shown, were:
<TABLE>
<CAPTION>
JAPAN FUND JAPAN FUND
PERIOD (CLASS A) (CLASS B)
- ----------------------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996............................. % %
</TABLE>
The aggregate Non-Standardized Returns (taking sales charges into account) for
the Class A and Class B shares of the Pacific Fund, stated as aggregate total
returns for the periods shown, were:
<TABLE>
<CAPTION>
PACIFIC FUND PACIFIC FUND
PERIOD (CLASS A) (CLASS B)
- --------------------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996........................... % %
</TABLE>
Statement of Additional Information Page 34
<PAGE>
GT GLOBAL GROWTH FUNDS
The aggregate Non-Standardized Returns (taking sales charges into account) for
the Class A and Class B shares of the Worldwide Fund, stated as aggregate total
returns for the periods shown, were:
<TABLE>
<CAPTION>
WORLDWIDE FUND WORLDWIDE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through October 31, 1996.................... % %
</TABLE>
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of each Fund's portfolio and operating expenses of
each Fund, so that current or past yield or total return should not be
considered representative of what an investment in each 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 each Fund's
investment results with those published for other investment companies and other
investment vehicles. Each Fund's results also should be considered relative to
the risks associated with such Fund's investment objective and policies.
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
the 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 or BBB by S&P, or, in
the case of nonrated bonds, BBB by Fitch Investors Service, Inc. ("Fitch"),
(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 Gross National Product ("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.
Statement of Additional Information Page 35
<PAGE>
GT GLOBAL GROWTH FUNDS
(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 in 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.
(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, S&P and Fitch.
(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 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, Mutual
Fund 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 1933 Act, 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
Statement of Additional Information Page 36
<PAGE>
GT GLOBAL GROWTH FUNDS
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 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 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 plans may produce returns superior to comparable non-retirement
investments. In sales material and advertisements, the Funds may also discuss
these plans, which include:
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS): If you have earned income from employment
(including self-employment), you can contribute each year to an IRA up to the
lesser of (1) $2,000 for yourself or $4,000 for you and your spouse, regardless
of whether your spouse is employed, or (2) 100% of compensation. 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
Statement of Additional Information Page 37
<PAGE>
GT GLOBAL GROWTH FUNDS
Rollover IRA. These accounts can also receive rollovers or transfers from an
existing IRA. If an "eligible rollover 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: Simplified employee pension plans ("SEPs" or "SEP-IRA") 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.
CODE SECTION 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 SECTION 401(K)) AND MONEY PURCHASE PENSION
PLANS: Corporations can sponsor these qualified defined contribution plans for
their employees. A 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).
SIMPLE RETIREMENT PLANS: Employers with no more than 100 employees who do not
maintain another retirement plan may establish a Savings Incentive Match Plan
for Employees ("SIMPLE") either as separate IRAs or as part of a Code Section
401(k) plan. SIMPLEs are not subject to the complicated nondiscrimination rules
that generally apply to qualified retirement plans.
GT Global may from time to time in its sales materials and advertising discuss
the risks inherent in investing. The major types of investment risk are market
risk, industry risk, credit risk, interest rate risk, liquidity 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, companies, individual countries, regions, world stock exchanges, and
economic and demographic statistics from sources GT Global deems reliable,
including the economic and financial data of such financial organizations as:
1) Stock market capitalization: Morgan Stanley Capital International World
Indices, IFC and Datastream.
2) Stock market trading volume: Morgan Stanley Capital International World
Indices and IFC.
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, IFC and Datastream.
7) The Consumer Price Index and inflation rate: The World Bank, Datastream and
IFC.
8) Gross Domestic Product (GDP): Datastream and The World Bank.
9) GDP growth rate: IFC, 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: IFC, The World Bank and Datastream.
14) Top three companies by country, industry or market: IFC, 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.
Statement of Additional Information Page 38
<PAGE>
GT GLOBAL GROWTH FUNDS
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. (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 GT Global provide any
assurance that the Manager or GT Global Mutual Fund's investment objectives will
be achieved.
GT GLOBAL ADVANTAGE
As part of Liechtenstein Global Trust, GT Global continues a 75-year tradition
of service to individuals and institutions. Today we bring investors a
combination of experience, worldwide resources, a global perspective, investment
talent and a time tested investment discipline. With investment professionals in
nine offices worldwide, we witness world events and economic developments
firsthand.
The key to achieving consistent results is following a disciplined investment
process. Our approach to asset allocation takes advantage of GT Global's
worldwide presence and global perspective. Our "macroeconomic" worldview
determines our overall strategy of regional, country and sector allocations. Our
bottom up process of security selection combines fundamental research with
quantitative analysis through our proprietary models.
Built in checks and balances strengthen the process, enhancing professional
experience and judgment with an objective assessment of risk. Ultimately, each
security we select has passed a ranking system that helps our portfolio teams
determine when to buy and when to sell.
- --------------------------------------------------------------------------------
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
DESCRIPTION OF COMMERCIAL PAPER RATINGS
Moody's employs the designations "Prime-1" and "Prime-2" to indicate commercial
paper having the highest capacity for timely repayment. Issuers rated Prime-1
(or supporting institutions) 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; and well-established access to a range of
financial markets and assured sources of alternate liquidity. Issuers rated
Prime-2 (or supporting institutions) have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a
Statement of Additional Information Page 39
<PAGE>
GT GLOBAL GROWTH FUNDS
lesser degree. Earnings trends and coverage ratios, while sound may be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
S&P rates commercial paper in four categories. "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. Those
issues determined to possess extremely strong safety characteristics will be
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."
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 edged." 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 are generally known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term
risk appear somewhat larger than the Aaa securities.
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.
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies
that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa to B in its corporate bond rating system. The modifier 1
indicates that the company ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.
S&P rates the 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.
Statement of Additional Information Page 40
<PAGE>
GT GLOBAL GROWTH FUNDS
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.
PLUS (+) OR MINUS (-): The ratings from "AA" to "BBB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of each Fund as of December 31, 1996 appear on
the following pages.
Statement of Additional Information Page 41
<PAGE>
GT GLOBAL GROWTH FUNDS
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 133
<PAGE>
GT GLOBAL GROWTH FUNDS
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 134
<PAGE>
GT GLOBAL GROWTH FUNDS
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 135
<PAGE>
GT GLOBAL GROWTH FUNDS
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 136
<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, INCLUDING FEES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING
MARKET INVESTING AND THE RISKS OF INVESTING IN RELATED INDUSTRIES, PLEASE
CONTACT YOUR FINANCIAL ADVISER 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 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,
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 MID CAP GROWTH FUND
Concentrates on medium-sized companies in the U.S.
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]
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,
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 IN SUCH JURISDICTION.
EQUSX610MC
<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
May 1, 1997
- --------------------------------------------------------------------------------
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 (the
"Company"), a registered open-end management investment company. The Small Cap
Fund and Value Fund invest all of their investable assets in the Small Cap
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 May 1,
1997, 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, and also serves as each Fund's
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 the "Transfer Agent").
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE NO.
-----------
<S> <C>
Investment Objectives and Policies..................................................................................... 2
Options and Futures.................................................................................................... 4
Risk Factors........................................................................................................... 11
Investment Limitations................................................................................................. 12
Execution of Portfolio Transactions.................................................................................... 14
Trustees and Executive Officers........................................................................................ 16
Management............................................................................................................. 18
Valuation of Shares.................................................................................................... 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>
[LOGO]
Statement of Additional Information Page 1
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
INVESTMENT OBJECTIVES
AND POLICIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
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 Fund's 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.
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 return on such securities will be
reduced by operating expenses of such companies including payments to the
investment managers of those investment companies.
DEPOSITORY RECEIPTS
Each Portfolio may invest up to 10% of its total assets in 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
Portfolio's investment policies, the Portfolio'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
Statement of Additional Information Page 2
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 Portfolios may invest in sponsored and unsponsored
ADRs.
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.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Portfolio may make secured
loans of its 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 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. Each Portfolio will have 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 may call in a loan in anticipation of any important vote. Loans
will only 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 Portfolio's investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks are obligations of
the issuing bank and may be general obligations of the parent bank. Such
obligations, however, may be limited by the terms of a specific obligation and
by government regulation. Although a Portfolio typically will acquire
obligations issued and supported by the credit of U.S. banks having total assets
at the time of purchase of $1 billion or more, this $1 billion figure is not an
investment policy or restriction of any Portfolio. For the purposes of
calculation with respect to the $1 billion figure, the assets of a bank will be
deemed to include the assets of its U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS
A repurchase agreement is a transaction 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. Although repurchase agreements carry certain risks not
associated with direct investment 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, 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 Growth Portfolio's Board of Trustees. The
Manager will review and monitor the creditworthiness of such institutions under
the general supervision of the Growth Portfolio's Board.
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. 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 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. If market fluctuations in the value of a
Portfolio's portfolio holdings
Statement of Additional Information Page 3
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 a Fund's shares than would be the case if the Portfolio did not
borrow.
Each Portfolio's fundamental investment limitations permit the Portfolio to
borrow money for leveraging purposes. Each Portfolio, however, currently is
prohibited, pursuant to a non-fundamental investment policy, from borrowing
money in order to purchase securities. Nevertheless, this policy may be changed
in the future by Growth Portfolio's Board of Trustees. In the event that a
Portfolio employs leverage in the future, it would be subject to certain
additional risks. Use of leverage creates an opportunity for greater growth of
capital but would exaggerate any increases or decreases in a Portfolio's net
asset value. When the income and gains on securities purchased with the proceeds
of borrowings exceed the costs of such borrowings, a Portfolio's earnings or net
asset value will increase faster than otherwise would be the case; 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 or 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.
TEMPORARY DEFENSIVE STRATEGIES
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 Investors Service ("Moody's") or A-1 by
Standard & Poor's Ratings Group ("S&P") at the time of investment or, if
unrated, deemed by the Manager to be of comparable quality.
- --------------------------------------------------------------------------------
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.
Statement of Additional Information Page 4
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
(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
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
Statement of Additional Information Page 5
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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.
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.
Statement of Additional Information Page 6
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 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 in over-the-counter
("OTC") markets. 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.
Statement of Additional Information Page 7
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When a Portfolio writes a call on
an index, it receives a premium and agrees that, prior to the expiration date,
the purchaser of the call, upon exercise of the call, will receive from the
Portfolio an amount of cash if the closing level of the index upon which the
call is based is greater than the exercise price of the call. The amount of cash
is equal to the difference between the closing price of the index and the
exercise price of the call times a specified multiple (the "multiplier"), which
determines the total dollar value for each point of such difference. When a
Portfolio buys a call on an index, it pays a premium and has the same rights as
to such call as are indicated above. When a Portfolio buys a put on an index, it
pays a premium and has the right, prior to the expiration date, to require the
seller of the put, upon the Portfolio's exercise of the put, to deliver to the
Portfolio an amount of cash if the closing level of the index upon which the put
is based is less than the exercise price of the put, which amount of cash is
determined by the multiplier, as described above for calls. When a Portfolio
writes a put on an index, it receives a premium and the purchaser has the right,
prior to the expiration date, to require the Portfolio to deliver to it an
amount of cash equal to the difference between the closing level of the index
and the exercise price times the multiplier, if the closing level is less than
the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Portfolio writes a
call on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. A Portfolio can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, a Portfolio cannot, as a practical matter, acquire and
hold a portfolio containing exactly the same securities as underlie the index
and, as a result, bears a risk that the value of the securities held will vary
from the value of the index.
Even if a Portfolio could assemble a securities portfolio that exactly
reproduced the composition of the underlying index, it still would not be fully
covered from a risk standpoint because of the "timing risk" inherent in writing
index options. When 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").
Statement of Additional Information Page 8
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
Although techniques other than sales and purchases of Futures Contracts could be
used to reduce a Portfolio's exposure to interest rate and stock market
fluctuations, the Portfolio may be able to hedge its exposure more effectively
and at a lower cost through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument for a
specified price at a designated date, time and place. A stock index Futures
Contract provides for the delivery, at a designated date, time and place, of an
amount of cash equal to a specified dollar amount times the difference between
the stock index value at the close of trading on the contract and the price at
which the Futures Contract is originally struck; no physical delivery of stocks
comprising the index is made. Brokerage fees are incurred when a Futures
Contract is bought or sold, and margin deposits must be maintained at all times
the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for
financial instruments, Futures Contracts usually are closed out before the
delivery date. Closing out an open Futures Contract sale or purchase is effected
by entering into an offsetting Futures Contract purchase or sale, respectively,
for the same aggregate amount of the identical financial instrument and the same
delivery date. If the offsetting purchase price is less than the original sale
price, the Portfolio realizes a gain; if it is more, the Portfolio realizes a
loss. Conversely, if the offsetting sale price is more than the original
purchase price, the Portfolio realizes a gain; if it is less, the Portfolio
realizes a loss. The transaction costs also must be included in these
calculations. There can be no assurance, however, that a Portfolio will be able
to enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If a Portfolio is not able to enter into an
offsetting transaction, the Portfolio will continue to be required to maintain
the margin deposits on the Futures Contract.
As an example of an offsetting transaction, the contractual obligations arising
from the sale of one September stock index Futures Contract on an exchange may
be fulfilled at any time before delivery under the Futures Contract is required
(I.E., on a specified date in September, the "delivery month") by the purchase
of the same September 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
Statement of Additional Information Page 9
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
deduction for the transaction costs, if the account were then closed out. A 15%
decrease would result in a loss equal to 150% of the original margin deposit, if
the Futures Contract were closed out. Thus, a purchase or sale of a Futures
Contract may result in losses in excess of the amount invested in the Futures
Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and options on Futures Contract prices during a single trading day. The
daily limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option prices occasionally have moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.
If a Portfolio were unable to liquidate a Futures or option on Futures position
due to the absence of a liquid secondary market or the imposition of price
limits, it could incur substantial losses. The Portfolio would continue to be
subject to market risk with respect to the position. In addition, except in the
case of purchased options, the Portfolio would continue to be required to make
daily variation margin payments and might be required to maintain the position
being hedged by the Future or option or to maintain cash or securities in a
segregated account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
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
Statement of Additional Information Page 10
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 or
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.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
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
Statement of Additional Information Page 11
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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.
DEBT SECURITIES
Each Portfolio is permitted to purchase investment grade debt securities. In
selecting debt securities for investment, 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, 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. For a description of Moody's
and S&P ratings, see "Description of Debt Ratings" herein.
- --------------------------------------------------------------------------------
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
THE FUNDS
The Small Cap Fund and Value Fund each has the following fundamental investment
policy to enable it to invest in the Small Cap Portfolio and Value Portfolio
respectively:
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
All other fundamental investment policies, and the non-fundamental policies, of
each Fund and its corresponding Portfolio are identical. Therefore, although the
following discusses the investment policies of each Portfolio and its Board of
Trustees, it applies equally to each Fund and its Board of Trustees.
Each Portfolio has adopted the following fundamental investment limitations as
fundamental policies which (unless otherwise noted) may not be changed without
approval by the affirmative vote of the lesser of (i) 67% of that Portfolio's
Statement of Additional Information Page 12
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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;
(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.
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;
Statement of Additional Information Page 13
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
(2) 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;
(3) 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
(4) 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.
If a percentage restriction on investment or utilization of assets in an
investment 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.
- --------------------------------------------------------------------------------
EXECUTION OF PORTFOLIO TRANSACTIONS
- --------------------------------------------------------------------------------
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 OTC 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
Statement of Additional Information Page 14
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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.
For the fiscal year ended December 31, 1996, and for the fiscal period October
18, 1995 (commencement of operations) to December 31, 1995, the Small Cap
Portfolio paid aggregate brokerage commissions of $
- ---- and $3,317, respectively. For the fiscal year ended December 31, 1996, and
for the fiscal period October 18, 1995 (commencement of operations) to December
31, 1995, the Value Portfolio paid aggregate brokerage commissions of $
- ---- and $1,032, respectively.
PORTFOLIO TRADING AND TURNOVER
Although the Portfolios generally do not intend to trade for short-term profits,
the securities held by a 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 Portfolio's
average month-end portfolio value, excluding short-term investments. The
portfolio turnover rate will not be a limiting factor when management deems
portfolio changes appropriate. Higher portfolio turnover involves
correspondingly greater brokerage commissions and other transaction costs that a
Portfolio will bear directly, and may result in the realization of net capital
gains that are taxable when distributed to each Fund's shareholders. For the
fiscal year ended December 31, 1996, the Small Cap Portfolio's and Value
Portfolio's portfolio turnover rates were
- ----% and
- ----%, respectively. For the Fiscal period October 18, 1995 (commencement of
operations) to December 31, 1995, the Small Cap Portfolio's and Value
Portfolio's portfolio turnover rates were
- ----% and
- ----%, respectively.
Statement of Additional Information Page 15
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
TRUSTEES AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The Company's Trustees and Executive Officers are listed below.
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
FUNDS AND ADDRESS EXPERIENCE FOR THE PAST 5 YEARS
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
William J. Guilfoyle*, 38 Director, LGT Asset Management, Inc. since 1996; Director, G.T. Insurance Agency ("G.T.
Director, Chairman of the Board and Insurance") since 1996; Director, Liechtenstein Global Trust AG (holding company of the
President various international LGT companies) Advisory Board since January 1996; President, GT
50 California Street Global since 1995; President and Chief Executive Officer, G.T. Insurance since 1995;
San Francisco, CA 94111 Director, Liechtenstein Global Trust AG from 1995 to January 1996; Senior Vice President
and Director, Sales and Marketing, G.T. Insurance from April 1995 to November 1995; Vice
President and Director of Marketing, GT Global from 1987 to 1995; Senior Vice President,
Retail Marketing, G.T. Insurance from 1993 to 1995; Vice President, G.T. Insurance from
1992 to 1993; and Director, Mutual Fund Forum (an industry group of mutual fund and
broker/dealer firms). Mr. Guilfoyle 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, 55 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, 57 Partner with Baker & McKenzie (a law firm): Director and Chairman, C.D. Stimson Company (a
Trustee private investment company). Mr. Bayley also is a director or trustee of each of the other
Two Embarcadero Center investment companies registered under the 1940 Act that is managed or administered by the
Suite 2400 Manager.
San Francisco, CA 94111
Arthur C. Patterson, 53 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, 61 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.
Robert G. Wade, Jr.*, 69 Consultant to the Manager; Chairman of the Board of Chancellor Capital Management, Inc.
Trustee from January 1995 to October 1996; President, Chief Executive Officer and Chairman of the
1166 Avenue of the Americas Board of Chancellor Capital Management, Inc. from 1988 to January 1995.
New York, NY 10036
</TABLE>
- --------------
* Mr. Guilfolye and Mr. Wade are "interested persons" of the Company as
defined by the 1940 Act due to their 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>
James R. Tufts, 38 Chief Information Officer for the Manager since October 1996; President,
Vice President and Chief GT Services since 1995; Senior Vice President -- Finance and
Financial Officer Administration, GT Global, GT Services and G.T. Insurance from 1994 to
50 California Street 1995; Senior Vice President -- Finance and Administration, LGT Asset
San Francisco, CA 94111 Management from 1994 to October 1996; Vice President -- Finance, LGT
Asset Management, GT Global and GT Services from 1990 to 1994; Vice
President -- Finance, G.T. Insurance from 1992 to 1994; and Director of
LGT Asset Management, GT Global and GT Services since 1991.
Kenneth W. Chancey, 51 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, 50 Executive Vice President, Asset Management Division, Liechtenstein
Vice President and Secretary Global Trust since October 1996; Senior Vice President, LGT Asset
50 California Street Management, GT Global, GT Services and G.T. Insurance from February 1996
San Francisco, CA 94111 to October 1996; Vice President, LGT Asset Management, GT Global, GT
Services and G.T. Insurance from May 1994 to February 1996; General
Counsel, LGT Asset Management, GT Global, GT Services and G.T. Insurance
from May 1994 to October 1996; Secretary, LGT Asset Management, GT
Global, GT Services and G.T. Insurance from May 1994 to October 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.
</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., G.T. Global
Developing Markets Fund, Inc. and G.T. Global Floating Rate Fund, Inc. and a
Trustee and officer of G.T. Global Eastern 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 11 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, 1996, 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 $
- -------, $
- -------, $
- ------- and $
- -------, 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 $
- -------, $
- -------, $
- ------- and $
- -------, respectively, from the 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 % of the shares of the Value Fund and % of the
shares of the Small Cap Fund.
Statement of Additional Information Page 17
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES RELATING TO THE FUNDS AND THE
PORTFOLIOS
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).
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 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 Portfolio and Value
Portfolio for their respective investment management and administration fees and
reimbursed the Small Cap Fund and Value Fund for their respective administrative
fees. In addition, during such same period the Manager reimbursed the Small Cap
Fund and Value Fund for expenses in the additional amounts of $65,079 and
$66,907, respectively.
For the fiscal period ended December 31, 1996, the Small Cap Portfolio and the
Value Portfolio paid fees of $
- ------- and $
- -------, respectively, to the Manager. For the same period, the Small Cap Fund
and Value Fund paid administration fees of $
- ------- and $
- -------, respectively, to the Manager. For the fiscal period ended December 31,
1996, the Manager reimbursed the Small Cap Portfolio and Value Portfolio for
their respective investment management and administration fees in the amounts of
$
- ------- and $
- -------, respectively; for the same period, the Small Cap Fund and Value Fund
paid administration fees of $
- ------- and $
- -------, respectively. Accordingly, the Manager reimbursed each Fund and its
respective investment management and administration fees in the aggregate
amounts of $
- ------- and $
- -------, respectively.
For the fiscal year ended December 31, 1996, the Manager, pursuant to its
voluntary expense undertaking, reimbursed the Small Cap Fund and Value Fund for
expenses in the additional amounts of $
- ------- and $
- -------, 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.
Statement of Additional Information Page 18
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 fiscal period ending December 31, 1996 by the Small Cap
Fund and Value Fund for Class A and Class B shares were $
- ---- and $
- ----, and $
- ---- and $
- ----, respectively.
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.
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.
The following table reviews the extent of such activity during the last two
fiscal years.
<TABLE>
<CAPTION>
SALES CHARGES AMOUNTS AMOUNTS
OCTOBER 18, 1995 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1995 COLLECTED RETAINED REALLOWED
- ----------------------------------------------------------------------------------- ------------- ----------- -----------
<S> <C> <C> <C>
Small Cap Fund..................................................................... $ 3,729 $ 2,815 $ 914
Value Fund......................................................................... 1,650 326 1,324
<CAPTION>
SALES CHARGES AMOUNTS AMOUNTS
YEAR ENDED DECEMBER 31 COLLECTED RETAINED REALLOWED
- ----------------------------------------------------------------------------------- ------------- ----------- -----------
<S> <C> <C> <C>
Small Cap Fund..................................................................... $ $ $
Value Fund.........................................................................
</TABLE>
GT Global receives any contingent deferred sales charges payable with respect to
redemptions of Class B shares and certain Class A shares. For the period October
18, 1995 (commencement of operations) to December 31, 1995, GT Global collected
contingent deferred sales charges for the Small Cap Fund and Value Fund of $112
and $0, respectively. For the fiscal year ended December 31, 1996, GT Global
collected contingent deferred sales charges for the Small Cap Fund and Value
Fund of $
- ------- and $
- -------, respectively.
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.The Manager also serves as
each Fund's pricing and accounting agent. For the fiscal year ended December 31,
1996 and the period October 18, 1995 (commencement of operations) to December
31, 1995, the transfer agency and accounting services fees for the Small Cap
Fund and Value Fund were $
- ------- and $
- -------, and $
- ------- and $
- -------, respectively.
Statement of Additional Information Page 19
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 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.
Statement of Additional Information Page 20
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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.
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
Statement of Additional Information Page 21
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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.
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
Statement of Additional Information Page 22
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 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
Statement of Additional Information Page 23
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 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.
Statement of Additional Information Page 24
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 AG, 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, 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.
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 that 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 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
- --------------------------------------------------------------------------------
STANDARDIZED RETURNS
Each Fund's "Standardized Returns," 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 (average annual total return ("T")) is computed by using the ending
redeeming value ("ERV") of a hypothetical initial investment of $1,000 ("P")
over a period of years ("n") according to the following formula as required by
the SEC: P(1+T) to the (n)th power = ERV. 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 Company's Board of Directors; and (4)
a complete redemption at the end of any period illustrated.
The Standardized Returns for the Class A and Class B shares of the Small Cap
Fund and Value Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP VALUE
FUND FUND FUND
PERIOD (CLASS A) (CLASS B) (CLASS A)
- ------------------------------------------------------------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Fiscal year ended October 31, 1996................................................... % % %
October 18, 1995 (commencement of operations) through October 31, 1996............... % % %
<CAPTION>
VALUE
FUND
PERIOD (CLASS B)
- ------------------------------------------------------------------------------------- ------------
<S> <C>
Fiscal year ended October 31, 1996................................................... %
October 18, 1995 (commencement of operations) through October 31, 1996............... %
</TABLE>
NON-STANDARDIZED RETURNS
In addition to Standardized Returns, each Fund also may include in
advertisements, sales literature and shareholder reports other total return
performance data ("Non-Standardized Return"). Non-Standardized Return is
calculated separately for Class A and Class B shares of each Fund and may be
calculated according to several different formulas. Non-Standardized Returns may
be quoted for the same or different time periods for which Standardized Returns
are quoted. Non-Standardized Returns 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.
Average annual Non-Standardized Return ("T") is computed by using the ending
redeeming value ("ERV") of a hypothetical initial investment of $1,000 ("P")
over a period of years ("n") according to the following formula as required by
the SEC: P(1+T) to the (n)th power = ERV. The following assumptions will be
reflected in computations made in accordance with this formula: (1) no deduction
of sales charges; (2) reinvestment of dividends and other distributions at net
asset value on the reinvestment date determined by the Board; and (3) a complete
redemption at the end of any period illustrated.
The average annual Non-Standardized Returns for the Class A and Class B shares
of the Small Cap Fund and Value Fund, stated as average annualized total returns
for the periods shown, were:
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP VALUE
FUND FUND FUND
PERIOD (CLASS A) (CLASS B) (CLASS A)
- ------------------------------------------------------------------------------------- ---------- ---------- ------------
<S> <C> <C> <C>
Fiscal year ended October 31, 1996................................................... % % %
October 18, 1995 (commencement of operations) through October 31, 1996............... % % %
<CAPTION>
VALUE
FUND
PERIOD (CLASS B)
- ------------------------------------------------------------------------------------- ------------
<S> <C>
Fiscal year ended October 31, 1996................................................... %
October 18, 1995 (commencement of operations) through October 31, 1996............... %
</TABLE>
Aggregate Non-Standardized Return ("T") is computed by using the ending value of
the account ("VOA") of a hypothetical initial investment of $1,000 ("P")
according to the following formula: T = (VOA/P)-1. Aggregate Non-Standardized
Return assumes reinvestment of dividends and other distributions and, as set
forth below, may or may not take sales charges into account.
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A and Class B shares of the Small Cap Fund and Value Fund, stated
as aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP VALUE
FUND FUND FUND
PERIOD (CLASS A) (CLASS B) (CLASS A)
- ------------------------------------------------------------------------------------- ---------- ------------ ------------
<S> <C> <C> <C>
October 18, 1995 (commencement of operations) through October 31, 1996............... % % %
<CAPTION>
VALUE
FUND
PERIOD (CLASS B)
- ------------------------------------------------------------------------------------- ------------
<S> <C>
October 18, 1995 (commencement of operations) through October 31, 1996............... %
</TABLE>
Statement of Additional Information Page 27
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
The aggregate Non-Standardized Returns (taking sales charges into account) for
the Class A and Class B shares of the Health Care Fund and Telecommunications
Fund, stated as aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP VALUE
FUND FUND FUND
PERIOD (CLASS A) (CLASS B) (CLASS A)
- ------------------------------------------------------------------------------------- ---------- ------------ ------------
<S> <C> <C> <C>
October 18, 1995 (commencement of operations) through October 31, 1996............... % % %
<CAPTION>
VALUE
FUND
PERIOD (CLASS B)
- ------------------------------------------------------------------------------------- ------------
<S> <C>
October 18, 1995 (commencement of operations) through October 31, 1996............... %
</TABLE>
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of each Fund's portfolio and operating expenses of
each Fund, so that current or past yield or total return should not be
considered representative of what an investment in each 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 each Fund's
investment results with those published for other investment companies and other
investment vehicles. Each Fund's results also should be considered relative to
the risks associated with such Fund's investment objective and policies.
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.
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, or BBB by S&P, or, in
the case of nonrated bonds, BBB by Fitch Investors Service, Inc. ("Fitch")
(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.
Statement of Additional Information Page 28
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
(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, S&P and Fitch.
(11) Wilshire Associates which is an on-line database for international
financial and economic data including performance measure for a wide range
of securities.
(12) Bank Rate National Monitor Index, which is an average of the quoted
rates for 100 leading banks and thrifts in ten U.S. cities.
(13) Average of Savings Accounts, which is a measure of all kinds of
savings deposits, including longer-term certificates (based on figures
supplied by the U.S. League of Savings Institutions). Savings accounts offer
a guaranteed rate of return on principal, but no opportunity for capital
growth. During a portion of the period, the maximum rates paid on some
savings deposits were fixed by law.
Indices, economic and financial data prepared by the research departments of
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, Mutual Fund 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.
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 1933 Act, 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.
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.
Statement of Additional Information Page 29
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 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): If you have earned income from employment
(including self-employment), you can contribute each year to an IRA up to the
lesser of (1) $2,000 for yourself or $4,000 for you and your spouse, regardless
of whether your spouse is employed, or (2) 100% of compensation. 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: Simplified employee pension plans ("SEPs" or "SEP-IRAs") 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.
CODE SECTION 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.
Statement of Additional Information Page 30
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
PROFIT-SHARING (INCLUDING SECTION 401(K)) AND MONEY PURCHASE PENSION
PLANS: Corporations can sponsor these qualified defined contribution plans for
their employees. A 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).
SIMPLE RETIREMENT PLANS: Employers with no more than 100 employees who do not
maintain another retirement plan may establish a Savings Incentive Match Plan
for Employees ("SIMPLE") either as separate IRAs or as part of a Code Section
401(k) plan. SIMPLEs are not subject to the complicated nondiscrimination rules
that generally apply to qualified retirement plans.
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, liquidity 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 data regarding:
industries, companies, individual countries, regions, world stock exchanges, and
economic and demographic statistics from sources GT Global deems reliable
including the economic and financial data of such financial organizations as:
1) Stock market capitalization: Morgan Stanley Capital International World
Indices, International Finance Corporation ("IFC") and Datastream.
2) Stock market trading volume: Morgan Stanley Capital International World
Indices, IFC, New York Stock Exchange, S&P 500, DJ, NASDAQ.
3) The number of listed companies: IFC, 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, IFC and Datastream, S&P 500, DJIA, Wilshire Assoc.
7) The Consumer Price Index and inflation rate: The World Bank, Datastream, IFC
and Ibbotson Assoc.
8) Gross Domestic Product (GDP): Datastream and The World Bank.
9) GDP growth rate: IFC, 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: IFC, The World Bank and Datastream.
14) Top three companies by country, industry or market: IFC, 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.
Statement of Additional Information Page 31
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 advertisements and sales
material information about privatization which is an economic process involving
the sale of state-owned companies to the private sector.
GT GLOBAL ADVANTAGE
As part of Liechtenstein Global Trust, GT Global continues a 75-year tradition
of service to individuals and institutions. Today we bring investors a
combination of experience, worldwide resources, a global perspective, investment
talent and a time tested investment discipline. With investment professionals in
nine offices worldwide, we witness world events and economic developments
firsthand.
The key to achieving consistent results is following a disciplined investment
process. Our approach to asset allocation takes advantage of GT Global's
worldwide presence and global perspective. Our "macroeconomic" world view
determines our overall strategy of regional, country and sector allocations. Our
bottom up process of security selection combines fundamental research with
quantitative analysis through our proprietary models.
Built in checks and balances strengthen the process, enhancing professional
experience and judgment with an objective assessment of risk. Ultimately, each
security we select has passed a ranking system that helps our portfolio teams
determine when to buy and when to sell.
- --------------------------------------------------------------------------------
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
DESCRIPTION OF COMMERCIAL PAPER RATINGS
Moody's employs the designations "Prime-1" and "Prime-2" to indicate commercial
paper having the highest capacity for timely repayment. Issuers rated Prime-1
(or supporting institutions) 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; and well-established access to a range of
financial markets and assured sources of alternate liquidity. Issuers rated
Prime-2 (or supporting institutions) have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many 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 affected by external
conditions. Ample alternate liquidity is maintained.
S&P rates commercial paper in four categories. "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. Those
issues determined to possess extremely strong safety characteristics will be
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."
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 edged." 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.
Statement of Additional Information Page 32
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
Aa -- High quality by all standards. Together with the Aaa group they
comprise what are generally known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term
risk appear somewhat larger than the Aaa securities.
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.
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies
that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa to B in its corporate bond rating system. The modifier 1
indicates that the company ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.
S&P rates the 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.
PLUS (+) OR MINUS (-): The ratings from "AA" to "BBB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
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 each Fund as of December 31, 1996 and for
the fiscal year then ended appear on the following pages.
Statement of Additional Information Page 34
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 35
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 36
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 37
<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, INCLUDING FEES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING
MARKET INVESTING AND THE RISKS OF INVESTING IN RELATED INDUSTRIES, PLEASE
CONTACT YOUR FINANCIAL ADVISER 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 MID CAP GROWTH FUND
Concentrates on 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 AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY GT
GLOBAL AMERICA SMALL CAP FUND, GT GLOBAL AMERICA VALUE FUND, SMALL CAP
GROWTH PORTFOLIO, VALUE PORTFOLIO, 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.
AMESA610MC
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND:
GT GLOBAL AMERICA VALUE FUND:
ADVISOR CLASS
50 California Street, 27th Floor
San Francisco, California 94111
(415) 392-6181
Toll Free: (800) 824-1580
Statement of Additional Information
May 1, 1997
- --------------------------------------------------------------------------------
This Statement of Additional Information relates to the Advisor Class 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 (the "Company"), a
registered open-end management investment company. The Small Cap Fund and Value
Fund invest all of their investable assets in the Small Cap 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 Advisor Class Prospectus dated May 1, 1997, 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, and also serves as each Fund's
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 the "Transfer Agent").
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Investment Objectives and Policies....................................................................................... 2
Options and Futures...................................................................................................... 4
Risk Factors............................................................................................................. 11
Investment Limitations................................................................................................... 13
Execution of Portfolio Transactions...................................................................................... 15
Trustees and Executive Officers.......................................................................................... 17
Management............................................................................................................... 19
Valuation of Shares...................................................................................................... 20
Information Relating to Sales and Redemptions............................................................................ 21
Taxes.................................................................................................................... 22
Additional Information................................................................................................... 25
Investment Results....................................................................................................... 26
Description of Debt Ratings.............................................................................................. 32
Financial Statements..................................................................................................... 33
</TABLE>
[LOGO]
Statement of Additional Information Page 1
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
INVESTMENT OBJECTIVES
AND POLICIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
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 Fund's 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.
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 part, 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 return on such securities will be
reduced by operating expenses of such companies including payments to the
investment managers of those investment companies.
DEPOSITORY RECEIPTS
Each Portfolio may invest up to 10% of its total assets in 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
Portfolio's investment policies, the Portfolio'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
Statement of Additional Information Page 2
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 Portfolios may
invest in sponsored and unsponsored ADRs.
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.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Portfolio may make secured
loans of its 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 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. Each Portfolio will have 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 may call in a loan in anticipation of any important vote. 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. banks having total assets
at the time of purchase of $1 billion or more, this $1 billion figure is not an
investment policy or restriction of any Portfolio. For the purposes of
calculation with respect to the $1 billion figure, the assets of a bank will be
deemed to include the assets of its U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS
A repurchase agreement is a transaction 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. Although repurchase agreements carry certain risks not
associated with direct investment in securities, including possible decline in
market value of the underlying securities and delays and costs to the Portfolio
if the other party to the repurchase agreement becomes bankrupt, 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 Growth Portfolio's Board of Trustees. The Manager will review
and monitor the creditworthiness of such institutions under the general
supervision of the Growth Portfolio's Board.
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. 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 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.
Statement of Additional Information Page 3
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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. 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 a Fund's shares than would be the
case if the Portfolio did not borrow.
Each Portfolio's fundamental investment limitations permit the Portfolio to
borrow money for leveraging purposes. Each Portfolio, however, currently is
prohibited, pursuant to a non-fundamental investment policy, from borrowing
money in order to purchase securities. Nevertheless, this policy may be changed
in the future by Growth Portfolio's Board of Trustees. In the event that a
Portfolio employs leverage in the future, it would be subject to certain
additional risks. Use of leverage creates an opportunity for greater growth of
capital but would exaggerate any increases or decreases in a Portfolio's net
asset value. When the income and gains on securities purchased with the proceeds
of borrowings exceed the costs of such borrowings, a Portfolio's earnings or net
asset value will increase faster than otherwise would be the case; 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 or 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.
TEMPORARY DEFENSIVE STRATEGIES
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 Investors Service, Inc.
("Moody's") or A-1 by Standard and Poor's Ratings Group ("S&P") at the time of
investment or, if unrated, deemed by the Manager to be of comparable quality.
- --------------------------------------------------------------------------------
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
Statement of Additional Information Page 4
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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
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.
Statement of Additional Information Page 5
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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.
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.
Statement of Additional Information Page 6
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
PURCHASING CALL OPTIONS
Each Portfolio may purchase call options on securities and indices. As the
holder of a call option, a Portfolio would have the right to purchase the
underlying security at the exercise price at any time until (American style) or
on (European style) the expiration date. A Portfolio may enter into closing sale
transactions with respect to such options, exercise such options or permit such
options to expire.
Call options may be purchased by a Portfolio for the purpose of acquiring the
underlying security for its portfolio. Utilized in this fashion, the purchase of
call options would enable a Portfolio to acquire the security at the exercise
price of the call option plus the premium paid. At times, the net cost of
acquiring the security in this manner may be less than the cost of acquiring the
security directly. This technique also may be useful to the Portfolios in
purchasing a large block of securities that would be more difficult to acquire
by direct market purchases. As long as it holds such a call option, rather than
the underlying security itself, a Portfolio is partially protected from any
unexpected decline in the market price of the underlying security and, in such
event, could allow the call option to expire, incurring a loss only to the
extent of the premium paid for the option.
Each Portfolio also may purchase call options on underlying securities it owns
in order to protect unrealized gains on call options previously written by it. A
call option could be purchased for this purpose where tax considerations make it
inadvisable to realize such gains through a closing purchase transaction. Call
options also may be purchased at times to avoid realizing losses that would
result in a reduction of a Portfolio's current return. For example, where a
Portfolio has written a call option on an underlying security having a current
market value below the price at which such security was purchased by the
Portfolio, an increase in the market price could result in the exercise of the
call option written by the Portfolio and the realization of a loss on the
underlying security. Accordingly, the Portfolio could purchase a call option on
the same underlying security, which could be exercised to fulfill the
Portfolio's delivery obligations under its written call (if 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 in over-the-counter
("OTC") markets. 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.
Statement of Additional Information Page 7
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When a Portfolio writes a call on
an index, it receives a premium and agrees that, prior to the expiration date,
the purchaser of the call, upon exercise of the call, will receive from the
Portfolio an amount of cash if the closing level of the index upon which the
call is based is greater than the exercise price of the call. The amount of cash
is equal to the difference between the closing price of the index and the
exercise price of the call times a specified multiple (the "multiplier"), which
determines the total dollar value for each point of such difference. When a
Portfolio buys a call on an index, it pays a premium and has the same rights as
to such call as are indicated above. When a Portfolio buys a put on an index, it
pays a premium and has the right, prior to the expiration date, to require the
seller of the put, upon the Portfolio's exercise of the put, to deliver to the
Portfolio an amount of cash if the closing level of the index upon which the put
is based is less than the exercise price of the put, which amount of cash is
determined by the multiplier, as described above for calls. When a Portfolio
writes a put on an index, it receives a premium and the purchaser has the right,
prior to the expiration date, to require the Portfolio to deliver to it an
amount of cash equal to the difference between the closing level of the index
and the exercise price times the multiplier, if the closing level is less than
the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Portfolio writes a
call on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. A Portfolio can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, a Portfolio cannot, as a practical matter, acquire and
hold a portfolio containing exactly the same securities as underlie the index
and, as a result, bears a risk that the value of the securities held will vary
from the value of the index.
Even if a Portfolio could assemble a securities portfolio that exactly
reproduced the composition of the underlying index, it still would not be fully
covered from a risk standpoint because of the "timing risk" inherent in writing
index options. When 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").
Statement of Additional Information Page 8
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
Although techniques other than sales and purchases of Futures Contracts could be
used to reduce a Portfolio's exposure to interest rate and stock market
fluctuations, the Portfolio may be able to hedge its exposure more effectively
and at a lower cost through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument for a
specified price at a designated date, time and place. A stock index Futures
Contract provides for the delivery, at a designated date, time and place, of an
amount of cash equal to a specified dollar amount times the difference between
the stock index value at the close of trading on the contract and the price at
which the Futures Contract is originally struck; no physical delivery of stocks
comprising the index is made. Brokerage fees are incurred when a Futures
Contract is bought or sold, and margin deposits must be maintained at all times
the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for
financial instruments, Futures Contracts usually are closed out before the
delivery date. Closing out an open Futures Contract sale or purchase is effected
by entering into an offsetting Futures Contract purchase or sale, respectively,
for the same aggregate amount of the identical financial instrument and the same
delivery date. If the offsetting purchase price is less than the original sale
price, the Portfolio realizes a gain; if it is more, the Portfolio realizes a
loss. Conversely, if the offsetting sale price is more than the original
purchase price, the Portfolio realizes a gain; if it is less, the Portfolio
realizes a loss. The transaction costs also must be included in these
calculations. There can be no assurance, however, that a Portfolio will be able
to enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If a Portfolio is not able to enter into an
offsetting transaction, the Portfolio will continue to be required to maintain
the margin deposits on the Futures Contract.
As an example of an offsetting transaction, the contractual obligations arising
from the sale of one September stock index Futures Contract on an exchange may
be fulfilled at any time before delivery under the Futures Contract is required
(I.E., on a specified date in September, the "delivery month") by the purchase
of the same September Futures Contract on the same exchange. In such instance,
the difference between the price at which the Futures Contract was sold and the
price paid for the offsetting purchase, after allowance for transaction costs,
represents the profit or loss to the Portfolio.
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
Statement of Additional Information Page 9
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and options on Futures Contract prices during a single trading day. The
daily limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option prices occasionally have moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.
If a Portfolio were unable to liquidate a Futures or option on Futures position
due to the absence of a liquid secondary market or the imposition of price
limits, it could incur substantial losses. The Portfolio would continue to be
subject to market risk with respect to the position. In addition, except in the
case of purchased options, the Portfolio would continue to be required to make
daily variation margin payments and might be required to maintain the position
being hedged by the Future or option or to maintain cash or securities in a
segregated account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
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.
LIMITATIONS 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
Statement of Additional Information Page 10
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE 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 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 or
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.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
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
Statement of Additional Information Page 11
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 Portfolios' 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 the
Portfolio's Board of Trustees.
DEBT SECURITIES
Each Portfolio is permitted to purchase investment grade debt securities. In
selecting debt securities for investment, 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, 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 debt securities represent the rating agencies' opinions regarding
their quality, are not a guarantee of quality and may be reduced after a
Portfolio has acquired the security. The Manager will consider such an event in
determining whether a Portfolio should continue to hold the security but is not
required to dispose of it. Credit ratings attempt to evaluate the safety of
principal and interest payments and do not reflect an assessment of the
volatility of the security's market value or the liquidity of an investment in
the security. Also, NRSROs may fail to make timely changes in credit ratings in
response to subsequent events, so that an issuer's current financial condition
may be better or worse than the rating indicates. For a description of Moody's
and S&P ratings, see "Description of Debt Ratings" herein.
Statement of Additional Information Page 12
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
THE FUNDS
The Small Cap Fund and Value Fund each has the following fundamental investment
policy to enable it to invest in the Small Cap Portfolio and Value Portfolio
respectively:
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
All other fundamental investment policies, and the non-fundamental policies, of
each Fund and its corresponding Portfolio are identical. Therefore, although the
following discusses the investment policies of each Portfolio and its Board of
Trustees, it applies equally to each Fund and its Board of Trustees.
Each Portfolio has adopted the following fundamental investment limitations as
fundamental policies which (unless otherwise noted) may not be changed without
approval by the 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 is requested to vote on a change in the investment limitations
of its corresponding Portfolio, such Fund will hold a meeting of its
shareholders and will cast its votes as instructed by the shareholders. No
Portfolio may:
(1) Invest in companies for the purpose of exercising control or
management;
(2) Purchase or sell real estate; provided that a Portfolio may invest
in securities secured by real estate or interests therein or issued by
companies that invest in real estate or interests therein;
(3) Purchase or sell interests in oil, gas or other mineral exploration
or development programs, except that the Portfolio may invest in the
securities of companies that engage in these activities;
(4) Purchase or sell commodities or commodity contracts, except that the
Portfolio may purchase and sell futures contracts and options;
(5) Mortgage, pledge or in any other manner transfer as security for any
indebtedness, any of its assets except to secure permitted borrowings.
Collateral arrangements with respect to initial or variation margin for
futures contracts and options will not be deemed to be a pledge of a
Portfolio's assets;
(6) Borrow money in excess of 33 1/3% of the Portfolio's total assets
(including the amount borrowed), less all liabilities and indebtedness
(other than borrowing). Transactions involving options, futures contracts,
options on futures contracts, and collateral arrangements relating thereto
will not be deemed to be borrowings;
(7) Purchase securities on margin or effect short sales, except that a
Portfolio may obtain such short-term credits as may be necessary for the
clearance of purchases or sales of securities and except in connection with
the use of options, futures contracts or options thereon. The Portfolios may
make deposits of margin in connection with futures contracts and options
thereon;
(8) Participate on a joint or a joint and several basis in any trading
account in securities. (The "bunching" of orders for the sale or purchase of
marketable portfolio securities with other accounts under the management of
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
Statement of Additional Information Page 13
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
beneficially more than 1/2 of 1% of the outstanding securities of such
issuer and together own beneficially more than 5% of the securities;
(11) Underwrite securities of other issuers, except to the extent that,
in connection with the disposition of portfolio securities, the Portfolio
may be deemed an underwriter under federal or state securities laws; and
(12) Invest more than 25% of the value of the Portfolio's total assets in
securities of issuers conducting their principal business activities in any
one industry, except that this limitation shall not apply to securities
issued or guaranteed as to principal and interest by the U.S. government or
any of its agencies or instrumentalities.
In addition, each Portfolio has adopted as a fundamental investment policy a
classification as a "diversified" portfolio under the 1940 Act. This means that,
with respect to 75% of the Portfolio's total assets, no more than 5% will be
invested in the securities of any one issuer, and the Portfolio will purchase no
more than 10% of the outstanding voting securities of any one issuer. This
policy cannot be changed without approval by the holders of a majority of the
Portfolio's outstanding voting securities as defined above.
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) 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;
(3) 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
(4) 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.
If a percentage restriction on investment or utilization of assets in an
investment 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.
Statement of Additional Information Page 14
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
EXECUTION OF PORTFOLIO TRANSACTIONS
- --------------------------------------------------------------------------------
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 OTC 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.
For the fiscal year ended December 31, 1996, and for the fiscal period October
18, 1995 (commencement of operations) to December 31, 1995, the Small Cap
Portfolio paid aggregate brokerage commissions of $
- -------------- and $3,317, respectively. For the fiscal year ended December 31,
1995, and for the fiscal period October 18, 1995 (commencement of
Statement of Additional Information Page 15
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
operations) to December 31, 1995, the Value Portfolio paid aggregate brokerage
commissions of $
- -------------- and $1,032, respectively.
PORTFOLIO TRADING AND TURNOVER
Although the Portfolios generally do not intend to trade for short-term profits,
the securities held by a 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 Portfolio's
average month-end portfolio value, excluding short-term investments. The
portfolio turnover rate will not be a limiting factor when management deems
portfolio changes appropriate. Higher portfolio turnover involves
correspondingly greater brokerage commissions and other transaction costs that a
Portfolio will bear directly, and may result in the realization of net capital
gains that are taxable when distributed to each Fund's shareholders.
For the fiscal year ended December 31, 1996, the Small Cap Portfolio's and Value
Portfolio's portfolio turnover rates were
- ----% and
- ----%, respectively.
For the fiscal period October 18, 1995 (commencement of operations) to December
31, 1995, the Small Cap Portfolio's and Value Portfolio's portfolio turnover
rates were $
- -------------- and $
- --------------, respectively.
Statement of Additional Information Page 16
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
TRUSTEES AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The Company's Trustees and Executive Officers are listed below.
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
COMPANY AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
William J. Guilfoyle*, 38 Director, LGT Asset Management, Inc. since 1996; Director, G.T. Insurance Agency ("G.T.
Director, Chairman of the Board and Insurance") since 1996; Director, Liechtenstein Global Trust AG (holding company of the
President various international LGT companies) Advisory Board since January 1996; President, GT
50 California Street Global since 1995; President and Chief Executive Officer, G.T. Insurance since 1995;
San Francisco, CA 94111 Director, Liechtenstein Global Trust AG from 1995 to January 1996; Senior Vice President
and Director, Sales and Marketing, G.T. Insurance from April 1995 to November 1995; Vice
President and Director of Marketing, GT Global from 1987 to 1995; Senior Vice President,
Retail Marketing, G.T. Insurance from 1993 to 1995; Vice President, G.T. Insurance from
1992 to 1993; and Director, Mutual Fund Forum (an industry group of mutual fund and
broker/dealer firms). Mr. Guilfoyle 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, 55 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, 57 Partner with Baker & McKenzie (a law firm); Director and Chairman, C.D. Stimson Company (a
Trustee private investment company). Mr. Bayley also is a director or trustee of each of the other
Two Embarcadero Center investment companies registered under the 1940 Act that is managed or administered by the
Suite 2400 Manager.
San Francisco, CA 94111
Arthur C. Patterson, 53 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, 61 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 or 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.
Robert G. Wade, Jr.*, 69 Consultant to the Manager; Chairman of the Board of Chancellor Capital Management, Inc.
Trustee from January 1995 to October 1996; President, Chief Executive Officer and Chairman of the
1166 Avenue of the Americas Board of Chancellor Capital Management, Inc. from 1988 to January 1995.
New York, NY 10036
</TABLE>
- --------------
* Mr. Guilfoyle and Mr. Wade are "interested persons" of the Company as
defined by the 1940 Act due to their affiliation with the LGT companies.
Statement of Additional Information Page 17
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
COMPANY AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
James R. Tufts, 38 Chief Information Officer for the Manager since October 1996; President,
Vice President and Chief GT Services since 1995; Senior Vice President -- Finance and
Financial Officer Administration, GT Global, GT Services and G.T. Insurance, from 1994 to
50 California Street 1995; Senior Vice President -- Finance and Administration, LGT Asset
San Francisco, CA 94111 Management from 1994 to October 1996; Vice President -- Finance, LGT
Asset Management, GT Global and GT Services from 1990 to 1994; Vice
President -- Finance, G.T. Insurance from 1992 to 1994; and Director of
the Manager, GT Global and GT Services since 1991.
Kenneth W. Chancey, 51 Vice President -- Mutual Fund Accounting, the Manager since 1992; and
Vice President and Vice President, Putnam Fiduciary Trust Company from 1989 to 1992.
Principal Accounting Officer
50 California Street
San Francisco, CA 94111
Helge K. Lee, 50 Executive Vice President, Asset Management Division, Liechtenstein
Vice President and Secretary Global Trust since October 1996; Senior Vice President, LGT Asset
50 California Street Management, GT Global, GT Services and G.T. Insurance from February 1996
San Francisco, CA 94111 to October 1996; Vice President, LGT Asset Management, GT Global, GT
Services and G.T. Insurance from May 1994 to February 1996; General
Counsel, LGT Asset Management, GT Global, GT Services and G.T. Insurance
fom May 1994 to October 1996; Secretary, LGT Asset Management, GT
Global, GT Services and G.T. Insurance from May 1994 to October 1996;
General Counsel and Secretary, Strong/Corneliuson Management, Inc. and
Secretary, each of the Strong Funds from October 1991 through May 1994.
</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., G.T. Global
Developing Markets Fund, Inc. and G.T. Global Floating Rate Fund, Inc. and a
Trustee and officer of G.T. Global Eastern 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 11 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, 1996, 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 $
- ---------, $
- ---------, $
- --------- and $
- ---------, respectively, from the Company for their services as Trustees. For
the year ended December 31, 1996, Mr. Anderson, Mr. Bayley, Mr. Patterson and
Ms. Quigley received total compensation of $
- ---------, $
- ---------, $
- --------- and $
- ---------, respectively, from the 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
- ---------% of the shares of the Value Fund and 1.17% of the shares of the Small
Cap Fund.
Statement of Additional Information Page 18
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES RELATING TO THE FUNDS AND THE
PORTFOLIOS
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).
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 period ended December 31, 1996, the Small Cap Portfolio and the
Value Portfolio paid fees of $
- -------------- and $
- --------------, respectively, to the Manager. For the same period, the Small Cap
Fund and Value Fund paid administration fees of $
- -------------- and $
- --------------, respectively, to the Manager. For the fiscal period ended
December 31, 1996, the Manager reimbursed the Small Cap Portfolio and Value
Portfolio for their respective investment management and administration fees in
the amounts of $
- -------------- and $
- --------------, respectively; for the same period, the Small Cap Fund and Value
Fund paid administration fees of $
- -------------- and $
- --------------, respectively. Accordingly, the Manager reimbursed each Fund and
its respective investment management and administration fees in the aggregate
amounts of $
- -------------- and $
- --------------, respectively.
For the fiscal year ended December 31, 1996, the Manager, pursuant to a
voluntary expense undertaking to limit expenses to the maximum annual level of
% of average daily net assets of Advisor Class shares of the Funds, reimbursed
the Small Cap Fund and Value Fund for expenses in the additional amounts of $
- -------------- and $
- --------------, respectively.
Statement of Additional Information Page 19
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
DISTRIBUTION SERVICES
Each Fund's Advisor Class shares are offered continuously through the Funds'
principal underwriter and distributor, GT Global, on a "best efforts" basis
without a sales charge or a contingent deferred sales charge.
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. The Manager also serves as
each Fund's pricing and accounting agent. For the fiscal year ended December 31,
1996 and the period October 18, 1995 (commencement of operations) to December
31, 1995, the transfer agency and accounting services fees for the Small Cap
Fund and Value Fund were $ and $ , and $
and $ , respectively.
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 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.
Statement of Additional Information Page 20
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 Advisor Class shares purchased should accompany the purchase order,
or funds should be wired to the Transfer Agent as described in the Prospectus.
Payment, other than by wire transfer, must be made by check or money order drawn
on a U.S. bank. Checks or money orders must be payable in U.S. dollars.
As a condition of this offering, if an order to purchase either class of shares
is cancelled due to nonpayment (for example, because a check is returned for
"not sufficient funds"), the person who made the order will be responsible for
any loss incurred by a Fund by reason of such cancellation, and if such
purchaser is a shareholder, that Fund shall have the authority as agent of the
shareholder to redeem shares in his or her account at their then-current net
asset value per share to reimburse that Fund for the loss incurred. Investors
whose purchase orders have been cancelled due to nonpayment may be prohibited
from placing future orders.
The Funds reserve the right at any time to waive or increase the minimum
requirements applicable to initial or subsequent investments with respect to any
person or class of persons. An order to purchase shares is not binding on a Fund
until it has been confirmed in writing by the Transfer Agent (or other
arrangements made with the Fund, in the case of orders utilizing wire transfer
of funds, as described above) and payment has been received. To protect existing
shareholders, the Funds reserve the right to reject any offer for a purchase of
shares by any individual.
SALES OUTSIDE THE UNITED STATES
Sales of Fund shares made through brokers outside the United States will be at
net asset value plus a sales commission, if any, established by that broker or
by local law. Such commission, if any, may be more or less than the sales
charges listed in the sales charge table included in the Prospectus.
EXCHANGES BETWEEN FUNDS
Shares of a Fund may be exchanged for shares of other GT Global Mutual Funds,
based on their respective net asset values without imposition of any sales
charges provided that the registration remains identical. Advisor Class shares
may be exchanged only for Advisor Class shares of other 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
Statement of Additional Information Page 21
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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.
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 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
Statement of Additional Information Page 22
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
investor in its corresponding Portfolio, is deemed to own a proportionate share
of the Portfolios assets, and to earn a proportionate share of the Portfolio's
income, for purposes whether the Fund satisfies all of the requirements
described above to qualify as a RIC.
Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the
extent it fails to distribute by the end of any calendar year substantially all
of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
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 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 may be forced to defer the closing out
of certain options and Futures, beyond the time when it otherwise would be
advantageous to do so, in order for the 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
Statement of Additional Information Page 23
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
December 31 of that year if the distributions are paid by the Fund during the
following January. Accordingly, those distributions will be taxed to
shareholders for the year in which that December 31 falls.
A portion of the dividends from a Fund's investment company taxable income
(whether paid in cash or reinvested in additional shares) may be eligible for
the dividends-received deduction allowed to corporations. The eligible portion
may not exceed the aggregate dividends received by a Fund (directly or through a
Portfolio) from U.S. corporations. However, dividends received by a corporate
shareholder and deducted by it pursuant to the dividends-received deduction may
be subject indirectly to the alternative minimum tax.
If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, or nonresident alien fiduciary of a trust or
estate, foreign corporation or foreign partnership ("foreign shareholder") will
be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply if a dividend paid by a Fund to a foreign shareholder
is "effectively connected with the conduct of a U.S. trade or business," in
which case the reporting and withholding requirements applicable to domestic
shareholders will apply. 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 24
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
LIECHTENSTEIN GLOBAL TRUST
Liechtenstein Global Trust AG, 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, 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.
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 that 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 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 25
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
STANDARDIZED RETURNS
Each Fund's "Standardized Returns," as referred to in the Prospectus (see "Other
Information -- Performance Information" in the Prospectus), is calculated
separately for Class A, Class B and Advisor Class shares of each Fund, as
follows: Standardized Return (average annual total return ("T")) is computed by
using the ending redeeming value ("ERV") of a hypothetical initial investment of
$1,000 ("P") over a period of years ("n") according to the following formula as
required by the SEC: P(1+T) to the (n)th power = ERV. 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) for Advisor Class shares, deduction of a sales charge is not
applicable; (4) reinvestment of dividends and other distributions at net asset
value on the reinvestment date determined by the Company's Board of Directors;
and (5) a complete redemption at the end of any period illustrated.
The Standardized Returns for the Class A, Class B and Advisor Class shares of
the Small Cap Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
SMALL CAP
SMALL CAP SMALL CAP FUND
FUND FUND (ADVISOR
PERIOD (CLASS A) (CLASS B) CLASS)
- -------------------------------------------------- ----------- ----------- ------------
<S> <C> <C> <C>
Fiscal year ended October 31, 1996................ % % %
October 18, 1995 (commencement of operations)
through October 31, 1996......................... % % %
</TABLE>
The Standardized Returns for the Class A, Class B and Advisor Class shares of
the Value Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
VALUE FUND
VALUE FUND VALUE FUND (ADVISOR
PERIOD (CLASS A) (CLASS B) CLASS)
- -------------------------------------------------- ----------- ----------- ------------
<S> <C> <C> <C>
Fiscal year ended October 31, 1996................ % % %
October 18, 1995 (commencement of operations)
through October 31, 1996......................... % % %
</TABLE>
NON-STANDARDIZED RETURNS
In addition to Standardized Returns, each Fund also may include in
advertisements, sales literature and shareholder reports other total return
performance data ("Non-Standardized Return"). Non-Standardized Return is
calculated separately for Class A, Class B and Advisor Class shares of each Fund
and may be calculated according to several different formulas. Non-Standardized
Returns may be quoted for the same or different time periods for which
Standardized Returns are quoted. Non-Standardized Returns for Class A and Class
B shares 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. Advisor Class shares are
not subject to sale charges.
Aggregate Non-Standardized Return ("T") is computed by using the ending value of
the account ("VOA") of a hypothetical initial investment of $1,000 ("P")
according to the following formula: T=(VOA/P)-1. Aggregate Non-Standardized
Return assumes reinvestment of dividends and other distributions.
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A, Class B and Advisor Class shares of the Small Cap Fund, stated
as aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
SMALL CAP
SMALL CAP SMALL CAP FUND
FUND FUND (ADVISOR
PERIOD (CLASS A) (CLASS B) CLASS)
- -------------------------------------------------- ----------- ----------- ------------
<S> <C> <C> <C>
October 18, 1995 (commencement of operations)
through October 31, 1996......................... % % %
</TABLE>
Statement of Additional Information Page 26
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
The aggregate Non-Standardized Returns (not taking sales charges into account)
for the Class A, Class B and Advisor Class shares of the Value Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
VALUE FUND
VALUE FUND VALUE FUND (ADVISOR
PERIOD (CLASS A) (CLASS B) CLASS)
- -------------------------------------------------- ----------- ----------- ------------
<S> <C> <C> <C>
October 18, 1995 (commencement of operations)
through October 31, 1996......................... n/a n/a %
April 1, 1993 (commencement of operations) through
October 31, 1996................................. n/a % n/a
January 27, 1992 (commencement of operations)
through October 31, 1996......................... % n/a n/a
</TABLE>
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of each Fund's portfolio and operating expenses of
each Fund, so that current or past yield or total return should not be
considered representative of what an investment in each 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 each Fund's
investment results with those published for other investment companies and other
investment vehicles. Each Fund's results also should be considered relative to
the risks associated with such Fund's investment objective and policies.
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.
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 or 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, or BBB by S&P, or, in
the case of nonrated bonds, BBB by Fitch Investors Service, Inc. ("Fitch")
(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.
Statement of Additional Information Page 27
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
(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, S&P and Fitch.
(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. 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 Fleming, The Bank for International
Settlements, Bloomberg, L.P., and Ibbottson Associates may be used, as well as
information reported by the Federal Reserve and the respective Central Banks of
various nations. In addition, GT Global may use performance rankings, ratings
and commentary reported periodically in national financial publications,
including but not limited to, Money Magazine, Mutual Fund 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.
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 1933 Act, 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.
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.
Statement of Additional Information Page 28
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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 GT Global Funds through various retirement accounts and plans that
offer deferral of income taxes on investment earnings and may also enable an
investor to make pre-tax contributions. Because of their advantages, these
retirement accounts and plans may produce returns superior to comparable
non-retirement investments. In sales material and advertisements the Funds may
also discuss these accounts and plans which include:
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS): If you have earned income from employment
(including self-employment), you can contribute each year to an IRA up to the
lesser of (1) $2,000 for yourself or $4,000 for you and your spouse, regardless
of whether your spouse is employed or (2) 100% of compensation. 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 rollover 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: Simplified employee pension plans ("SEPs" or "SEP-IRAs") 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.
CODE SECTION 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.
Statement of Additional Information Page 29
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
PROFIT-SHARING (INCLUDING SECTION 401(K)) AND MONEY PURCHASE PENSION
PLANS: Corporations can sponsor these qualified defined contribution plans for
their employees. A 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).
SIMPLE RETIREMENT PLANS: Employers with no more than 100 employees who do not
maintain another retirement plan may establish a Savings Incentive Match Plan
for Employees ("SIMPLE") either as separate IRAs or as part of a Code Section
401(k) plan. SIMPLEs are not subject to the complicated nondiscrimination rules
that generally apply to qualified retirement plans.
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, companies, individual countries, regions, world stock exchanges, and
economic and demographic statistics from sources GT Global deems reliable
including the economic and financial data of the referenced financial
organizations such as:
1) Stock market capitalization: Morgan Stanley Capital International World
Indices, IFC and Datastream.
2) Stock market trading volume: Morgan Stanley Capital International World
Indices, IFC, New York Stock Exchange, S&P 500, DJ, NASDAQ.
3) The number of listed companies: IFC, GT 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, IFC, Datastream, S&P 500, DJIA, Wilshire Assoc.
7) The Consumer Price Index and inflation rate: The World Bank, Datastream, IFC
and Ibbotson Assoc.
8) Gross Domestic Product (GDP): Datastream and The World Bank.
9) GDP growth rate: IFC, 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: IFC, The World Bank and Datastream.
14) Top three companies by country, industry or market: IFC, GT 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.
Statement of Additional Information Page 30
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
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.
GT GLOBAL ADVANTAGE
As part of Liechtenstein Global Trust, GT Global continues a 75-year tradition
of service to individuals and institutions. Today we bring investors a
combination of experience, worldwide resources, a global perspective, investment
talent and a time tested investment discipline. With investment professionals in
nine offices worldwide, we witness world events and economic developments
firsthand.
The key to achieving consistent results is following a disciplined investment
process. Our approach to asset allocation takes advantage of GT Global's
worldwide presence and global perspective. Our "macroeconomic" world view
determines our overall strategy of regional, country and sector allocations. Our
bottom up process of security selection combines fundamental research with
quantitative analysis through our proprietary models.
Built in checks and balances strengthen the process, enhancing professional
experience and judgment with an objective assessment of risk. Ultimately, each
security we select has passed a ranking system that helps our portfolio teams
determine when to buy and when to sell.
Statement of Additional Information Page 31
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
DESCRIPTION OF COMMERCIAL PAPER RATINGS
Moody's employs the designations "Prime-1" and "Prime-2" to indicate commercial
paper having the highest capacity for timely repayment. Issuers rated Prime-1
(or supporting institutions) 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; and well-established access to a range of
financial markets and assured sources of alternate liquidity. Issuers rated
Prime-2 (or supporting institutions) have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many 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 affected by external
conditions. Ample alternate liquidity is maintained.
S&P rates commercial paper in four categories. "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. Those
issues determined to possess extremely strong safety characteristics will be
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."
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 edged." 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 are generally known as high grade bonds. They are rated lower
than the best bond because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term
risks appear somewhat larger than the Aaa securities.
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.
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies
that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Statement of Additional Information Page 32
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa to B in its corporate bond rating system. The modifier 1
indicates that the company ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.
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.
PLUS (+) OR MINUS (-): The ratings from "AA" to "BBB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of each Fund as of December 31, 1996 and for
the fiscal year then ended appear on the following pages.
Statement of Additional Information Page 33
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
Statement of Additional Information Page 55
<PAGE>
GT GLOBAL AMERICA SMALL CAP GROWTH FUND
GT GLOBAL AMERICA VALUE FUND
NOTES
- --------------------------------------------------------------------------------
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
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, INCLUDING FEES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING
MARKET INVESTING AND THE RISKS OF INVESTING IN RELATED INDUSTRIES, PLEASE
CONTACT YOUR FINANCIAL ADVISER 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 MID CAP GROWTH FUND
Concentrates on 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
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY GT GLOBAL AMERICA SMALL CAP FUND, GT
GLOBAL AMERICA VALUE FUND, SMALL CAP GROWTH PORTFOLIO, VALUE PORTFOLIO, G.T.
GLOBAL GROWTH SERIES, CHANCELLOR LGT ASSET MANAGEMENT, INC. OR GT GLOBAL.
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.
AMESX610MC
<PAGE>
G.T. GLOBAL GROWTH SERIES
PART C: OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS.
The following audited financial statements as of December 31, 1996, and
for the fiscal year then ended for the Class A, Class B and Advisor Class of the
GT Global Worldwide Growth Fund, GT Global International Growth Fund, GT Global
New Pacific Growth Fund, GT Global Europe Growth Fund, GT Global Japan Growth
Fund, GT Global America Mid Cap Growth Fund (collectively, the "Initial Six
Series"), GT Global America Small Cap Growth Fund and GT Global America Value
Fund, each a series of the Registrant, will be included in the Funds' Statements
of Additional Information and will be filed by amendment:
-- Reports of Independent Accountants
-- Portfolios of Investments
-- Statements of Assets and Liabilities
-- Statements of Operations
-- Statements of Changes in Net Assets
-- Financial Highlights
-- Notes to Financial Statements
(b) EXHIBITS REQUIRED BY PART C, ITEM 24 OF FORM N-1A.
(1)(a) The Registrant's Agreement and Declaration of Trust, as
amended(7).
(1)(b) Certificate of Secretary amending the Registrant's Agreement and
Declaration of Trust dated May 4, 1995(5).
(2) The Registrant's By-Laws, as amended(2).
(3) Not Applicable.
(4) Instruments Defining Rights of Shareholders -- To be filed.
(5)(a) Investment Management and Administration Contract dated April 24,
1989 relating to the Initial Six Series(2).
(5)(b) Form of Administration Contract relating to: GT Global America
Small Cap Growth Fund and GT Global America Value Fund(7).
(6)(a) Distribution Agreement relating to Class A shares(3).
(6)(b) Distribution Agreement relating to Class B shares(3).
(6)(c) Distribution Agreement relating to Advisor Class shares -- To be
filed.
(7) Not Applicable.
(8)(a) Custodian Agreement between the Registrant and State Street Bank
and Trust Company(2).
(9)(a) Transfer Agent Contract dated May 25, 1990(2).
(9)(b) Other material contracts:
(i) Broker/dealer sales contract(2).
(ii) Bank sales contract(2).
(iii) Agency sales contract(2).
(iv) Foreign sales contract(2).
C-1
<PAGE>
(10)(a) Opinion and Consent of Counsel relating to the Initial Six
Series(1).
(10)(b) Opinion and Consent of Counsel relating to GT Global America
Small Cap Growth Fund and GT Global America Value Fund(7).
(11) Consents of Coopers & Lybrand, Independent Accountants relating to:
(i) GT Global Worldwide Growth Fund -- To be filed.
(ii) GT Global International Growth Fund -- To be filed.
(iii) GT Global New Pacific Growth Fund -- To be filed.
(iv) GT Global Europe Growth Fund -- To be filed.
(v) GT Global Japan Growth Fund -- To be filed.
(vi) GT Global America Mid Cap Growth Fund -- To be filed.
(vii) GT Global America Small Cap Growth Fund -- To be filed.
(viii) GT Global America Value Fund -- To be filed.
(12) Not Applicable.
(13) Not Applicable.
(14) Model retirement plan -- GT Global Individual Retirement Account
Disclosure Statement and Application(2).
(15)(a) Distribution Plan adopted pursuant to Rule 12b-1 relating to
Class A shares(3).
(15)(b) Distribution Plan adopted pursuant to Rule 12b-1 relating to
Class B shares(3).
(16) Schedules of Computation of Performance Quotations relating to the
Class A, Class B and Advisor Class shares of:
(a) GT Global America Mid Cap Growth Fund(9).
(b) GT Global Europe Growth Fund(9).
(c) GT Global International Growth Fund(9).
(d) GT Global Japan Growth Fund(9).
(e) GT Global New Pacific Growth Fund(9).
(f) GT Global Worldwide Growth Fund(9).
(g) GT Global America Small Cap Growth Fund(9).
(h) GT Global America Value Fund(9).
(18) Multiple Class Plan adopted pursuant to Rule 18f-3 -- Filed
herewith.
Other Exhibits:
(a) Power of Attorney for G.T. Global Growth Series -- Superceded.
(b) Power of Attorney for Growth Portfolio(6).
(c) Power of Attorney for Helge K. Lee, Peter R. Guarino and David J.
Thelander(8).
(d) Power of Attorney for Helge K. Lee, David J. Thelander and Matthew
M. O'Toole -- Filed herewith.
- ------------------------
(1) Incorporated by reference to Exhibit 10 of Post-Effective Amendment No. 11
to the Registration Statement on Form N-1A, filed in 1985.
C-2
<PAGE>
(2) Incorporated by reference to the identically enumerated Exhibit of
Post-Effective Amendment No. 22 to the Registration Statement on Form N-1A,
filed on February 28, 1992.
(3) Incorporated by reference to the identically enumerated Exhibit of
Post-Effective Amendment No. 31 to the Registration Statement on Form N-1A,
filed on April 26, 1994.
(4) Incorporated by reference to the identically enumerated Exhibit of
Post-Effective Amendment No. 33 to the Registration Statement on Form N-1A,
filed on March 1, 1995.
(5) Incorporated by reference to the identically enumerated Exhibit of
Post-Effective Amendment No. 34 to the Registration Statement on Form N-1A,
filed on May 24, 1995.
(6) Incorporated by reference to the identically enumerated Exhibit of
Post-Effective Amendment No. 35 to the Registration Statement on Form N-1A,
filed on August 4, 1995.
(7) Incorporated by reference to the identically enumerated Exhibit of
Post-Effective Amendment No. 36 to the Registration Statement on Form N-1A,
filed on October 18, 1995.
(8) Incorporated by reference to the identically enumerated Exhibit of
Post-Effective Amendment No. 37 to the Registration Statement on Form N-1A,
filed on February 15, 1996.
(9) Incorporated by reference to the indentically enumerated Exhibit of
Post-Effective Amendment No. 38 to the Registration Statement on Form N-1A,
filed on April 19, 1996.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of January 24, 1997:
<TABLE>
<CAPTION>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
- ------------------------------------------------------------------------------------ ----------------
<S> <C>
Shares of Beneficial Interest, no par value, of:
GT Global America Mid Cap Growth Fund Class A................................. 31,099
GT Global America Mid Cap Growth Fund Class B................................. 28,900
GT Global America Mid Cap Growth Fund Advisor Class........................... 339
GT Global Europe Growth Fund Class A.......................................... 57,433
GT Global Europe Growth Fund Class B.......................................... 9,451
GT Global Europe Growth Fund Advisor Class.................................... 172
GT Global International Growth Fund Class A................................... 20,453
GT Global International Growth Fund Class B................................... 7,382
GT Global International Growth Fund Advisor Class............................. 89
GT Global Japan Growth Fund Class A........................................... 9,327
GT Global Japan Growth Fund Class B........................................... 3,919
GT Global Japan Growth Fund Advisor Class..................................... 81
GT Global New Pacific Growth Fund Class A..................................... 36,804
GT Global New Pacific Growth Fund Class B..................................... 16,910
GT Global New Pacific Growth Fund Advisor Class............................... 247
GT Global Worldwide Growth Fund Class A....................................... 12,289
GT Global Worldwide Growth Fund Class B....................................... 6,349
GT Global Worldwide Growth Fund Advisor Class................................. 151
GT Global America Small Cap Growth Fund Class A............................... 1,137
GT Global America Small Cap Growth Fund Class B............................... 1,337
GT Global America Small Cap Growth Fund Advisor Class......................... 99
GT Global America Value Fund Class A.......................................... 359
G.T. Global America Value Fund Class B........................................ 569
G.T. Global America Value Fund Advisor Class.................................. 64
</TABLE>
C-3
<PAGE>
ITEM 27. INDEMNIFICATION
Section 5.3 of the Registrant's Declaration of Trust provides for
indemnification of certain persons acting on behalf of the Registrant.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended ("1933 Act") may be permitted to Trustees, officers and
controlling persons by the Registrant's Declaration of Trust, bylaws, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission ("Commission") such indemnification is against public
policy as expressed in the 1933 Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a Trustee, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such Trustee, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issues.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
See the material under the heading "Management" included in Part A
(Prospectus) of this amendment and the material appearing under the headings
"Trustees and Executive Officers" and "Management" included in Part B (Statement
of Additional Information) of this Amendment. Information as to the Directors
and Officers of the Adviser is included in its Form ADV (File No. 801-10254),
filed with the Commission, which is incorporated herein by reference.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) In addition to the Registrant, GT Global, Inc. is the principal
underwriter for the following other investment companies: G.T. Investment
Portfolios, Inc. (which includes one fund currently in operation: GT Global
Dollar Fund); and G.T. Investment Funds, Inc. (which includes twelve funds
currently in operation: GT Global Strategic Income Fund, GT Global Government
Income Fund, GT Global High Income Fund, GT Global Growth & Income Fund, GT
Global Latin America Growth Fund, GT Global Telecommunications Fund, GT Global
Health Care Fund, GT Global Financial Services Fund, GT Global Infrastructure
Fund, GT Global Consumer Products and Services Fund, GT Global Natural Resources
Fund and GT Global Emerging Markets Fund); G.T. Global Variable Investment
Series (which includes five funds in operation: GT Global Variable New Pacific
Fund, GT Global Variable Europe Fund, GT Global Variable America Fund, GT Global
Variable International Fund and GT Global Money Market Fund); and G.T. Global
Variable Investment Trust (which includes nine funds in operation: GT Global
Variable Latin America Fund, GT Global Variable Emerging Markets Fund, GT Global
Variable Infrastructure Fund, GT Global Variable Natural Resources Fund, GT
Global Variable Telecommunications Fund, GT Global Variable Growth & Income
Fund, GT Global Variable Strategic Income Fund, GT Global Variable Global
Government Income Fund and GT Global Variable U.S. Government Income Fund).
C-4
<PAGE>
(b) Directors and Officers of GT Global, Inc.
Unless otherwise indicated, the business address of each person listed is 50
California Street, San Francisco, CA 94111.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- -------------------------------------------- ---------------------------------- ----------------------------------
<S> <C> <C>
William J. Guilfoyle President and Director Chairman of the Board of Directors
and President
James R. Tufts Senior Vice President -- Finance Vice President, Treasurer and
and Administration and Director Principal Financial Officer
Helge K. Lee Senior Vice President and General Vice President and Secretary
Counsel
Raymond R. Cunningham Senior Vice President -- None
National Bank Sales
and Director
Richard Healey Senior Vice President -- None
Retail Marketing
Philip D. Edelstein Senior Vice President None
9 Huntly Circle
Palm Beach Gardens, FL 33418
Stephen A. Maginn Senior Vice President -- None
519 S. Juanita Regional Sales Manager
Redondo Beach, CA 90277
David J. Thelander Vice President and Assistant Assistant Secretary
General Counsel
David P. Anderson, Jr. Vice President None
1012 William
Plymouth, MI 48170
Jon Burke Vice President None
31 Darlene Drive
Southboro, MA 01772
Phil Christopher Vice President None
3621 59th Avenue, SW
Seattle, WA 98116
Anthony DiBacco Vice President None
30585 Via Lindosa Way
Laguna Niguel, CA 92677
Stephen Duffy Vice President None
1120 Gables Drive
Atlanta, GA 30319
Ned E. Hammond Vice President None
5901 McFarland Ct.
Plano, TX 75093
</TABLE>
C-5
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- -------------------------------------------- ---------------------------------- ----------------------------------
<S> <C> <C>
Campbell Judge Vice President None
4312 Linden Hills Blvd., #202
Minneapolis, MN 55410
Richard Kashnowski Vice President None
1454 High School Drive
Brentwood, MO 63144
Allen M. Kuhn Vice President None
7220 Garfield Street
New Orleans, LA 70118
Jeffrey S. Kulik Vice President None
6540 Autumn Wind Circle
Clarksville, MD 21029
Steven C. Manns Vice President None
3025 Caswell Drive
Troy, MI 48084
C. David Matthews Vice President None
2445 Pebblebrook
Westlake, OH 44145
Wayne F. Meyer Vice President None
2617 Sun Meadow Drive
Chesterfield, MO 63005
Dean Phillips Vice President None
3406 Bishop Park Drive, #428
Winter Park, FL 32792
Anthony R. Rogers Vice President None
100 Southbank Drive
Cary, NC 27511
James B. Sandidge Vice President None
16437 W. First Ave.
Golden, CO 80401
Philip Schertz Vice President None
25 Ivy Place
Wayne, NJ 07470
Peter Sykes Vice President None
1655 E. Sherman Ave.
Salt Lake City, UT 84105
Lance Vetter Vice President None
10915 La Salinas Circle
Boca Raton, FL 33428
Tommy D. Wells Vice President None
25 Crane Drive
Sam Anselmo, CA 94960
Todd H. Westby Vice President None
3405 Goshen Road
Newtown Square, PA 19073
</TABLE>
C-6
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- -------------------------------------------- ---------------------------------- ----------------------------------
<S> <C> <C>
Brian A. Williams Vice President None
874 Lincoln Ave.
Winnetka, IL 60093
Eric T. Zeigler Vice President None
3100 The Strand
Manhattan Beach, CA 90266
</TABLE>
(c) None.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other records required by Rules 31a-1 and 31a-2 under
the Investment Company Act of 1940, as amended, are maintained and held in the
offices of the Registrant and its investment manager, Chancellor LGT Asset
Management, Inc., 50 California Street, San Francisco, California 94111 and its
custodian, State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110.
Records covering shareholder accounts are maintained and kept by the
Registrant's transfer agent, GT Global Investor Services, Inc., 2121 N.
California Boulevard, Suite 450, Walnut Creek, California 94596, and records
covering portfolio transactions are maintained and kept by the Registrant's
Custodian, State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
None.
C-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant has duly caused
this Post-Effective Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of San Francisco
and the State of California, on the 27th day of February, 1997.
G.T. GLOBAL GROWTH SERIES
By: William J. Guilfoyle*
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement of G.T. Global Growth
Series has been signed below by the following persons in the capacities
indicated on the 27th day of February, 1997.
President, Trustee and
William J. Guilfoyle* Chairman of the Board
(Chief Executive Officer)
/s/ JAMES R. TUFTS
- ---------------------------------------- Vice President, Treasurer and
James R. Tufts Chief Financial Officer
/s/ KENNETH W. CHANCEY
- ---------------------------------------- Vice President and Chief
Kenneth W. Chancey Accounting Officer
C. Derek Anderson* Trustee
Arthur C. Patterson* Trustee
Frank S. Bayley* Trustee
Ruth H. Quigley* Trustee
Robert G. Wade, Jr.* Trustee
*By: /s/ MATTHEW M. O'TOOLE
-----------------------------------
Matthew M. O'Toole
Attorney-in-Fact, pursuant to
Power-of-Attorney filed herewith.
C-8
<PAGE>
SIGNATURES
Growth Portfolio has duly caused this Post-Effective Amendment of G.T.
Global Growth Series to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of San Francisco, and the State of California, on the
27th day of February, 1997.
GROWTH PORTFOLIO
By: William J. Guilfoyle*
President
This Post-Effective Amendment to the Registration Statement of G.T. Global
Growth Series has been signed below by the following persons in the capacities
indicated on the 27th day of February, 1997.
<TABLE>
<S> <C>
William J. Guilfoyle* President, Trustee and Chairman of the Board (Chief
Executive Officer)
/S/ JAMES R. TUFTS Vice President, Treasurer and Chief
- -------------------------------------- Financial Officer
James R. Tufts
/S/ KENNETH W. CHANCEY Vice President and Chief Accounting Officer
- --------------------------------------
Kenneth W. Chancey
C. Derek Anderson* Trustee
Arthur C. Patterson* Trustee
Frank S. Bayley* Trustee
Ruth H. Quigley* Trustee
Robert G. Wade, Jr.* Trustee
*By: /S/ MATTHEW M. O'TOOLE
-------------------------------------------
Matthew M. O'Toole
Attorney-in-Fact, pursuant to
Power-of-Attorney filed herewith.
</TABLE>
C-9
<PAGE>
Exhibit 99.18
G.T. GLOBAL GROWTH SERIES
MULTIPLE CLASS PLAN PURSUANT TO RULE 18f-3
G.T. Global Growth Series ("Company") hereby adopts this Multiple Class
Plan pursuant to Rule 18f-3 under the Investment Company Act of 1940, as
amended (the "1940 Act") on behalf of its current operating series, GT Global
Worldwide Growth Fund, GT Global International Growth Fund, GT Global New
Pacific Growth Fund, GT Global Europe Growth Fund, GT Global Japan Growth
Fund, GT Global America Small Cap Growth Fund, GT Global America Growth Fund,
GT Global America Value Fund and any series that may commence operations in
the future (referred to hereinafter collectively as the "Funds" and
individually as a "Fund").
A. GENERAL DESCRIPTION OF CLASSES THAT ARE OFFERED
1. CLASS A SHARES. Class A shares of each Fund are sold to the general
public subject to an initial sales charge of 4.75% of the public offering
price for Class A shares of the Fund. The initial sales charge is waived for
certain eligible purchasers and reduced or waived for certain large volume
purchases.
Class A shares of each Fund may pay a service fee at the annualized rate
of up to 0.25% of the average daily net assets for the Fund's Class A shares.
Class A shares of each Fund may pay a distribution fee at the annualized
rate of up to 0.35% of the average daily net assets for the Fund's Class A
shares, less any amounts paid by the respective Fund as the aforementioned
service fee. Such fees are paid pursuant to a plan of distribution adopted
in accordance with Rule 12b-1 under the 1940 Act.
Class A shares of each Fund are subject to a contingent deferred sales
charge ("CDSC") on redemptions of shares: (i) purchased without an initial
sales charge due to a sales charge waiver for purchases of $500,000 or more,
and (ii) redeemed within one year after the date of purchase. 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. The Class A CDSC is equal to
1% of the lower of (i) the original purchase price, or (ii) the net asset
value of the shares at the time of redemption.
Class A shares that are redeemed will not be subject to a CDSC to the
extent that the value of such shares represents: (i) reinvestment of
dividends or other distributions, or (ii) Class A shares redeemed one year or
more after their purchase. Class A shares purchased in amounts of 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 CDSC, although the CDSC will apply to the redemption of the
shares acquired through an exchange.
<PAGE>
G.T. Global Growth Series
Multiple Class Plan
Page 2
2. CLASS B SHARES. Class B shares of each Fund are sold to the
general public without imposition of an initial sales charge; however, a CDSC
is imposed on certain redemptions of Class B shares. The maximum CDSC for
Class B shares is equal to 5% of the lesser of the original purchase price or
the net asset value of the shares at the time of redemption. The CDSC is
waived for certain exchanges and redemptions.
Class B shares that are redeemed will not be subject to a CDSC to the
extent that the value of such shares represents: (i) reinvestment of
dividends or capital gains distributions, or (ii) shares redeemed more than
six years after their purchase.
Class B shares are subject to a service fee at the annualized rate of up
to 0.25% of the average daily net assets of the Class B shares of each Fund
and 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. Such fees are paid pursuant
to a plan of distribution adopted in accordance with Rule 12b-1 under the
1940 Act.
3. ADVISOR CLASS SHARES. Advisor Class shares are sold without
imposition of an initial sales charge or CDSC and are not subject to any
service or distribution fees.
Advisor Class shares of each Fund are available for purchase only by:
(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 0.50% on the assets in the account; (c) any account
with assets of at 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 0.50% 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.
B. EXPENSE ALLOCATIONS OF EACH CLASS
Certain expenses may be attributable to a particular Class of shares
("Class Expenses"). Class Expenses are charged directly to the net assets of
the particular Class and, thus, are borne on a pro rata basis by the
outstanding shares of that Class.
2
<PAGE>
G.T. Global Growth Series
Multiple Class Plan
Page 3
In addition to the service and distribution fees described above, each
Class could also pay a different amount of the following other expenses:
(1) transfer agent fees identified as being attributable to a specific
Class of shares;
(2) stationery, printing, postage and delivery expenses related to
preparing and distributing materials such as shareholder reports,
prospectuses and proxy statements to current shareholders of a specific
Class of shares;
(3) Blue Sky registration fees incurred by a specific Class of shares;
(4) SEC registration fees incurred by a specific Class of shares;
(5) expenses of administrative personnel and services as required to
support the shareholders of a specific Class of shares;
(6) Directors' fees or expenses incurred as a result of issues relating
to a specific Class of shares;
(7) accounting expenses relating solely to a specific Class of shares;
(8) auditors' fees, litigation expenses and legal fees and expenses
relating to a specific Class of shares; and
(9) expenses incurred in connection with shareholders meetings as a
result of issues relating to a specific Class of shares.
C. EXCHANGE PRIVILEGES
Class A shares of any Fund may be exchanged only for Class A shares of
other GT Global Mutual Funds, as listed in the Fund's Prospectus. Class B
shares of any Fund may be exchanged only for Class B shares of other GT
Global Mutual Funds, as listed in the Fund's Prospectus. Advisor Class
shares of any Fund may be exchanged only for Advisor Class shares of other GT
Global Mutual Funds, as listed in the Fund's Prospectus.
3
<PAGE>
G.T. Global Growth Series
Multiple Class Plan
Page 4
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. The
terms of the exchange privileges may be modified at any time, on sixty days'
prior written notice to shareholders.
D. ADDITIONAL INFORMATION
The prospectus for each Fund contains additional information about the
Classes and each Fund's multiple class structure. This Multiple Class Plan
is subject to the terms of the then current prospectus for the applicable
Classes; provided, however, that none of the terms set forth in any such
prospectus shall be inconsistent with the terms of the Classes contained in
this Plan.
E. DATE OF EFFECTIVENESS
This Multiple Class Plan will become effective on July 26, 1996. Before
any material amendment of this Multiple Class Plan, a majority of the
Directors of the Company, and a majority of the Directors who are not
interested persons of the Company, shall find that the plan as proposed to be
adopted or amended, including the expense allocation, is in the best
interests of each class individually and the Company as a whole.
4
<PAGE>
Exhibit 99.19
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
David J. Thelander, Daniel R. Waltcher and Matthew M. O'Toole, and each of
them, with full power to act without the other, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities (until revoked in writing) to sign the Registration
Statement and any and all Amendments to the Registration Statement (including
Post-Effective Amendments), and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
G.T. GLOBAL GROWTH SERIES
<TABLE>
<S> <C> <C>
- -------------------------------- Director, Chairman of the
David A. Minella Board and President
/s/ C. Derek Anderson
- -------------------------------- Director February 24, 1997
C. Derek Anderson
/s/ Frank S. Bayley
- -------------------------------- Director February 24, 1997
Frank S. Bayley
/s/ Arthur C. Patterson
- -------------------------------- Director February 24, 1997
Arthur C. Patterson
/s/ Ruth H. Quigley
- -------------------------------- Director February 24, 1997
Ruth H. Quigley
/s/ Robert G. Wade, Jr.
- -------------------------------- Director February 24, 1997
Robert G. Wade, Jr.
</TABLE>
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
David J. Thelander, Daniel R. Waltcher and Matthew M. O'Toole, and each of
them, with full power to act without the other, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities (until revoked in writing) to sign the Registration
Statement and any and all Amendments to the Registration Statement (including
Post-Effective Amendments), and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
GROWTH PORTFOLIO (HUB)
<TABLE>
<S> <C> <C>
- -------------------------------- Director, Chairman of the
David A. Minella Board and President
/s/ C. Derek Anderson
- -------------------------------- Director February 24, 1997
C. Derek Anderson
/s/ Frank S. Bayley
- -------------------------------- Director February 24, 1997
Frank S. Bayley
/s/ Arthur C. Patterson
- -------------------------------- Director February 24, 1997
Arthur C. Patterson
/s/ Ruth H. Quigley
- -------------------------------- Director February 24, 1997
Ruth H. Quigley
/s/ Robert G. Wade, Jr.
- -------------------------------- Director February 24, 1997
Robert G. Wade, Jr.
</TABLE>
<PAGE>
POWER OF ATTORNEY
- --------------------------------------------------------------------------------
Page 3
- --------------------------------------------------------------------------------
William J. Guilfoyle hereby constitutes and appoints David J. Thelander,
Daniel R. Waltcher and Matthew M. O'Toole, and each of them, with full power to
act without the other, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities (until revoked in writing) to sign the
Registration Statement and any and all Amendments to the Registration Statement
(including Post-Effective Amendments), and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
G.T. GLOBAL GROWTH SERIES
/s/ Willian J. Guilfoyle
_____________________________ Director, Chairman of February 26, 1997
William J. Guilfoyle the Board and President
<PAGE>
- --------------------------------------------------------------------------------
Page 4
- --------------------------------------------------------------------------------
POWER OF ATTORNEY
William J. Guilfoyle hereby constitutes and appoints David J. Thelander,
Daniel R. Waltcher and Matthew M. O'Toole, and each of them, with full power to
act without the other, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities (until revoked in writing) to sign the
Registration Statement and any and all Amendments to the Registration Statement
(including Post-Effective Amendments), and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
GROWTH PORTFOLIO (HUB)
/s/ Willian J. Guilfoyle
_____________________________ Director, Chairman of February 26, 1997
William J. Guilfoyle the Board and President
